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[2010] ZAWCHC 512
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FirstRand Bank Ltd t/a Wesbank v Weltman -Shmaryanhu, FirstRand Bank Ltd t/a McCarthy Finance a division of Wesbank v Weltman -Shmaryanhu (18229/2010, 18230/2010, 18243/2010) [2010] ZAWCHC 512 (25 October 2010)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE HIGH COURT, CAPE TOWN)
In
the matters between:
18229/2010
FIRSTRAND
BANK LTD t/a WESBANK
and
ININA
WELTMAN-SHMARYAHU
18230/2010
FIRSTRAND
BANK LTD t/a MCCARTHY FINANCE
a
division of WESBANK
and
MRS
ANINA WELTMAN-SHMARYAHU
18243/2010
FIRSTRAND
BANDK LTD t/a WESBANK
and
MRS
ANINA WELTMAN-SHMARYAHU
JUDGMENT
HANDED DOWN ON MONDAY, 25 OCTOBER 2010
CLEAVER
J
[1]
These matters are yet further cases spawned by the National Credit
Act No 34 of 2005 ("the NCA"). Although the issues
in all
three matters are identical, I will for the purposes of this judgment
deal with the papers in case no 18229/2010. The parties
agreed that a
finding in this matter would result in similar findings in the other
two matters.
[2]
The plaintiff seeks by way of summary judgment an order for the
return of a motor vehicle sold to the defendant in terms of
an
instalment sale agreement. The application is opposed in the main on
grounds which may be termed 'technical'.
[3]
On 19 October 2007 the plaintiff and the defendant entered into what
is termed a 'costs of credit sale agreement' in terms whereof
the
defendant purchased from the plaintiff a BMW 330I CI motor vehicle
for a purchase consideration of R479 000 plus certain extra
charges
listed in the particulars of claim. The plaintiff avers that the
defendant, to whom the vehicle was duly delivered,
".
has breached the terms of the Agreement in that the
Defendant
has failed to maintain regular instalments on account, the arrears as
at the 16
th
AUGUST
2010 being the sum of R66 060.85 and the balance the sum of R505
153.65. As a result of the Defendant's breach, the Plaintiff
elected
to cancel the agreement, alternatively, Plaintiff's election to
cancel the agreement is herewith conveyed to the Defendant."
[4]
Defendant's counsel submitted that the description of the rights
accorded to the plaintiff in the agreement was not accurate
and that
the wording thereof was not to be found in the agreement. The
averments made by the plaintiff in paragraph 6.5 of its
particulars
of claim are as follows:
"In
the event of the Defendant breaching any terms of the agreement (all
of which are agreed to be material) the Plaintiff
shall be entitled
to immediately cancel the Agreement, obtain possession of the vehicle
and recover from the Defendant, as pre-estimated
liquidation damages,
the total amount payable, but not yet paid, less the value of the
vehicle as at the date of delivery thereof
to the Plaintiff;"
Defendant's
counsel is correct in that the wording supplied by plaintiff does not
appear
in the agreement, but in my view nothing turns on this. The relevant
portion
of the breach clause in the agreement reads as follows:
"11.
Breach
11.1.
If you do not comply with any of the terms and conditions of this
Agreement (all of which you agree are matehal), or you fail
to pay
any amounts due under this Agreement, or you have made misleading
statements to us before signing this Agreement, or you
allow any
judgement that has been taken against you to remain unpaid for more
that seven days, or are sequestrated or liquidated,
or perform an act
of insolvency in terms of the
Insolvency Act no 24 of 1936
or enter
into a compromise with any of your creditors, or being a natural
person, die, or being a juristic person undergo a material
restructure, then we may (without affecting any of our other rights),
proceed with the enforcement or termination of the Agreement,
as set
out in Chapter 6
Part C
of the Act.
11.2.
Should we elect to enforce the Agreement, the procedure set out
hereunder will be followed:
11.2.1.
A letter will be despatched to you drawing your default under the
Agreement to your attention;
11.2.2.
A proposal will be made in that letter that you refer this Agreement
to a debt counsellor, alternative dispute resolution
agent, consumer
court or Ombud with jurisdiction, with the intention that we resolve
any disputes or develop and agree on a plan
to bhng the payments
under this Agreement up to date.
11.2.3..
If the Agreement is under review in terms of section 86 of the Act,
and the review is not finalised within 60 business
days after you
applied for the debt review, we will send you a notice, terminating
the debt review.
11.2.4.
