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[2014] ZAGPJHC 197
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Papageorgio v Wainbergas G M T/A Wainbergas Financial Services and Others; InRe: Wainbergas T/A Wainbergas Financial services vQueste Business Enterprises CC and Another; InRe: Wainbergas Financial Services v LDV Trading CC and Another; InRe: Wainbergas Financial Services v Veloza Tercio PS (2010/6708, 2010/6710, 2010/6711) [2014] ZAGPJHC 197 (5 September 2014)
REPUBLIC OF SOUTH AFRICA
SOUTH GAUTENG LOCAL DIVISION,
JOHANNESBURG
CASE NOs: 2010/6708, 2010/6710 and 2010/6711
DATE: 05 SEPTEMBER 2014
In the matter between:
PAPAGEORGIO, R
G
.......................................................
Applicant
And
WAINBERGAS, G M t/a WAINBERGAS
FINANCIAL
SERVICES
.........................................
First
Respondent
VELOZA T P
S
...................................................
Second
Respondent
LDV TRADING
CC
...............................................
Third
respondent
In re: CASE No: 2010/6708
WAINBERGAS, MICHAEL GARY t/a WAINBERGAS
FINANCIAL
SERVICES
......................................................
Plaintiff
And
QUESTE BUSINESS ENTERPRISES CC
.................
First
Defendant
PAPAGEORGIO, R
G
.........................................
Second
Defendant
And
In re: CASE No: 2010/6710
WAINBERGAS, G M t/a WAINBERGAS
FINANCIAL
SERVICES
...................................................
Plaintiff
And
LDV TRADING
CC
...............................................
First
Defendant
PAPAGEORGIO, R
G
........................................
Second
Defendant
And
In re: CASE No: 2010/6711
WAINBERGAS, MICHAEL GARY t/a WAINBERGAS
FINANCIAL
SERVICES
.................................................
Plaintiff
And
VELOZA TERCIO P
S
...................................................
Defendant
JUDGMENT
OPPERMAN AJ
Introduction
[1] This is an application for the rescission of
provisional sentence judgments granted by Vally J on 5 November 2010
under case
numbers 2010/6708, 2010/6710 and 2011/6711. The applicant
contends for rescission of those judgments granted in 2010 on the
basis
that the applicant discovered in March 2013 that the first
respondent was not registered as a "Credit Provider" as
required
in terms of section 40 of the National Credit Act, No. 34 of
2005 (hereinafter referred to as "the NCA").
Factual matrix
[2] During or about March 2013, the first respondent
served an application on the applicant in terms whereof he sought to
have applicant's
home declared specially executable for purposes of
satisfying the provisional sentence judgment which had been granted
against
him and which at that stage, had become final.
[3] After the application to have the applicant's
home declared specially executable had been served on him, he
discussed the matter
with a mutual friend who disclosed to the
applicant that the first respondent had never been registered as a
"Credit Provider"
as required in terms of section 40 of the
NCA.
[4] Five months later the applicant brought the
application for rescission in which he contended that the
transactions forming the
subject matter of the provisional sentence
judgments were unlawful and unenforceable as contemplated in sections
89(5)(a) and 89(5)(b)
of the NCA and that the first respondent is
required to refund all monies paid by him to the first respondent in
respect of the
transactions pertaining to the cheques upon which the
provisional sentence was granted.
[5] The cheques upon which the first respondent sued
were post-dated cheques issued by the second respondent and the third
respondent
in respect of goods purchased on consignment from the
applicant. Certain of such cheques were discounted by the applicant
with
the first respondent.
[6] It is common cause that the applicant did not put
up security for the judgment debt and did not enter into the
principal case,
that the judgments had become final and that the
appeal procedure had not been pursued.
[7] Adv Nowitz, representing the applicant, also
represented the applicant in the hearing before Vally J. The
following appears
from the transcript of the argument before Vally
J.:
'Mr Nowitz: … Firstly let me hand to your
lordship a copy of relevant extracts from the
National Credit Act.
