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[2014] ZAGPJHC 345
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BMW Financial Services (Pty) Ltd v Shaff (21833 /2013) [2014] ZAGPJHC 345 (28 October 2014)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 21833 /2013
DATE:
28 OCTOBER 2014
In
the matter between:
BMW
FINANCIAL SERVICES (PTY)
LTD
..............................
APPLICANT/PLAINTIFF
And
DARRYL
SHAFF
...............................................................
RESPONDENT/DEFENDANT
JUDGMENT
ANDREWS
AJ
1.
This is an application for an order
directing the respondent to return a BMW motor vehicle, financed by
the applicant under an instalment
sale agreement between the parties,
and in the event of him failing to do so, authorizing the Sheriff to
attach it and hand it
over to the applicant. The applicant seeks an
order postponing the question of damages for determination
sine
die
and until after the return of the
vehicle. The applicant seeks leave to approach the court on the same
papers supplemented by a
damages affidavit once it has determined the
damages.
2.
The application is opposed by the
respondent who has filed a counterclaim, in which he seeks an order
declaring the instalment sale
agreement between the parties to be
reckless, and setting it aside. The respondent also seeks payment of
the amount of R245,335.21
together with interest on this sum, being
the amount he claims to have paid the applicant.
3.
The following facts are common cause.
The respondent purchased a BMW motor vehicle from the applicant and
the vehicle is still in
his possession. It was intended that the
vehicle would be bought on credit and that the intended credit
transaction was to be subject
to the provisions of the National
Credit Act 34 of 2005 (“NCA”) On or about 9
th
November 2010 the applicant and respondent concluded a written
instalment sale agreement ("the agreement") in terms
whereof the applicant sold and delivered to the respondent a BMW 2010
320d A/T motor vehicle with engine number 81027421 and chassis
number
ONM97310. The purchase price was payable in instalments. The
agreement was signed by the respondent but not by the
applicant.
4.
A document purporting to be the
agreement was annexed to the applicant's founding affidavit. Its
terms include that failure to pay
the instalments provided for would
constitute an event of default as defined in the agreement, and upon
such default the applicant
would be entitled, after demand, to cancel
the agreement, obtain possession of the vehicle and recover damages
from the respondent
as provided for in the agreement.
5.
The applicant made the following
averments in its founding affidavit. The respondent had breached the
agreement by failing to pay
the instalments due and was in arrears as
at 15
th
May 2013 in an amount of R22824.24. The applicant had complied with
the provisions of section 129 and 130 of the NCA, and that
the
respondent did not avail himself of the rights afforded him under
that act. The applicant cancelled the agreement in writing
as it was
entitled to and the respondent has no right to remain in possession
of the vehicle.
6.
The respondent denied that the
agreement was binding on the parties as it had not been signed by the
applicant. He stated that the
applicant had granted credit to him
recklessly as envisaged in section 80(1) of the NCA. As a consequence
the agreement stands
to be set aside and the applicant is not
entitled to enforce the agreement against him. He denied that he had
breached the agreement
by failure to pay instalments due. Apart from
these defences which were not stated in the alternative,
the respondent
raised several further defences which include:
a.
the
locus
standi
of the applicant as well as the
authority of the deponent to the founding affidavit to depose thereto
is disputed ;
b.
the terms and conditions of the agreement
contains erroneous terms;
c.
the applicant failed to comply with the
provisions of section 129 of the NCA;
d.
the agreement was cancelled prematurely;
e.
the applicant can only proceed if it can
prove that the section 129 notice was in fact delivered to him.
7.
The applicant stated that before
dealing with the defences it wished to point out that regardless of
which defence was relied on
by the respondent, on his version
there is no agreement between the parties, hence he has no right to
possess and use the
vehicle, but continues to do so. .
The
locus standi of the applicant.
8.
