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
>>
2010
>>
[2010] ZAGPJHC 30
|
|
SA Taxi Securitisation (Pty) Ltd v Chesane (26382/2009) [2010] ZAGPJHC 30; 2010 (6) SA 557 (GSJ) (1 April 2010)
Links to summary
REPUBLIC OF SOUTH AFRICA
SOUTH GAUTENG HIGH COURT, JOHANNESBURG
CASE NO: 26382/2009
In the matter between:
S A TAXI
SECURITISATION (PTY) LTD
Applicant
and
CHESANE,
ANDRIES RABOHADI
Respondent
J U D G M E N T
BORUCHOWITZ, J
:
[1] This
is
an interlocutory application for the interim attachment of two motor
vehicles for safekeeping pending the finalisation of a trial.
[2] An
application claiming the same relief has been instituted by the
applicant against a different respondent in respect of another
vehicle under Case No. 26389/2009. It has been agreed that this
judgment and the order I make shall apply
mutatis
mutandis
to that application.
[3] The
applicant which is a registered credit provider under the National
Credit Act, 34 of 2005 (the NCA) has leased two motor
vehicles to the
respondent which he uses as taxis in the conduct of his business as a
taxi operator. Ownership of the vehicles
vests in the applicant. It
is common cause that the respondent is substantially in arrear with
the payment of instalments under
the leases and the applicant has
instituted an action against the respondent in which it claims, among
other things, cancellation
of the lease agreements and return of the
vehicles.
[4] The
interim relief sought in the present application is for an order
directing the respondent to deliver the vehicles into the
possession
of the applicant who shall, in turn, at is own expense, store the
vehicles at secure garaged premises in Johannesburg
pending the
outcome of the action.
[5] The
immediate question is whether and to what extent the applicant’s
right to obtain the relief sought is affected by
the provisions of
the NCA.
[6] At common
law the interim
attachment
of goods pending the outcome of vindicatory or
quasi
-vindicatory
proceedings is well-established. See
Morrison
v African Guarantee and Indemnity Co Ltd
1
;
Loader v De Beer
2
;
Van Rhyn v Reef Developments A (Pty) Ltd
3
.
[7] The NCA
is silent as to whether a registered credit provider may obtain an
order for the interim attachment of goods. Sections
129(3)(b),
129(4)(a) and 130(2)(a)(ii) make express reference to attachment
orders but it is unclear whether these include orders
for the interim
attachment of goods pending the outcome of vindicatory or
quasi
vindicatory proceedings.
[8]
The
question falls to be resolved by applying general interpretative
principles. Where provisions of a statute are of doubtful meaning
there is a presumption against an alteration in the common law. A
statute must be construed in conformity with the common law
rather
than against it, except where the statute is clearly intended to
alter the common law. See
Stadsraad
van Pretoria v Van Wyk
4
.
[9] There is
no express indication in the NCA that the common law remedy has been
abrogated. In fact, there are textual indications
to the contrary.
The NCA places emphasis on what is termed “
debt
enforcement
”.
One of the stated purposes of the NCA is to provide for a consistent
and harmonised system of debt enforcement in which
the consumer’s
rights are protected (see section 3(i)). The debt enforcement
provisions are to be found in Chapter 6. Section
123(2) provides
that if a consumer is in default under a credit agreement, the credit
provider may take the steps set out in Part
C of Chapter 6 ‘
to
enforce and terminate
’
that agreement. Sections 129(1) and 130(1)(ii) prescribe the
procedures that must be followed before a credit provider
may take
legal proceedings ‘
to
enforce
’
a credit agreement.
[10] The
function and purpose of an interim attachment order is to protect the
leased goods against deterioration and damage and
to keep them in
safekeeping until the case between the parties has been finalised.
Its purpose is not to enforce remedies or obligations
under the
credit agreement and the remedy does not form part and parcel of the
debt enforcement process envisaged in the NCA.
See in this regard J
M Otto
The
National Credit Act Explained
para 44.4. See also the unreported judgment in
S
A Taxi Securitisation (Pty) Ltd v H W Young
Case No. 10249/2008 (CPD). Compare though in a different context
Absa
Bank Ltd v De Villiers
5
.