What
I have done M'lord is I have put an asterisk next to each of the
paragraphs in the
National Credit Act upon
which we rely.'
Procedure adopted by the applicant
[8] The respondent's counsel argued that the
applicant has adopted the incorrect procedure in approaching the
court by way of a
rescission application. It was argued that
rescission applications are generally only utilised where an order
was granted by default
and not where the applicant was properly
represented in court and where the matter had been argued and
ventilated before a judge.
[9] Much reliance was placed on the judgment of
Thirion J in Port Edward Town Board v Kay and Another
1994 (1) SA 690
(D&CLD) at 705, where the following was held:
'In Schierhout v Union Government
1927 AD 94
at 102,
De Villiers JA was prepared to assume in favour of the applicant for
rescission that the Court 'would grant relief where
new documents
came to light after the trial which would have entitled him to
judgment had they been produced, provided he can show
weighty reasons
by which he was prevented from producing such documents at the
trial'.
It seems clear that in the case of instrumentum
noviter repertum the Court would only grant restitution if the
document had been
discovered by the unsuccessful litigant after
judgment only. There seems no reason why the position should be any
different in
the case of a fraud committed in a manner other than by
falsifying documents.
In Schierhout's case the Court stressed the fact that
a final judgment of a court of law, being res judicata, should not be
lightly
set aside. As it was put by Steyn JA in Making's case at 349:
'Waar die moontlikhede van appèl en hersiening
langs gewone weg uitgeput of onbenut gelaat is, word die gewysde, hoe
aanvegbaar
ook, die judisieel vasgelegde reg tussen die partye
(Leyser Meditationes 7.470 op 300 en 301) en is dit in die openbare
belang
dat daaraan die gesag toegeken word wat nakoming daarvan
sonder weerspraak sal verseker en dat inbreuk op die afdoendheid
daarvan
deur 'n buitengewone prosedure van restitusie, binne strenge
perke gehou sal word.'
In a somewhat different context it was said by
Wessels CJ in Colman v Dunbar
1933 AD 141
at 161:
'It is essential that there should be finality to a
trial and therefore if a suitor elects to stand by the evidence which
he adduces,
he should not be allowed to adduce further evidence
except in exceptional circumstances.'
[10] The first respondent argued that it is incumbent
upon applicant to show weighty reasons which prevented him from
arguing the
point now sought to be relied upon at the hearing of the
matter before Vally J. The first respondent argues that the
applicant
has clothed what is in truth an appeal, with a rescission
‘coat’ under circumstances where the applicant had failed
to utilise the remedies which where available to him at the time,
i.e. to enter the principal case or to take the final judgment
on
appeal. Having failed to do this, first respondent points out that
the applicant then sought to rescind the judgment under
circumstances
where, even after obtaining knowledge of the existence of the fact,
waited a further five months, before launching
the application
without explaining such delay at all.
Principles applicable to rescission under the common
law.
[11] In De Wet and Others v Western Bank Ltd
1977 (4)
SA 770
(T), Melamet J (with whom Boshoff J and Curlewis J concurred)
held at 776F as follows:
'Before a judgment would be set aside under the
common law, an applicant would have to establish a ground on which
restitutio in
integrum would be granted by our law such as fraud or
justus error in certain circumstances. Childerley Estate Stores v.
Standard
Bank of SA Ltd..
1924 OPD 163
at pp. 166 - 168: Seme v
Incorporated Law Society,
1933 (1) T.P.D. 213
at p. 215: Makings v
Makings,
1958 (1) SA 338
(AD) at p. 343: Athanassiou v Schultz,
1956
(4) SA 357
(W). It would appear that the procedure to set aside a
judgment on grounds justifying restitutio in integrum is by way of
action.