The respondent stated in his answering
affidavit that the applicant had not attached a resolution evidencing
its
locus standi
,
and the deponent's authority to depose to the founding affidavit in
order to institute the proceedings or represent the applicant
therein. The authority of the applicant’s attorneys was
likewise disputed. A resolution authorizing the proceedings
and the
appointment of attorneys to represent the applicant and confirming
the authority of the deponent to act on its behalf,
dated 3
rd
April 2013 was attached to the applicant's replying affidavit,
together with relevant confirmatory affidavits. This point
was
not persisted with in argument. No notice as envisaged in Rule 7 of
the Uniform Rules of the High Court appears in the file
challenging
the applicant’s attorney’s authority and the applicant
stated that none had ever been served. On
the basis of this
information I accept that the deponent and the applicant’s
attorneys were duly authorised to bring the
proceedings and that the
challenge to its
locus standi
has no merit.
Failure
to sign the agreement
9.
The respondent argued that the
agreement is not valid and enforceable as it has not been signed for
and on behalf of the applicant;
the document is incomplete and
the alleged terms and conditions relied upon do not relate to the
type of agreement intended
by the parties. The respondent argued that
on the applicant's version, the parties intended that the writing
embodies the contract
and that the parties agreed that the contract
shall be a written one. It was argued that a written contract
involves the
signature of all the parties thereto and such a contract
cannot be said to have been fully executed until the consent of the
parties
has been expressed by the signature upon the document
constituting the written contract.
10.
The respondent argued further that the
NCA requires large instalment agreements to follow the prescribed
form, and referred in this
regard to Form 20.1. This form
relates to quotations for large contracts, not the contracts
themselves, and is hence irrelevant.
The respondent made no reference
to a form that is required for intermediate or large credit
agreements and which requires such
agreements to be signed by both
parties, and I can find none. The NCA does not require credit
agreements to be signed by both parties
for validity. It states
“
s93.
(1) The credit provider must deliver to the consumer, without charge,
a copy of a
document
that records their credit agreement, transmitted to the consumer in a
paper form, or in a printable electronic form.
(2)
A document that records a small credit agreement must be in the
prescribed form;
(3)
A document that records an intermediate or large agreement-
(a)
must be in the prescribed form, if any, for the category or type of
credit agreement concerned; or
(b)
if there is no applicable prescribed form, may be in any form that-
(i)
is determined by the credit provider; and
(ii)
complies with any prescribed requirements for the category or type of
credit agreement concerned.”
11.
As
elucidated in
The
National Credit Act Explained
[1]
,
the
provisions of the NCA and
section 93
in particular appear to be aimed
at ensuring that written copies of these agreements are made
available to consumers:
“
The
Credit Agreement Act
[2]
and the
Usury Act
[3]
both provided that
an agreement which was not reduced to writing was not invalid that
merely because of that fact. Failure to reduce
an agreement to
writing constituted an offence. Other legislation, such as the
Alienation of Land Act
[4]
,
explicitly provides that a contract is void if it is not reduced to
writing. The NCA neither declares a contract void nor creates
an
offence, for want of compliance with the formality requirements.
Section 93, like many other provisions in the act, does however
create a right for consumers and a corresponding obligation for
credit providers. Like any right, this one can also be enforced,
and
credit providers repeated failure to furnish copies of agreements may
even lead to deregistration of that credit provider.”
The
respondent’s argument that the agreement is invalid for want of
compliance with the NCA is without merit.
12.
The respondent argued that if the
parties agree to have their agreements in writing, then until the
document is drawn up there is
no
vinculum
juris
and therefore no actionable
contract. The applicant had failed to prove a valid and binding
written agreement and, as such cannot
seek to enforce same in this
application. The applicant is not entitled to the relief sought as a
result. The respondent relied
on the judgment in
Goldblatt
and Freemantle
1920 AD 123
where it was
stated by Innes, CJ at page 128:
“
Subject
to certain exceptions, mostly statutory, any contact may be verbally
entered into; writing is not essential to contractual
validity. If
during negotiations mention is made of a written document, the court
would assume that the object was merely to afford
facility of proof
of the verbal agreement, unless it is clear that the parties intended
that the writing should embody the contract
and (
Grotius
3.14.26 etc.). At the time it is always open to parties to
agree that they contract shall be a written one (see
Voet
5.1.73.