Legal proceedings will not be commenced against you unless:
(a)
You have been in default for at least 20 business days;
(b)
At least 10 business days have elapsed since the default letter or
notice referred to above has been delivered (which 10 day
period may
run concurrently with the 20 day default period);
(c)
You have failed to respond to the default letter or you have
responded by rejecting our proposal;
(d)
You have not surrendered the Goods to us in terms of section 127 of
the Act.
11.3.
Should
we elect to cancel this Agreement in terms of section 123 of the Act,
the same procedure set out in paragraph 11.2 above
will be followed
prior thereto.
11.4
At any time before cancellation of the Agreement you are entitled to
reinstate the Agreement which is in default by paying
all overdue
amounts, as well as our permitted default charge and reasonable costs
up to the time of reinstatement.
As
will be seen from the clause,
11.1
affords
the plaintiff the right to proceed with the termination
(cancellation) of the agreement in the event of the defendant failing
to pay any amounts due under the agreement; and
11.3
provides
the procedure to be adopted in the event of the plaintiff electing to
cancel the agreement.
[5]
The applicability of the NCA is set out in the following manner in
the particulars of claim:
"9.
The Plaintiff has complied with the provisions of the National Credit
Act 34 of 2005 (the 'NCA'), more particularly:
9.1.
The Plaintiffs duly authorised Attorneys, Jeff Gowar and Associates,
instructed the Sheriff of Simonstown to serve a notice
in terms of
the provisions of Section 129(1)(a) on the Defendant, which Notice
was duly served on the Plaintiffs chosen
domicilium
on
27
th
JULY
2010. A copy of the Notice and a copy of the Sheriffs Return to the
Notice is annexed as 'E' and 'F respectively;
9.2.
In response to the Notice in terms of Section 129(1)(a), the
Plaintiffs Attorney, Mr Jeff Gowar of Jeff Gowar and Associates,
received a telephone call from Mr Brendan Nielsen of Butler
Blanckenberg Nielsen Safodien Incorporated, acting for the Defendant
herein on the 30
th
July
2010, requesting suitable arrangements to liquidate the debt herein.
9.3.
The Defendant has not surrendered the vehicle to the Plaintiff as
contemplated in Section 127 of the NCA;
9.4.
There is no matter arising under the agreement and pending before the
National Credit Tribunal that could result in an order
affecting the
issues to be determined by the Court;
9.5.
The Plaintiff has not approached the Court during the time that the
matter was before a Debt Counsellor, an Alternative Dispute
Resolution Agent, Consumer Court or the Ombud with jurisdiction;
9.6.
The Defendant has not:
9.6.1.
agreed to a proposal made in terms of Section 129(1)(a) of the NCA or
acted in good faith in fulfilment of such agreement
as no such
agreement has been reached;
9.6.2.
complied with an agreed plan as contemplated in Section 129(1) (a) of
the NCA as no such plan has been agreed; or
9.6.3.
brought the payments under the credit agreement up to date, as
contemplated in Section 129(1)(a) of the NCA.
9.7.
More than 10 business days has passed since the delivery of the above
notice;
9.8.
The Defendant has been default under the agreement for more than 20
business days;
9.9.
The agreement is not subject to pending debt review as contemplated
in Section 86 of the NCA."
[6]
Annexure E, being the notice in terms of section 129(1) of the act,
is dated 22 July and is addressed to the defendant at 7
Avenue
Francaise, Fresnaye, Cape Town, her place of residence. The letter
reads:
"RE:
NOTICE IN TERMS OF
SECTION 129(1)
OF THE
NATIONAL CREDIT ACT NO 34 OF
2005
WESBANK
a division of FIRSTRAND BANK LIMITED / YOURSELF
ACCOUNT
NR: LWC17998E
GOODS:
BMW 3301 CI CONVERT ATT (46) F/L
AGREEMENT
CREDIT REGISTRATION NUMBER WESBANK-NCRCP20
1.
We act on behalf of Wesbank a division of Firstrand Bank Limited, at
whose behest we have been instructed to proceed against
you.
2.
The abovementioned Agreement is in arrears in the sum of R63 915.37.
The total balance outstanding under the agreement including
arrears
amounts to the sum of R452 211.79.
3.
We must request that you effect payment of the aforementioned amount
plus interest at the rate set out in your agreement within
TEN (10)
business days of this letter, alternatively to contact the writer's
office to make an arrangement which is both suitable
to our client
and yourself in respect of the outstanding balance.
4.
Kindly note that you may seek assistance from a Debt Counsellor,
Alternative Dispute Resolution Agent, Consumer Court or Ombud
with
jurisdiction with the intent to resolve any dispute under the
agreement or develop and agree on a plan to bring the payments
under
the agreement up to date.
5.
