About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: South Gauteng High Court, Johannesburg
SAFLII
>>
Databases
>>
South Africa: South Gauteng High Court, Johannesburg
>>
2014
>>
[2014] ZAGPJHC 398
|
|
Firstrand Bank Limited T/A Wesbank v Whittington (14/14936) [2014] ZAGPJHC 398 (11 December 2014)
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG LOCAL DIVISION,
JOHANNESBURG
CASE NO. 14/14936
DATE: 11 DECEMBER 2014
Before the Honourable Vermeulen AJ
In the matter between:
FIRSTRAND BANK LIMITED T/A
WESBANK
.....................
PLAINTIFF
And
WHITTINGTON,
LEONARD
................................................
DEFENDANT
JUDGMENT
[1] The plaintiff provided finance to
the defendant in order to enable the latter to purchase a motor
vehicle in terms of an instalment
sale agreement (“the
agreement”). The agreement constitutes a “credit
agreement” within the purview of
the National Credit Act, No.34
0f 2005 (“the Act”) and the agreement is accordingly
subject to its provisions.
[2] It is common cause that the
defendant fell in arrears with the repayments in terms of the
agreement and that the plaintiff’s
attorneys, on 10 March 2014,
addressed a notice in terms of section 129(1) of the Act to the
defendant, which notice was sent per
registered post to the address
corresponding with the address which the defendant had appointed as
an address citandi et executandi
for purposes of the agreement at the
time of the execution thereof. In accordance with the provisions of
the Act, the notice informs
the defendant of his default in terms of
the agreement and calls upon him to refer the agreement to a debt
councillor, or to alternative
dispute resolution, to a consumer court
or to an ombud so as to resolve any dispute in terms of the agreement
or to agree on a
plan to bring the payments up to date.
[3] When no response was forthcoming,
the plaintiff issued summons against the defendant on 24 April 2014,
in which the plaintiff,
having cancelled the agreement, claims the
return of the motor vehicle sold in terms of the agreement and
further relief related
thereto.
[4] The defendant filed a notice of
intention to defend the action, whereupon the defendant applied for
summary judgment against
the defendant, in which application the
plaintiff refers to the fact that notice in terms of section 129(1)
of the Act had been
given and discloses a “track and trace”
print-out obtained from the Post Office which indicates that the
notice as
aforesaid had been sent to the post-office the name whereof
corresponds with the adress as stated in the notice.
[5] The defendant filed an affidavit
resisting summary judgment, in which he gives a full account of the
litany of financial difficulties
which befell him as a result of his
retrenchment during 2012, and which eventually led to his defaulting
on his payment obligations
in terms of the agreement. His account in
this regard, though regrettable, is hardly unusual and would not
ordinarily afford a
cognisable basis upon which the plaintiff could
be denied its ordinary contractual remedies consequent upon the
defendant’s
breach of the agreement. However, that which is
somewhat out of the ordinary in the present matter, is the diligence
with which
the defendant would appear to have sought to avert some of
the financial consequences of the adversity which came his way. When
he was retrenched, for instance, he states that he approached the
plaintiff, long before he actually fell into arrears with his
payments in terms of the agreement, forewarning the plaintiff of the
potential problem following his retrenchment and prevailing
upon the
plaintiff to grant him what he refers to in his affidavit as “a
period of amnesty”, pending the payment to
him of an amount due
to him by way of retrenchment insurance which payment he, at the
time, thought was imminent.
[6] The defendant states further in
this regard that on 4 September 2013, he sent an email to the
plaintiff to record in writing
the discussion he had with an employee
of the plaintiff in regard to the aforegoing. The email reads as
follows:
“Dear Gugu,
Following our telephone conversation I
would just like to confirm the following:
1. I, Leonard Whittington, (ID
8508025045083, Wesbank Acc nr-85186660922) have been retrenched from
employment on 13-08-2012.