V
Leeuwen
section 4,2, sec 2,
Decker's note
);
and in that case there will be no binding obligation until the terms
have been reduced to writing and signed. The question
is in each case
one of construction.”
13.
In reply the applicant referred to
legal developments since the
Goldblatt
case. Reference was made to
Mervis Brothers v Interior
Acoustics and Another
1990(3) SA 607
(
Mervis Brothers)
and
Pillay and Another v Shaik and Others
2009(4) SA 74 at 83 F (
Pillay)
wherein
Farlam, JA stated:
“
In
my opinion it is clear from
Goldblatt
versus Freemantle
, supra, and the
authorities cited there in that in the absence of a statute which
prescribes writing signed by the parties or their
authorized
representatives as an essential requisite for the creation of a
contractual obligation (something that does not apply
here) an
agreement between parties which satisfies all the other requirements
for contractual validity will be held not to have
given rise to
contractual obligations only if there is a pre-existing contract
between the parties which prescribes compliance
with the formality or
formalities before binding contract can come into existence.”
14.
In the
Mervis
Brothers
judgment, which deals with an
agreement to refer a dispute to arbitration, is was stated on page
610:
“
In
terms of
section 1
of the
Arbitration Act 42 of 1965
, an agreement
providing for reference of a dispute to arbitration is required to be
in writing. Generally such a provision
postulates
signature by both parties. However an document may constitute
an agreement in writing even though it is
signed by only one
party. That the signature of one party is lacking does not
matter, depending on the circumstances of the
case. The test is
whether the parties have deliberately intended to record their
agreement in writing and have shown that
the document so produced
constitutes the agreement between them. (
Union
Government (Minister of Finance) v Chatwin
1931
TPD 317).
In the present case the second document was sent in
response to the first and constituted a counter-offer to the proposal
of arbitration.
It was received without demur and the parties
proceeded to arbitration. By its conduct the appellant accepted
the terms expressed
therein. In my opinion it is clearly part
of a written document within the meaning of s1 of the Act”
15.
In the present case there is no
pre-existing contract as referred to in
Pillay
.
An offer, contained in a document entitled “Quotation and Pre
Agreement Statement” was presented to the respondent,
and was
signed by him. The offer sets out the parties’
understanding of how the agreement was to come into being and
bind
them contractually. This is unambiguously stated on page 14
under paragraph G as follows:
“
You
can accept this quotation and pre-agreement statement by being
present at BMW financial services registered business premises
and by
initialling each page and signing in full in the space provided
hereunder, within five business days of you receiving this
quotation.
The quotation and pre-agreement statement together with any other
documentation required to be signed by you will form
the entire
instalment sale agreement together with the terms and conditions
attached hereto between you and BMW financial services.”
16.
The agreement did not therefore require
signature by the applicant to constitute a valid and binding
agreement. It only required
signature by the respondent.
The facts that follow are not in dispute. The respondent after
signing the agreement signed
the release notes, insurance
confirmation and debit order confirmation on the same day as signing
the agreement. The release note
confirms that he received the vehicle
in good order and condition. The insurance confirmation, also signed
by the respondent confirms
the existence of the agreement and that he
considered himself bound thereby, as implied by the following
wording:
“
I
agree that should any problem occur which causes me to miss payments
on my finance agreement leading to possible repossession
of the
asset, I will in no way hold BMW financial services or the dealership
responsible.”
17.
The respondent took possession of the
vehicle, maintaining payments in terms of the agreement for a period
of at about three years.
