About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Eastern Cape High Court, East London Local Court
SAFLII
>>
Databases
>>
South Africa: Eastern Cape High Court, East London Local Court
>>
2023
>>
[2023] ZAECELLC 6
|
|
Ngandela v Absa Bank Limited and Another (1637/2021) [2023] ZAECELLC 6 (31 January 2023)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
FLYNOTES:
NCA
AND DEFAULT JUDGMENT BY REGISTRAR
CIVIL
PROCEDURE – Default judgment – By registrar –
Where credit agreement involved – Instalment sale
agreement
for vehicle – The grant of default judgment in matters under
the NCA must be dealt with by the court –
Recent cases
discussed, in particular the Constitutional Court case of Nkata
and the full bench case of Mollentze –
Registrar not
authorised to grant bank default judgement – Judgment
granted by registrar rescinded.
IN THE HIGH COURT OF
SOUTH AFRICA
(EAST LONDON LOCAL
CIRCUIT DIVISION)
CASE NO: EL 1637/2021
In the matter between:
NDODOMZI
DAVID NGANDELA
Applicant
and
ABSA
BANK
LIMITED
1
st
Respondent
SHERIFF
OF THE HIGH COURT
2
nd
Respondent
JUDGMENT
DREYER
AJ
Introduction
[1]
In 2019, the applicant
secured finance from the respondent, ABSA Bank Limited (“Absa
Bank”) for the finance of a 2018
Volkswagen Golf V11[…],
with engine number CHH 2[…] and chassis number WVWW[…]
(“the motor vehicle”).
The finance for the purchase of
the motor vehicle was regulated by an instalment sale agreement.
The applicant failed to
make certain monthly instalment payments.
After issuing summons against the applicant, on 25 March 2022,
the registrar of
this court (“the Registrar”), granted
Absa Bank default judgement which included
inter
alia
the confirmation
of the cancellation of the instalment sale agreement and that the
applicant deliver the motor vehicle to Absa
Bank.
[2]
This judgement concerns
the validity the default judgement granted by the Registrar.
[3]
A
number of recent decisions have considered the power of the registrar
to grant default judgement relating to credit agreements.
In
the decisions of
Theu
v FirstRand Auto Receivables (RF) Limited and another
[1]
;
Xulu v Standard Bank of South Africa Limited and Others
[2]
;
and Seleka v Fast Issuer SPV ( RF) Limited and Another
[3]
,
the
courts have held that the registrar of the court is not
empowered to grant such default judgement.
[4]
All
these decisions refer with approval to the concurring majority
decision Jafta J in
Nkata
v FirstRand Bank Limited and Others (Socioeconomic Rights Institution
of South Africa as amicus curiae)
[4]
(“the Nkata decision”) that the pre-emptory language of
s130 of the National Credit Act
[5]
(“NCA”) requires the court, not a registrar of the court,
to consider the enforcement of a credit agreement. The credit
provider, Jafta J held
”
sought
and obtained a default judgment from the registrar of the High Court,
something that is
incompatible
with s 130(3) which requires such matters to be determined by the
court.
”
(my
emphasis)
[5]
The
outlier in the line of recent authorities regarding the powers of the
registrar to grant default judgement relating to credit
agreement is
a full bench decision of the Mpumalanga Division, Middelburg,
Nedbank
Limited v Mollentze; FirstRand Auto Receivables (RF) Limited v Radebe
and Another
[6]
(“the
Mollentze decision”)
,
which held that s23 of the Superior Courts Act
[7]
clothed the registrar with the authority of a court, enabling the
registrar to deal with quasi-judicial functions, including a
consideration and granting of default judgments under the NCA.
[8]
[6]
The court in the Mollentze
decision, considered the concurring judgement of Jafta J in
Nkata decision as a minority and
obiter
decision (as, the Mollentze decision found, the Constitutional
Court was not called on to interpret s130
of the NCA).
This finding of the court is, respectfully, incorrect.
[7]
Firstly,
Moseneke DCJ for the majority in Nkata specifically states in the
introductory paragraph of his judgement “
I
am also grateful for the concurring judgement of Jafta J and have
noted the additional reasons he relies on
”.
[9]
[8]
Jafta J in his concurring
majority decision, echoes this:”
Like
Moseneke DCJ, I would uphold the appeal and set aside the order of
the Supreme Court of Appeal, for mainly the reasons
advanced by him
in his judgement and to which I add mine
”.
