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[2011] ZAGPJHC 55
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Standard Bank of South Africa Ltd v Hand (34066/10) [2011] ZAGPJHC 55; 2012 (3) SA 319 (GSJ) (15 June 2011)
REPORTABLE
SOUTH GAUTENG HIGH COURT, JOHANNESBURG
CASE NO
:
34066/10
DATE:15/06/2011
In the matter between:
THE
STANDARD BANK OF SOUTH AFRICA LTD
...........................
Applicant
and
ELSJE
HAND
.........................................................................................
Respondent
______________________________________________________________
J U D G M E N T
______________________________________________________________
HALGRYN, AJ
:
[1] The Applicant is Standard
Bank of South Africa Ltd. It is cited as a public company and credit
provider duly registered and
incorporated with limited liability in
accordance with the laws of the Republic of South Africa and in terms
of the
National Credit Act 34 of 2005
trading,
inter
alia
, as bankers and
financiers in terms of the provisions of Act 94 of 1990 (as amended).
[2] The Respondent is one Elsje
Hand, evidently a client of the Applicant, who contracted with the
Applicant in terms of a written
“Vehicle
and asset finance FinRent consumer agreement
”,
which I will deal with hereunder.
[3] The relief which the
Applicant seeks herein reads as follows:
“
Confirming
the cancellation of the agreement entered into between the Applicant
and the Respondent and attached to the Applicant’s
founding
affidavit as Annexure “A”.
The Sheriff of the above
Honourable Court or his lawful deputy is authorised, directed and
empowered to attach, seize and hand
over to the Applicant the
vehicle, being 2007 Dihatsu Sirion 1.3 litre, engine number 1401402;
chassis number JDAM301S001019223
(“the vehicle”).
Costs of suit.
The Applicant is given leave
to approach the above Honourable Court on the same papers duly
supplemented for payment on the difference
between the balance
outstanding and the market value of the vehicle in the event of
there being a shortfall after the vehicle
has been repossessed and
sold or released and there being a balance outstanding by the
Respondent to the Applicant.”
[4] The Applicant’s claim
is founded upon the aforesaid written agreement, a copy of which is
attached to the founding affidavit
marked “A”. In
paragraph 6 of the founding affidavit the Applicant set out to allege
what the material terms of the
agreement are. It did so without at
all indicating which clauses of the agreement it is referring to,
making for very difficult
reading in order to compare the quoted
portions with the attached copy of the agreement, which in addition,
was illegible to the
extent that I was constrained to request a
readable copy,
in lieu
of which, I was going to strike the matter from the roll.
[5] It is improper for a
litigant in motion proceedings, to simply attach a (lengthy) document
to an affidavit and then proceed
to quote therefrom without any
indication as to which paragraphs are indeed being quoted and to
expect of a Judge – in preparation
for the matter – to
struggle through what is often a quagmire of fine print, to check if
the quotes are in fact correct.
[6] It turns out that had I not
taken the trouble to do this exercise, I may have granted relief
herein, to which the Applicant
would not have been entitled.
[7] The particular wording of
the attached agreement – so it would appear – is not
unique to the Applicant. I have
personally witnessed the exact same
wording used by another bank in a separate matter. The specific
wording which I propose to
analyse and pronounce upon has also been
the cause of concern for some of the judges of this Division. Mr
Aucamp appearing on behalf
of the Applicant and Mr Van der Merwe on
behalf of the Respondent, assured me that there are many pending
applications in this
Division, concerning the same wording and
requested me to – notwithstanding their initial agreement to
postpone the matter
– write this Judgment in order to create
certainty.
[8] The defences raised herein
are many but I deal with one issue only i.e.: - Did the Applicant
prove that it cancelled the agreement?
[9] In paragraph 6.2 of the
founding affidavit the Applicant alleges:
“
Should
the Respondent commit any breach of the agreement, then the Applicant
would be entitled without prejudice to any other rights
it may have
against the Respondent to:
cancel the agreement, take
repossession of the vehicle, retain all payments already made in
terms of the agreement by the
respondent and claim as liquidated
damages, payment of the difference between the balance outstanding
and the market value
of the vehicle, which amount would be due and
payable forthwith;
”.
[10] This purports to be a
quotation of clause 13.2.2 of the attached agreement, but the
Applicant misquoted it - by omitting to
allege the words “
…
after due demand …
”
before the words “
…
cancel the agreement …
”.
This omission is material and impacts on the Applicant’s
entire cause of action herein. Incidentally the same omission
occurred in paragraph 6.2.1, where clause 13.2.1 of the agreement was
purportedly quoted. Nothing turns on this for the purposes
of this
Judgment, save to record that the incorrect quotations are
inexcusable.
[11] It is trite that a party
wishing to rely on the cancellation of an agreement – because
of its breach – must allege
and prove:-
11.1. the breach of the
agreement;
11.2. that the right to
cancellation has occurred because the breach was material or in the
event that the agreement contains a
cancellation clause, that its
provisions have been complied with; and
11.3. that clear and unequivocal
notice of rescission was conveyed to the other party, unless the
agreement dispenses with such
notice.
1
[12] The learned author took
care to emphasise that:-
“
The
act of cancellation must be clear and unambiguous.
”
2
[13] The relevant portions of
clauses 13.2 and 13.2.2 of the agreement under consideration provide
as follows:-
“
Upon
an event of default … Lessor may … after due demand,
cancel this agreement, obtain possession of the vehicle
…
”
[14] Given its normal
grammatical meaning, the intention of the parties in this clause is
that upon default the Applicant may cancel
the agreement “
…
after due demand …
”.