At no stage did he indicate that he did not
consider himself to be bound by the agreement because it had not been
signed by the
applicant. In his answering affidavit the respondent
refers to several facts which confirmed that the agreement had come
into existence.
These include the fact that he approached the
applicant to conclude a credit instalment agreement, and that the
applicant financed
the purchase by him of a motor vehicle. He now
seeks to have this agreement set aside because he alleges that the
credit was extended
recklessly.
18.
The respondent has therefore advanced
no basis for me to conclude that the parties intended the contract to
come into existence
only once signed by both parties and I confirm
that a valid and binding agreement came into effect on signature of
the agreement
by the respondent.
Alleged
erroneous terms
19.
The respondent denied the
enforceability of certain terms in the agreement, stating that “the
alleged terms and conditions
relied on seemed to relate to a
different type of agreement which was not intended by the parties and
were attached in error when
the documents were signed by him”.
In this regard he referred to the fact that the following terms,
defined in the
applicant’s quotation, namely "credit
provider", "dealer" and "client/customer"
are different
from the parties referred to in the terms and
conditions, namely “supplier", "seller" and
"you."
The applicant averred that the same reference number
appears throughout the document at the base of each page indicating
that the
document was generated as a single entity and there is no
obvious error as to its intended components.
20.
The terms referred to by the
respondent, in the context of the agreement, connote the same things
.
As stated in by Wallis JA, in
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012 (3) SA 503
at paragraph 18:
“
Interpretation
is the process of attributing meaning to the words used in a
document, be it legislation, some other statutory instrument,
or
contract, having regard to the context provided by reading the
particular provision or provisions in the light of the document
as a
whole and the circumstances attendant upon its coming into existence.
Whatever the nature of the document, consideration must
be given to
the language used in the light of the ordinary rules of grammar and
syntax; the context in which the provision appears;
the apparent
purpose to which it is directed and the material known to those
responsible for its production. Where more than one
meaning is
possible each possibility must be weighed in the light of all these
factors. The process is objective not subjective.
A sensible meaning
is to be preferred to one that leads to insensible or unbusinesslike
results or undermines the apparent purpose
of the document.”
21.
The fact that the applicant is a credit
provider, and also supplied the vehicle to the respondent is not a
fact that is disputed
in this application. The word “dealer”
in the context of the sale of motor vehicles I understand to mean the
same thing as a seller, and the customer is referred to as “you”
in both parts of the agreement. The use of these
terms
interchangeably does not alter the contractual obligations of the
parties in any way.
The
respondent’s breach.
22.
The applicant alleged that the
respondent is in breach of contract, a fact denied by the
respondent. The respondent states
that he has in fact paid 43
instalments which means, according to calculations submitted by the
applicant, that he paid instalments
that fell due after signing the
answering affidavit. He attached no proof of payment. The
applicant’s replying affidavit
contains a payment history from
1
st
December 2010 to 1
st
May 2013, which reflects the indebtedness of the respondent as being
arrears in the amount of R22 824.24 and which information
was
addressed to the respondent at the postal address chosen by him in
the agreement.
23.
I am satisfied as to the inherent
credibility of the applicant's factual averments in this regard and
will proceed on the
basis of the correctness thereof and will
include these facts among those upon which I will determine whether
the applicant is
entitled to the final relief which it seeks (see
Plascon-Evans Paints (Pty) Ltd v Van
Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA
623(A)
at 634H-635B).
Compliance
with sections 129 and 130 of the NCA
24.
The respondent argued that the
applicant is only entitled to proceed with the legal process against
him for the return of the vehicle
if it has complied with section 129
and 130 of the NCA, that it can show that the section 129 notice was
in fact delivered to him,
and further that it lawfully
cancelled the credit agreement. The respondent denies receiving the
section 129 notice and that the
“track and trace” report
for registered letters constitute proof of delivery. The
assertion that the applicant
was required to deliver the section 129
notice to the respondent personally is however incorrect.