The position as set out above recognises the finality
of a judgment once delivered or issued (vide, Estate Garlick v
Commissioner
for Inland Revenue,
1934 AD 499
at pp. 502 - 503).
Under the common law a judgment can be altered or set
aside only under limited circumstances and the additional relief
extended
by the Rules of Court is intended to modify such rigid
provisions but within the confines of such Rules. The Court is
empowered
to grant relief in certain additional circumscribed
circumstances.' (The judgment was confirmed on appeal, De Wet v West
Bank
1979 (2) 1031 (A)).
[12] It should of course be borne in mind that the
judgment under consideration was not granted by default. The
applicant was duly
represented and in addition, the NCA was debated
and argument was advanced that it had application, albeit not on the
point now
raised. In terms of the common law, the rescission of
final and definitive judgments can only occur on limited grounds. In
De
Wet and Others v Western Bank Ltd
1979 (2) SA 1031
(AD), Trengove
AJA comments as follows at 1041C:
'The Courts of Holland, as I have mentioned, appear
to have had a relatively wide discretion in regard to the rescission
of default
judgments, and a distinction seems to have been drawn
between the rescission of default judgments, which had been granted
without
going into the merits of the dispute between the parties, and
the rescission of final and definitive judgments, whether by default
or not, after evidence had been adduced on the merits of the dispute.
(Cf Athanassiou v Schultz
1956 (4) SA 357
(W) at 360G and
Verkouteren v Savage
1918 AD 143
at 144). In the former instance the
Court enjoyed relatively wide powers of rescission, whereas in the
latter event the Court was,
generally speaking, regarded as being
functus officio, and judgments could only be set aside on the limited
grounds mentioned in
the Childerley case.'
[13] At 1040 Trengove AJA held as follows:
'In the Childerley case, DE VILLIERS JP was primarily
concerned with the Court's jurisdiction to set aside a final and
definitive
judgment, on the merits of the dispute between the
parties, after evidence had been led. The issue in that case was
whether the
Court was empowered to set aside a final judgment on the
ground that it was subsequently discovered that the judgment had been
obtained as a result of fraudulent and false statements made by a
witness during the course of the trial. Referring to a number
of
authorities, which had been quoted in support of the proposition that
judgments could be set aside, under Roman-Dutch law, on
the ground of
justus error, DE VILLIERS JP remarked at 166:
"It is evident that these cases and also the
other cases of similar nature mentioned by Voet in (4.6.10, 11) are
rather instances
of purging default or granting extensions of time
such as are still recognized by our modern Rules of Court in cases in
which judgments
are entered for default and not on the merits of the
dispute"(my italics).
Then, after discussing the exceptions to the rule
that a judgment could not be set aside on the ground of the discovery
of new documents
after judgment, the learned Judge said at 168:
"We arrive at this position then that so far as
justus error is concerned default judgments may in some cases be set
aside
under the Roman-Dutch law on the ground of justus error, and
that judgments, whether by default or not, may be set aside in the
seven exceptional cases above-mentioned on the ground of instrumentum
noviter repertum, though evidently some of those cases are
nowadays
obsolete and inapplicable; there are, further, the exceptional cases
of setting aside a judgment in a matrimonial suit
on the ground of
justus error... There may be other exceptional instances. But I must
say that I know of no such further general
application of the
doctrine of justus error to judgments as would entitle the vanquished
party to bring an action to set aside
a judgment on the ground that
the court gave the judgment in error, even if such error was just and
was induced by a non-fraudulent
misrepresentation made by the other
party to the case. And no attempt has been made by plaintiff's
counsel in this case to produce
any authority which would justify
such an extensive application of the doctrine. On the contrary it
seems clear that Voet, in stating
that judgments may be set aside on
the ground of fraud, and (in exceptional cases) on the ground of
instrumentum noviter repertum
(42.1.28) intends impliedly to exclude
any other grounds ejusdem generis for setting aside judgments
delivered in defended cases
after both parties have been heard and
the action has been fought to a finish. (my italics).