2. I have a retrenchment policy with
Frank.net and I have been informed that they have a 3 month waiting
period for claims to be
processed, so I ask that (should I not be
able to meet my payment obligations within the next 3 months) you
defer payment. Please
confirm that you agree to this, as per our
telephone conversation yesterday (03-10-2012).
3. I will keep in touch with you and
keep you informed of any changes in my financial situation. I will
also inform you when Fank.net
starts paying out, if I haven’t
found emplyment in the interim.
Thank you, Gugu, so much for your
understanding in this matter, it is such a pleasure dealing with an
institution that goes the
extra mile and who sees their customers as
humans and not just another number. Your motto of “How can we
help you”truly
proves to be true!”
[7] There was no response by the
plaintiff to the aforesaid email from the defendant.
[8] The defendant, who found it
impossible to obtain employment in Gauteng, migrated to the Western
Cape in an increasingly desperate
quest for better prospects, but the
latter province proved to be equally unyielding as far as job
opportunities were concerned.
He, nevertheless, succeeded in keeping
up with his repayments on the vehicle.
[9] On 30 November 2012, he telephoned
the plaintiff’s call centre in Capetown and informed an
employee of the plaintiff of
the status quo as it then was, to the
effect that the insurance pay-out which he foreshadowed in the first
discussion with the
plaintiff during September had not materialised
as yet but that he would keep the plaintiff apprised of developments
in this regard.
[10] On 5 February 2013, the defendant
again telephoned Gugu, the employee of the plaintiff in Johannesburg
with whom he had the
discussion in September 2012, in order to inform
her of his intended move to the Cape. He followed this up with an
email to Gugu,
in which he recorded the following: (I quote the
material part of the email only)
“Dear Gugu
Following our telephone conversation I
would just like to confirm the following:
I haven’t as yet been able to
find new employment. I was hoping that with the start of the new year
I would be quick to find
a new job, but it doesn’t seem that
way.
I will be relocating to the Western
Cape, as there is an opportunity of finding employment there. I am
not sure where exactly I
will be staying as yet, I would like to
request that you change my address on file to my mother’s home
address, they have
stayed here since 2005 and own the property:
Plot 42 Stephanopark
Vanderbijlpark
1911”
[11] Again, his email as aforesaid did
not meet with a response from the plaintiff.
[12] During May 2013, the defendant
took up a position in Uvongo, KwaZulu Natal, where he moved into the
holiday home of a friend
on the basis that he repairs,renovates and
looks after the property against payment to him of 22.5% of the
rental income of the
property as from the end of January next year.
[13] As it happened, for reasons that
need not be canvassed here, the insurance pay-out which was
eventually made was a fraction
of the insured amount and, as such,
was not sufficient to enable the defendant to make any payment
towards the arrears which had
by then accrued.
[14] The defendant, furthermore, denies
that the notice in terms of section 129(1) of the Act came to his
attention.
[15] Against the aforegoing background,
Ms Malan, who appeared on behalf of the defendant, submitted that the
defendant’s
email of 4 September 2012 constitutes an amendment
of the agreement, to the effect that the plaintiff must by its terms
be taken
to have consented to an indefinite deferment of the
defendants obligation to make regular monthly repayments in terms of
the agreement.
In her heads of argument, Ms Malan submitted further
that, although there is a non-variation clause in the agreement, the
plaintiff
must by its conduct in failing to take any action for a
period of two and a half years be taken to have accepted the
variation
of the agreement.
[16] I am unable to accede to this
submission. Even assuming that the non-variation clause in casu may
be said to permit a variation
of the agreement on the basis contended
for, which strikes me as quite a generous assumption in the
defendant’s favour, the
question remains what the actual
exigible content of the alleged variation was. Until when was the
defendant’s obligation
to pay suspended? If the resumption of
his obligation to pay was subject to some or the other contingency,
as it must necessarily
have been, what was the nature thereof and
what would happen if the contingency failed to materialise? The email
is silent about
all these matters, which is in itself fatal for the
proposed variation. Despite the valiant efforts on the part of Ms
Malan to
imbue the suggested variation with definite and specific
content, I remain unpersuaded, with respect, that she succeeded in
doing
so. In my view, the content of the email concerned, on the
ordinary grammatical meaning of the words employed therein, is simply
not amenable to an interpretation in terms of which the indefinite
suspension of the defendant’s obligations in terms of
the
agreement was permitted thereby.
