IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE HIGH COURT, CAPE TOWN)
CASE NO: 6688/2010
In the matter between
FIRSTRAND BANK LIMITED Applicant
(trading as Wesbank)
STACY-LEE ANN TALANA ALBERTYN Respondent
Judgment handed down on 10 February 2011
Sven Olivier AJ
1. This is an application for summary judgment wherein the plaintiff claims an order
directing the defendant to return a Volkswagen City motor vehicle and costs. It is common
cause that the lease agreement is a credit transaction as defined in section 1 of the
National Credit Act, 34 of 2005 ("the NCA").
2. The application is opposed and the defendant has filed an opposing affidavit wherein
she in essence contends that she is under debt review and her application for debt review
has been set down for hearing on 16 September 2010 in the Wynberg Magistrates' Court.
She states that debt review proceedings were initiated in a notice1 sent by her debt
counsellor sent out on 23 October 2009. She contends, accordingly, that there were no
grounds on which to terminate the debt review process.
3. In view of this defence it is appropriate to first set out the time line against which this
defence is to be adjudicated.
Form 17.1 of the prescribed forms set out in Schedule 1 in the Regulations made in terms of the National
Credit Act, Act 34 of 2005.
4. Although there was some debate at the bar regarding the date on which the defendant
had applied for a debt review in terms of the provisions of section 86(1) of the National
Credit Act, and whether it was on 2 November 2009, (as was alleged in the particulars of
claim) or 23 October 2009 (as was alleged in the opposing affidavit and the annexures
thereto), I accept, that the notice in terms of section 86(4) was given to all credit providers,
including the plaintiff, on 23 October 2009 and that this is the date on which the debt
review had commenced.
5. This notification triggered the provisions of section 88(3) of the NCA.
6. On 27 January 2010 the plaintiff gave notice in terms of section 86(10) to terminate the
7. On 16 April 2010 the summons was served. Therein the plaintiff conveyed its election to
cancel the credit agreement between it and the defendant. It is common cause that the
defendant is in default under the credit agreement and that she has been so for at least 20
business days as is envisaged in terms of the provisions of section 130(1) of the NCA.
8. Section 129 under Part C (which part deals with "debt enforcement by
repossession or judgment') provides that legal proceedings to enforce an agreement may
only be commenced with if notice in terms of, inter alia, section 86(10) has been provided
and the requirements of section 130 had been met. Section 130, in turn, provides that the
credit provider may approach a court for an order to enforce a credit agreement only if the
consumer is in default and has been in default for at least 20 business days and at least 10
business days have elapsed since the credit provider delivered a notice to the consumer
as contemplated in section 86(10).2
9. These requirements have been met.
The section states section 86(9), but it seems to be common cause that it should be read as section 86(10).
10. Though not stated in the papers, it is common cause that the application in terms of
section 86(7)(c)3 was issued in the Wynberg Magistrates' Court on 7 June 2010.
11. In passing I point out that Mr Noor, the debt counsellor, came to the conclusion that the
defendant was over-indebted and that her obligations were to be rearranged by extending
the periods of the agreements and reducing the amounts of each payment due
12. At issue between the parties was whether the plaintiff was entitled to terminate the debt
review process in terms of section 86(10) of the NCA.
13. Section 86(10) of the National Credit Act provides that:
"If a consumer is in default under a credit agreement that is being reviewed
in terms of this section, the credit provider in respect of that credit
agreement may give notice to terminate the review in the prescribed manner
to - (a) the consumer; (b) the debt counsellor; and (c) the National Credit
Regulator, at any time at least 60 business days after the date on which the
consumer applied for the debt review."
14. The starting point of this debate is to be found in the provisions of the section and
those of section 88(3) of the NCA.
15. Section 88(3) provides that:
"Subject to section 86(9) and (10), a credit provider who receives notice of
court proceedings contemplated in section 83 or 85, or notice in terms of
section 86(4)(b)(i), may not exercise or enforce by litigation or other judicial
process any right to security under that credit agreement until - (a) the
consumer is in default under the credit agreement; and (b) one of the
following has occurred:
"(7) If, as a result of an assessment conducted in terms of subsection (6), a debt counsellor reasonably
concludes that -... (c) the consumer is over-indebted, the debt counsellor may issue a proposal recommending
that the Magistrates' Court make either or both of the following orders - (i) ...; and (ii) that one or more of the
consumer's obligations be rearranged by - (aa) extending the period of the agreement and reducing the
amount of each payment due accordingly;"
(i) an event contemplated in subsection (1)(a) through (c); or
(ii) the consumer defaults on any obligation in terms of a rearrangement
agreed between the consumer and credit providers, or ordered by a court or
16. As is already set out above, notice was given in terms of section 86(4)(b)(i) on 23
October 2009. It is also common cause that the defendant was in default under the credit
17. None of the events contemplated by
(a) section 88(1 )(a) through to (c), that is, the debt counsellor had not rejected
the application, the court had not determined that the defendant was not
over-indebted, nor had the court made any order for the rearrangement of the
defendant's obligations and had such an order been fulfilled; nor
(b) subsection (ii) of section 88(3)(b)
18. It is therefore only if notice is given as contemplated in terms of section 86(10) that the
plaintiff could proceed to court.