25.
The obligations that a credit provider
must discharge under the NCA in order to bring a section 129 notice
to the attention of a
consumer are now settled law, As stated
in the recent judgment of the Constitutional Court in
Moshomo
Levin Kubyasa and Standard Bank of South Africa Ltd and the Socio
Economics Institute of South Africa
[2014] ZACC 1
(Kubyasa)
:
“
When
delivery occurs through the postal service, proof of that these
obligations have been discharged entails proof that –
a.
the section 129 notice was sent via
registered mail to the correct branch of the Post Office, in
accordance with the postal address
nominated by the consumer. This
may be deducted from a track and trace report and the terms of
the relevant credit agreement;
b.
the Post Office issued a notification
to the consumer that the registered item was available for
collection;
c.
the Post Office notification reached the
consumer. This may be inferred from the fact that the Post Office
sent the notification
to the consumer’s correct postal
address, which inference may be rebutted as set out in
(52) above;
d.
a reasonable consumer would have collected
the section 129 notice and engaged with its contents. This may
be inferred if the
credit provider has proven (a)-(c), which
inference may, again, be rebutted by a contrary indication: an
explanation of why, in
the circumstances, the notice would not have
come to the attention of a reasonable consumer”
Actual
delivery to the respondent of this notice was therefore not required.
26.
The respondent does not deny that the
applicant sent a letter by registered post on the 24
th
April 2013 to the address which appears as his chosen
domicilium
on the agreement and that he signed this agreement. He merely denies
that he received it. He denies that the registered
post
“track and trace” report annexed to the founding
affidavit proves that he received the letter, but does not deny
that
the post office in Sandringham was the correct branch of the Post
Office for the chosen address nor does he deny that the
Post Office
sent a notice to him that a registered item was ready for collection.
27.
The applicant has satisfied the
requirements for notification under section 129 and 130 of the NCA as
described by the Constitutional
Court, and the respondent’s
claim of non compliance with the requirements of section 129 and 130
is without foundation.
Cancellation
of the agreement
28.
The respondent argued that the
agreement was not lawfully cancelled, prior to the instituting of
legal proceedings against him.
He argued that the right to cancel in
terms of this specific agreement is “peculiar” and is
“causally linked
to the delivery of the section 129 notice as
contemplated in the NCA”. Further that although sections
129 and 130 of
the NCA are not intended to govern cancellation of
credit agreements, this agreement was peculiar in that statutory and
contractual
rights “are intertwined”. The argument was
put as follows by the respondent in its heads of argument:
“
In
terms of the agreement the applicant is required to comply with the
mandatory requirements of section 129 of the NCA which forms
part of
the contract for breach and cancellation process, namely the
applicant first has to prove the breach, then prove
compliance
with section 129 in the manner contemplated in terms of the NCA and
thirdly in the absence of the respondent exercising
the statutory
rights provided to him and failing to remedy the breach complained of
in the ten business day period provided for
in terms of section 129,
the applicant only then has the right to cancel the agreement and
notify the respondent accordingly.
The provisions of section
129 form part of the
mora
process
in terms of the agreement relied on.”
The
applicant strenuously opposed this argument.
29.
In essence the respondent’s
argument has three components: Firstly that the applicant was
required in terms of the contract
to notify him in terms of section
129 that he was in default, before it could cancel the
agreement. Secondly the obligations
that a credit provider must
discharge under the NCA in order to bring a section 129 notice to the
attention of a consumer as set
out in
Kubyasa
applied to this notice. Thirdly that the applicant did not comply
with these obligations and prematurely cancelled the contract.
.
30.