[17] Ms Malan further contended that
the provisions of section 129(1) of the Act were not complied with,
in that the address appearing
in the notice, 429 Scrooby Street,
Ruimsig 1732, is an incomplete address if regard is had to the
address appearing on the summons,
as amended. From a perusal of the
summons it would appear that the defendant’s address, as it
originally appeared on the
front page thereof, had been amended to
read: “429 Santa Maria, Scrooby Street, Willowbrooke Estate,
Ruimsig”,which
is the full and correct address, according to
the submission of Ms Malan. When the Sheriff attempted to serve the
summons shortly
after its issue in April 2014, the address was, no
doubt, also stated as 429 Scrooby Street, Ruimsig, which would
explain why it
was impossible to effect service of the summons in
April. Only when the aforesaid amendment to the address was effected,
as indicated
above, could service be effected, which finally occurred
during August this year. It was finally contended that, in the light
of
the aforegoing circumstances, there is substance to the
defendant’s denial that he received the requisite notice. Ms
Malan
relied in support of the aforegoing submissions on the decision
by the Constitutional Court in Sebola v Standard Bank and Others
2
012
(5) SA 142
CC.
[18] Ms Kruger, who appeared for the
plaintiff, sought to counter this submission by contending that the
plaintiff had done all
that was required of it to bring the notice to
the attention of the defendant and that he was bound by the address
as stated in
the agreement, whether that address had been correctly
recorded or not. She further relied on the decision of this court in
SA
Taxi Development Finance (Pty) Ltd v Phalafala (Case No.
1512/2013) by my brother, van Eeden AJ., in support of the submission
that, whatever defects may be said to attach to the original notice,
the fact is that the notice was attached to the summons and
the
defendant has indubitably had knowledge of the notice and its content
at least since service of summons on him. On this basis,
van Eeden AJ
held that the defendant in that matter “…was thus fully
apprised of his rights”. He continued by
holding that the
defendant had had the opportunity to do what the notice invited him
to do since receipt of the summons. He pointed
out that, on the facts
of that matter, the defendant was not asking for directions in terms
of s 130(4)(b)(ii), nor did he give
any indication of prejudice or of
what he would have done had he received the notice prior to the
summons. On the aforegoing basis
the court granted summary judgment
despite the lack of due notice in terms of section 129(1) of the Act
to the defendant before
the issue of summons.
[19] In the present matter, the notice
in terms of section 129(1) of the Act was also attached to the
summons. On the basis of the
approach in the Phalafala-decision, I am
accordingly at large to grant summary judgment, notwithstanding any
possible defect in
the notice in terms of s 129(1), provided I am
satisfied that the defendant would not be prejudiced.
[20] I am of the respectful view,
however, that the reasoning underpinning the Phalafala-decision is
clearly wrong and I accordingly
decline to follow this decision. In
my view, sight was lost of the purpose of sections 129 and 130 in the
Phalafala-decision and
this, in turn, led the learned judge into
error in adopting the stated approach .
[21] In para 59 of the Sebola-decision,
Cameron J pointed out that the significance of section 129 manifests
itself in the consumer-friendly
and court-avoidance procedures which
are innovatively introduced by its provisions. I would add, with
great deference, that an
additional consideration that may have a
bearing on the sweep of these and many other provisions of the Act,
is that they are informed
by the substantial inequality of bargaining
and litigating power which usually exists between a credit provider
and the overwhelming
majority of consumers. See in this regard
section 3(e) of the Act. In my respectful view, the approach of van
Eeden AJ in the
Phalafala-decision stems from an under-emphasis of
and necessarily results in an under-valuation of both the objects of
sections
129 and 130 as articulated by Cameron J in the
Sebola-decision.
