FirstRand Bank Ltd v Kona and Another
Jurisdiction | South Africa |
Citation | 2015 (5) SA 237 (SCA) |
FirstRand Bank Ltd v Kona and Another
2015 (5) SA 237 (SCA)
2015 (5) SA p237
Citation |
2015 (5) SA 237 (SCA) |
Case No |
20003/14 |
Court |
Supreme Court of Appeal |
Judge |
Mpati P, Cachalia JA, Mbha JA, Van Der Merwe AJA and Meyer AJA |
Heard |
February 26, 2015 |
Judgment |
March 13, 2015 |
Counsel |
L Meintjies for the appellant. |
Flynote : Sleutelwoorde F
Credit agreement — Consumer credit agreement — Debt re-arrangement — Debt re-arrangement and sequestration — Existence of rearrangement order not barring sequestration of consumer's estate at behest of credit provider — National Credit Act 34 of 2005, s 88(3). G
Court — Precedent and stare decisis — Observance of doctrine mandatory.
Headnote : Kopnota
The existence of a debt-rearrangement order does not bar the sequestration of the consumer consumer's estate at the behest of the credit provider. (Paragraphs [13] – [21] at 241G – 243G.) H
Cases Considered
Annotations
Case law
Camps Bay Ratepayers' and Residents' Association and Another v Harrison and Another 2011 (4) SA 42 (CC) (2011 (2) BCLR 121; [2010] ZACC 19): I dictum in paras [28] – [30] applied
Credex Finance (Pty) Ltd v Kuhn 1977 (3) SA 482 (N): dictum at 485F applied
Estate Logie v Priest 1926 AD 312: dictum at 319 applied
Ferris and Another v FirstRand Bank Ltd 2014 (3) SA 39 (CC) (2014 (3) BCLR 321; [2013 ZACC 46): dicta in paras [14] and [16] applied J
2015 (5) SA p238
FirstRand Bank Ltd v Evans 2011 (4) SA 597 (KZD): dicta in paras [23] – [25] and [35] applied A
FirstRand Bank Ltd v Fillis 2010 (6) SA 565 (ECP) ([2010] ZAECPEHC 50): dictum in para [16] applied
Investec Bank Ltd and Another v Mutemeri and Another 2010 (1) SA 265 (GSJ): dictum in paras [27] – [28] applied
Jili v FirstRand Bank Ltd t/a Wesbank 2015 (3) SA 586 (SCA) ([2014] ZASCA 183): dicta in paras [22] and [25] applied B
Naidoo v Absa Bank Ltd 2010 (4) SA 597 (SCA): dictum in para [4] applied.
Statutes Considered
Statutes
C The National Credit Act 34 of 2005, s 88(3): see Juta's Statutes of South Africa 2014/15 vol 2 at 1-522.
Case Information
L Meintjes for the appellant.
SS Cohen for the respondents.
D An appeal against a decision in the Gauteng Division, Pretoria (Phatudi J).
Order
The appeal succeeds with costs, which costs shall be paid out of the joint estate of the respondents as part of the costs of sequestration.
The order of the court a quo is set aside and replaced with: 'The E joint estate of the respondents is placed under final sequestration.'
Judgment
Meyer AJA (Mpati P, Cachalia JA, Mbha JA and Van der Merwe AJA concurring):
[1] This is an appeal against an order of the North Gauteng High Court, F Pretoria (Phatudi J) on 7 March 2014 discharging a provisional order of sequestration of the joint estate of the respondents, who are married in community of property. The appeal is with leave of the High Court.
[2] It is common cause that the appellant has a liquidated claim against the respondents. As at 26 August 2011 their indebtedness to the G appellant amounted to R953 903,48, plus interest thereon at the rate of 7,30% per annum. The indebtedness arose as a result of an overdraft facility the appellant had granted to the respondents pursuant to the conclusion of a written loan agreement on 7 August 2006. The facility was subsequently increased. The moneys borrowed from the appellant H were secured by a first and a second mortgage bond registered in favour of the appellant over an immovable property owned by the respondents and in which they reside. The National Credit Act 34 of 2005 (the NCA) applies to the loan agreement. The appellant is a 'credit provider' and each respondent a 'consumer' as contemplated in s 1 of the NCA.
[3] During the year 2008 the respondents applied to a registered debt I counsellor, Mr Rael Zimmerman, for a debt review in terms of s 86(1) of the NCA. They submitted an application, as required in terms of reg 24(1)(a) read with form 16 of the regulations promulgated in GN R489, GG 28864, 31 May 2006 (the NCA regulations), to the debt counsellor. The debt counsellor dispatched notices dated 25 July 2008 in accordance J with s 86(4)(b) read with reg 24(2) and form 17.1 to credit
2015 (5) SA p239
Meyer AJA (Mpati P, Cachalia JA, Mbha JA and Van der Merwe AJA concurring)
bureaux and the respondents' credit providers that were listed in their A application, advising them that the respondents had applied for debt review in terms of s 86 of the NCA. He conducted an assessment in terms of s 86(6) and concluded that the respondents were overindebted. He thereafter sent further notices dated 3 September 2008 in accordance with reg 24(10) and form 17.2 to credit bureaux and the respondents' B credit providers, advising them that the respondents' application for debt review had been successful and that their debt obligations were being restructured.
[4] The proposal which the debt counsellor made to the respondents' credit providers, including the appellant, reflects a substantial monthly C shortage of their income over their expenditure. The debt counsellor recommended that the period for payment in respect of each credit agreement be extended and that the monthly payments be reduced accordingly. He also recommended that the interest accruing on the debt owed to the appellant be reduced to a rate of 5% per annum. Interest reductions in respect of other debts were also recommended. The D appellant was one of the credit providers which did not consent to the debt counsellor's proposal.
[5] The debt re-arrangement order proposed was put before the Magistrate's Court, Alberton, in terms of s 86(7), read with ss 87 and 79 of the NCA, by means of a substantive application. BMW Financial Services E (SA) (Pty) Ltd and the appellant opposed the application. On 20 August 2009 the magistrates' court issued an order declaring the respondents to be overindebted and rearranging their obligations in accordance with the debt re-arrangement proposed by the debt counsellor. (Whether the reduction in contractually agreed interest rates renders the F debt re-arrangement order invalid as contended for by the appellant is a matter that need not be decided in this matter.) The respondents failed to effect proper and punctual payment to the appellant of the reduced monthly instalments due to it in terms of the debt re-arrangement order.
[6] Because the respondents were in default under the loan agreement G and with their obligations in terms of the debt...
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