The first component of the argument is
incorrect. Paragraph 11.3 of the agreement, which deals with default
and cancellation, does
not require a default to be drawn to the
attention of the credit receiver in terms of section 129, prior to
cancellation. The clause
gives the credit provider a discretion
whether to do so. The applicant could just as well have sent a
registered letter to the
respondent saying that it was in default
without reference to the NCA. Only if the credit provider
wished to commence legal
proceedings to enforce the agreement was it
required to provide notice to the consumer as contemplated in section
129(1)(b).
The relevant sections of the agreement are as
follows
“
11.3:
Upon an event of default, the seller
may,
at its election
and without prejudice
to any other remedy which it may have in terms of this agreement or
otherwise: (emphasis added)
11.3.2:
if this agreement subject to the provisions of the
National Credit
Act
>
11.3.2.1:
draw the default to your notice in writing in terms of
section 129
of
the NCA and propose that you refer this agreement to a debt
counsellor, alternative dispute resolution agent, consumer court
ombud within the jurisdiction with the intent that the seller and you
resolve any dispute under this agreement or develop or agree
on a
plan to bring the payments under this agreement up to date;
11.3.2.3:
after demand referred to in 11.3.2.1 above, cancel this agreement.
15.3
the seller will send any notice to you at the last
domicilium
you have chosen or to your last postal address. The seller shall
except that you have received the notice on the third day after
the
seller has posted it to you.”
31.
No authority was advanced for the
second component of the respondent’s argument. The judgment in
Kubyasa
clarifies
the obligations that a credit provider must discharge under the NCA
in order to bring a
section 129
notice to the attention of a credit
receiver when delivery is effected through the postal services, and
in order to comply with
the requirement that notice must be given in
terms of
section 129(1)(b)
prior to the commencement of proceedings
to enforce the agreement. The respondent provided no authority
for claiming that
these requirements were also applicable to a
section 129
notice which the applicant had chosen to send prior to
cancellation, and that the requirements set out in
Kubyasa
curtail the contractual rights of the applicant in regard to
cancellation.
32.
Letters
drafted in terms of
section 129
of the NCA serve to encourage dispute
resolution and promote payment of debts before the institution of
proceedings for debt recovery.
It follows that contracting parties
are at liberty to agree that the credit provider may send a
section
129
notice at any stage in their contractual relationship when a
default occurs. The cancellation of an agreement does not
constitute
the institution of legal proceedings and hence giving
notice in terms of
section 129
prior to cancellation is not required
in order for cancellation to be valid. The word “proceedings”
is not defined
in the NCA but according to the law of interpretation
of statues words should be given their ordinary meaning. The
Concise
Oxford Dictionary
[5]
defines the word to mean “(1) an event or a series of
activities with a set procedure; (2) law action taken in a court to
settle a dispute” The cancellation of an agreement,
unless agreed to the contrary, is neither of these. The respondent
correctly stated that
Section 129
of the NCA does not govern
cancellation of credit agreements
33.
The respondent referred to the judgment
in
Standard Bank of South Africa v Hand
2012(3) SA 319 (GSJ) in support of its argument, but this judgment
does not take his case any further. Here the court looked at
the
requirements for due demand where a contract was ambiguous in this
regard. The court concluded that by expressly requiring
‘due
demand’ in the agreement, the parties intended
·
a notice by the applicant to the
respondent;
·
in terms of which the applicant would
notify the respondent to perform and/or rectify the breach;
·
before or on a specific date.
34.
It should be noted that the words “due
demand”, which are mentioned in clause 11.3.1.1 of the
agreement in the present
matter do not appear in clause 11.3.2.3,
which is the clause governing agreements that are subject to the
NCA. Even so, applying
the test for due demand set out in the
Hand
case
shows that due demand was made, by the applicant in terms of the
contract. The respondent was informed of the demand, in the
manner
contemplated in the agreement. The following averments made by the
applicant regarding dates of delivery of the
section 129
notice,
although denied, I regard as inherently credible. The notice
was sent by registered post informing the applicant
that he was in
arrears on 24
th
April 2013. In terms of clause 15.3 of the contract it was
deemed to have been received on the third day after
being sent
to the respondent’s chosen
domicilium
ie 27
th
April 2013.The letter gave the respondent ten business days after
delivery to rectify the default. More than ten business
days
after the deemed date of delivery of the letter had passed, the
contract was cancelled. The notice of cancellation of the
contract
was dated 16
th
May 2013 posted on the 17
th
May 2013 and was deemed to have been delivered to him on 19
th
May 2013.There was thus fulfilment of the contractual requirements
for notice of default prior to cancellation.