In the event that you refer the matter to a Debt Counsellor, you
shall be liable to pay an Application fee to the Debt Counsellor,
as
prescribed by Schedule 2 of the Regulations to the
National Credit
Act No. 34 of 2005
, and not be able to incur any further debt until
your debt review has been finalised.
6.
Accordingly, we await to hear from you within TEN (10) business days
to pay your arrears or to take action in terms of clause
4 above.
Should you fail to take either action as set out above, we will have
no option but to institute the necessary legal action
for the return
of the goods."
Annexure
F, being the return of the deputy sheriff relating to service of the
letter of demand reads:
"On
this 27th day of July 2010 at 12:51 I served a copy of the LETTER OF
DEMAND in this matter upon ININA WELTMAN SHMARYAHU
by affixing a copy
thereof to the outer or principal door of the place of RESIDENCE of
the DEFENDANT at 7 AVENUE FRANCAISE, FRESNAYE
CAPE TOWN. No other
service possible after a diligent search.
(Rule 9(6))
"
[7]
Clause
20 of the agreement deals with the
domicilium
address
chosen by the defendant for the purpose of receiving communications
from the plaintiff. The clause reads as follows:
20.
Addresses
20.1.
You agree that the postal address / e-mail address that you have
provided on the Quotation is the address where we must send
all post
and other communication to you and that such communication shall be
binding on you.
20.3.
You agree that the physical address that you have provided on the
Quotation is the address that you have selected as the address
that
we must send all legal notices to you.
20.4.
You must let us know in writing of any change to either of your
addresses as well as your e-mail address and telephone number.
If you
fail to give notice of a change of address, we may use the last
address we have for you, even if you are no longer there.
20.5.
You accept that you will be deemed to have received a notice or
letter 5 days after we have posted it to either of the addresses
you
have given."
On
the front page of the agreement the following appears:
"DOMICILIUM
PHYSICAL
7
A VENUE FRANCAIS FRESNA YE 8005
ADDRESS:"
[8]
Relying on the judgment of the SCA in
Rossouw
1
counsel
for the defendant submitted that the only manner in which
section
129(1)
of the NCA can be complied with is for delivery of the notice
to be effected in the manner prescribed in terms of
section 65
of the
NCA and that since this had not been done, the issue of summons was
premature with the result that the plaintiffs action
cannot succeed.
The submission was further that since the provisions in paragraphs
11.2 and 20.1 of the agreement presuppose the
despatch of letters to
the defendant by ordinary mail, service of the
section 129
notice by
the sheriff was insufficient as such service was not one of the
methods of service chosen by the defendant as prescribed
by
section
65
of the NCA.
2
Counsel's submission went even further for it was to the efect that
even had the notice come to the attention of the defendant,
such
notice would still have been irregular because it was not delivered
in terms of a manner prescribed in
section 65.
In my view there is no
merit in this latter submission.
[9]
As was made clear in
Rossouw,
"It
appears to me that the legislature's grant to the consumer of a
right to choose the manner of delivery inexorably points
to an
intention to place the risk of non-receipt on the consumer's
shoulders. With every choice lies a responsibility and it
is after
all within a consumer's sole knowledge which means of communication
will reasonably ensure delivery to him. It is entirely
fair in the
circumstances to conclude from the legislature's express language in
s 65(2)
that is considered despatch of a notice in this manner
chosen by the appellants in this matter sufficient for purposes of a
s 129(1)(a)
and that actual receipt is the consumer's
responsibility."
3
In
the present case the plaintiff went to the trouble of ensuring that
the notice would come to the attention of the defendant
by having
the notice served by the deputy sheriff at the
domicilium
address
chosen by the defendant, which address was also her residential
address. Although one may deduce from the wording of clause
20.4
that the defendant chose that communications could be addressed to
her by ordinary mail at her place of residence, it would
to my mind
be overtechnical and unfair to the plaintiff to rule that
delivery of the notice by the deputy sheriff to the
defendant at her
residential address, being the
domicilium
chosen
by her, does constitute delivery of the notice as required by
section 130(1)(a)
of the NCA. The form of the notice complies in all
respects with the requirements of
section 129(1)(a)
of the act.
[10]
The defendant denies receipt of the notice and says the following in
her opposing affidavit:
"/
emphatically state that at no stage did I receive the alleged
section 129
notice
("the
notice',). /
respectfully
submit that the Plaintiff as per annexure 'E' merely attended to
having these documents attached to what it deemed
to be my premises'
'front door'. I at this stage need to make mention of the fact that
my front door is located in the main road
and as such it is in all
likelihood possible that any documentation attached thereto could
quite easily be blown off by the wind.
