Carter Trading (Pty) Ltd v Blignaut (444/09) [2009] ZAECPEHC 22; 2010 (2) SA 46 (ECP) (14 May 2009)

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[2009] ZAECPEHC 22
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Carter Trading (Pty) Ltd v Blignaut (444/09) [2009] ZAECPEHC 22; 2010 (2) SA 46 (ECP) (14 May 2009)

FORM
A
FILING
SHEET FOR EASTERN CAPE HIGH COURT, POR ELIZABETH JUDGMENT
PARTIES
:
CARTER
TRADING (PTY) LTD
Plaintiff
And
VENECIA
BLIGNAUT
Defendant
Registrar:
CASE No. 444/09
Magistrate:
High
Court:
EASTERN
CAPE HIGH COURT, PORT ELIZABTH
DATE
HEARD:
5 May 2009
DATE
DELIVERED:
14 May 2009
JUDGE(S):
Van der Byl, AJ
LEGAL
REPRESENTATIVES –
Appearances:
for
the Plaintiff(s)/Applicant(s)/ Appellant(s):
ADV C K MEY
for
the Defendant(s)/Respondent(s):
ADV D A SMITH
Instructing
attorneys:
Plaintiff(s)/
Applicant(s)/
Appellant(s):
VAN ZYL’S INCORPORATED
Defendant(s)/Respondent(s):
J R BESTER & ASSOCIATES
CASE
INFORMATION -
Nature
of proceedings
:
IN THE HIGH COURT OF
SOUTH AFRICA
(
EASTERN
CAPE - PORT ELIZABETH
)
CASE
No. 444/09
In
the matter between:-
CARTER
TRADING (PTY) LTD
Plaintiff
and
VENECIA
BLIGNAUT
Defendant
JUDGMENT
Van
der Byl, AJ:-
Introduction
[1]
This is an application for summary judgment in terms of Rule 32 for
an amount due to the Plaintiff in terms of an Acknowledgement
of
Debt.
[2]
In its Particulars of Claim the Plaintiff contends -
(a)
that the Defendant on 23 December 2008 signed an Acknowledgement of
Debt in respect of goods sold and delivered to the Defendant;
(b)
that in terms of the Acknowledgement of Debt the Defendant
acknowledged that she was indebted to the Plaintiff in an amount
of
R107 082,30 and that the amount was to be paid in full by 16h00 on 24
December 2008, being the date immediately after the date
on which the
Acknowledgement of Debt was signed;
(c)
that the Defendant failed to pay the debt so owed to the Plaintiff.
[3]
On the Defendant having entered an appearance to defend, the
Plaintiff filed an application for summary judgement against the

Defendant for -
(a)
payment of the sum of R104 587,70, being the amount of R107 082,32,
less less R2 494,60 worth of goods it recouped during
January 2009.;
(b)
interest on the aforesaid amount at the legal rate of 15,5 per cent
per annum; and
(c)
costs of suit.
[4]
The Defendant, thereupon, filed, in opposition to the application
for summary judgment, an opposing affidavit, in which she
states -
(a)
that the Acknowledgement of Debt in question is a credit agreement
described in section 8(4)(f) of the National Credit Act,
2005 (Act 34
of 2005) (“
the Act
”); and
(b)
that the Plaintiff failed to comply with the provisions of sections
129 and 130 of the Act.
[5]
From the Defendant’s opposing affidavit it is apparent (and it was
not contended otherwise by Mr. Smith who appeared on behalf
of the
Defendant) that it is not disputed by the Defendant -
(a)
that she is liable to pay the sum claimed by the Plaintiff; and
(b)
that she validly concluded the Acknowledgement of Debt in question.
[6]
Ms. Mey who appeared on behalf of the Plaintiff, on the basis that
for those reasons the merits of the matter were not in dispute,

