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[2010] ZAGPPHC 147
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ABSA Bank Ltd v Havenga (21558/10) [2010] ZAGPPHC 147; 2010 (5) SA 533 (GNP) (10 August 2010)
IN
THE NORTH GAUTENG HIGH COURT PRETORIA
DATE:10/08/2010
In
the matter between:
ABSA
BANK LTD
…..............................................................................................
Plaintiff
and
JACOBUS
FRANCOIS
HAVENGA
...................................................................
Defendant
(Case
No. 21558/10)
,
And
the following other cases: 30828/10; 24530/10; 28432/10; 28796/10;
34473/10; 35431/10; 35432/10; 35698/10; 36208/10; 36213/10;
34475/10;
35426/10; 36131/10; 36133/10; 36136/10; 36209/10
JUDGMENT
Horwitz
AJ
:
The motor industry seems to be thriving, certainly as regards the
leasing and sale on instalments of motor vehicles is concerned.
That
industry, however, has spawned in its wake, and has sustained,
another flourishing industry: the repossession of those vehicles
for
want of payment of the monthly instalments as and when they fall due.
Claims for the latter are generally initiated by way
of action (in
one instance that came before me, proceedings were instituted by way
of motion) by the seller or lessor against the
purchaser or lessee,
as the case may be, depending on the nature of the agreement.
Invariably, so it seems, the defendant does
not defend the case and
the plaintiff then seeks default judgment. Week by week, dozens of
these matters appear on the motion roll
and it is a painstaking and
time-consuming task for the presiding judge to read each one. In
issue in this judgment are numerous
such cases which have occasioned
me difficulty. (As aspects of the National Credit Act, No. of 34 of
2005 are relevant to this
judgment, I will henceforth employ the
nomenclature of that Act when referring to the parties. The seller or
lessor will therefore
be referred to as "the credit provider"
and the purchaser or lessee as "the consumer".)
But
for stylistic and cosmetic differences, the particulars of claim or
founding affidavit in each instance commences with a description
of
the motor vehicle concerned and continues with details of what are
alleged to be the terms of each agreement. Invariably, one
of the
terms is alleged to be one which provides that upon a breach of the
agreement by the consumer, the credit provider may cancel
the
agreement, retake possession of the vehicle, dispose of it, retain
the proceeds and recover from the consumer the outstanding
amount so
as to compensate the credit provider for the damages that it may have
suffered as a result of the breach. Because the
credit provider
cannot calculate its damages until it has obtained possession of the
motor vehicle and valued it, this ineluctably
entails a preliminary
application to court for a repossession order to enable the credit
provider to value the vehicle, with a
concomitant order that the
remaining prayer for damages be postponed until a valuation has been
obtained.
Clearly,
then, what is in issue in all such cases is a cancellation of the
agreement by reason of a
lex
commissoria,
a
term which is alleged to be express and which vests the credit
provider with a right to cancel the agreement by reason of a breach
of a term thereof. Because the alleged term providing for
cancellation invariably refers to a breach of any term in the
agreement
which imposes an obligation upon the consumer, the right to
cancel is not limited to material breaches only. It is a trite
principle
of the law of contract that the right of a party to a
contract to cancel it, is not restricted to cases in which there is
such
an express term: generally speaking, in the absence of an
express term allowing for cancellation of a contract, a party may
cancel
a contract by reason of the breach of a material term by the
other party to the contract, or the breach of a term which the
first-mentioned
party has by notice to the other party made material.
It is not the function of the judgment to serve as a discourse into
the law
of contract, but the distinction is important for reasons
that will hopefully become clear.
In
Absa
Bank Ltd v De Villiers and another
2009
(5) SA 40
(C), the Court held that before a credit provider becomes
entitled to claim a final order authorising attachment of a motor
vehicle
{and I interpolate here that this is precisely the kind of
order which is sought in the cases presently under discussion) the
credit
provider must first cancel the relevant agreement with the
consumer. (See, e.g., paras [19], [28], [32], [42] and[43] of the
judgment.)