I
am advised that in the light of the fact that the notice did not
come to my attention, I was not able to exercise my rights
as
provided for in the NCA in particular
sections 127
,
129
and
130
thereof."
Although
the defendant denies receipt of the notice, she fails to answer the
averment in the particulars of claim which clearly
suggests that she
did receive the notice. As indicated in paragraph [5] the averment
is:-
"In
response to the Notice in terms of
Section 129(1)(a)
, the Plaintiffs
Attorney, Mr Jeff Gowar of Jeff Gowar and Associates, received a
telephone call from Mr Brendan Nielsen of Butler
Blanckenberg
Nielsen Safodien Incorporated, acting for the Defendant herein on
the 30
th
July
2010, requesting suitable arrangements to liquidate the debt
herein."
Not
only does the defendant not deny this averment, she also fails to
deal with it in any way. Interestingly, her denial of receipt
of the
notice in case no 18243/2010 is in exactly the same terms as is set
out in the beginning of this paragraph. That response
is difficult
to reconcile with the return of the sheriff which reads
"On
this 23rd day of July 2010 at 10:32 I served the LETTER in this
matter upon MR BRITE * EMPLOYEE apparently a responsible
person and
apparently not less than 16 years of age, of and in control of and
at the place of residence of I NINA WELTMAN SHMAYAHU
at 7 AVENUE
FRANCAISE, FRESNAYE, CAPE TOWN, the DEFENDANT being temporarily
absent, and by handing to the PARTY SERVED a copy
thereof after
explaining the nature and exigency of the said process.
RULE
4(1)(a)(ii).
"
The
sheriff's return is not dealt with in any way.
It
is perhaps necessary to add that although appearance to defend the
action on behalf of the defendant was filed by the firm
of attorneys
referred to in the particulars of claim and indeed signed by the
attorney referred to, that firm subsequently withdrew
and the
defendant is now represented by a different firm of attorneys.
Having
regard to the defendant's failure to deal properly with the return
of service referred to above and her failure to deal
in any manner
with the averments to the effect that her previous attorney had
communicated with the plaintiff's attorney in response
to the notice
in terms of
section 129(1
)(a), the defendant's bare denial that she
received the notice is in my view insufficient and her
bona
fides
cannot
be accepted in this regard.
[11]
On behalf of the defendant it was also submitted that since the
agreement relied upon did not contain a provision to the
effect that
upon a breach of the agreement by the defendant the plaintiff would
be entitled to cancel the agreement, the contention
that the
plaintiff had cancelled the agreement was of no force and effect. In
making this submission counsel relied heavily on
the judgment in
Absa
Bank v Havenga and similar cases
4
.
That
was a case in which the learned judge found that although the
particulars of claim contained the necessary averments as to
the
plaintiff's right to terminate the agreement on default of payment
by the defendant, no right to terminate the agreement
upon default
was contained in the agreement. In the case before me, the
plaintiff's right to terminate the agreement in the event
of the
defendant failing to pay any amount due is contained in clause 11.1
and the notice given to the defendant in terms of
section 129(1)
of
the act advised the defendant that should she fail to pay the
arrears or seek assistance from a debt counsellor within ten
business days, the plaintiff would have no option but to institute
"the
necessary legal action for the return of the goods".
In
my view these clauses constitute a
lex
commisoria.
The
defendant also appears to take issue with the fact that in the
plaintiffs summons it is recorded that
"As
a result of the defendant's breach, the Plaintiff elected to cancel
the agreement, alternatively, Plaintiff's election
to cancel the
agreement is herewith conveyed to the Defendant."
There
is no difference in law as to whether the cancellation of an
agreement is conveyed to the defendant prior to the service
of
summons or by the service of summons. In the circumstances I am
satisfied that the necessary averments in respect of cancellation
are present and that the cancellation of the agreement was conveyed
to the defendant, at least when the summons was served on
her.
[12]
Defendant's counsel also took issue with the citation of the
plaintiff alleging that its
locus
standi
had
not been established. In the summons, the plaintiff is cited as
FirstRand Bank Limited t/a Wesbank. It would seem that the
defendant's objection stems from the emphasis placed on the trading
style of
"Wesbank"
in
the agreement. In the agreement and also in the particulars of claim
it is recorded that the agreement is between
"Wesbank"
and
the defendant. The first
page
of the agreement is a letterhead on which the name
"Wesbank"
appears
prominently followed by the wording in the next line
"a
division of FirstRand Bank Limited".
A
few lines lower there is a heading
"TERMS
AND CONDITIONS FOR THIS INSTALMENT SALE AGREEMENT".