[22] The fact that section 129 is
animated throughout by the idea of avoiding litigation as far as
possible is self-evident from
its very provisions. Section 129(1)(a),
by its provisions, enable the parties to avail themselves of a number
of different dispute
resolution mechanisms, in the event of a default
by a consumer under a credit agreement, whereas section 129(1)(b), in
peremptory
terms, forbids the commencement of legal proceedings by
the credit provider before first providing notice to the consumer as
contemplated
in paragraph (a). In other words, the notice in terms of
section 129(1) of the Act has as its avowed objective, the avoidance
of
litigation. Proscribing the commencement of legal proceedings to
enforce the agreement before such notice is given is a legislative
device, the employment whereof is central to the attainment of this
objective. To permit a credit provider to give the requisite
notice
pari passu with the very summons which the notice is supposed to
forestall is, quite simply, illogical. By the time summons
has been
issued, the notice has lost its entire raison d’être and
the very purpose of the section is subverted absent
an insistence
that the notice should precede the issue of summons.
[23] The right granted by virtue of the
provisions of section 129(1) has a procedural as well as substantive
dimension. Whilst the
substantive dimension of the section is
self-evident, the procedural dimension may be less so; the two are,
at all events, intimately
intertwined. This much is evident from the
provisions of section 129(3), in terms of which a consumer in default
is entitled, at
any time before the cancellation of the agreement, to
re-instate the agreement by purging the default. If compliance with
section
129(1) becomes optional, this may well detract from the
incentive on the part of the credit provider to actively pursue the
alternative
dispute resolution mechanisms as provided for in terms of
section 129(1)(a) of the Act. Conversely, as pointed out in para. 60
of the Sebola-decision, supra, access to debt counselling and
extra-judicial resolution will undoubtedly have their most potent
impact when the guillotine is about to fall, so to speak. The latest
decision by the Constitutional Court in Kubyana v Standard
Bank of
South Africa Ltd
2014 (3) SA 56
CC, in para. 22 thereof, also places
emphasis on the importance, in the context of the scope and ambit of
sections 129 and 130,
of the consensual resolution of credit
agreement disputes. To permit the credit provider to issue summons
without compliance with
section 129(1) of the Act will, in my view,
not facilitate the ideal of the consensual resolution of disputes; on
the contrary,
it will likely materially hinder its attainment.
[24] I further invite attention to the
use of the word “ must” in section 130(4)(b) of the Act,
in terms of which the
court is required in peremptory terms to
adjourn the matter in the event of a finding that the credit provider
has not complied
with the provisions of, inter alia, section 129 of
the Act. The use of the word “must” prima facie implies a
peremptory
intention on the part of the legislature. The same
considerations apply in regard to the provisions of section 130(3)(a)
of the
Act.
[25] The cumulative effect of the
considerations referred to above compel the conclusion, in my view,
that it is incumbent upon
me to adjourn the matter and to grant an
order in terms of sections 130(4)(b)(i) and (ii) of the Act in the
event of a finding
that the requisite notice in terms of section
129(1) of the Act did not precede the issue of summons. The plaintiff
must, as a
matter of principle, establish and prove that the notice
in terms of section 129(1) of the Act was delivered to the defendant.
This is done by the credit provider alleging and establishing that
the notice was delivered to the relevant post office and that
the
post office would, in the normal course, have secured delivery of a
registered item notification slip, informing the consumer
that a
registered item was ready for collection.
[26] Where the defendant disputes
receipt of the notice, as is the case in the present matter, and the
objective facts indicate
that the address to which the notice was
sent was not a functional one, which in my view is indicated by the
relevant facts, it
follows that the defendant’s denial of
receipt of the notice is probably true, in which case the matter must
be adjourned
in terms of section 130(4)(b) of the Act
[28] I have already referred to the
defendant’s denial that he received the section 129(1) notice.