contended -
(a)
that an acknowledgement of debt in effect constitutes a settlement
between parties (and, therefore, a novation of the sale
agreement)
which is not a “
credit agreement
”, as defined in the Act,
and, therefore, not subject to the Act; and
(b)
that the Plaintiff was, therefore, under no obligation to comply
with the provisions of sections 129 and 130 of the Act.
[7]
On the other hand, Mr. Smith contended on behalf of the Defendant -
(a)
that, upon a proper interpretation of the provisions of,
particularly, subsection (1)(b), read with subsection (4)(f) of
section
8 of the Act, the Acknowledgement of Debt relied upon in this
matter is indeed a “
credit agreement
” envisaged in
sections 129 and 130 of the Act; and
(b)
that, conceding, correctly in my view, that the failure to comply
with the provisions of sections 129 and 130 of the Act is
in itself
no defence on the merits of the Plaintiff’s claim, the matter
should be adjourned as envisaged in section 130(4)(b)
of the Act and
an order be made as to the steps to be taken by the Plaintiff before
the matter may be resumed.
[8]
I am accordingly called upon to pronounce on the question whether
the Acknowledgement of Debt concerned is, as is contended
on behalf
of the Defendant, indeed a credit agreement envisaged in the Act.
[9]
Should I hold that the Acknowledgement of Debt concerned is, upon a
proper interpretation of the relevant provisions of the
Act, not a
credit agreement, it would in the circumstances follow that the
Plaintiff will be entitled to summary judgment.
[10]
Should I, however, hold that the Acknowledgement of Debt concerned
is indeed a credit agreement envisaged in the Act, the
question of
the application of the provisions of section 130(4)(b) of the Act
will arise.
[11]
I deal
seriatim
with these issues.
Is
the Acknowledgement of Debt in question a “
credit
agreement
” as envisaged in the Act?
[12]
This question requires a scrutiny of the provisions of
subsection(1)(b), read with subsection (4)(f), of section 8 of the

Act and, of course, also of the terms of the Acknowledgement of Debt
on which the claim is based.
[13]
Those provisions, in so far as they are relevant for present
purposes, read as follows:
“
8.
(1) ...... an agreement constitutes a credit agreement for the
purposes of this Act if it is -
(a) a
credit facility .................;
(b) a
credit transaction, as described in subsection (4);
(c) a
credit guarantee ..........;
(d) .......................................;
(2)
..........................................
(3)
..........................................
(4)
An agreement, irrespective of its form ............. constitutes a
credit transaction if it is -
(a) .........................................;
(b)
..........................................;
(c) ..........................................;
(d) ..........................................;
(e) ...........................................;
(f) any
other agreement, other than a credit facility or credit guarantee, in
terms of which payment of an amount owed by one person
to another is
deferred, and any charge, fee or interest is payable to the credit
provider in respect of -
(i) the
agreement; or
(ii) the
amount that has been deferred.
”.
[14]
As far as the Acknowledgement of Debt is concerned, I need to point
out that it consists of a roneoed form which seems to
be ordinarily
used in the Plaintiff's business to record an acknowledgement of
debt.
Paragraphs
1, 2, 3 and 7 thereof read as follows (the words which are underlined
in the quoted passages are those which were inserted
in handwriting
in the blank spaces provided therein):
“
1.
I undertake to pay the undermentioned amount, interest
calculated monthly in advance
from
on
the 24.12/2008 by 4pm (16h00
on the balance of capital
owing from time to time at the rate of
15.5 % [fifteen and
a half percent]
per annum, the cost of negotiating and
preparing this Acknowledgement of Debt and collection commission
calculated with the Rules
of the Law Society of the Cape of Good
Hope.
2.
The creditor shall be entitled from time to time to increase the
interest rate to the maximum allowed by law, upon having given
me
15
(fifteen)
days
[-----------------------] written notice to
such effect.
3.
I undertake to make payments of R
102 467,30 and R4615,00 (crates)
[_____________________] each, the first of such payments being due on
24/12/2008 by 4pm (16h00 full amount
and each subsequent
payment being due on the __________ day of each and every
_____________________ thereafter and I agree that
the Creditor shall
be entitled to review the amount of the aforementioned payment by
giving me 30 (Thirty) days notice in writing
of his intention to
review the amount.
7.
Should I fail to make any payment promptly on due date, the total
amount owing will immediately become due and payable. I further

accept that in such circumstances I shall be liable for the payment
of all legal fees on the attorney and own client scale of costs,