[9]
It is clear that these
two concurring judgements are the decision for the majority in the
Nkata judgement.
[10]
Secondly, the question
before the Constitutional Court was, whether the credit
provider had met the provisions of s129
of the NCA ( that is
whether proper notice had been given to the credit receiver, prior to
the credit provider instituting legal
proceedings) to justify the
grant of default judgement by the registrar of the court. The default
judgement included the cancellation
of the credit agreement. The
question whether default judgement was properly granted, consequently
the interpretation of
s130 of the NCA, was an issue front and central
for the Constitutional Court’s determination.
[11]
I am bound by the
Nkata decision, not the Mollentze decision.
The provisions of the
NCA
[12]
The NCA regulates
instalment sale agreements. The long title of the NCA states
that it was promulgated,
inter
alia
, “
to
promote a fair non-discriminatory marketplace … [and] to
provide for the general regulation of consumer credit and improve
standards of credit information
”.
[13]
The purpose of the NCA is
set out in section 3, recording that:
“
The purposes of
this Act are to promote and advance the social and economic welfare
of South Africans, to promote a fair, transparent
and competitive,
sustainable, responsible, efficient, effective, and accessible credit
market and industry and to protect consumers,
by –
…
(i)
by providing for a consistent and harmonised system of debt
restructuring, enforcement and judgment
which places priority on the
eventual satisfaction of all responsible consumer obligations under
credit agreements.
”
[14]
The purpose of the Act to
provide a harmonised system of enforcement and judgment is realised
in s 130, which details the procedures
a
credit
provider must follow to enforce a credit agreement
.
A credit provider may only approach the Court once it has complied
with specific procedural steps and after giving notice
as specified
to the credit receiver in writing. S130(3) further specifies
that “
despite
any provision of the law or contract to the contrar
y,
any proceedings commenced in a court in respect of a credit agreement
to which the Act applies
,
the court may only determine the matter
if the court is satisfied that…
”
certain specific procedural requirements of the Act have been met.
[15]
As
the Supreme Court noted, in
FirstRand
Bank Limited t/a Wesbank v Davel
(University
of the Free State Law Clinic as amicus curiae)
,
[10]
it is clear from these provisions that the legislature was intent on
ensuring that sufficient protections are provided to ensure
that, on
termination of the credit agreement, a consumer is protected. These
consumer protections include the court’s oversight
of the
enforcement of credit agreements.
[16]
The Absa Bank, argues
that, despite the specific wording of the Act requiring
the
court to determine the enforcement
of a credit agreement, the default judgment granted by the registrar
of this court on 25 March 2022 was competent. Absa Bank relies
on the
Mollentze decision.
[17]
The applicant, in
contrast, relies on the Nkata decision.
[18]
The
applicant’s argument is supported by an unreported decision of
the Free State Division, Bloemfontein,
Gcasamba
v Mercedes-Benz Financial Services SA (Pty) Limited and Another
[11]
(“
the
Gcasamba decision”
)
,
handed down after I had heard argument in this matter.
Snellenberg JA in the Gcasamba decision held that the Registrar
of the High Court is not competent or empowered to grant any order or
judgment in a matter where the NCA applies.
[12]
Snellenburg JA held that this question has been settled by the
Constitutional Court in the Nkata decision and that
a proper
interpretation of the provisions of the NCA leaves no doubt that the
legislature (NCA) entitled the court and only the
court to grant
judgments and orders in matters in which the NCA applies.
[13]
[19]
I agree. I referred the
parties to the Gcasamba decision and requested the parties to
provide me with their written submissions.
Unfortunately, the parties
did not take up the opportunity.
[20]
I will return to the
consideration of the competing decisions on the interpretation of
s130 of the NCA.
The Facts
[21]
On 25 March 2022, the
Registrar granted Absa Bank default judgment against the
applicant.
[22]
On 12 April 2022, Absa
executed the warrant for the delivery of the motor vehicle. The
applicant complied with the warrant
and delivered the motor into the
possession of the Sheriff on 12 April 2022. The applicant
settled the outstanding arrears,
in the sum of R20 345.41.
[23]
This amount was in
addition to amounts the applicant had made since the service of
the summons in December 2021, in reduction
of his indebtedness to
Absa Bank, including payments of R20 000.00 in January 2022,
R12 000.00 in February 2022, R12 000.00
in March 2022, and
a payment of R15 000.00 on 5 April 2022. On 4 April
2022, Absa Bank secured payment from a debit
order due in terms of
the instalment sale agreement in the sum of R11 497.58.
