Ex parte Ford and Two Similar Cases

JurisdictionSouth Africa
JudgeBinns-Ward AJ
Judgment Date05 March 2009
Citation2009 (3) SA 376 (WCC)
Docket Number21084/08, 1034/09 and 1035/09
Hearing Date30 January 2009
CounselA Heyns for the applicant.
CourtWestern Cape High Court, Cape Town

Binns-Ward AJ:

[1] Three applications in terms of the Insolvency Act 24 of 1936, for the C voluntary surrender of the respective applicants' estates, came before me on the same day in the unopposed motion court.

[2] A consideration of the applicants' founding affidavits in each of the matters suggested that a considerable portion of each of their respective liabilities consisted of debt owed to financial institutions or money- D lenders, either by way of loans on overdraft or otherwise, or as a consequence of the extension of credit through credit-card facilities. On the face of it, therefore, it appeared on the papers that the major portion of each of the applicants' debts arose out of'credit agreements' within the meaning of the National Credit Act 34 of 2005 (the NCA). [1] It was also striking on the papers how disproportionately high the amount of E this type of debt was in each case in relation to the relatively modest incomes of the applicants. So, for example, the applicant in case No 21084/08 had a net monthly income of R10 849,29, after standard deductions, at source, for matters such as medical-aid and pension contributions. Notwithstanding this modest income, she disclosed F credit-card debt totalling R132 299,35 (spread over five different credit-card accounts) and loans totalling R281 910,50 (from five different lending institutions). In addition, the applicant disclosed a debt of R37 748,85 owed to a commercial bank, which she described as 'vehicle finance'. However, the indication that this debt is unsecured makes me believe that it does not arise out of a standard instalment sale or vehicle- G lease transaction, but is just another bank loan. A similar picture of gross over-indebtedness in respect of credit-agreement transactions presents on the other two applications under consideration.

[3] In each of the applications the respective applicants made averments H to the effect that they had'become insolvent by misfortune and due to circumstances beyond [their] control, without fraud or dishonesty on[their] part'. One must assume therefore that in applying for the credit which came to constitute the unaffordable burden that drove the applicants to seek the acceptance of the surrender of their respective estates, the credit grantors involved were fully informed of the apparent I limits of the ability of the applicants to service the debts, or could easily have ascertained the position had they made reasonable enquiries before granting the loan or credit facilities in question. This begs the question of how it was possible for the applicants each to be extended credit way

Binns-Ward AJ

beyond their ability to afford. The question is unanswered on the papers. A I should mention in this respect that nothing in the evidence indicates, save for the applicant in case No 1035/09, that any of the applicants' incomes was previously materially higher than it is now. In the case of the applicant in case No 1035/09, who did previously enjoy a much higher income, the evidence is that he incurred most of his debt after his B earnings had been diminished as a consequence of injuries suffered in a motor-vehicle accident. Grounds for cogent suspicion of at least some degree of reckless credit extension therefore present themselves strongly on the disclosed facts in each of the applications.

[4] One of the objects of the NCA is the discouragement of reckless C credit extension. The long title to the Act describes the statute as being intended to promote a fair and non-discriminatory marketplace for access to consumer credit and for that purpose, amongst other matters, to promote responsible credit-granting and use, and for that purpose to prohibit reckless credit-granting and to provide for debt reorganisation in cases of over-indebtedness. Section 3 of the NCA provides, amongst D other things:

The purposes of this Act are to promote and advance the social and economic welfare of South Africans, promote a fair, transparent, competitive, sustainable, responsible, efficient, effective and accessible credit market and industry, and to protect consumers, by - E

. . .

(c)

promoting responsibility in the credit market by -

(i)

encouraging responsible borrowing, avoidance of over-indebtedness and fulfilment of financial obligations by consumers; and

(ii)

discouraging reckless credit granting by credit providers and F contractual default by consumers;

. . .

(g)

addressing and preventing over-indebtedness of consumers, and providing mechanisms for resolving over-indebtedness based on the principle of satisfaction by the consumer of all responsible financial obligations; G

. . .

(i)

providing for a consistent and harmonised system of debt restructuring, enforcement and judgment, which places...