19. In terms of section 86(10) the plaintiff may withdraw from the debt review process after
the expiry of a period of 60 days. The defendant, however, must be in default in regard to
the relevant credit agreement and applications in terms of subsections 86(8)(b)4 or section
86(9)5 should not be pending. This, by necessary implication, means that the credit
provider can thereafter proceed with legal action to enforce its rights in terms of its credit
"(a) If a debt counsellor makes a recommendation in terms of subsection (7)(b) and -...
(b) ... the debt counsellor must refer the matter to the Magistrates' Court with the recommendation" made in
terms of subsection (7)(b), namely that "the consumer and the respective credit providers voluntarily consider
and agree on a plan of debt rearrangement".
"(9) If a debt counsellor rejects an application as contemplated in subsection (7)(a), the consumer, with leave
of the Magistrates' Court, may apply directly to the Magistrates' Court, in the prescribed manner and form, for
an order contemplated in subsection (7)(c)."
20. A full court in this division in Wesbank v Papier (The National Credit Regulator as
amicus curiae) case no 14256/10, handed down on 1 February 2011, held as
" The subsection contains no limitation on a creditor's right to give notice
of termination, save for the two jurisdictional requirements postulated,
namely (a) the consumer must be in default under the credit agreement;
and (b) at least 60 business days must have elapsed after the date on
which the consumer applied for the debt review. In the present instance, it is
common cause that both these requirements have been met: the defendant
was already in default when he applied for debt review on 29 September
2009. On 4 June 2010, ie more than 60 business days later, the plaintiff
gave the requisite notice in terms of s 86(10). Moreover, more than 10 days
have elapsed after the plaintiffs notice before summons was issued, as
required by s 130(1). The plaintiff, relying on a literal interpretation of s
86( 10), accordingly submitted that it is entitled to enforce the terms of the
credit agreement in question by claiming summary judgment.
 It would be an unduly onerous and tedious task to analyse and discuss
individually the reasoning in each of the ever-growing number of judgments
on the topic. Instead, I propose briefly to set out the reasons why I agree
with the approach followed in the second line of cases regarding the
interpretation ofs 86(10)
 Having regard to the context in which they appear, it is clear to me that a literal
interpretation of the provisions of s 86(10), read in isolation, would amount to a 'blinkered'
approach7 which could easily lead to the wrong answer. Those provisions deal with one
aspect of an elaborate process described in the heading to s 86 as 'Application for debt
review'. The process commences with an application by the consumer 'in the prescribed
"Standard Bank of South Africa Limited v Kruger; Standard Bank of South Africa Limited v Pretorius 2010 (4)
SA 635 (GSJ) paras 13, 24 (per Kathree-Setiloane AJ). She subsequently reiterated these views in SA
Securitisation (Pty) Limited v Matlala  ZAGPJHC 70 (29 July 2010), where she specifically disagreed with
the approach of Kemp AJ in SA Taxi Securitisation v Nako, supra. Other cases following the same approach
include the judgments of Binns-Ward J in this Division in Changing Tides 17 (Pty) Ltd NO v Erasmus &
another, and two similar cases 
ZA WCHC 175 (12 November 2009); and Wesbank v Martin  ZA WeRe 173 (13 August 2010)."
