About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Eastern Cape High Court, Port Elizabeth
SAFLII
>>
Databases
>>
South Africa: Eastern Cape High Court, Port Elizabeth
>>
2010
>>
[2010] ZAECPEHC 52
|
|
Scania Finance Southern Africa (Pty) Ltd v Kaknis (1271/2010) [2010] ZAECPEHC 52 (5 August 2010)
IN THE
HIGH COURT OF SOUTH AFRICA
EASTERN
CAPE, PORT ELIZABETH CASE NO:
1271/2010
DATE
HEARD:
13/07/10
DATE
DELIVERED:
05/08/10
In the
matter between
SCANIA FINANCE SOUTHERN AFRICA (PTY)
LTD
APPLICANT
And
PANTELS
KAKNIS
RESPONDENT
_____________________________________________________________________
JUDGMENT
_____________________________________________________________________
TSHIKI J:-
A)
Introduction
[1]
The Applicant, an
incorporated company with limited liability, seeks an order for the
provisional sequestration of the estate of
the Respondent who owes it
an amount of R970 334 – 00. The owed debt arises from the
written lease agreements which the
applicant and respondent entered
into in terms of which Applicant leased to Respondent various
vehicles on various dates between
2004 and 2010. Having failed to
pay in full the required instalments as per agreements the applicant
advised the Respondent of
his indebtedness but the latter failed to
pay the arrear instalments in terms of the lease agreements. It is
the uncontested view
of the applicant that the respondent’s
conduct amounts to a contravention of section 8(g) of the Insolvency
Act
1
.
[2] Respondent has opposed the application on the basis that a
settlement between himself and the applicant was reached on the
14
May 2010 as a result of which the Applicant’s application for
sequestration was eventually settled, inter alia, on the
following
exact terms:
‘
2.1 That the vehicles forming
the subject matter of the applicant’s application would be
refinanced.
2.2 That the said financing of the vehicles would be
concluded on the same terms and conditions as per the consolidation
agreement
enclosed to the applicant’s affidavit marked ‘D’
2.3 That the aforesaid Finance Agreements terms and
conditions as well as the consideration agreement will be entered
into by and
between a new Close Corporation to be formed.
That the members of this new Close Corporation would
sign as sureties together with my father, Ioanis Kaknis.
That my father Iaonis Kaknis, would allow the
Applicant to register a mortgage covering bond for the security to
the value of
R3 417 629-90 against his re-encumbered property known
as Erf 1538 Stutterheim in the Municipality and Division of
Stutterheim,
in extent of nine hundred and twenty nine square
metres held under Deed of transfer T 932/1984; and
That no document
,
fees will again be levied on the respective finance agreements.’
[3] On the strength of the above terms and conditions the Respondent
tendered full compliance with the aforesaid agreement allegedly
reached between himself and the applicant.
[4] Mr Dyke appears for the Applicant and Mr Buchanan SC for the
Respondent.
[5] In his Heads of Arguments respondent has raised a point that on
the basis of the compromise agreement annexure D the original
order
has been extinguished so that it is no longer possible for the
Applicant to obtain a sequestration order on the basis of
the
original debt. In a nutshell respondent is contending that there is
a settlement of the debt in terms agreeable to all the
parties.
[6] Applicant in his replying affidavit re-iterated his earlier
assertion that there was no new binding agreement whose terms would
then settle the debt owed by Respondent to applicant. On the
contrary according to applicant Annexure D is an agreement for the
benefit of the Applicant consolidating the individual lease
agreements between the parties herein into one agreement which has
the effect of linking the individual transactions with the general
terms and conditions such that a breach of one of the terms
and
conditions for a specific transaction may be dealt with as a breach
under the main agreement as a whole.
B)
Novation /
Compromise
[7] Mr Buchanan’s main argument is based mainly on the
non-existence of the original contract as, according to him, has been
replaced by the new one. Mr Dyke’s argument is that the facts
do not establish novation instead they show the contrary.