Clearly (with respect) that is correct. 1 would, however,
add an obvious rider to that: before one can cancel an agreement,
there
has to be right vesting in the credit provider to do so. That
is precisely the difficulty which confronted me in the motion court
during the last two weeks and that is the reason for this judgment.
Consonant
with the rules of pleading which apply in our courts, a party
claiming relief must set out its case with reasonably clarity
so that
the opposing party may be informed of the case which it has to meet.
(See, e.g., sub-rules 18(4) and (6).) However, another
reason for
that is so that the court, from which relief is sought, can also know
what it is that the claimant is claiming and the
basis for the claim.
In the cases presently under discussion, (as it was in numerous other
similar matters which I disposed of)
it has been an inordinately
laborious task to match the allegations in the particulars of claim
or founding affidavit to the particular
agreement in issue. In too
many cases, they do not match at all. That is because the attorneys
who launch these applications on
behalf of their clients (the credit
providers) are clearly using a single, computerised template as a
precedent for every such
matter that happens to land on the table, on
the simple basis that one size fits all. It has become a case of
putting a square
peg into a round hole.
As
frustrating as it has been to seek correlation between the terms
alleged in the founding affidavit or particulars of claim and
the
actual agreement in those cases (and there are many of them) in which
the agreement contains a cancellation clause (because
the formulation
of the term in the founding affidavit or particulars of claim by the
draftsman thereof differs
toto
caelo
from
the actual wording of the relevant agreement) so much more
exasperating has it been to waste time reading the entire agreement,
only to find that it contains no cancellation clause at all. To
allege that such agreement contains one of the standardised,
hackneyed
cancellation provisions that is embodied in the template
amounts to careless pleading. It is enough that judges have to wade
through
numerous other files with which they have to deal in the
motion court, without having to also read unnecessary nonsense in an
affidavit
or particulars of claim, only because someone who created
that document did not take the trouble to ensure that it accurately
reflected
what it was supposed to reflect. It reveals discourtesy to
the court. The motion roll is therefore cluttered up with cases in
which
the plaintiff or applicant credit provider is simply not
entitled to relief. I hesitate to believe that pleaders draft their
pleadings
in the belief, or hope, that the judge will not read them
but will merely rubber stamp the relief that is sought.
What
reinforced my view that those responsible for drafting the papers
have opted for wholesale standardisation and generalisation,
instead
of individualisation, is the following: In each case which commenced
with the issue of summons, there is an affidavit by
someone to
confirm that the plaintiff has complied with the provisions of
section 129 of the Act. Aside for one or two exceptions,
each
affidavit contains the following allegation, or one in almost
identical terms:
"In
the case of an instalment agreement or lease, the defendant has not
surrendered the property to the plaintiff as contemplated
in section
127 [section 130(1)(c)]".
The
deponent does therefore not bother to state the nature of the
particular agreement in issue; he merely contents himself with
a
hypothetical statement as to what the facts should be, if the
agreement is an instalment agreement or a lease. The juxtaposing
of
the two sections of the Act in the manner that it has been done is
also unacceptable.
Legal
practitioners would do well to bear in mind that the type of relief
that they seek on behalf of their clients is of the nature
of
specific performance and therefore discretionary. If they insist upon
imposing on judges the effort to wade through file after
file
containing incorrect allegations, they should not be surprised that
the court exercises its discretion to refuse relief. Certainly
it
should be refused if the agreement is alleged to contain an express
cancellation provision in circumstances in which it contains
none.
As
regards the latter point, and as I have indicated above, the fact
that an agreement does not contain an express cancellation
provision
is not to say that cancellation is therefore never possible: the
common law may well avail the credit provider. But in
that instance,
the appropriate allegations must be made in the founding papers; not
some absurd allegation, based on a template,
that the agreement
contains an express provision to that effect. As regards this
category of cases (where the agreement contains
no cancellation
clause) it was submitted to me that the allegations in the
particulars of claim or founding affidavit that the
credit provider
had complied with the provisions of sections 123 and 129 of the
National Credit Act were sufficient to found an
action for
cancellation because, so the submission went, those provisions
created, and afforded the credit provider, a right of
cancellation.
