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[2021] ZAGPJHC 516
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Rooplal N.O. v Khangela and Another (2020/11111) [2021] ZAGPJHC 516 (28 April 2021)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
REPORTABLE:
NO
OF
INTEREST TO OTHER JUDGES: NO
REVISED.
28/4/2021
CASE
NO.: 2020/11111
In
the matter between:
ANOOSHKUMAR
ROOPLAL N.O.
Applicant
and
NDIVHUWO
KHANGELA
First Respondent
AZWINNDINI
CONSTANCE KHANGELA
Second Respondent
JUDGMENT
ROBINSON
AJ:
INTRODUCTION
[1]
This is an application brought by the
applicant in his capacity as liquidator of the VBS Bank (“the
bank”). The
applicant seeks relief against both
respondents. It is common cause that the first and second
respondents are married in
community of property.
[2]
Two agreements are in issue, a vehicle
finance agreement as well as a mortgage agreement. The former was
concluded between the bank
and the first respondent, whilst the
latter was concluded between the bank and both respondents.
[3]
In respect of the vehicle finance
agreement, the applicant claims cancellation of the sale; delivery
and return of the vehicle,
this being a Mercedes Benz; and payment of
an amount of R2,555,191.66, jointly and severally, plus interest at
the agreed rate
of prime, calculated daily and compounded monthly in
arrears from 29 February 2020 until date of payment to VBS, less the
market
value of the vehicle as at the date of cancellation, if any,
as determined in terms of the vehicle finance agreement.
[4]
In respect of the mortgage agreement the
applicant seeks payment of the sum of R5,767,735.24, jointly and
severally, plus agreed
interest at the rate of 10.50%, calculated
daily and compounded monthly in arrears from 29 February 2020 until
date of full payment,
(both dates inclusive), being the money
outstanding and payable to VBS under that agreement.
[5]
The applicant seeks costs of the
application on the scale of attorney and client.
[6]
Each of the two agreements in question is a
credit agreement as contemplated in the National Credit Act, 2005
(“the Act”).
It is not seriously in dispute that the
money claimed is owed. Whether the applicant is entitled to relief
depends on whether or
not it has complied with section 129(1) of the
Act.
[7]
It is accordingly immediately apparent that
notice as contemplated in section 129(1) had to be provided to each
of the first and
second respondents, these being consumers as
contemplated in the Act.
[8]
In
this regard the founding affidavit claims that the applicant’s
attorneys addressed a letter of demand dated 29 September
2019 to the
first and second respondents in accordance with section 129(1) of the
Act. The names of Ndivhuwo Khangale (the first
respondent) and
Azwinndini
Constance
Khangale (the second respondent), appear at the top of the letter.
The letter is addressed to the address of the mortgaged
property,
this being 538 Furrow Road (Feartherfalls Estate) Erf 538 Homes
Haven, Ext 16, Mogale City Local Municipality Gauteng.
The address is
stated in the letter to be the
domicilium
address and residential address. The letter was also sent by
email to the address
khangalen@gmail.com
.
[9]
The
domicilium
address to which the section 129 letter was addressed and at which it
was delivered is in fact the
domicilium
address indicated and disclosed in the mortgage finance agreement
entitled “LARGE MORTGAGE CREDIT AGREEMENT IN TERMS OF THE
NATIONAL CREDIT ACT NO 34 OF 2005”. In terms of paragraph 34 of
that document, the parties choose the Featherfalls address
as the
domicilium citandi et executandi
(address for service and execution). However, in paragraph 35 of that
agreement, the parties appoint another address for the purposes
of
notice in terms of section 129. The clause reads as follows:
The parties appoint the
following addresses as their postal addresses for any notice in terms
hereof or as may be required by the
Act and any notice so sent shall
be deemed to have been received by the party it’s addressed to
ten (10) days after despatch
thereof by pre-paid registered post:
35.1.2 The
Consumer
77 Milkwood Ext 23
Ormonde Johannesburg
2091
35.3 The
parties record that they elect that all notices to be sent by one
party to the other in terms hereof or
in terms of the Act must be
sent by prepaid registered post.
[10]
The large mortgage credit agreement is concluded
between VBS Mutual Bank and
Ndivhuwo Khangela and Azwinndini
Constance Khangela, these being jointly referred to as the consumer.
The Act in question is defined
as the National Credit Act 34 of 2005.
[11]
It is not in dispute that the respondents are in arrears with the
bond payments.
In its application the applicant states that, as
at the time of the deposition to the affidavit, which was on 24 March
2020, the
respondents were in arrears in the sum of R1,469,876.09 and
that therefore the full amount of R5,767,735.24, being the amount
which
remains overdue and owing, is now payable to VBS under the
mortgage credit agreement.
[12]
In the section 129 letter of 29 October 2019, the applicant’s
attorneys address both the mortgage and vehicle finance agreements.
