FFS Finance t/a Ford Credit v Van Der Merwe (21308/2022) [2025] ZAWCHC 230 (30 May 2025)

IN
THE HIGH COURT OF SOUTH AFRICA

(WESTERN
CAPE DIVISION,  CAPE TOWN)

[2]
A section 129
notice in terms of the National Credit Act was delivered, followed in
due course by personal service of the summons, on the defendant on 16
January 2023.  A Notice of Intention
to Defend was thereafter
filed on 06 February 2024.  The defendant was barred from filing
a plea. According to
the Declaration filed on 12 February 2024, the plaintiff, a
registered commercial bank, entered into a written instalment
sale
agreement with the defendant for the sale and purchase of a 2015 Ford
Ranger 4 x 4 motor vehicle.   The plaintiff
alleged that
the defendant failed to make payments as agreed, hence the plaintiff
cancelled, alternatively, cancels the agreement
and alleged it is
entitled to the immediate return of the goods. It
was alleged that the arrears as of 09 December 2022, amounted to
R112 888,19 which also is the outstanding balance. 
The
plaintiff alleged that it had complied with the provisions of the
National Credit Act and hence sought judgment confirming the
cancellation of the agreement and return of the 2015 Ford Ranger 4 x
4 motor vehicle, as well
as costs on the attorney and client scale. 

[3]
The defendant was represented, and the plaintiff’s Declaration
was served on his attorneys electronically on 13 February
2024. 
On 15 March 2024,  the plaintiff’s attorneys, not having
received a plea, despatched a Notice of Bar, electronically
to the
Defendant’s attorneys.  The defendant’s attorneys
per return email, acknowledged receipt of the Notice
of Bar. 
The plaintiff filed its Notice in terms of Rule 41A, dated 09
December 2022.  In this Notice it is recorded that the
defendant was invited to a whole range of alternative dispute
resolution options
when it delivered its section 129 notice in terms
of the NCA to the defendant, prior to the institution of legal
proceedings against the defendant.  The notice
records further
that there was no response forthcoming from the defendant.  This
notice was directed to the defendant himself,
and the defendant was
notified as follows: “The plaintiff has cancelled the
agreement with the defendant as a result of the defendant’s
failure to make payments as alleged
in the summons and delivery of
the asset described in the instalment sale agreement cannot be an
aspect for referral to mediation
and constitutes urgent relief…” 

[4]
In bringing this application, the plaintiff relied on the affidavits
deposed to by Kyle Vilakazi (Vilakazi) on 22 July 2024. 
He
averred that he is a manager employed by the plaintiff in Auckland
Park who has personal knowledge of this matter.  He
stated the
following about the arrears: “The defendant contacted the
plaintiff to make the necessary payment arrangement to bring the
arrears up to date. 
The defendant was accordingly informed that
his last payment was in August 2022 and that he is required
to pay 50% of the arrear amount immediately and the remaining arrear
amount over a period of three months.  The
defendant advised that he is unable to meet the plaintiff’s
requirements and therefore an arrangement was not concluded.”

[5]
The NCA regulates credit agreements. 
The various purposes of the NCA are
set out, in section 3, in some detail.  Section 3(e) aimed to
address and correct the imbalances that existed in the negotiating
power between consumers and credit providers. 
The
NCA aimed to promote social and economic welfare of South Africans by
fostering a fair, transparent, responsible, and accessible
credit
market. It encouraged responsible borrowing and lending, protected
consumers from unfair practices, provided for improved
credit
information and regulation, and addressed over-indebtedness. The Act
also promoted informed consumer choices through education
and
disclosure and established mechanisms for dispute resolution in
credit matters.  In section 3(e), the NCA expressed its

intention to protect consumers from
unfair conduct. 

[6]
Section 129 (1) to (3) of the NCA read:

“ Required
procedures before debt enforcement

129
(1) If
the consumer is in default under a credit agreement, the credit
provider-

   (a)   may
draw the default to the notice of the consumer in writing and propose
that the consumer refer the credit agreement
to a debt counsellor,
alternative dispute resolution agent, consumer court or ombud with
jurisdiction, with the intent that the
parties resolve any dispute
under the agreement or develop and agree on a plan to bring the
payments under the agreement up to
date; and

[NB: Para. (a) has
been substituted by s. 20 (a) of
the National Credit Amendment Act
7 of 2019, a provision which will be put into operation by
proclamation. See PENDLEX.]

   (b)   subject
to section 130 (2), may not commence any legal proceedings to enforce
the agreement before-

     (i)   first
providing notice to the consumer, as contemplated in paragraph (a),
or in section 86 (10), as the case may be; and

    (ii)   meeting
any further requirements set out in section 130.

(2)
Subsection (1) does not apply to a credit agreement that is subject
to a debt restructuring order, or to proceedings in a court
that
could result in such an order.

(3) Subject
to subsection (4), a consumer may at any time before the credit
provider has cancelled the agreement, remedy a default
in such credit
agreement by paying to the credit provider all amounts that are
overdue, together with the credit provider’s prescribed
default
administration charges and reasonable costs of enforcing the
agreement up to the time the default was remedied.”