With reference to Bato Star Fishing (Pty) Ltd v Minister o/Environmental Affairs 2004 (4) SA 490 (CC) para
manner and form' to a debt counsellor to have the consumer declared over-indebted 8 The
debt counsellor is thereupon required to notify all credit providers listed in the application
as well as every registered credit bureau.9 The consumer and each credit provider must
thereafter 'participate in good faith in the review and in any negotiations designed to result
in responsible debt re-arrangement'.10 A debt counsellor must determine within 30 days
whether the consumer appears to be over-indebted.11
 However, if the debt counsellor concludes that the consumer is indeed over-indebted,
the procedure described in s 86(7)(c) must be followed. This means that the debt
counsellor 'may issue a proposal recommending that the magistrate's court make an order,
inter alia, that one or more of the consumer's debts be 're-arranged' in one or more of a
number of specified ways.12 (In the National Credit Regulator case, supra,13 these
provisions were interpreted to mean that the debt counsellor must refer the matter to the
magistrate'scourt,14 which referral takes the form of an ordinary application regulated by
Magistrates' Courts rule 55.)15
 Thus, s 86(7)(c) sets in motion a 'debt re-arrangement by the court', as opposed to a
'voluntary re-arrangement' in terms of s 86(8)(a).16 Unlike the position with regard to s
86(9), the Act as well as the regulations are silent as to the time period within which the
debt counsellor may (must) issue the requisite 'proposal' in terms of s 86(7)(c). However, if
one has regard to the context, then the answer to the question posed above becomes
clear. The process of 'debt review' requires of the debt counsellor to determine, within 30
business days, whether or not a consumer is over-indebted.17 If not, the debt counsellor
must advise the consumer of his or her right 'to approach the courf within a further 20
business days for the necessary order.18 This leads me the conclusion that he period of 60
business days referred to in s 86(10) was introduced with the abovementioned timeframe
in mind so as to allow the consumer and/or debt counsellor sufficient time to 'approach the
court' for the necessary relief in terms ofs 87.
 To sum up, applying a purposive approach to the relevant provisions, and having due
regard to the context in which they appear, I am satisfied that, on a proper interpretation of
subsec 86(10), the consumer is protected against enforcement proceedings by the credit
provider, not only once a re-arrangement order has been made by a magistrate in terms of
s 87, but also whileproceedings for such an order are pending. The corollary is that
delivery of a notice of termination by a credit provider in terms of s 86(10) is not competent
once any of the steps referred to in ss 86(7)(c), 86(8) or 86(9) have been taken. Obviously
this impediment will cease to exist, once a magistrate's court has dismissed the application
for re-arrangement or the application has been withdrawn or abandoned.
 In view of these conclusions, it follows that it is not necessary, for purposes of this
case, to consider the provisions of subsec 86(11),20 or to pronounce on the correctness or
6 Section 86(1)
Section 86(6)(a) read with Regulation 24(6)
National Credit Regulator v Nedbank Ltd & Others 2009 (6) SA 295 (GNP)
at 304B-C and 307A-B.
Ibid at 310C-D; 310H-3111A; 320G-H
Ibid at 301E-302A.
"cf Martin's case, supra, para 8. See also A Boraine & S Renke Some practical and comparative aspects of
the cancellation of instalment agreements in terms of the National Credit Act 34 of 2005 (Part 2),2008 De Jure
1 at p 4 n 147."
Section 86(11) provides
'If a credit provider who has given notice to terminate a review as contemplated in subsection (10) proceeds to
enforce that agreement in terms of Part C of Chapter 6, the Magistrate's Court hearing the matter may order
that the debt review resume on any conditions the court considers to be just in the circumstances.'
otherwise of the interpretation attached to those provisions in Dunga's case21 supra.'22
21. As already set out above, the application in terms of section 86(7)(c) was only brought
on 7 June 2010, that is well after the date upon which the plaintiff had given notice
terminating the debt review process, and well after the date upon which the summons was
served cancelling the credit agreement. This takes the present application well outside the
factual matrix of the Papier case.
22. In Mercedes Benz Financial Services South Africa (Pty) Limited v Dunqa (9222/2010)
 ZA WCHC 208 (20 September 2010) no application for a debt review was pending
before the Magistrate's Court at the time when the section 86(10) notice was given.
Blignault J found that the delay of more than seven months in filing the new application for
a debt review as not a reasonable way to prosecute a debt review. Accordingly, so
Blignault J found, the plaintiffs termination of the debt review in terms of section 86(10)
23. Accordingly I have to come to the same conclusion on the facts as presented to me in
the instant application as did Blignault J in Dunpa.
24. Blignault J, however, continued as follows at paragraph :
 That is, however, not the end of the road for defendant. Upon my
interpretation of section 86(11) defendant would be able to ask for an order
in the present proceedings that the debt review resumes. In summary
judgment proceedings, therefore, defendant would have been able to raise
the defence that he intends to ask h an order. In order to show that he has
a bona fide defence he would presumably have to allege that he has
reasonable prospects of obtaining a favourable order in the debt review
 It is apparent from defendant's opposing affidavit in the summary
Paragraphs 33 - 44 of the judgment.