Simply put, the parties intended a logical flow of things i.e.
breach – demand – cancellation – judicial
process.
[15] This seems simple enough
until one is confronted with a “
definition
”
of “
due demand
”,
further on in clause 13.2.2, which reads as follows:-
“
…
‘due demand’ shall mean ‘immediately on demand’
…
”
[16] If I were to read
“
immediately on
demand
” into
“
due demand
”
the absurd result is this:-
“
Upon
an event of default … Lessor may … after ‘immediately
on demand’, cancel this agreement …
”
[17] Even if I were wrong by
literally reading “
immediately
on demand
” into
“
due demand
”
the result of this interpretation would still be this:-
“
Upon
an event of default … Lessor may … immediately on
demand cancel the agreement…”
[18] This would render the
requirement of prior
“due
demand”
superfluous. This could not have been what the parties intended.
Upon a proper construction of this clause, the parties - in
my view
- intended that in the event of the Respondent’s default, the
Applicant would give “
due
demand
” and only
thereafter could the Applicant have earned the right to cancel, by
giving clear, unequivocal and unambiguous notice
thereof to the
Respondent.
[19] By expressly requiring “
due
demand
” before
cancellation, the parties intended that effect be given to it.
Christie states:-
“
…
if the contract expressly requires demand or notice, the giving of
which then becomes part of the creditor’s cause of action.
”
3
[20] I pause to deal briefly
with demand, as it is not defined in the agreement, as far as I could
ascertain. In their still
authoritative work De Wet and Yates state
the following:-
“
Aanmaning
is ‘n kennisgewing deur die skuldeiser aan die skuldenaar gerig
waarin eersgenoemde laasgenoemde in kennis stel
dat hy voor of op ‘n
bepaalde dag moet voldoen.
”
4
[21] In other words by expressly
providing for “
due
demand
” in the
agreement, the parties intended:-
21.1. a notice by the Applicant
to the Respondent;
21.2. in terms of which the
Applicant would notify the Respondent to perform and/or to rectify
the breach;
before or on a specific date.
[22] It is so that demand can be
effected by way of summons (
interpellatio
iudicialis
) or
“
buitegeregtelik
”
(
interpellatio extra
iudicialis
), i.e. by
way of notice other than judicial procedure.
5
If the Applicant intended this application to constitute
interpellatio
iudicialis
, it did not
allege that and even if it could be contended that nothing needed to
be stated in this respect, the Applicant could
not – on my
interpretation of clause 13.2.2 – have:-
made “
due
demand
”; and
simultaneously –
give clear, unequivocal and unambiguous notice of cancellation;
singularly - by way of these
judicial proceedings.
[23] The parties clearly
intended that due demand and clear, unequivocal and unambiguous
notice of cancellation should occur prior
to the institution of
judicial proceedings; or at the very least, that “
due
demand
” ought to
have occurred prior to the institution of judicial proceedings and if
the Applicant thereafter intended this application
to constitute
“
clear,
unequivocal and unambiguous notice of cancellation
”,
it ought to have alleged that.
[24] I now turn to deal with
the manner in which the Applicant sought to prove the cancellation in
its founding affidavit. After
misquoting clause 13.2.2 of the
agreement – as I have pointed out hereinabove – the
Applicant states the following
in paragraph 9 of the founding
affidavit:
“
The
Applicant in terms of the agreement has elected to cancel the
agreement, take repossession of the vehicle and claim damages.
The
Applicant seeks confirmation of the cancellation of the agreement and
the return of the vehicle in the present application.
”
[22] The Applicant goes no
further in the remainder of its founding affidavit and the high
watermark of what the Applicant states
in respect of the cancellation
of the agreement is thus that it “
…
has elected to cancel the agreement …
”.
It does not allege that it had – as a fact – cancelled
the agreement, let alone how it did so or how the cancellation
notice
was conveyed to the Respondent in clear, unequivocal and unambiguous
terms. The Applicant also does not state that it cancels
the
agreement by means and in terms of this application and even if this
was its intention, it does not allege that the cancellation
was
preceded by “
due
demand
”.
[23] It follows that the
Applicant failed to allege and prove that it had earned the right to
cancel the agreement and that it
had - as a fact - lawfully cancelled
the agreement. In the result the application has to fail.
In the premises I make the following order:
The application is dismissed with costs.
_____________________________________
L P HALGRYN
ACTING JUDGE OF THE SOUTH GAUTENG
HIGH COURT, JOHANNESBURG
1
LTC Harms;
Amler’s
Precedence on Pleadings
;
7
th
edition; Lexis Nexis; Durban; at page 115.
2
Supra
;
at page 115. In doing so Harms refers to the following
authorities:-
Swart v
Vosloo
[1965] 1 All
SA 264
(A),
1965 (1) SA 100
(A);
Miller
& Miller v DickInson
[1971] 3 All SA 6O3
(A),
1971 (3) SA 581
(A);
Datacolor
International (Pty) Ltd v Intamarket (Pty) Ltd
[2000] ZASCA 82
;
[2001]
1 All SA 581
(A),
2001 (2) SA 284
(SCA) para.29;
Nedcor
Bank Ltd t/a Nedbank v Mooipan Voer & Graanverspreiders CC
[2002] 3 All SA 477
(T).
3
R H
Christie;
The
Law of Contract in South Africa
;
5
th
edition; Lexis Nexis; Butterworths, at page 503. See also
Henriques
v Lopez
1978 (3) SA 356
(W) at 358C.
4
Kontrakreg en
Handelsreg;
4
th
edition, Butterworths, at page 145.
5
De Wet and Yates
;
supra
,
at page 145.