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23 practice notes
  • Nedbank Ltd and Others v National Credit Regulator and Another
    • South Africa
    • Invalid date
    ...All SA 199): referred to H Durban City Council v Gray 1951 (3) SA 568 (A): dictum at 580B applied Ex parte Ford and Two Similar Cases 2009 (3) SA 376 (WCC): referred FirstRand Bank Ltd t/a First National Bank v Seyffert and Another and Three Similar Cases 2010 (6) SA 429 (GSJ): referred to ......
  • Consumer Debt Relief in South Africa; Lessons from America and England; and Suggestions for the Way Forward
    • South Africa
    • Juta South Africa Mercantile Law Journal No. , May 2019
    • 25 May 2019
    ...of Pretoria.*** BCom Law LLB LLM (Pretoria). Lecturer, Department of Mercantile Law, Faculty of Law,University of Pretoria.12009 (3) SA 376 (WCC) at 383.224 of 1936.3The Court referred to Ex parte Pillay; Mayet v Pillay 1955 (2) SA 309 (N) at 31. See also R v Meerand Others 1957 (3) SA 614 ......
  • The Income of an Insolvent and Sequestration under the Insolvency Act 24 of 1936
    • South Africa
    • Juta South Africa Mercantile Law Journal No. , August 2019
    • 20 August 2019
    ...R v Meer & others1957 (3) SA 614 (N) at 619A; Fesi v Absa Bank Ltd 2000 (1) SA 499 (C) at 502E–F; Ex parte Ford& two similar cases 2009 (3) SA 376 (WCC) para 21; Ex parte Mark Shmukler-Tshiko [2012]ZAGPJHC 209 para 8: Arntzen para 13.THE INCOME OF AN INSOLVENT AND SEQUESTRATION 481© Juta an......
  • FirstRand Bank Ltd v Maleke and Three Similar Cases
    • South Africa
    • Invalid date
    ...Financial Services (South Africa) (Pty) Ltd v Dr MB Mulaudzi Inc 2009 (3) SA 348 (B): referred to Ex parte Ford and Two Similar Cases 2009 (3) SA 376 (WCC): referred to FirstRand Bank Ltd v Carl Beck Estates (Pty) Ltd and Another 2009 (3) SA 384 (T): referred to I FirstRand Bank Ltd v Olivi......
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15 cases
  • Nedbank Ltd and Others v National Credit Regulator and Another
    • South Africa
    • Invalid date
    ...All SA 199): referred to H Durban City Council v Gray 1951 (3) SA 568 (A): dictum at 580B applied Ex parte Ford and Two Similar Cases 2009 (3) SA 376 (WCC): referred FirstRand Bank Ltd t/a First National Bank v Seyffert and Another and Three Similar Cases 2010 (6) SA 429 (GSJ): referred to ......
  • FirstRand Bank Ltd v Maleke and Three Similar Cases
    • South Africa
    • Invalid date
    ...Financial Services (South Africa) (Pty) Ltd v Dr MB Mulaudzi Inc 2009 (3) SA 348 (B): referred to Ex parte Ford and Two Similar Cases 2009 (3) SA 376 (WCC): referred to FirstRand Bank Ltd v Carl Beck Estates (Pty) Ltd and Another 2009 (3) SA 384 (T): referred to I FirstRand Bank Ltd v Olivi......
  • Ex parte Arntzen (Nedbank Ltd as Intervening Creditor)
    • South Africa
    • Invalid date
    ...Van Jaarsveld v Roebuck; Van Aardt v Borrett 1996 (1) SA 935 (C): dictum at 937E – F applied Ex parte Ford and Two Similar Cases 2009 (3) SA 376 (WCC): referred Ex parte Mattysen et Uxor (First Rand Bank Ltd Intervening) 2003 (2) SA 308 (T): referred to Ex parte Pillay; Mayet v Pillay 1955 ......
  • Phaladi v Lamara
    • South Africa
    • Invalid date
    ...ZAWCHC 141: approved Ex parte Concato and Similar Cases 2016 (3) SA 549 (WCC): referred to F Ex parte Ford and Two Similar Cases 2009 (3) SA 376 (WCC): referred Geuking v President of the Republic of South Africa and Others 2003 (3) SA 34 (CC) (2003 (1) SACR 404; 2004 (9) BCLR 895; [2002] Z......
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8 books & journal articles
  • Consumer Debt Relief in South Africa; Lessons from America and England; and Suggestions for the Way Forward
    • South Africa
    • Juta South Africa Mercantile Law Journal No. , May 2019
    • 25 May 2019
    ...of Pretoria.*** BCom Law LLB LLM (Pretoria). Lecturer, Department of Mercantile Law, Faculty of Law,University of Pretoria.12009 (3) SA 376 (WCC) at 383.224 of 1936.3The Court referred to Ex parte Pillay; Mayet v Pillay 1955 (2) SA 309 (N) at 31. See also R v Meerand Others 1957 (3) SA 614 ......
  • The Income of an Insolvent and Sequestration under the Insolvency Act 24 of 1936
    • South Africa
    • Juta South Africa Mercantile Law Journal No. , August 2019
    • 20 August 2019
    ...R v Meer & others1957 (3) SA 614 (N) at 619A; Fesi v Absa Bank Ltd 2000 (1) SA 499 (C) at 502E–F; Ex parte Ford& two similar cases 2009 (3) SA 376 (WCC) para 21; Ex parte Mark Shmukler-Tshiko [2012]ZAGPJHC 209 para 8: Arntzen para 13.THE INCOME OF AN INSOLVENT AND SEQUESTRATION 481© Juta an......
  • The Need to Clarify the Sheriff’s Duties when Executing Writs of Execution that Could Indicate the Debtor’s Insolvency
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    • Juta South Africa Mercantile Law Journal No. , June 2020
    • 17 June 2020
    ...Land and Agricultural Development21(2015/17903) [2017] ZAGPJHC 402 (30 November 2017).22See Ex parte Ford & Two Similar Cases 2009 (3) SA 376 (WCC) paras 17–20 where thecourt refused to exercise its discretion in making a determination of advantage to creditors.The court refused to grant an......
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    • South Africa
    • Sabinet De Jure No. 48-1, January 2015
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    ...alternative measures such as debt review in terms of theNational Credit Act 34 of 2005 (NCA) (Ex parte Ford and two similar cases2009 3 SA 376 (WCC) 384; Ex parte Arntzen (Nedbank Ltd as interveningcreditor) 2013 1 SA 49 (KZP) 56–57; Ex parte Shmukler-Tshiko 2013 JOL29999 (GSJ) par 33). In ......
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