Attention is drawn to the provisions of section
129(1)(a) of the National Credit Act and the letter advises the
reader thereof to
refer any dispute to a debt counsellor or
alternative dispute resolution agent, consumer court or ombud with
jurisdiction so that
such dispute may be resolved and an arrangement
can be made to bring the payment due to the bank under the mortgage
loan agreement
up to date.
[13]
The respondents in their answering
affidavit object that there was non-compliance with the Act. In
particular the respondents object
to the letter of 29 September 2019
on the following grounds:
[13.1]
the notice was delivered to the first
respondent and not to the second respondent;
[13.2]
the applicant has failed to establish that
the notice had been delivered to the first respondent;
[13.3]
the second respondent is a consumer in her
own right and ought to have received her own separate notice in terms
of section 129
of the Act;
[13.4]
it was not appropriate to deliver one
notice to two separate consumers;
[13.5]
the applicant was not entitled to deliver a
single notice in respect of two independent credit agreements.
It ought to have
delivered two separate notices in respect of each
credit agreement.
[14]
In the circumstances the respondents submit
that the applicant has failed to deliver a notice in terms of section
129 of the Act
in respect of each credit agreement as contemplated in
the Act and/or to draw the default to the notice of the second
respondent
as required by section 129(1)(a) of the Act. Accordingly
the applicant has failed to comply with the provisions of the Act and
more specifically section 130 thereof.
[15]
In
reply the applicant refers to a further delivery by hand and by
registered post to the first respondent and the second respondent,
this time to each of them separately and each of them in respect of
the separate agreements. Accordingly four letters were hand
delivered, this to the Featherfalls Estate address. The letters were
also sent by registered post and to this end copies of registered
slips are attached to demonstrate that two registered letters were
sent to a Mrs A C Khangale at the Featherfalls Estate address,
as
well as two letters to a Mr N K Khangale. On the registered
letter slip appears a stamp from what appears to be Benmore
post
office dated 15 July 2020. This is evidently not compliance
with the requirements in
Sebelo
v Standard Bank of South Africa
[1]
.
The further problem facing the applicant is that the Featherfalls
Estate is not the address designated for the purposes
of notice in
terms of the Act.
[16]
During the first day on which this
application was heard, I pointed out to counsel for the applicant, Mr
Mohapi, that there was
no satisfactory proof of hand delivery to the
Featherfalls Estate address. Evidently, Mr Rooplal would not
have personal
knowledge thereof. I permitted the matter to stand down
to enable the applicant to provide proof of service affidavits, which
it
did in respect of both the first notice of 2019 as well as the
second letters of 14 July 2020. I afforded Mr Ndobe an opportunity,
should any of the respondents wish to respond to the service delivery
affidavits, but Mr Ndobe indicated that he did not require
to submit
such a response. Subsequently, and on the hearing on Thursday
15 April 2021, this Court, having consulted the terms
of the mortgage
agreement again, realised that the notices were delivered to the
domicilium
address, but that they were not in terms of paragraph 35 sent by
registered post to the address indicated in paragraph 35, this
being
the 77 Milkwood Extension address. Accordingly, the hand delivery to
the Feather Falls Estate address was called into question
as far as
s129(1) notice was concerned. In those letters, and as far as the
vehicle finance agreement is concerned, the applicant
conveys the
fact of cancellation thereof.
[17]
Adv Mohapi submitted in this regard that
the
domicilium citandi et executandi
domicilium
address counts equally well
for purposes of section 29(1) notice. To that Adv Ndobe countered
that a
domicilium citandi et executandi
address was for purposes of services of legal process, which is
further supported by the phrase (address for service and execution)
whereas paragraph 35 very clearly indicated the preference of the
consumer as contemplated in section 129(6) of the Act.
I accept
the submissions made by Adv Ndobe in this regard.
[18]
The matter does, however not end there. It
is not in dispute that the first notice dated 29 October 2019 was in
fact received
by the first respondent. The first respondent
himself admits as much in paragraph 9 of his affidavit, where he
states “
in support of the clear
intent on the part of the Applicant to deliver the Notice to the
First Respondent, the Notice was also delivered
via email to the
First Respondent and there is no email address to the Second
Respondent.
” This point was
made in support of the respondents’ argument that in fact, no
notice had been addressed to the
second respondent. Be that as
it may, it is clear that the first respondent did receive the notice.
A copy of the cover email
evidencing delivery of the letter to the
first respondent is attached to the founding affidavit, showing that
the email was sent
on 29 October 2019 at 15:38. The covering
email reads as follows: “
Dear
Sirs, we attach a correspondence for your attention.