Those provisions of the Act do no such thing. The right to cancel an
agreement arises out of an application of the
rules of the law of
contract. Sections 123 and 129 are procedural in their nature. They
prescribe the procedure that the credit
provider must follow in those
instances in which the latter enjoys a right of cancellation, no
matter how that right arises. I
think that that much was also made
clear in
Abso
Bonk, supra.
With
those general observations in mind, 1 direct my attention now to
specific cases. In each one, the plaintiff seeks an order
confirming
its cancellation of the relevant agreement, an order that it be
authorised to repossess the motor vehicle which was
the subject of
the sale or lease to enable to plaintiff to have it valued and an
order that its prayer for default judgment be
postponed, pending the
valuation and calculation of what the defendant owes the plaintiff.
Case
Number 21558/10
Miss
Van
Niekerk
appeared
on behalf of the plaintiff. She very properly conceded that the
agreement in this matter did not contain an express cancellation
clause. In sub-paragraph 6.3 of the particulars of claim, however,
the allegation is made that the agreement contains the following
"express term and condition":
"6.3
.... in the event of the Defendant failing to make any payment in
terms of the AGREEMENT or fail
{sic)
to
comply with any other provision of the AGREEMENT or any legal
provision applicable in respect of the said transaction, the
Plaintiff
would be entitled to terminate the AGREEMENT in which
event, the Plaintiff shall further be entitled, subject to the
provisions
of
Section 129(1)(a)
and (b)(i) of the
National Credit Act
No 34 of 2005
, to return and possession of the GOODS and the
Defendant shall be obliged to deliver the GOODS to the Plaintiff at
his own costs
(sic) at such address as the Plaintiff may have
notified or may notify the Defendant of
{sic)
in
writing and further, the Plaintiff shall be entitled to demand
immediate payment from the Defendant of the following amount:
6.3.1
All
arrear instalments plus additional finance charges thereon up to the
date of payment thereof; plus
6.3.2
All
amounts payable by the Defendant to the Plaintiff in terms of the
provisions of the AGREEMENT, as amended; plus
6.3.3
The
balance of the PRINCIPAL DEBT owing by the Defendant to the Plaintiff
on the date of termination plus additional Finance Charges
in respect
thereof, calculated from the date of termination up to the date of
payment thereof."
(There
does not appear to have been any amendment to the agreement, as
postulated in 6.3.2.)
The
agreement contains nothing like this term. There is one provision
which gives the plaintiff the right to "enforce this
agreement
including retaking possession of the goods and recover collection
costs and default administration charges from the Purchaser..."
That
provision could refer to a temporary attachment order pending
compliance by the defendant (the consumer) with his obligations
under
the agreement. It is does not imply a right to cancel the agreement.
I
requested Miss
Van
Niekerk
to
obtain an explanation from the draftsman for this inconsistency. She
obliged and provided me with an affidavit by the attorney
dealing
with the matter. With remarkable candour, he stated the following:
"I
place on record that the Terms and Conditions of our client's
contracts are not always available as same is stored electronically
due to lack of storage space, and therefore we use a pro-forma
Combined Summons as almost all the Instalment Sale Agreements are
in
principle the same. I attach hereto marked as Annexure "A"
an affidavit of Stephan Strauss, the Credit Manager of
the
Plaintiff."
"In
this specific matter the Terms and Conditions became available after
issuing of the Summons and due to an administrative
oversight the
Particulars of Claim was not amended accordingly."
This
says it all and other than for expressing my surprise at what appears
to be a rather
laissez
/aire
attitude,
there really remains nothing for me to say, other than this: in this
electronic age, if the plaintiff is unable to electronically
marry
the terms of its agreement to the allegations in the particulars of
claim, then it will simply have to revert to the tried
and tested
old-fashioned method of doing so.
The
affidavit of the credit manager adds nothing to the matter. Aside
from informing me of the lack of storage space, he merely
requested
the court "to accept the copy as a true copy of the original."
I am not sure that he understood what 1 had
wanted.
Miss
Van Niekerk sought a postponement to enable the plaintiff to effect
an amendment to its particulars of claim. I have no good
reason to
grant that application. The application for default judgment is
therefore dismissed.