He stated that he does
not know why this is the case, save to suggest
that the Postal Strike may be to blame for this fact. It is not
explained in the
affidavit who lives at the address in Ruimsig, but
in my view, none of the aforegoing is of any relevance in the light
of the content
of the email referred to in paragraph 10 above, in
which the defendant gave unequivocal notice to the plaintiff to
change his address
to the Vanderbijlpark address stated in the email
concerned. This notice complies with the provisions of clauses 17.1
to 17.3 of
the agreement, which provide as follows:
“17.1 You agree that the
postal/email address that you have provided on the Quotation/Cost of
Credit is the address where
we must send all post and other
communication to you and that such communications will be binding on
you.
17.2 You agree that the physical
address that you have provided on the Quotation/Cost of Credit is the
address that you have selected
where we must send all legal notices
to you.
17.3 You must let us know, in writing,
by hand or registered mail, of any change of your addresses or your
email address, telephone
or cellular phone numbers. If you fail to
give notice of a change of address, we may use the last address we
have for you.”
[29] That which is postulated in terms
of clause 17.3 is precisely what the defendant did when he informed
the plaintiff, on 5 February
2013, by way of the email of even date,
that the address which the plaintiff had of him on file should be
changed to the address
as stated in the said email. It would appear
that the plaintiff’s servants may well not have acted upon the
notice contained
in the defendant’s email of 5 February 2014 by
updating the plaintiff’s records with the defendant’s new
address
as provided by him. The same conclusion is arrived at via the
provisions of section 168 of the Act, which provide that, unless
otherwise provided for in terms of the Act, a notice, order or other
document that, in terms of this Act, must be served in terms
of this
Act, will have been properly served if it has been either- (a)
delivered to that person; or, (b) sent by registered mail
to that
person’s last known address.
[30] The ineluctable result of the
aforegoing is that the notice in terms of section 129(1) of the Act
was ineffective, since the
address as stated in the Quotation/ Cost
of Credit, whether that address was complete or not, had been changed
pursuant to the
terms of the agreement, and the plaintiff’s
records had not been updated accordingly.
[31] The result of the plaintiff’s
failure to comply with the provisions of section 129(1) of the Act is
that I am precluded
by the provisions of section 130(3)(a) of the Act
to determine the matter and must, in stead, adjourn the matter and
make an appropriate
order setting out the steps the plaintiff must
complete before the matter may be resumed.
I accordingly make the following order:
A The matter is adjourned sine die.
B The plaintiff is ordered to comply
with the provisions of section 129(1)(a) of the National Credit Act,
No. 34 of 2005, (“the
NCA”) by providing notice to the
defendant in terms of the aforesaid provision, at the address of his
attorneys of record,
or such other address as he may appoint within
the meaning of clause 17.3 of the agreement, and section 168 of the
NCA. Before
the matter may be resumed.
C The plaintiff shall pay the
defendant’s costs of the application for summary judgment as
well as the notice of intention
to defend.
Vermeulen AJ
Date of Hearing: 09 December 2014
Date of Judgment: 11 December 2014
For the Plaintiff:
Adv. Karin Meyer, instructed by:
Smit Jones & Pratt
2nd Floor Building C
Sunnyside Office Park
4 Carse O’ Gowrie Road
Parktown
PO Box 8
Johannesburg
Tel: (011) 532 1500
Fax: (011) 532 1512
Ref. Mr. Smit/AM/FIR33/1428
For the Defendant:
Adv. C Malan; instructed by:
CA Mather Inc.
No. 7 Dunwest
427 Dunwest Ave.
Ferndale
C/O Mary Jardim
No. 6 Young Ave
Houghton Estate
Johannesburg
REF: KS Whittington_Wesbank
Tel: (011) 791 1766
Fax: 086 688 8537 (Direct)
Email: kjrs@isat.co.za