FirstRand Bank Ltd v Olivier

• Jurisdiction: South Africa
• Judge: AR Erasmus J
• Judgment Date: 08 May 2008
• Citation: 2009 (3) SA 353 (SE)
• Docket Number: 2369/07
• Hearing Date: 18 March 2008
• Counsel: AR Gautschi SC (with Adv Bester) for the applicant. No Appearance for the respondent.
• Court: South Eastern Cape Local Division

FirstRand Bank Ltd v Olivier
2009 (3) SA 353 (SE)

2009 (3) SA p353

Citation	2009 (3) SA 353 (SE)
Case No	2369/07
Court	South Eastern Cape Local Division
Judge	AR Erasmus J
Heard	March 18, 2008
Judgment	May 8, 2008
Counsel	AR Gautschi SC (with Adv Bester) for the applicant.; No Appearance for the respondent.

Flynote : Sleutelwoorde

Credit agreement — Consumer credit agreement — Over-indebtedness — Judicial B relief — Declaration of over-indebtedness and referral to debt counsellor — Discretion of court — Relevant factors — Consumer over-indebted because of mortgage-bond obligation — If property sold, he would no longer be over-indebted — Consumer not showing good and sufficient cause for referral — Application for referral refused — National Credit Act C 34 of 2005, s 85(a).

Credit agreement — Consumer credit agreement — Over-indebtedness — Judicial relief — Declaration of over-indebtedness and referral to debt counsellor — Discretion of court — Relevant factors — Failure by consumer to approach debt counsellor for declaration of over-indebtedness before D institution of proceedings against him by credit provider — Since procedure new and relatively unknown, not yet appropriate to take such factor into account — National Credit Act 34 of 2005, ss 85(a) and 86(1).

Headnote : Kopnota

The applicant sought summary judgment in the High Court for the respondent's E arrears on a mortgage bond. The respondent resisted the application on the basis that he was over-indebted as defined in s 79(1) of the National Credit Act 34 of 2005, in that he was unable to satisfy all of his obligations under the bond in a timely manner and, in terms of s 85 of the Act, he therefore sought an order referring the matter directly to a debt counsellor with the request that the debt counsellor evaluate his circumstances and make a recommendation to the court in terms of s 86(7) of the Act. At the hearing F of the matter counsel for the applicant argued that it was relevant to the exercise of the court's discretion that the respondent had failed to apply to a debt counsellor in terms of s 86(1) of the Act to have himself declared over-indebted prior to institution of the proceedings; that the respondent was required explain that failure to the court; and that his action in awaiting legal debt enforcement by the applicant, rather than voluntarily taking steps G to have himself declared over-indebted, amounted to an abuse of the court process.

Held, that while a respondent's failure to make application in terms of s 86(1) might, in proper circumstances, influence the court in the exercise of its discretion, in the present matter the respondent could not be faulted for not acting timeously in terms of s 86(1). The relevant portions of the Act H commenced on 1 June 2007. Summons was served on the respondent on 23 October 2007. There was no indication of how long before that date the s 129(1) notice was served on the respondent. It was not clear whether the defendant had sufficient time before receiving the s 129(1) notice to act in terms of s 86(1). That procedure was, at the time, still very new and not generally known. (Paragraph [16] at 359H - I.) I

Held, further, that it was also relevant to the exercise of the court's discretion in terms of s 85 that the defendant had failed to act upon receipt of the s 129(1) notice and that he furthermore failed to explain or ask for condonation of his failure. (Paragraph[19] at 360F - H.)

Held, further, that the respondent's alleged over-indebtedness was due largely to his maintenance of the credit agreement with the applicant. If he sold the J

2009 (3) SA p354

A property, he would no longer be over-indebted. (Paragraph [23] at 362D - F.)

Held, further, that, in the circumstances, the respondent had failed to show good and sufficient reasons for the granting of the relief sought by him. (Paragraph [24] at 362F - G.)

Held, accordingly, that judgment was granted for the applicant. (Paragraph [25] at 362H.) B

Cases Considered

Annotations

Reported cases

Troskie v Troskie1968 (3) SA 369 (W): referred to.

Statutes Considered

Statutes C

The National Credit Act 34 of 2005, ss 85(a) and 86(1): see Juta's Statutes of South Africa 2007/8 vol 2 at 1-463.

Case Information

Application for summary judgment. The facts appear from the reasons for judgment.

AR Gautschi SC (with Adv Bester) for the applicant. D

No appearance for the respondent.

Cur adv vult.