[1
1]
To succeed in this application the applicant is required to
establish and satisfy the well-established requirements for the
grant
of an interim interdict. It is required to show: (a) that the
right which it seeks to enforce is clear or, if not clear,
is
prima
facie
established, though open to some doubt; (c) that, if the right is
only
prima
facie
established there is a well-grounded apprehension of irreparable harm
if the interim relief is not granted; (c) that the balance
of
convenience favours the granting of interim relief; and (d) that the
applicant has no other satisfactory remedy.
[12
]
The respondent disputes both the right relied upon by the applicant
and that the balance of convenience favours the grant of
the interim
relief sought.
[13]
It
is settled law (at least in this Division) that it is a prerequisite
for the grant of an interim attachment order that any agreement
under
which the respondent has the right to possess the vehicles first be
cancelled. See
Steyns
Foundry (Pty) Ltd v Peacock
6
;
First Consolidated Leasing and Finance Corporation Ltd v N M Plant
Hire (Pty) Ltd
7
.
In the present matter the applicant has purported to cancel the
agreements of lease and is accordingly not precluded from claiming
interim recovery of the vehicles.
[1
4]
In his answering affidavit the respondent challenges the validity of
the applicant’s cancellation of the lease agreements.
He does
so on the basis that when the applicant purported to cancel the lease
agreements there was in force a debt review process
as envisaged in
section 86
of the NCA which precluded the applicant from doing so.
[15
]
It is common cause or not in dispute that on 19 February 2009 a debt
counsellor notified the applicant that the respondent had
applied for
debt relief in terms of
section 86(1)
of the NCA. By further notice
dated 2 March 2009 the debt counsellor advised the applicant that he
had found the respondent to
be over-indebted and that his debt
obligations were in the process of being restructured. As at least
60 business days had elapsed
after the date on which the respondent
had applied for the debt review and because the respondent was in
default of his obligations
in terms of the leases the applicant gave
notice to the debt counsellor, the National Credit Regulator and the
respondent of its
election to terminate the debt-review process in
terms of
section 86(10)
of the NCA. That notice was given on 26 May
2009. On 23 June 2009 the debt counsellor issued a debt-review
proposal which was
not accepted by the applicant. Following the
aforegoing and on or about 26 June 2009 the applicant instituted the
action against
the respondent for cancellation of the lease
agreements and return of the vehicles.
[1
6]
There is a dispute as to whether the applicant’s termination
of the debt- review process is valid. The respondent contends
that
on 26 May 2009 when the applicant purported to terminate the process,
the Magistrates’ Court had not yet decided whether
or not to
make any of the orders proposed by the debt counsellor. Accordingly,
it is submitted that
section 86(10)
of the NCA could not have been
invoked by the applicant.
[1
7]
This contention is disputed by the applicant. It avers that no
proposal or recommendation has been presented by the debt counsellor
to a Magistrates’ Court as contemplated in
section 86(7)(c)
of
the NCA and there is no application pending in terms of which an
order is sought either that the credit extended by the applicant
to
the respondent was reckless or that the respondent is over-indebted
and that his debt should be restructured.
[1
8]
In addition, there is no application currently pending before a
Magistrates’ Court as contemplated in
section 89(11)
of the NCA
for an order reviving the debt-review process. Accordingly the
applicant contends that its cancellation which was conveyed
to the
respondent in the particulars of claim is valid.
[1
9]
A different approach was adopted on behalf of the respondent when
the matter was argued before this Court. Counsel for the
respondent
sought to invoke the provisions of
section 83
of the NCA which permit
the court to declare that a credit agreement is reckless and to set
aside all or part of the consumer’s
rights and obligations or
suspend the force and effect of the agreement. It was submitted
that, if there was a reasonable chance
of it being found that the
credit extended to the respondent was reckless or that it resulted in
the respondent being over-indebted,
the
prima
facie
right sought to be enforced in the instant application will not have
been established. It was submitted that this Court had a
discretion
on the basis of justice and reasonableness to inappropriate
circumstances set aside the respondent’s obligations
under the
credit agreements while permitting the respondent to retain the
vehicles.