[14] In Nyingwa v Moolman N.O.
1993 (2) SA 508
(Tk
GD) White J summarises the principles succinctly as follows at 511J:
"It follows that any judgment, including a
summary judgment, can be rescinded under the common law. If the
merits of the dispute
were considered before summary judgment was
granted, rescission can follow only on the grounds set out in the
Childerley case;
if the merits were not considered and the judgment
was granted by default, the grounds for rescission are virtually
unlimited,
and the only prerequisite is that 'sufficient cause'
therefor must be shown. It follows that, if an answering affidavit,
or evidence,
has been considered by the Court before it grants
summary judgment, the Court would then have considered the merits of
the case
and its judgment cannot then be held to be by default, even
if there was no appearance for the defendant when the application was
heard.'
Application of the aforegoing principles to the facts
of this matter.
[15] The nub of the applicant's argument is that the
first respondent ought to have been registered as a "Credit
Provider"
as provided for in
section 40
of the NCA.
Section
40(3)
of the NCA provides if one is required to be registered as a
"Credit Provider", but isn't so registered, such person
must not offer, make available or extend credit, enter into a credit
agreement, or agree to do, any of those things.
Section 40(4)
makes
any agreement concluded with a person required to be registered as a
"Credit Provider" and who is not so registered,
unlawful
and void to the extent provided for in
section 89
of the NCA.
[16] Although the judgment of Vally J was not made
available to this court, the argument in front of Vally J had been
transcribed
and was annexed to the respondent's answering affidavit.
[17] The applicability of the NCA was argued before
Vally J. This is apparent from the argument of Adv Nowitz at p 54 of
the transcription.
I quote the relevant portion:
'M' lord, just, I asked your lordship to take
cognisance of two things with regard to
section 15(G).
One, the
limit at the relevant time was R500 000 and I think, ja [inaudible]
mention it as well, but I think it is R500 000 and
the second aspect
M'lord is when your lordship reads this
section 15(G)
and invite your
lordship to read it carefully, your lordship will see that it relates
to a specific transaction and not to cumulative
transactions as my
learned friend invites your lordship to, to interpret it.
He talks about the principal debt on the date when
such transaction is entered into and it then talks about the
aggregate amount
of the principal debt. That the principal debt is,
the principal debt in respect of each cheque not the cumulative, you
take
all the cheques that you can find that you want to sue on and of
course your lordship knows from the plaintiff's case that what
they
have decided is to appropriate payments where they want to and then
take a bunch of cheques and say we are going to sue on
these cheques
and my learned friend he says when you look at 15(G), when your
lordship sees the word aggregate of the principal
debt you must take
all the cheques that they have decided to sue on and that is going to
give you your aggregate and that is in
excess of R500 000
[intervenes]'
… and further at page 55 :
“Court: Now your submission is you must look at
each cheque individually?
Mr Nowitz: Yes. …
Court: Each claim is an individual, separate claim?
Mr Nowitz: An individual principal debt.'
[18] It is apparent from the aforegoing quotation
that Adv Nowitz, on behalf of the applicant, was arguing for the
application of
the NCA. He requested the Court to consider each and
every cheque to be a separate claim and a separate transaction. Thus
arguing
that each cheque constituted a principal debt and that each
cheque should be viewed individually. The acceptance of such an
argument
would have resulted in the NCA being applicable.
[19] In this hearing, there has been an about turn.
Adv Nowitz, on behalf of the applicant, contended that
section 40
required a person to apply to be registered as a “Credit
Provider”, if that person were the “Credit Provider”
under at least 100 credit agreements or the total principal debt owed
to that “Credit Provider” under all outstanding
credit
agreements exceeded R500 000. It is in respect of the latter
requirement that the applicant argued that the first
respondent had
entered into more than 100 credit agreements with the applicant alone
and annexed a schedule evidencing this to
his replying affidavit
alleging that the principal debt owing under all such credit
agreements, exceeded the prescribed threshold
of R500 000.