[8] H.R Christie
2
at page 449 describes novation as ‘Replacing an existing
obligation by a new one, the existing obligation being thereby
discharged’.
[9] The onus lies on the Defendant (Respondent) to
establish the defence of novation. The authorities are adamant that
clear and
cogent proof of the alleged novation would be required in
view of the fact that it involves a waiver of rights
3
.
In
Barclays National Bank Ltd v Smith
4
at page 683 B-D Booysen AJ aptly explained the requirements of
novationas follows:
‘ In
regard to novation it is clear that:
the onus of proving novation rests on the person
alleging novation
(Antonie en Andere v Koekoe
1966 (2) SA 610
(O) at page
613; Trust Bank of Africa Ltd 304 (N) at 307);
the intention to novate is never presumed (Van
Coppenhagen v Van Coppenhagen
1947 (1) SA 576
(T) at 578 –
581);
the question is one of intention
and that, in the absence of any express declaration of the parties
the intention to effect novation
cant be held to exist except by way
of the necessary inference from all the circumstances of the case.
(Electric Process Engraving
and Stereo Co. v Irwin
1940 AD 220
at
226 – 7)
The circumstances of the case of course include the
conduct of the parties (French v Sterling Finance Corporation (Pty)
Ltd
1961 (4) SA 732
(AD) at page 736.’
[10] In the present case in order to establish whether the parties
have in fact entered into a new contract which has extinguished
the
original contract I have to examine thoroughly the terms of the
agreement in ‘exhibit D’. The parties herein have
entered into a written agreement which is referred to by the
applicant as a consolidation agreement (annexure D). In my view
paragraph 2 of the agreement shows clearly the intention of the
parties when they entered into this agreement and it reads thus:
2.
‘
Consolidation
a) The original agreements and the
additional agreements are hereby consolidated into a single,
indivisible agreement (the Consolidation
Agreement) to the full
extent permitted by the law, the intention and effect being that
notwithstanding anything to the contrary
contained in the Original
Agreement
[s] or the
Additional Agreement[s], ownership in the Original goods and the
Additional goods shall remain vested in the lessor until
all amounts
payable by the lessee to the lessor in terms of the Original
Agreement have been paid in full;
b) This Consolidation Agreement shall amend the Original
Agreement[s] and Additional Agreement[s] only to the [stated] herein;
c) In the event of any conflict between the provisions
of the Original Agreement[s], the additional agreement[s] and this
Consolidation
Agreement, the terms of this Consolidation Agreement
shall prevail.
……………………………………………………
..
3.
Breach
In the event that the Lessee commits
an event of default, under any
of the
Original
Agreement or Additional Agreement
;
Such a default shall be deemed to be a default under
the Consolidation Agreement;
The Lessor shall be entitled to
take such action in terms of the Consolidation Agreement
as
it shall have been entitled to take [if]the Lessee[has] committed
an event of the default under any of the Original Agreements
or the
Additional Agreements ……….’[
my
emphasis
]
[1
1] Both Mr Marius
Cloete on behalf of the applicant as well as the Respondent have
signed the above agreement. It is evident from
the extract quoted
supra
that
the parties have never, even for a moment, intended to novate the
original contract into a new one. The wording of the clauses
show
beyond a reasonable doubt that this was an improvement of the
existing contract to the benefit of the Applicant. There was
never
an intention to replace the old contract with the new one. In any
event the applicant has explained in the founding affidavit
that the
purpose of the agreement was to protect the interests of the
applicant in that any default by the respondent is a default
of each
of the individual lessee agreements.
[12] The respondent, who has raised novation as a defence herein, has
not convinced me that there was any novation of the original
agreement by the parties.
C)
Application (or
not) of National Credit Act (the NCA)
For the reason that respondent in his affidavit
relied on the provisions of the NCA
5
as a
matter of completeness
,
I must deal with this issue
albeit
summarily.