including collection commission, incurred by the Creditor in
enforcing compliance with my obligations in terms hereof.
”.
It
is from a reading of these passages obvious that the roneoed form was
designed to provide for circumstances where the amount
owing was to
be paid by way of instalments and not, as in this case, by way of one
single payment and, furthermore, the form was
not filled in or
adapted with proper care so as to properly provide for the
circumstances of this matter.
No
point was, however, made in argument on the efficacy of the
Acknowledgement of Debt relied upon by the Plaintiff.
[15]
I will according, in pronouncing upon the issues raised before me,
accept that the Defendant by having signed this Acknowledgement
of
Debt on 23 December 2008 in effect intended -
(a)
to acknowledge that she is indebted to the Plaintiff in the sum of
R102 467,30 and R4 615 for crates;
(b)
to undertake to pay that sum on 24 December 2008 by 16h00 together
with “
the cost of negotiating and preparing this Acknowledgement
of Debt and collection commission calculated with (sic) the Rules of
the Law Society of the cape of Good Hope
”;
(c)
to undertake that, should she fail to make the payment promptly, she
will be liable for the payment of all legal fees on the
attorney and
own client scale of costs, including collection commission, incurred
by the Plaintiff in enforcing compliance with
her obligations under
the Acknowledgement of Debt.
[16]
From the aforegoing it in my view follows that the payment of the
amount owing was deferred to 24 December 2008 and that
the Defendant
undertook to pay, in addition to the amount owing, at least the cost
of preparing the Acknowledgement of Debt (whatever
it may have been)
and, in the event of a failure to pay the sum owing, also collection
commission and legal fees.
[17]
In the application of these terms of the Acknowledgement of Debt to
the provisions of section 8(4)(f) of the Act it would
appear that
those terms are exactly what is envisaged in the Act to be a credit
agreement, namely, an agreement in terms of which
payment is deferred
and at least a fee or charge is payable in respect of the
Acknowledgement of Debt and interest and legal fees
are payable in
the event of a failure by the Defendant to pay the amount as agreed
therein.
[18]
For this reason alone the Acknowledgement of Debt in my opinion
clearly falls within the ambit of the provisions of section
8 of the
Act and, therefore, constitutes a credit agreement as envisaged in
the Act.
[19]
There are in my opinion also other and, perhaps, even more
persuasive considerations on which the Acknowledgement of Debt
in
question must be adjudged as being a credit agreement envisaged in
the Act.
[20]
As is apparent from the Particulars of Claim, the Acknowledgement of
Debt in question was concluded in respect of goods sold
and delivered
on credit with the obvious intention that the amount owing in respect
thereof should be paid the following day.
[21]
In this regard I can refer to subsection (1)(a), read with
subsection (3), of section 8 of the Act which reads, in so far
as it
is relevant for present purposes, as follows:
“
8.
(1) .................. an agreement constitutes a credit agreement
for the purposes of this Act if it is -
(a) a
credit facility, as described in subsection (3);
(b) .....................................
;
(c) .....................................
;
(d) .....................................
.
(2)
.........................................
(3)
An agreement, irrespective of its form .........., constitutes a
credit facility if, in terms of that agreement -
(a) a
credit provider undertakes -
(i) to
supply goods ...... to the consumer .... ; and
(ii) either
to -
(aa) defer
the consumer's obligation to pay any part of the cost of goods ....
contemplated in subparagraph (i); or
(bb) ......;
and
(b) any
charge, fee or interest is payable to the credit provider in respect
of -
(i) any
amount deferred as contemplated in paragraph (a) (ii) (aa); or
(ii) ......
”.
[22]
It is apparent from these provisions that an agreement in terms of
which a credit provider undertakes to supply goods to a
consumer and
to defer the consumer’s obligation to pay any part of the cost of
such goods together with any charge, fee or interest
payable to the
credit provider in respect of any amount so deferred, is regarded as
a credit facility and therefore to be a credit
agreement.
[23]
In so far as the Plaintiff provided goods to the Defendant on credit
on the basis set out in the Acknowledgement of Debt which
was
eventually concluded, it would appear that such an agreement would in