[20] The
respondent’s assertion that on 26 May 2009 when the applicant
purported to terminate the debt-review process, the
Magistrates’
Court had not yet decided whether or not to make any of the orders
proposed by the debt counsellor is manifestly
incorrect. Applicant
gave notice of its intention to terminate the debt-review process in
terms of
section 86(10)
on 26 May 2009. At that date the debt
counsellor had not yet presented a proposal to the respondent or to
the Magistrates’
Court as contemplated in section 86(7)(c) of
the Act. A written proposal was only put to the applicant on 23 June
2009 after the
applicant had already purported to terminate the
debt-review process. The termination by the applicant of the
debt-review process
on 26 May 2009 was thus lawful as all the
jurisdictional requirements of section 86(10)
8
had been met.
[21] Once the
debt-review process has terminated in the circumstances referred to,
the only remedy available to a consumer such
as the respondent is
that contemplated in section 86(11) of the NCA which allows for a
resumption or revival of the debt-review
process by the Magistrates’
Court hearing the matter. On the papers before me there appears to
be no application currently
pending before a Magistrates’ Court
as contemplated in section 89(11)
9
of the NCA.
[22
]
As the applicant had complied with the provisions of section
129(1)(b)(i)
10
and section 130(1)
11
of the NCA, the applicant was entitled to enforce its debt as
contemplated in Part C of that Act.
[23
]
It follows from the aforegoing that the applicant’s
cancellation of the lease agreements which was conveyed to the
respondent
in the particulars of claim served on or about 26 June
2009, was validly effected. As the agreements of lease appear to
have been
validly terminated the applicant is not precluded from
obtaining an order for the interim attachment of the vehicles.
[24
]
The aforegoing disposes of the contentions advanced in the
respondent’s answering affidavit. I accordingly turn to the
submission that the court ought to invoke the provisions of section
83 of the NCA.
[25] Section
83 of the NCA provides as follows:
“
83.
Court may suspend reckless credit agreement. –
(1)
Despite any provision of law or agreement to the contrary, in any
court proceedings in which a credit agreement is being considered,
the court may declare that the credit agreement is reckless, as
determined in accordance with this Part.
(2) If a court declares that a credit agreement is reckless in
terms of section 80(1)(a) or 80(1)(b)(i), the court may make an order
-
setting aside all or part of the consumer’s rights and
obligations under that agreement, as the court determines just and
reasonable in the circumstances; or
suspending the force and effect of that credit agreement in
accordance with subsection (3)(b)(i).
(3) If a court declares that a credit agreement is reckless in
terms of section 80(1)(b)(ii), the court -
must further consider whether the consumer is over-indebted at
the time of those court proceedings; and
if the court concludes that the consumer is over-indebted, the
court may make an order –
suspending the force and effect of that credit agreement until a
date determined by the Court when making the order of suspension;
and
restructuring the consumer’s obligations under any other
credit agreements, in accordance with section 87.
(4) Before making an order in terms of subsection (3), the court
must consider -
(a) the consumer’s current means and ability to pay the
consumer’s current financial obligations that existed at the
time the agreement was made; and
(b) the
expected date when any such obligation under a credit agreement will
be fully satisfied, assuming the consumer makes all
required payments
in accordance with any proposed order.
”
[26
]
As appears from the wording thereof, section 83 of the NCA permits a
court, in any proceedings in which a credit agreement is
being
considered, to declare that the credit agreement is reckless as
determined in terms of section 80(1). Section 83(2)(a) empowers
the
court, upon making a finding that a credit agreement is reckless, to
make an order setting aside all or part of the consumer’s
rights and obligations under that agreement as the court determines
just and reasonable in the circumstances. The respondent submits
that, if there is a reasonable chance of it being found that the
credit extended was reckless or that it resulted in the respondent
being over-indebted, the
prima
facie
right to obtain the interim interdict of the relief sought will not
have been established.