Mercedes Benz Financial Services South Africa (Ptv) Limited v Dunqa (9222/2010)  ZA WCHC 208
(20 September 2010)
judgment proceedings that he did not have in mind a defence based on
section 86(11). In view of the fact that defendant's debt review application
had already been referred to the Magistrate's Court and that its withdrawal
thereof was perhaps not due a lack of any belief on his part in its prospects
of success, defendant may yet be able to set out a defence based on the
provisions of section 86(11)"
25. Section 86(11) provides as follows:
"If a credit provider who has given notice to terminate a review as
contemplated in subsection (10) proceeds to enforce that agreement
in terms of Part C of Chapter 6, the Magistrates' Court hearing the
matter may order that the debt review resume on any conditions the
court considers to be just in the circumstances."
26. It does appear from the papers that there is pending, as part of the section 86(7)(c)
application, an application in terms of section 86(11).
27. As set out above, there is pending an application in terms of section 86(11) before the
Magistrate's Court as part of the debt review application. The defendant contended that
that application be disposed of before that Court.
28. Mr Noor's affidavit concludes "I kindly request the Honourable Court to invoke its
powers in terms of section 86(11) of the National Credit Act to order that all credit providers
who have sent notices of termination of the debt review process, in terms of section 86(10),
to resume with the debt review on any conditions that the court considers to be just and
equitable in the circumstances". In manuscript is added "I received a termination notice
29. Before me the parties were ad idem that this Court had no jurisdiction in terms of
section 86(11). This common assumption, by virtue of what Blignault J had found in Dunqa,
[347 It is my view that a literal interpretation of section 86(11) is untenable.
There is, as stated above, a casus omissus here which could and should be
addressed by reading in the words "or High Court" immediately after
"Magistrate's Court." Such a reading in would give effect to the object of the
debt review provisions of the NCA and render section 86(11) sensible,
workable and linguistically appropriate."
was, accordingly, wrong.
30. Blignault J continued as follows at paragraphs  -
 I return then to the interpretation of section 86(10). The question to be
determined is whether section 86(11), on my construction thereof, provides
such meaningful protection for the consumer that it would justify the literal
interpretation of section 86(10).
 In my view it would not. Upon a literal interpretation of section 86(10)
the consumer may find that the debt review is arbitrarily terminated by the
credit provider. It would be in the consumer's interest that the debt review
resume as soon as possible but he will have to wait for the credit provider to
institute enforcement proceedings. The consumer will have to defend the
enforcement action in a litigatory environment. He will be saddled with an
onus to show at least that he has prospects of success in the debt review
application. The parties will be involved in time consuming, costly, and, for
many consumers, unaffordable litigation, the very event which the debt
review procedure seeks to avoid.
 It is my view therefore that the suggested protection afforded to the
consumer in terms of section 86( 11), is fraught with difficulties, costs and
delays which are contrary to the purpose of debt review
proceedings. It is not a factor that can justify a literal interpretation of section
 The solution suggested by me is the implication of a proviso into section
68(10) to the effect that a credit provider may only terminate a debt review if
he is acting in good faith. The implication of such a proviso would be
consistent with the purpose of the debt review provisions of the NCA and
avoid the unfortunate results of a literal interpretation. It would not
jeopardise the workability of section 86(10) and it would fit in with the
language of section 86 as a whole, in particular section 86(5) (b).
 For these reasons I conclude that it is necessary to imply a proviso into
section 86(10) to the effect that a credit provider may only terminate a debt
review if he is acting in good faith."
31. It seems to me that, based on Dung a, the defendant should have raised a defence in
terms of section 86(11) before this Court. She has done so, but asked for that hearing to
take place before the magistrate. For the very reasons set out by Blignault J that would be
undesirable. Dung a, however, concerned both a claim for the vehicle, as well as the
payment of the balance. In casu the plaintiff only seeks delivery of the vehicle.