Case
Number 30828/10
In
this matter the credit provider (who was represented by Mr
Minnaar)
instituted
motion proceedings supported by affidavit to recover the motor
vehicle which it had sold the consumer, and damages. It
also claims
an order confirming cancellation of the agreement. Here, too, the
deponent to the founding affidavit alleges a whole
host of material
terms, one of which is alleged to be a right to cancel the agreement
in the event that the purchaser committed
any breach and, as in the
other matters, no such right is to be found recorded in the written
instalment sale agreement. Curiously,
whilst clause 12.3 provides
that the credit provider may approach a court for an order to enforce
the agreement if certain conditions
(such as a the commission of a
breach) are fulfilled, clause 12.6 provides that at any time prior to
the credit provider "cancelling
this Agreement" the
consumer may reinstate the terms thereof by paying,
inter
alia,
all
overdue amounts. The only right of cancellation that can possibly be
in issue here is one in terms of the common law. The applicant,
however, does not rely on such a cancellation. The applicant is
therefore not entitled to either of the orders which it claims
at
this stage, namely, confirmation of the cancellation of the agreement
and a repossession order. As for the further order which
it seeks,
namely, that it be granted leave to supplement its papers with a
claim for the balance outstanding after it has established
the market
value of the vehicle and made an allowance therefor in its
calculation of what the consumer owes it, two points are
to be made.
Firstly, the prayer is foursquare dependent upon a valid cancellation
of the agreement and the applicant has failed
on that score.
Secondly, as the claim is dependent upon a cancellation of the
agreement, the nature of the claim is none other
than a claim for
damages and motion proceedings are not appropriate for such a claim.
Before
finally disposing of this matter, I draw attention to an allegation
in the founding affidavit which, as in other matters,
displays an
antipathy towards individualisation. The allegation reads as follows:
"In
the event of the word "fixed" not appearing next to the
finance charges on the face of the agreement, then the
following
conditions would apply:.......*
The
deponent speaks hypothetical^, not troubling to ascertain the true
facts and state them in so many words.
The
application is therefore dismissed.
Case
Numbers 24530/10; 28432/10: 28796/10: 34473/10: 35431/10; 35432/10;
35698/10; 36208/10; 36213/10; 34475/10: 35426/10; 36131/10;
36133/10;
36136/10; 36209/10
In
all these matters, the credit provider was represented by Mr
Van
der Schyff.
As
in the case of the previously mentioned matters, the claims are
identical. In each there is a claimfor confirmation of the purported
cancellation of the agreement, repossession of the motor vehicle and
a prayer that the claim for damages be postponed until after
the
motor vehicle has been valued. None of the agreements in these
matters contains a cancellation provision and for the reasons
stated
above, the claims for default judgment cannot be granted. Mr
Van
der Schyff
provided
me with heads of argument wherein he embarked upon a discussion of
the law relating to the cancellation of contracts. The
argument does
not avail him because the issue is not what rights each of the credit
providers may in each instance theoretically
have had. The question
is: what case did each one make out on the papers before the court
and it is on this score that they failed.
The
other point that he made was that none of the consumers had defended
the actions that his clients has instituted and that that
was
sufficient reason for me to grant the credit providers default
judgment. Here, too, the argument founders because I have to
be
satisfied that in each instance, a proper case has been made out on
the papers for the relief sought.
In
all these matters, the claim for default judgment is dismissed.
AJ
HORWITZ
Acting
Judge of the High Court
Date
of judgment:
…...............
10
August 2010
For
the plaintiff in case number 21558/10 :
Counsel
:
….............................
Miss
A Van Niekerk
Attorneys
:
.............................
Hack,
Stupel & Ross
…
................................................
Pretoria
For
the applicant in case number 30828/10 :
Counsel:
.........................................................
MrJ
NMinnaar
Attorneys
:
…...............................................
Hammond,
Pole Majola Inc
…
....................................................................
Pretoria
For
the plaintiff in all other cases :
…..
Mr
O Van der Schyff of the firm
…
....................................................................
Vesi
& De Beer Inc
…
....................................................................
c/o
Ehlers & Fakude Inc
…
....................................................................
Pretoria
No
appearance on behalf of any of the defendants/respondents