[20] Apart from the glaring volte face on a factual
level, the applicant clearly had an opportunity to deal with the
applicability
of the NCA before Vally J. Rescission applications
cannot be used to serve as veiled appeals.
[21] In Schierhout's case, the Court stressed the
fact that a final judgment of a court of law should not be lightly
set aside and
in the Makings (supra) case (quoted in De Wet (above)),
Steyn JA emphasised that where the appeal procedure is not exhausted,
the
legal position between the parties will be honoured regardless of
how judicially flawed such position is, as it is in the public
interest that a final judgment be afforded the authority that
compliance with it will be guaranteed. The unusual procedure of
restitution should be kept in check by strict constraints. It is
essential that there should be finality to a trial, particularly
under circumstances where a litigant has had an opportunity to
advance a legal argument and did so, but is then advised by a friend
that there is a different angle to the argument which could have, or
might have, yielded a different result.
[22] In my view, the applicant has failed to make out
a case for the rescission of the judgments in question. Adv Nowitz
argued
that should the Court fail to rescind the judgments, the Court
would effectively be complicit in enforcing and upholding a situation
which is unlawful and which is contrary to the provisions of the NCA.
[23] A similar argument was advanced in the matter of
Port Edward Town Board (supra) and Thirion J dealt with it as follows
at 705A:
'But, argued counsel for the plaintiff, the fact that
plaintiff had been aware during the pendency of the case that
evidence of
decisive importance was being withheld from the court, is
not fatal to plaintiff's case because of the fact that it was the
court
which had been fraudulently misled into giving a wrong
judgment.
Voet 42.1.28, however, is to the effect that, if the
falsity had become known to either the opposing party or to the Judge
during
the pendency of the case (quae lite pendente neque adversario
neque judici innotuerat), rescission would not be granted. Knowledge
on the part of the party while the case is pending would therefore be
sufficient to disentitle him from rescission. I find it in
any event
difficult to understand why Voet imports the knowledge or absence of
knowledge on the part of the Judge into the enquiry.
If the Judge
trying the case or hearing the application were to obtain knowledge
extra-curially of a fraud affecting the case,
he would have to recuse
himself. If, on the other hand, he were to become aware of the fraud
through evidence placed before him,
then the opposing party would
equally become aware of the fraud. If from evidence before him it
should appear to the Judge that
the claim is fraudulent, he would
undoubtedly draw the attention of the parties to it. But, if after
having been so informed the
opposing party were to decide not to rely
on the fraud as a ground of defence, there would be little or nothing
that the Judge
would be able to do about it - save perhaps in the
rarest of circumstances.'
[24] Although one is not dealing with fraud in this
instance and this case is to be distinguished, in that in respect of
the applicability
of the NCA, the court would be entitled to raise it
mero motu and the Applicant did not wilfully withhold reliance on
sections 40
and
89
of the NCA, parties can not be permitted to
rescind judgments every time they conceive of a possible better
argument. Policy considerations
weigh against permitting this. See
Makings (above) per Steyn JA at 349.
The inherent nature of the transactions forming the
subject matter of the provisional sentence summonses.
[25] I have already found that the rescission
application should fail as the applicability of the NCA was argued
and dealt with
before Vally J, I would also find against the
applicant on another basis.
[26] Applicant contends that the cheques upon which
the first respondent sued were post-dated cheques issued by the
second respondent
and the third respondent in respect of goods
purchased on consignment from the applicant. Certain of such cheques
were discounted
by the applicant with the first respondent in order
to generate cash-flow. Applicant contends that this was done on the
strict
understanding that if customers such as the second and third
respondents returned the goods covered by such cheques, before the
due date of such post-dated cheques, three things would happen.