35.
This letter was delivered by registered
post to the correct post office as per the respondent’s chosen
domicilium
as stated on the contract signed by him, and the respondent was
notified of its arrival on the 8
th
May 2013. A reasonable consumer in his position would have had at
least eleven days in order to react to the notice, before being
notified of cancellation. Due demand was therefore made in terms of
the contract prior to cancellation.
Whether
the agreement was concluded recklessly
36.
The respondent’s heads of
argument state that the relief sought in the counter claim will not
be claimed at the hearing of
this application. Further that
whether or not the agreement was concluded recklessly by the
applicant will not be relevant
to the first phase of the relief
sought by the applicant, namely, whether or not it is entitled to the
return of the vehicle.
As such the issue of the counter
application need not be determined now. The respondent
contended that the counter application
in any event is not ripe for
hearing, as the respondent “needs to file its replying
affidavit”, and will only be relevant
if the applicant intends
to enforce the agreement and recover of any alleged shortfall from
the respondent.
37.
The applicant responded arguing that it
is not in the respondent's hands to decide when he files the papers.
He was obliged to comply
with the rules of court and had failed to do
so. He was not at liberty to arrive on the date of hearing and state
that the court
could not deal with his application. It submitted that
there was no reason why the court could not deal with this matter in
its
entirety. Furthermore that the applicant would refer the court to
allegations made in support of the counter application because
it
contended that the respondent’s averments therein were
dishonest.
38.
I see no reason why the counter
application cannot be considered. It is over a year since the
applicant filed its answering affidavit
to the counter application,
and the respondent has not replied thereto. The matter was set down
and an application for a postponement
of the hearing of the counter
application has not been made.
39.
The respondent’s counter
application seeks an order against the applicant in terms of the NCA
declaring him to be over indebted
as a result of the credit granted
to him by the applicant, which credit was granted recklessly in terms
of
section 80(1)(a)
as well as
section 80(1)(b)(i)
and (ii) of the
NCA. The purpose of the application is to set aside the credit
instalment agreement, arising from the applicant's
alleged failure to
comply with NCA, and to recover all amounts paid by the respondent in
terms thereof to date.
40.
The respondent averred that by entering
into the credit instalment agreement with applicant he was over
indebted as contemplated
in terms of
section 79
of the NCA at the
time of the conclusion of the credit instalment agreement relied upon
by applicant. Had the applicant properly
conducted a credit
assessment in terms of
section 81(2)
of the NCA it would have
established that by entering into the intended credit instalment
agreement with the respondent, he would
have been over indebted as a
result.
41.
In support of these averments the
respondent set out a chart of his and his wife’s total income
and expenses at the time of
entering into the agreement, although no
documentation in support thereof was annexed. He stated that at the
time he had a monthly
shortfall of R27 000 per month. He was
funding monthly shortfalls through the use of credit cards or by
escalating debt and
had no assets in his name.
42.
This figure is in stark contrast to
finance application form completed at the same time as the conclusion
of the agreement, annexed
to the applicant’s answering
affidavit to the counter application. This document indicated the
respondent's take-home pay
to have been R63,000 and total monthly
expenses to have been R9000. It contains a declaration that the
information provided is
true and correct, signed by the respondent.