"
[18.1]
Also attached to the founding affidavit and indeed
referred to in the founding affidavit itself is an email from
Ndivhuwo Khangela dated 31 October 2019 10:20 and addressed to
Ms Matshebela of the applicant’s attorneys, with the subject
heading
re Anooshkumar Rooplal N.O / Ndivhuwo Khangela and
Azwinndini Constance Khangela
. Ms Matshebela is the
attorney in the employ of Werksmans attorneys, attending to this
matter on behalf of the applicant.
[18.2]
The email commences as follows: “
Good day Ms Matshebela I
wish to acknowledge receipt of your letter of demand. I
however, would like to bring the following
to your attention
.”
[18.3]
Eight points are listed in the email.
[18.4]
The upshot of these points is that the first respondent is unable to
pay because of the
fact that VBS had become liquidated. It appears
that the first respondent was reliant on payment from VBS and that
because of the
failure to pay by VBS, he in turn is unable to settle
his debts. At item 6 the first respondent states “
I am
currently unemployed and my company has not had any contract since
VBS’s liquidation. 7, I am therefore unable to make
any
payments at the moment and was hoping that should VBS pay some money
owed to my company, I will also be able to start servicing
my loans.
8, I am committed to paying every money owed to VBS by myself and my
wife Constance Khangela.
”
[18.5]
This was not placed in dispute in the answering affidavit, more
particularly the email
is referred to at paragraph 38 of the founding
affidavit and dealt with in paragraphs 38 to 39. Indeed in paragraph
38 of the answering
affidavit the first respondent states as follows:
“
In support of the clear intent on the part of the Applicant
to deliver the Notice to the First Respondent, the Notice was also
delivered
via email to the First Respondent and there is no email
address to the Second Respondent.
”
[18.6]
It is therefore not in dispute that the first respondent received the
letter on which
the applicant relies in support of its compliance
with sections 129 and 130.
[18.7]
Indeed, on 31 October 2019 at 15:30 Ms Matshebela responded to
the email of the
first respondent by informing him that the applicant
was reiterating the contents of its letter of demand of 29 October
2019 by
demanding payment of 1, R2,448,402.59 under the vehicle
finance agreement and R5,488,449,79 being the total amount
outstanding
as at 29 October 2019 under the mortgage credit
agreement, with interest thereon and legal costs on an attorney and
client scale
within ten days of receipt of the letter of demand.
[19]
There is accordingly no dispute that the first respondent received
the letter of 29 October
2019.
[20]
Mr
Ndobe argued at the hearing that it was for the credit provider to
establish that strict compliance in terms of section 129 of
the
National Credit Act has taken place. In this regard I enquired of
both counsel whether I was precluded by any authority from
taking
cognisance of the fact that in fact the first respondent did receive
notice before the institution of the legal proceedings.
Neither
counsel could refer me to authority. I consider the issue resolved by
the decision of the Supreme Court of Appeal in the
matter of
Naidoo
v the Standard Bank of South Africa
[2]
.
In this matter what was in issue was whether failure strictly to
comply with section 129 in circumstances where the appellant
had
admitted that the section 129(1) notice had come to its attention,
was required. Majiedt JA rejected the contentions
from the
appellant that such strict compliance was required. The ultimate
purpose of section 129 is to ensure that a consumer is
notified of
his or her default and of the various options available to him or
her. The SCA had little patience with the contentions
of the
appellant in
Naidoo
that, despite his admission that the section 129(1) notice had come
to his attention, the bank had not shown that it had effected
the
notice by registered mail, shown that the notice was delivered to the
correct post office and, in order to prove delivery furnish
a
post-despatch (track and trace) print out from the post office
website, this relying on
Sebola
.
The Court held as follows: “
But
this line of argument was wisely not pursued during oral argument by
counsel… all that is required of a credit provider
is to
‘satisfy the Court from which enforcement is sought that the
notice, on a balance of probabilities, reached the Consumer
”
(
Sebola
para 74).
Ultimately,
the question is whether delivery as envisaged in the Act has been
effected (Kubyana paras 31, 36, 39, 52 and 53).
”
[21]
I am therefore satisfied that the section 129(1) notice of 29 October
2019 did come to
the attention of the first respondent.
[22]
I merely add that I have not been persuaded by the argument on behalf
of the respondents
that two separate notices and two separate
applicants ought to have been brought. Counsel could not refer me to
any authority in
this respect. I see no reason why costs should be
increased by the issuing of two separate applications nor indeed why
both credit
agreements could not be addressed in one letter.
The Act requires of the credit provider to inform the consumer of the
basis
of the claim, the amount claimed as well its options under
section 129(1)(a) of the National Credit Act. All this is clearly
communicated
in the letter of 29 October 2019. That the letter
erroneously claims that the second respondent is a party to the
vehicle finance
agreement is in my view neither here nor there. In
any event, and on the own admission of the respondents, this letter
did not
reach the second respondent and a separate letter ought to
have been addressed to her.