[13
] Mr Buchanan has
conceded, correctly in my view, that he was no longer relying on this
defence. For obvious reasons the respondent
would not successfully
rely on the said Act because it had been previously decided
6
that the provisions of the National Credit Act, cannot be an obstacle
to a Creditor who applies for the sequestration of the debtor.
At
paragraph 29 and 30 Trengore AJ stated
in
Investec Bank Ltd and Another v Mutemeri and Another
supra
;
[14
]
“……………
It does not apply to an application by a credit provider for the
sequestration
of a consumer’s estate based on a claim in terms
of a credit agreement between them. Such an application is not one
for
an order enforcing the credit provider’s claim against the
consumer. Section 9(2) of the Insolvency Act indeed makes it clear
that the sequestration creditor’s claim need not even be due,
that is, need not yet be enforceable. An application for
sequestration may be made on the strength of a claim which is not yet
enforceable, because a sequestration order is not an order
for
enforcement of the claim. It’s purpose and effect are merely
to bring about a convergence of the claims in an insolvent
estate to
ensure that it is wound up in an orderly fashion and that creditors
are treated equally………... .
I conclude that an
application for sequestration is not an application for enforcement
of the sequestrating creditor’s claim
and is thus not subject
to the requirements of section 130(1) of the National Credit Act’.
[15
]
I
agree with the above dictum more so that the facts of that case in
this regard are similar to ours. In addition, a sequestrating
creditor may even get nothing from his or her sequestration of the
debtor unlike a credit provider who would certainly enforce
a claim
against the consumer for the sole purpose of receiving money owed to
him or her by the debtor.
[16
] For the above
reasons I have no reason to uphold the respondent’s opposition
to the applicant’s application.
In the result I make the following order:
16
. 1 That the Estate of
the Respondent be and is hereby provisionally sequestrated in the
hands of the Master of this Honourable
Court.
1
6.2 That a Rule Nisi do
issue calling upon the Respondent and all interested parties to show
cause, if any, to the above Honourable
Court on Tuesday, the 24
th
day of August 2010 at 09h30 or so soon thereafter as Counsel may be
heard, why the Respondent should not be finally sequestrated.
16.3 That the service of the order of the above Honourable Court
shall be effective as follows:
16.3.1 by the sheriff or;
16.3.1.1 the Respondent personally
16.3.1.2 the local office of the South African Revenue
Service;
16.3.1.3 if applicable
16.3.1.3.1 upon the employees of the Respondent by affixing a copy
thereof at the gate to the Respondent’s premises;
1
6.3.1.3.2 upon the
known Trade Union(s) representing the employees of the Respondent.
16.3.2 by one publication in each of The Herald (English) the Die
Burger (Ooskaap) (Afrikaans) newspapers.
16.4 That the costs of this application be costs in the sequestration
of the Respondent.
__________________
P.W TSHIKI
JUDGE OF THE HIGH COURT
Appearances:
For the Applicant: Adv Dyke instructed by Senekal Simmonds Inc
attorneys-
Port Elizabeth
For the Respondent: Adv Buchanan instructed by Pierre Kitching
Attorneys –
Port Elizabeth
1
Act 24 of 1936 which provides that a debtor
commits an act of insolvency if he gives notice in writing to any
one of his creditors
that he is unable to pay any of his debts.
2
H.R Christie On The Law of Contract in South
Africa, 5
th
Edition
3
Woolfson’s Credit (Pty) Ltd (formerly
Vavasseur (SA) Credit (Pty) Ltd v Holdt
1977 (3) SA 720
(N)
4
Barclays National Bank Ltd v Smith
1975 (4) SA
675
D.
5
Act 34 of 2005
6
See Judgment of Trengrove AJ in Investec Bank Ltd and Another v
Mutemeri and Another-
2010 (1)
SA
265
(GSJ)