[7]
In the absence of an indication of abuse to alert the court to a more
vigilant enquiry, an applicant would ordinarily be entitled
to
judgment in the ordinary course where a creditor sought to enforce an
agreement [Nedbank v Fraser 2011 (4) SA 363 GSJ at para 27].
One of the philosophical shifts in the jurisprudence of credit
agreements, ushered in by the NCA, is to research
the existence of
reasonable alternatives to the satisfaction of the debt without
resort to litigation. In Nedbank at para 43 the court said:

“The
existence of these reasonable alternatives will be determined with
regard being had to attempts by the debtor to pay off the
debt and
the debtor’s resources”

At
para 44, the court opined that a determination of these
considerations was made much easier by the ability of the debtor to
disclose resources, employment status and any other factor which
might militate against an order being granted in favour of a
creditor.
In Ranamane v SB Guarantee Company (Rf) (Pty) Ltd
(5285321) 2023 ZAGPJHC 592 (29 May 2023) the creditor had
required information from the debtor which included proof of income;
reasons
for not maintaining monthly payments and proposal; breakdown
of monthly expenses; list of all debt, monthly repayment amount and

outstanding balance; 3 month bank statements, municipality utility
bill and if in arrears proof of payment arrangements; and in
the
alternative the debtor’s attention was brought to the
creditor’s programmes to assist debtors in distress. This
was a
movement of a creditor in the right direction in the spirt of the
NCA, for it to make a fair assessment of the proposal.

[8]
In the matter before me, the applicant’s attitude was
preference to only one payment arrangement option, which was its
own
proposal. On the applicant’s own version, the respondent
“contacted the plaintiff to make the necessary payment
arrangements to bring the arrears to date”. This is not the
conduct of a respondent who has a hostile mindset towards his
obligations in terms of the contract. The conduct
suggests an
appreciation of the problem and a desire to resolve it. The
“necessary payment arrangements to bring the arrears to
date” proposed to the applicant were not disclosed to the
court in this matter. The applicant elected to make the proposal a
mystery in
its approach to the court for relief. Whilst the applicant
followed the attitude in Ranamane and sought a lump-sum
payment of 50% of the arrears, it does not follow that such option is
always reasonable and fair to a debtor
who is known to have suffered
financial distress in the recent past. Such demand appear to have the
tendency to negate a genuine
attempt made to reach a resolution of
the indebtedness without resorting to litigation, as envisaged by the
NCA. The submission
of a debtor’s comprehensive financial
documentation acknowledged that some debtors may not be able to meet
strict lump-sum
requirements but may require payment arrangements
plans tailored to provide a solution to meet their individualised
capacity. In
my view, this promoted equity, and not the punitive
approach of ‘my way as a creditor or we are having a meeting
with a Judge’.

[9]
I am circumspect in confirming a cancellation of an agreement where
the credit provider did not attempt to negotiate with the
debtor in
the spirit of our jurisprudence. The statement by Vilakazi that “the
defendant advised that he is unable to meet the plaintiff’s
requirements and therefore an arrangement was not concluded”,
in my view, reflected the power imbalance of the parties. There was
no equality of arms. The approach of Vilakazi, to wit,
that the only
way towards a payment arrangement was for the debtor to meet the
plaintiff’s requirements of 50% immediate
payment and the
remainder of the arrears within three months, suggests coercion and
not collaboration, in the discussions on the
payment arrangements to
bring the arrears up to date. The failure to indicate the proposal by
the debtor, his financial health,
and why the proposal did not make
business and/or economic sense amounts to simply a pursuit of a
dangerous policy to the limits
of threatening debtor fairness and
protection and is an unfair practice in debt collection. It excludes
meaningful participation
by the debtor in the payment arrangement.
Vilakazi’s approach, when assessed for fairness, transparency,
accessibility and
debtor protection, fell short of what was required.

[10]
A creditor should engage meaningfully with a debtor. A section
129(1)(a) notice of the NCA is not a creditor’s ritual.
It
should never be equated to an empty box for a creditor to tick. It
confers on a creditor certain responsibilities which are

prerequisites central to the decision of the creditor to institute
litigation proceedings. The response of a debtor to a section
129 is
not simply a noisy irritation to be endured by a creditor, which a
creditor can simply ‘blue tick’. Vilakazi
was wrong to
simply read and ignore the debtor’s proposal. The applicant was
wrong to expect the courts to accept their ignorance
of the proposal,
without the courts even knowing what that proposal was. The debtor,
in response to the section 129 through a proposal,
expected or
requested a consideration thereof. A debtor’s proposal is an
essential part of the prerequisite to institute
legal proceedings.

[11]
A consideration of the proposal would mean that the creditor
acknowledged and saw the debtor as a party that could contribute
to
the resolution of the challenge faced. A genuine consideration of the
proposal means the creditor appraised the relationship
and the esteem
of the debtor, and did not see the debtor as a commodity with fungi,
to be dispensed with at will. The debtor and
their response may no
longer be important for the creditor who may have developed an
impatient and restless behaviour, but that
did not mean they were not
important for the courts. Debtors must still be seen and heard by the
courts, despite the views of creditors
on them.  This case
demonstrated the need for a creditor not only to provide a
certificate of indebtedness, but also a compliance
affidavit,
especially dealing with the path of travel after the section
129(1)(a) notice was served, where it was reacted to by
a debtor who
accepts responsibility and needs to correct the failures, even in an
application for a default judgment. In this matter,
except for an
unexplained condescending attitude towards the debtor’s
proposal, there is no explanation as to why the creditor
did not deem
the debtor’s proposal worthy enough for a payment plan
arrangement. For these reasons I make the order.

(a)
The application is dismissed on the papers.

(b)
No cost order is made.

DM THULARE

JUDGE
OF THE HIGH COURT

Counsel
for the Applicants:                      

Adv Lauren Bosman

Attorneys
for the Applicants:                    

Sandenberg Nel Haggard

Bellville

Attorneys
for the Respondent:                
In
Person