[27
]
The following factors militate against the court exercising its
discretion to declare the agreement reckless in accordance with
section 83 of the NCA. The respondent initiated the voluntary
debt-review process contemplated in section 86 of the NCA. Despite
the valid termination of that process in terms of section 86(10) of
the NCA the respondent has taken no steps to revive the process
in
accordance with the provisions of section 86(11). The respondent
remains in default under the credit agreement and has simply
left
matters in abeyance. Most importantly, the lease agreements appear
to have been validly cancelled. There is no provision
in the NCA
which would entitle a court to reinstate an agreement that has been
validly terminated. The only remedy available to
the applicant would
be to obtain a revival of the debt-review process in relation to
whatever amounts may remain outstanding after
return of the vehicles
to the applicant. It is neither just nor reasonable for the court to
set aside, albeit on a temporary basis,
the respondent’s
obligations under the leases while permitting the respondent to
retain the vehicles.
[28] Even
should the respondent be successful at the trial in demonstrating
that the credit grant to him was reckless, then and
in that event the
probabilities are that the court hearing the matter will, in terms of
section 83(2)(a) of the NCA, set aside
all or part of the
respondent’s rights and obligations in terms of the credit
agreements in which event the vehicles will
be returned to the
applicant and any remaining indebtedness of the respondent to the
applicant will be the subject-matter of the
court’s
discretionary re-organisation. It is highly improbable that the
trial court will allow the respondent to retain
possession of both
vehicles, operate them for profit as taxis and not make any payment
therefor to the applicant.
[29
]
I accordingly conclude that the applicant has established a clear
right to cancellation and restoration of the vehicles in the
pending
action.
[30
]
I turn to the balance of convenience. As the applicant’s
claim is a vindicatory one the element of irreparable harm is
presumed. See
Stern
and Ruskin NO v Appleson
12
.
Having apparently validly cancelled the lease agreements the
applicant as owner of the vehicles is entitled to have the vehicles
preserved in their present condition
pendente
lite
.
See the cases of
Morrison,
Loader and Van Rhyn supra
.
It is self-evident that the vehicles are depreciating by use and
that the respondent’s continued utilisation of the vehicles
as
taxis over an extended period will have the result that, should the
applicant be successful in its action, the vehicles that
it recovers
may be virtually worthless. It is untenable that the respondent be
entitled to utilise the vehicles without effecting
payment under the
credit agreements. The applicant seeks to have the vehicles stored
in a place of safety so that, in the unlikely
event that the
applicant is directed after the finalisation of the action to return
the vehicles to the respondent, they will not
have suffered any
meaningful reduction in value. The applicant will bear the costs of
the storage.
[31
]
As against the aforegoing the respondent contends that he will
suffer substantial prejudice if he is deprived of the vehicles.
This
prejudice includes the loss of his full income together with the
assertion that, with such loss, he will be unable to support
his
family.
[32
]
The question of the balance of convenience must be placed in its
proper perspective. It is a well-settled principle that the
stronger
the case which the applicant makes out, the less balance of
convenience in favour of
the applicant
there needs to be for interim relief to be granted. See
Olympic
Passenger Service (Pty) Ltd v Ramlagan
13
.
As the applicant has established a strong right to cancellation and
restoration of the vehicles in the pending action, less weight
ought
to be placed on the question of balance of convenience. I am
nevertheless satisfied that the balance of convenience for
the
reasons stated favours the applicant.
[33] For these reasons, the applicant has established the
requirements for the grant of the interim interdict sought.
[34] The following order is granted:
Pending the final outcome of the action instituted by the applicant
against the respondent:
CLAIM A:
The respondent is directed to deliver into the possession of the
Sheriff a 2008 CAM INYATHI Xgs 2.2i HIGH ROOF vehicle with engine
number SF491QE071262556A and chassis number LPBMBDDE47H120705 who
shall deliver it to the applicant who shall, in turn, at its
own
expense:
transport the vehicle to garaged premises situated at 17 Bompas
Avenue, Dunkeld, Johannesburg:
1.2 retain
the vehicle at such garaged premises under security pending the
outcome of the action;
The applicant shall not use the vehicle or permit that it be used.