any event have been a credit agreement.
[24]
As I have already indicated, Ms. Mey submitted, relying on three
decisions dealing with the question whether one agreement
substituted
for another constitutes novation, that an acknowledgement of debt
constitutes a settlement between parties and, therefore,
a novation
of the Defendant’s obligation to pay for the goods sold and
delivered.
[25]
In my opinion the Acknowledgement of Debt in this matter is not a
novation of the obligations of the Defendant under the agreement
in
respect of the goods sold and delivered. It rather appears that the
Acknowledgement of Debt has been intended to be a confirmation
that
creates a further obligation relating to the same performance and not
as a replacement of the obligation which existed under
the agreement
in respect of the goods sold and delivered (see:
Adams v S A
Motor Industry Employers Association 1981(3) SA 1189 (A) at 1199H
).
[26]
In my opinion the Acknowledgement of Debt is indeed a credit
agreement as envisaged in the Act and that, because of the
Plaintiff’s
failure to comply with the provisions of sections 129
and 130 of the Act, the summons must be regarded as having been
prematurely
issued so that summary judgment cannot at this stage be
considered.
[27]
This brings me to the second issue to which I have already referred,
namely, whether the provisions of section 130(4)(b) of
the Act can
find any application in this matter.
Application
of the provisions of section 130(4) of the Act
[28]
Both counsel argued that, should I conclude that the Acknowledgement
of Debt in this matter is indeed a credit agreement,
I should adjourn
this application as provided in section 130(4)(b) of the Act.
[29]
Section 130(4)(b) of the Act reads, in so far as it is relevant for
present purposes, as follows:
“
(4)
In any proceedings contemplated in this section, if the court
determines that -
(a) ................................
(b) the
credit provider has not complied with the relevant provisions of this
Act, as contemplated in subsection (3) (a), .....
the court must -
(i) adjourn
the matter before it; and
(ii) make
an appropriate order setting out the steps the credit provider must
complete before the matter may be resumed;
...........
”.
[30]
In considering Counsel’s submissions on the application of these
provisions, I asked myself the question whether these provisions
can
find application in an application for summary judgment. In summary
judgment proceedings under these circumstances the failure
to comply
with the provisions of sections 129 and 130 of the Act is not a
defence on the merits of the Plaintiff’s claim. The
question which
came to mind is whether the application of the provisions of section
130(4) of the Act should not be regarded as
an issue which should be
raised in the action proceedings.
In
my view those provisions can in the circumstances find application in
these proceedings since the Plaintiff may, bearing in mind
that the
merits of the matter are not in dispute, after the remedies referred
to in section 129(1)(a) of the Act, if resorted thereto,
have been
exhausted, resume its application for summary judgment (see:
ABSA
Bank Ltd v Prochaska t/a Bianca Cara Interiors 2009(2) SA 512 (D) at
518B-F, para [24] and [25]
).
Costs
[31]
The Defendant was clearly entitled to oppose these proceedings
because the summons was, the Plaintiff having failed to comply
with
the provisions of sections 129 and 130 of the Act, prematurely
issued.
Order
[32]
For the reasons set out in this judgment the following order is
made:-
1.
The Plaintiff’s application for summary judgment is postponed
sine
die
;
2.
The Plaintiff may not set this matter down until -
(a)
it has complied with the provisions of section 129(1)(a), read with
section 130
, of the
National Credit Act, 2005
; and
(b)
it has, upon completion of the remedies referred to in section
129(1)(a) of the Act, if resorted to, or otherwise become entitled
to
resume its application for summary judgement.
3.
The Plaintiff is ordered to pay the Defendant’s costs incurred in
opposing this application.
...............................
P
C VAN DER BYL
ACTING
JUDGE OF THE HIGH COURT
ON
BEHALF OF PLAINTIFF
ADV C K MEY
On
the instructions of:- VAN ZYL’S INCORPORATED
19
Mangold Street
Newton
Park
PORT
ELIZABETH
Ref
: Mr C van Zyl/lk
Tel:
(041) 363 3677
ON
BEHALF OF DEFENDANT ADV D A SMITH
On
the instructions of: J R BESTER & ASSOCIATES
70
Worraker Street
Newton
Park
PORT
ELIZABETH
Ref:
/lf/
Tel:
(041) 365 5523
DATE
OF HEARING 5 May 2009
JUDGMENT
DELIVERED ON 14 May 2009