Firstly, the applicant would notify the first respondent of the
return of such goods; secondly, the first respondent would not
deposit such cheques but would return same to the applicant; thirdly,
the applicant would reimburse the first respondent in respect
thereof. The applicant contends that the cheques in question pertain
to goods which had been returned and of which return, applicant had
notified the first respondent. Applicant contends that by
depositing
such cheques, the first respondent breached the agreement which
covered their relationship. Implicit in this accusation
is an
admission that the first respondent was the holder in due course of
the cheques and that the instruments empowered him to
present same
for payment.
[27] In order for the applicant to succeed in showing
that the first respondent ought to have been registered as a "Credit
Provider", applicant must show that the first respondent
provided credit agreements under at least 100 transactions.
[28] In Bridgeway Limited v Markham
[2008] ZAGPHC 251
;
2008 (6) SA 123
(W) at para
[18]
Motopo J held as follows:
'[18] He submitted that the discount sale can neither
be classified as a credit facility nor credit transaction because no
payments
were made periodically or deferred as envisaged in the Act.
Once the applicant pays the purchase price upfront, he steps into the
shoes of the seller vis-à-vis the purchaser and no money is
borrowed in this instance. Again he submitted that, if regard
is had
to the intention of the parties and the objective facts, the
inescapable inference or conclusion to be drawn is that this
was a
discount sale and not a money lending, and the applicant as
discounter is purchasing and not lending See De Villiers v Roux
1916
CPD 295
at 298 where Kotze J said the following:
'The difference between ''advancing'', ''lending
money'' and ''discounting'' is distinct and palpable. ''Discounting''
is purchasing,
not lending. The discounter, whether of a bill or
bond, or any other security, becomes the owner. If the thing bought,
turns out,
when realised, to be of less value than the price paid for
it, the loss falls upon the purchaser or discounter. If a profit or
gain is made upon the transaction, it belongs wholly and exclusively
to the discounter or purchaser.' The view, therefore, which
I
expressed during the argument that the relation between the
discounter of a bill or promissory note and the person who presents
it for discount seems rather that of purchaser and seller than that
of lender and borrower, is borne out by authority. The discounter
becomes owner of the note; it is his property and he in turn can
discount it, pass it over to others, or deal with it in any other
legitimate way; whereas, if the transaction were one of the loan of
money against the security of the bil
l or note, the discounter would not be able to deal
with the document in the way described.'
[29] I conclude that if regard is had to the nature
and substance of the transaction, the inescapable inference to be
drawn is that
this was a discount sale and not a money-lending
transaction or credit transaction. I therefore conclude that these
transactions
do not fall within the ambit of the provisions of
section 8 of the NCA, and that the first respondent would thus not
have been
obliged to register as a “Credit Provider” as
contended for by the applicant.
[30] A final aspect is whether the declaration of
invalidity in respect of provisional sentence judgments contained in
Twee Jongegezellen
v Land and Agricultural Development Bank
2011 (3)
SA 1
(CC), has application in this matter. It does not, as was
correctly submitted by Adv Novitz, as these judgments had become
final
prior to such declaration.
CONCLUSION
[31] I thus find that the applicant has failed to
make out a case for the rescission of the provisional sentence
judgments.
[32] The parties were in agreement that the
application declaring the immovable property specifically executable
be set down at
a later date and I will accordingly postpone such
application with no order as to costs.
ORDER
1. The applications brought for the rescission of
judgments under case nos. 6708/2010, 6710/2010 and 6711/2010, are
dismissed with
costs.
2. The application declaring the property executable,
brought under case no. 6710/2010 is postponed sine die and costs are
reserved.
I OPPERMAN
Acting Judge of the High Court
Heard: 18 March 2014
Judgment delivered: 5 September 2014
Appearances:
For Applicant: Adv M Nowitz
Attorneys: Steve Merchak Attorney
For the First Respondent: Adv B E Gradidge
Attorneys: Dadic Attorneys