CLAIM B
The respondent is directed to deliver into the possession of the
Sheriff a 2007 CAM INYATHI 15 SEATER vehicle with engine number
SF491QE0709568051A and chassis number LPBMBDDE17H112982 who shall
deliver it to the applicant who shall, in turn, at its own
expense:
transport the vehicle to garaged premises situated at Park Village
Auctioneers, 4 Wemmer Jubilee, Johannesburg;
retain the vehicle at such garaged premises under security pending
the outcome of the action;
The applicant shall not use the vehicle or permit that it be used.
In the event
of the respondent failing to comply with the contents of paragraphs
1 and 3 above within five days of service of
this order on
respondent’s attorneys, the Sheriff is authorised and directed
to take the vehicles into his possession from
wherever he may find
them and return the vehicles to the applicant as aforesaid;
The respondent is ordered to pay the costs of the application.
_____________________________
P
BORUCHOWITZ
JUDGE OF THE SOUTH GAUTENG
HIGH COURT, JOHANNESBURG
COUNSEL FOR
APPLICANT ADV A SUBEL SC
ADV ARG MUNDELL
INSTRUCTED
BY
MARIE-LOU
BESTER INC
COUNSEL FOR
RESPONDENT ADV J SUTTNER SC
ADV C GEORGIADES
INSTRUCTED
BY
NOZUKO
NXUSANI INC
DATE OF HEARING 23 FEBRUARY 2010
DATE OF
JUDGMENT
1
APRIL 2010
1
1936 (1) Ph M 35 (T).
2
1947 (1) SA 87 (W).
3
1973 (1) SA 488
(W) at 492.
4
1973 (2) SA 779
(A) at 784 and cases there cited.
5
2009 (5) SA 40
(C) at paras [11]-[14] and [42].
6
1965 (4) SA 549
(T).
7
1988 (4) SA 924
(W).
8
Section 86(10) reads:
“
(10)
If a consumer is in default under a credit agreement that is being
reviewed in terms of this section, the credit provider
in respect of
that credit agreement may give notice to terminate the review in the
prescribed manner to -
the consumer;
the debt counsellor; and
the
National Credit Regulator, at any time at least 60 days after the
date on which the consumer applied for the debt review.
”
9
Section 86(11) reads:
“
(11)
If a credit provider who has given notice to terminate a review as
contemplated in subsection (10) proceeds to enforce that
agreement
in terms of Part C of Chapter 6, the Magistrate’s Court
hearing the matter may order that the debt review resume
on any
conditions the court considers to be just in the circumstances.
”
10
Section 129(1) provides as follows:
“
(1)
If the consumer is in default under a credit agreement, the credit
provider –
may draw the default to the notice of the consumer in writing
and propose that the consumer refer the credit agreement to a debt
counsellor, alternative dispute resolution agent, consumer court or
ombud with jurisdiction, with the intent that the parties
resolve
any dispute under the agreement or develop and agree on a plan to
bring the payments under the agreement up to date;
and
subject to section 130(2), may not commence any legal
proceedings to enforce the agreement before –
first providing notice to the consumer, as contemplated in
paragraph (a), or in section 86(10), as the case may be; and
(ii)
meeting any further requirements set out in section 130.
”
11
Section 130(1) provides:
“
(1)
Subject to subsection (2), a credit provider may approach the court
for an order to enforce a credit agreement only if, at
that time,
the consumer is in default and has been in default under that credit
agreement for at least 20 business days and –
at least 10 business days have elapsed since the credit provider
delivered a notice to the consumer as contemplated in section
86(9), or section 129(1), as the case may be;
in the case of a notice contemplated in section 129(1), the
consumer has –
not responded to that notice; or
responded to the notice by rejecting the credit provider’s
proposals; and
(c) in
the case of an instalment agreement, secured loan, or lease, the
consumer has not surrendered the relevant property to
the credit
provider as contemplated in section 127.
”
12
1951
(3) SA 800
(W) at 813.
13
1957
(2) SA 382
(D) at 383C-G