Postea (May 8). E

Judgment

AR Erasmus J:

[1] The applicant (plaintiff) seeks summary judgment on a summons issued against the respondent (defendant) for the payment of F R452 142,89, being the principal debt together with finance charges due and owing by the defendant to the plaintiff as at 23 August 2007 under a mortgage bond passed by the defendant in favour of the plaintiff hypothecating certain immovable property owned by the defendant (the property). The defendant opposes the application and has filed an affidavit in support of his opposition.

G [2] The defendant's attorneys of record have filed a notice of withdrawal as attorneys. They therein intimate that the defendant's financial position is such that he is unable to afford the services of an attorney or advocate and that he therefore abides by the decision of the court. The defendant failed to file heads of argument and failed to make appearance H at the hearing. Counsel for the plaintiff, however, accept that the plaintiff must nevertheless satisfy the court that it is entitled to judgment.

[3] In his affidavit the defendant admits that he is indebted to the plaintiff as claimed in the summons, but submits that he is nonetheless entitled to avoid summary judgment by virtue of certain provisions of the I National Credit Act 34 of 2005 (the NCA, or the Act). He continues:

3.

The property which forms the subject matter of the applicant's action, was purchased by me during September 2006 through obtaining a bond from the applicant. At the time I was employed at Keypak, Port Elizabeth, and my financial position was of such a nature that I could afford to purchase the property and as a result J my application for a bond was approved by the applicant.

2009 (3) SA p355

AR Erasmus J

4.

During December 2006, I resigned at Keypak as a result of A personal reasons. I merely wish to mention that my engagement with the owner of Keypak's daughter, was broken off and it would have been unbearable to continue working there.

5.

5.1

Since January 2007 to July 2007, I have been unemployed but B I have been able to service the bond account up and until 1 March 2007 in that my pension benefits were paid into my bank account from which the monthly instalment was debited. According to my latest bond statement, the following payments have been made to the applicant:

5.1.1	1 October 2006:	R1 900,00 C
5.1.2	1 November 2006:	R4 900,00
5.1.3	1 November 2006:	R5 200,00
5.1.4	1 December 2006:	R5 200,00
5.1.5	1 January 2007:	R5 200,00 D
5.1.6	1 February 2007:	R5 200,00
5.1.7	1 March 2007:	R5 200,00
5.1.8	14 September 2007:	R2 200,00
5.1.9 3	October 2007:	R2 200,00 E
5.1.10	29 October 2007:	R2 200,00

5.2

The last three payments of R2 200,00 each represent the net rental income received from the current tenants in the property which is paid directly into the bond account of the applicant. F

6.

During July 2007 I relocated to Gauteng Province and I currently reside with my parents at Plot 91, Old Rustenburg Road, Brits. I have obtained employment at SS Profiling (Pty) Ltd at cnr Mathinus Ras & Van Tonder Street, Brits, Gauteng Province as from August 2007 and I have now been permanently employed by G them as from December 2007.

7.

My monthly income amounts to the following:

Salary (net) see annexure A:	R7 125,00
Rental income:	R2 500,00
Total:	R9 625,00 H

8.

My reasonable and necessary monthly expenses amounts to the following:

8.1	Board & lodging with my elderly parents ....:	R 2000,00
8.2	Contribution towards groceries:	R 650,00 I
8.3	Payment (to the seller) on motor vehicle:	R 500,00
8.4	Petrol	R 400,00
8.5	Repayment of loan (from employer in order to purchase motor vehicle)	R 1000,00
8.6	Commission payable to rental agency	R 300,00 J

2009 (3) SA p356

AR Erasmus J

A 8.7	Payment herewith tendered to the applicant	R5 000,00
8.8	Miscellaneous including clothing and toiletries	R 600,00
	Total:	R10 450,00

I therefore currently have a monthly shortfall of R825 per month B which is absorbed by my parents by not insisting on full payment of board and lodging which I have undertaken to pay them.

9.

The motor vehicle which I refer to is an old model Opel Kadett which I purchased for an amount of R14 000. I loaned an amount of R8000 from my current employer to enable me to pay the deposit on the vehicle and I am paying off this loan to my employer C of R1000 per month. I am furthermore paying R500 per month towards the balance of the purchase price (R6 000) to the seller of the vehicle.

10.

The final instalment to be paid by me to my employer will be made on 7 July 2008 and from August 2008 I will therefore have an extra D amount of R1000 per month available to pay towards my indebtedness to the applicant.

11.

The final instalment to be paid by me to the previous owner (seller) of the motor vehicle will be made on 7...