32. Claims B and C, pertaining to the payment of money, should, in applying the principles
set out in Dunga, accordingly be refused, as the defendant, in my view, has some
prospects of success. The same, however, does not apply to the claim for delivery of the
33. In Matimba Management & Labour CC and Others v SA Taxi Securitisation (Pty) Ltd
and Another, Case No. 36490/2009, Blieden J, sitting in the South Gauteng High Court,
had to consider an application for rescission of judgment. In that matter, as in the matter
before me, it was not in dispute that the defendant (the applicant for rescission) had been
in default, and that the plaintiff (the respondent in the application for rescission) had
cancelled the agreement and claimed the return of the vehicle forming the subject-matter
thereof. It was also not in dispute that a notice, as required, was given in terms of section
86(10) of the National Credit Act. As in the case before me, a restructuring "proposal" was
made, but not accepted. No further steps were taken by the debt counsellor or the
defendant in the debt review process. Thereafter the plaintiff delivered its notice in terms of
section 86(10) terminating the debt review. It was only on 11 March 2009, after the
summons had been served on 24 February 2009, that the applicant had made an
application for an order contemplated in terms of section 87 of the National Credit Act. The
plaintiff contended that it had already cancelled the debt review process in terms of section
34. In the matter before Blieden J it was the plaintiffs case, accordingly, that at the time of
the institution of the action, there was not in existence an application in terms of section
86(7)(c) of the National Credit Act which precluded the action. As in the case before me,
the defendant sought the revival of the debt review process as contemplated in section
35. On behalf of the defendant, it was submitted that reliance on the provisions
of section 86(11) ignores the significant fact that the agreement of lease hadbeen validly
terminated by the defendant. Mr Justice Blieden agreed with the submission that:
"There is no provision in the NCA which entitles a Magistrates' Court (or,
indeed, any court) to reinstate an agreement that has been validly
terminated. The only remedy available to the applicant in those
circumstances is to invoke the provisions of section 86(11) in order to obtain
a revival of the debt process in relation to whatever amounts may remain
outstanding by him after return of the vehicle to the respondent and after the
respondent has utilised the provisions of section 127 of the NCA which
deals with the surrender of goods by the consumer, being the present
applicant. In such case the applicant would be entitled to be credited with
the price received on the sale of the goods by the respondent which is in
excess of the debt at that time outstanding. '
36. Blieden J continued as follows at paragraph 24:
"In my view counsel for the respondent is correct in his submission that
once the debt review process has terminated in the circumstances already
referred to, the only remedy remaining available to a consumer such as the
At pages 11 - 12 of the unreported judgment.
applicant is that contemplated in section 86(11) of the NCA which allows for
the resumption of the debt review process by the Magistrates' Court hearing
the matter on such terms and conditions as that court considers to be just in
the circumstances. It is plain that the section contemplates an application
for that relief."
37. There was no suggestion in the opposing affidavit, or in the argument
advanced by Mr Joubert, who appeared for the defendant, that the debt
counsellor had not complied with his duties and that there was a basis uponwhich to apply
the discretion as did Binns-Ward J in Changing Tides 17 (Pty) Ltd N.O. v Erasmus and
similar cases24 As Davis J remarked in Nitro Securitisation 1 (Pty) Ltd v Christians25 the
matter before him had important distinctions with the Changing Tides case, namely, first,
that the debt was in respect of a motor vehicle, and section 26 of the Constitution therefore
did not apply; second, there is an absence of any specific details concerning the lack of
bona fides on the part of the credit provider. Davis J, accordingly, found that there was no
evidential basis upon which a court could or should exercise its discretion along the lines
suggested by Binns-Ward J in the Changing Tides judgment (at page 9 of the unreported
38. In SA Taxi Securitisation (Pty) Ltd v Mishack and similar cases, Case No. 51330/09,
South Gauteng High Court, Levenberg AJ considered the purpose of the Act with regard to
its preamble and the express provisions of section 3 of the Act. He points out that a major
purpose of the Act is to assist over-indebted consumers to pay off their indebtedness. And
stressed that all of these objectives are directed at the consumer's indebtedness, that is,
the claim for the outstanding deficiency after realisation of the lender's securities ("the
deficiency claim"). The intention of the Act is not to unfairly deprive lenders of their security
39. Levenberg AJ concluded that where a consumer is over-indebted, the credit providers'
A judgment delivered on 12 November 2009 in the Western Cape High Court.
Case No. 20768/09, Western Cape High Court, 14 December 2009.
prospects of recovering from the consumer are often effectively limited to the recovery of
the creditor's security. "If lenders are unable to recover deteriorating security, such as
motor cars, promptly the consequences would be economically disastrous for asset base
lenders, especially those lending to the less affluent" (at paragraph ).
40. In the premises I am satisfied that a proper case has been made out for the grant of
summary judgment and I grant an order as follows:
1. The defendant is directed to forthwith return to the plaintiff a 2007
Volkswagen City Rhythm 1.4 motor vehicle with chassis number
AAVZZZ17ZU024913, and engine number BSC223343, failing which the
Sheriff is authorised to attach the vehicle wherever he may find same and
hand the vehicle to the plaintiff.
2. In respect of prayers B and C of the particulars of claim summary judgment is
refused and the defendant is granted leave to defend.
3. The respondent is to pay the costs of the application.
Sven Oliver, AJ