Also annexed was one of the respondent’s bank statements from
the same time period,
which reveals large deposits indicating a
substantial monthly income. The bank statement records regular
withdrawals of large sums
of money and substantial and frequent
payments to restaurants and fast food outlets which applicant argued
indicated substantial
disposable income. The bank statement does not
indicate that the respondent had an overdraft facility with a large
debit balance
as he now alleges. The applicant averred that it had
conducted a credit check which did not reveal any information that
the applicant
should have been concerned about, and attached a report
in that regard. It stated that the respondent had also completed a
prior
instalment sale agreement with it for a BMW motor vehicle and
had an exemplary instalment payment history for that transaction.
The
respondent had paid his monthly instalments for the vehicle under the
present agreement from November 2010 until May 2013 which
would not
have been possible if his monthly shortfall was as he alleged.
Further, the respondent had alleged that he had made 43
payments on
the agreement which also does not square with being financially over
indebted. The applicant’s averments have
not been disputed to
date and I consider them to be inherently credible.
43.
The respondent’s counter
application is a statement made under oath that implies that
information provided by him to the applicant
at the time of
undertaking the financial assessment under
section 81
of the NCA did
not fully and truthfully answer to requests for information regarding
his financial position by the credit provider,
the applicant. As such
this is a statement providing a complete defence to the applicant
against a claim that the agreement is
reckless. The application must
therefore fail.
44.
The notice of motion contains a prayer
for an order postponing the question of the determination of the
damages suffered by the
applicant
sine
die
until the return of the motor
vehicle to the applicant for the determination of the value and the
amount due. it was further prayed
that leave be granted to the
applicant to approach the court on the same papers supplemented by a
damages affidavit once the applicant
has determined the damages.
45.
The respondent argued that the quantum
of such damages has yet to be determined and the determination of an
illiquid damages claim
is not an appropriate matter for motion
proceedings. Hence a postponement for purposes of later determination
of such damages should
not be granted. The applicant argued that this
court deals with claims of this nature on a weekly basis where the
determination
of damages is postponed for further determination. If
disputes arise these can be dealt with in accordance with the rules
of court,
but if there is no dispute there is no reason why the
matter cannot be dealt with in motion proceedings.
46.
I regard the approach argued for by the
applicant as the most practical and expeditious and consider it
appropriate to grant the
postponement for purposes of the
determination of damages as prayed.
47.
The agreement makes provision for costs
incurred by the applicant in enforcing its rights as embodied in the
agreement to be awarded
on the scale of attorney and client basis.
(clause 14.2). The award of costs on this scale is also justifiable
in the light of
the conduct of the respondent in bringing the counter
application.
I
make the following order
(i)
the respondent is ordered to return the BMW
2010 320d A/T (E90) motor vehicle with engine number 81027421 and
chassis number ONM97310
to the applicant. In the event that the
respondent does not return the vehicle, the Sheriff is directed to
remove the vehicle from
wherever it may be found and to return same
to applicant;
(ii)
an order is granted postponing the question
of damages suffered by the applicant
sine
die
until the return of the vehicle to
the applicant for determination of the value thereof and the amount
due;
(iii)
the applicant is granted leave to approach
this court on these papers supplemented by a damages affidavit, once
the applicant has
determined its damages;
(iv)
costs are to be paid by respondent to
applicant on the scale of attorney and client.
A
ANDREWS
ACTING
JUDGE OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
DATE
HEARD : 2
nd
September 2014
DATE
DELIVERED : 28
th
October 2014
For
the Plaintiff : Adv van Rheenen
Instructed
by : Smit Jones and Pratt
For
the Defendant : Mr Ker -Phillips
Instructed
by : Matthew Kerr-Phillips Attorneys
[1]
JM
Otto and R-L Otto 3
rd
edition Lexis Nexis 2013 page 52
[2]
S(2)
of Act 75 of 1980
[3]
S3(8)
of Act 73 of 1968
[4]
S2(1)
of Act 68 of 1981
[5]
10
th
editions 2001