Immediately
thereunder it is reflected that the agreement is between Wesbank
(the company registration and VAT registration number
of FirstRand
Bank being quoted) and the buyer whose name is then reflected as
that of the defendant. In my view it is clear therefore
that the
agreement is recorded as being between Wesbank and the defendant and
that Wesbank is a division of FirstRand Bank Limited.
In
Wesbank
(a division of FirstRand Bank Ltd) v Anwar Smith and Others
5
,
Griesel
J
held in this division on 17 August 2010 that it was competent to
cite the plaintiff as
"Wesbank
a division of FirstRand Bank Limited"
because
the company FirstRand Bank Limited traded through the medium of the
business known as Wesbank. In the case before me Wesbank
is not
cited as the plaintiff; FirstRand Bank is cited as the plaintiff,
but it is made clear that it trades as Wesbank. In my
view there is
no merit in the objection.
The
citation of the plaintiff in case no 18230/2010 is somewhat
different but is perfectly acceptable for the reasons I have already
given. In that case the plaintiff is cited as
"FirstRand
Bank Ltd t/a McCarthy Finance, a division of Wesbank".
There
is no reason in my view why one division of the plaintiff cannot
trade under another name. Both the particulars of claim
and the
agreement in question make it clear that while the agreement is
concluded between McCarthy Finance and the defendant,
McCarthy
Finance is a division of Wesbank which in turn is a division
No
attempt is made by the defendant to invoke the provisions of the NCA
in order to provide debt relief for herself. All that
she does is to
deny that the relevant provisions of the act have been complied
with.
[14]
The defendant's defence on the merits which is set out in vague
terms was not advanced with any vigour during the course
of
argument. In her opposing affidavit, the defendant merely denies
"that
the above agreement
(sic)
is
in arrears in the sum as alleged in the notice"
and
alleges that according to the notice she would have been unaware as
to whether she had to pay the amount in arrears or effect
payment of
the total balance outstanding. The notice makes it clear as to the
amount of her arrears at the time. In order to
resist a claim for
summary judgment a defendant is required to satisfy the court that
he / she has a
bona
fide
defence
to a plaintiffs claim. In order to do so a defendant must fully
disclose the nature and grounds of the defence and the
material
facts upon which the defence is founded. In the case under
consideration, the defendant is silent as to what she contends
the
position to be in respect of arrear payments. She does not deny that
she is in arrear but rather that the specific amounts
are due. In my
view this does not satisfy the requirements of
Rule 32(3)
of the
Rules of Court. The defendant's averment that she requires further
documents, presumably to establish whether she might
have a defence
in terms of
section 83
or
section 90(4)(b)
of the NCA is also not a
defence to an application for summary judgment.
[15]
In all the circumstances I conclude that the defendant has failed to
make out a
bona
fide
defence
to the plaintiff's claim and that summary judgment against her should
follow.
[16]
The following orders are made:
1.
In
case no 18229/2010 summary judgment is granted in favour of the
plaintiff
for:
1.1.
The return of the BMW 330I CI convert A/T (E46) F/L, engine no
74374102 to the plaintiff forthwith;
1.2.
Costs of suit.
2.
In
case no 18230/2010 summary judgment is granted in favour of the
plaintiff for:
2.1.
The return of the Land Rover Range Rover Sport 4.21 V8 SC, engine no
260608B23273428PS to the plaintiff forthwith;
2.2.
Costs of suit.
3.
In case no 18243/2010 summary judgment is granted in favour of the
plaintiff for:
3.1.
The return of the BMW X5 4.8 A/T (E70), engine no 53134012 to the
plaintiff forthwith;
3.2.
Costs of suit.
RB CLEAVER
1
Benjamin
Rossouw and Another v FirstRand Bank Limited t/a FNB Homes
Supreme
Court of Appeal case no 640/2009 delivered on 30 September 2010.
2
"(1)
Every document that is required to be delivered to a consumer in
terms of this Act must be delivered in the prescribed
manner, if
any.
(2)
If no method has been prescribed for the delivery of a particular
document to a consumer, the person required to deliver that
document
must-
(a)
make
the document available to the consumer through one of the following
mechanisms—
(i)
in
person at the business premises of the credit provider, or at any
location designated by the consumer but at the consumer's
expense,
or by ordinary mail;
(ii)
by
fax;
(iii)
by e-mail; or
(iv)
by printable web-page; and
(b)
deliver
it to the consumer in the manner chosen by the consumer from the
options made available in terms of paragraph (a)."
3
At
paragraph [31].
4
2010
(5) SA 533
(in North Gauteng)
5
Unreported
judgment in case numbers 12203/2010 and others.