[23]
I am therefore satisfied that the applicant has established its case
as against the first
respondent and that judgment can be granted
against the first respondent as far as the vehicle finance agreement
is concerned.
For the reasons stated below, judgment cannot at this
stage be granted in terms of the mortgage agreement.
[24]
I am not satisfied that the Act has been complied with in respect of
the second respondent.
In this regard I am in agreement with Mr Ndobe
that the second respondent is a consumer in her own right and that
notification
ought to have been given to her. I am also in agreement
with Mr Ndobe that, where a credit provider fails to follow the
strictures
of section 129 to the letter by failing to provide
notification as chosen and indicated in the relevant agreement, the
credit provider
bears the risk of showing that the notice had in fact
come to the notice of the consumer. In this regard there is no
evidence that
it had in fact come to the notice of Mrs Khangela. The
question is whether the attachment of the notices to the replying
affidavit
was sufficient to bring it to her attention. In this regard
Mr Ndobe submitted that it came to the notice of the respondents’
attorneys, but that there is no evidence that it did come to the
notice of the second respondent. Whether that is so or not I do
not
know, but the fact that I do not know is the precise point. In my
view it is incumbent upon the applicant to ensure a notice
is sent to
the second respondent by way of pre - paid registered post and
addressed to the address chosen in the mortgage agreement,
this being
77 Milkwood Ext 23, Ormonde, Johannesburg 2091. Thus, in terms of
section 130(4)(b) the application as against the second
respondent is
to be postponed until such time as the applicant can show that the
requisite notification had been given to the second
respondent.
[25]
In respect of
Benson
,
that judgment is arguably distinguishable because the founding
affidavit in this case contains no clear notification to the second
respondent. Although the letter of 29 October 2019 contains her name
at the top thereof, it only contains the email address of
her
husband, the first respondent, and then commences with the salutation
Dear Sirs
.
In addition, it commences with a discussion of the vehicle finance
agreement to which the second respondent is not a party.
[26]
It may be unduly formalistic to require the
applicant to act in terms of section 130(4) but, if this court is to
err in this regard,
albeit reluctantly, it would err on the side of
caution. The provisions of section 130(4) are clear, namely that,
should the Court
determine that the credit provider has not complied
with the relevant provisions of the Act, the Court must adjourn the
matter
before it and make an appropriate order setting out the steps
the credit provider must complete before the matter may be resumed.
[27]
Before me Mr Ndobe was in agreement that,
were I to be of the view that a case has been shown satisfactorily
against the first respondent
in respect of the vehicle finance
agreement, I would be entitled to grant an order against the first
respondent and postpone the
matter as against the second respondent.
[28]
I am of the view that it would be
inappropriate to grant judgment against the first respondent on the
mortgage agreement whilst
postponing that judgment against the second
respondent. That might amount to cancelling the agreement as against
the one and keeping
it
in esse
as against the other. For that reason, the relief sought in respect
of the mortgage agreement is postponed as against both respondents.
[29]
In the circumstances I make the following
order:
[29.1]
The cancellation of the Sale on Suspensive
conditions, concluded between VBS Mutual Bank and the first
respondent (“the vehicle
finance agreement”) (FA8 to the
founding affidavit) is confirmed;
[29.2]
The first respondent is ordered to return
the Mercedes Benz vehicle being the subject matter of the vehicle
finance agreement to
the applicant;
[29.3]
The first respondent is ordered to pay the
sum of R2,555,191.66 plus interest at the agreed rate of prime,
calculated daily and
compounded monthly in arrears from 29 February
2020 until date of full payment, less the market value of the vehicle
as determined
in terms of the vehicle finance agreement;
[29.4]
As against the respondents and in respect
of the relief sought in respect of the Large Mortgage Credit
Agreement concluded between
VBS Mutual Bank and the respondents (FA4
to the founding affidavit)
[29.4.1]
this application is adjourned;
[29.4.2]
the applicant is ordered to deliver a
section 129(1) notice to the second respondent by sending such notice
by prepaid registered
post to the following address: 77 Milkwood Ext
23, Ormonde, Johannesburg, 2091.
[29.5]
The costs of this application are reserved.
[29.6]
The applicant is permitted to approach this
court with its papers suitably supplemented to provide proof of
notification.
R
M ROBINSON
[Acting
Judge of the High
Court,
Gauteng Local
Division,
Johannesburg]
DATES OF HEARING:
14
April 2021
DATE OF JUDGMENT:
APPEARANCES:
COUNSEL
FOR APPLICANT:
Adv. SL Mohapi
INSTRUCTED
BY:
Werksmans Attorneys
COUNSEL
FOR RESPONDENT: Adv. SM Ndobe
INSTRUCTED
BY:
Ndobe Incorporated Attorneys
[1]
2012
(5) SA 142 (CC).
[2]
(20595/14)
[2016] ZASCA 9(9 March 2016)