[24]
On 22 April 2022, the
applicant instituted these proceedings. This court, (per Hartle
J), granted the applicant interim relief
staying the execution of the
motor vehicle and directed Absa Bank return the motor vehicle to the
applicant, pending finalisation
of the rescission application.
This is the application before me.
The rescission
application
[25]
The applicant relies on
three grounds for the rescission of the judgment:
25.1
firstly, he did not
receive the statutory notice in terms of s129 of the National Credit
Act, prior to the institution of the legal
proceedings;
25.2
secondly, Absa Bank is
estopped from relying on the cancellation of the instalment sale
agreement, as its conduct in debiting the
applicant’s bank
account, contradicts cancellation; and
25.3
thirdly, the default
judgment is a nullity as it was granted by the Registrar, who is
precluded from doing so in terms of the provisions
of s130 of the
National Credit Act 2005.
[26]
During argument, the
applicant’s representative did not persist with the argument
that due notice of the breach was not given
in terms of s129 of the
NCA. This concession was correctly made. While the applicant
may not have physically received the
s129 notice, this is not the
test.
[27]
The
s129 notice was sent to the applicant at 26 16
th
Avenue, Gonubie by registered mail. The applicant concedes this
is his home address. SA Post Office’s parcel
tracking
records receipt of the s129 letter at the Gonubie Post Office and
that final notification given to the applicant to collect
the notice
on 13 October 2021. This constitutes sufficient notice.
[14]
[28]
Counsel
for Absa Bank contended in argument that the applicant could
not rely on the estoppel defence as it was only raised
in the reply.
I disagree. It is trite that estoppel is not a cause of
action. A plaintiff must not rely on estoppel
in the claim, nor
may a defendant rely on it in the counterclaim.
[15]
A plaintiff wishing to rely on estoppel must plead it in the
replication in the reply to a defendant’s plea.
[16]
Where a plaintiff is aware, at the inception, of the true facts,
these must be pleaded. In these circumstances, a plaintiff
may
rely on estoppel in the replication.
[17]
[29]
The applicant has properly
raised the estoppel defence. The facts on which the applicant
relies for this defence are set out
in the founding affidavit in
accordance with the settled legal principles. The estoppel defence,
itself is raised in
the replying affidavit . Absa Bank’s
opposition to the applicant’s estoppel defence is misguided.
[30]
Absa Bank, in any event,
did not oppose the application for condonation for the late filing of
the replying affidavit. I was
pertinently informed by the
counsel for Absa Bank that he had no instructions to oppose the
application for condonation.
[31]
I am satisfied that the
applicant has provided adequate explanation why the replying
affidavit was filed late. Condonation
for the late filing of
the replying affidavit is granted.
[32]
For the reasons set out
below, I do not consider it necessary to decide whether Absa Bank was
estopped by its conduct, after default
judgement was granted in its
favour, to contend that the credit agreement had been cancelled.
[33]
The question, which is
dispositive of this rescission, is whether it is permissible for the
registrar of the High Court, to grant
default judgement when the
subject matter of the action is a consideration of the credit
agreement
.
The Powers of the
registrar
[34]
A
registrar’s authority to grant default judgement is regulated
by s23 of the Superior Courts Act:
[18]
“
a judgment by
default may be granted and entered by the registrar of a division in
the manner and in circumstances prescribed by
the rules and a
judgment so entered is deemed to be a judgment of the court
”.
[35]
The deeming provision in
s23 of the Superior Courts Act does not deem the Registrar as a
court, empowered with the functions of
a court. The deeming
provision merely deems that the default judgments granted by the
Registrar are, as prescribed, are in
all instances, decisions of the
Court.
[36]
Uniform Rule of Court
31(5) prescribes the manner and the circumstances when a registrar
can grant default judgement:
“
(5) (a)
Whenever the defendant is in default of delivery of a notice of
intention to defend or of a plea,
the plaintiff, if he wishes to
obtain judgment by default, shall where each of the claims is for a
debt
or a
liquidated demand
file with the registrar a written application for judgment against
the defendant: …….
(b)
The registrar may –
(i)
grant the judgment as requested;
(ii)
grant judgment for part of the claim only or on amended terms;
(iii)
refuse the judgment wholly or in part;
(iv)
postpone the application for judgment on such terms as he or she may
consider just;
(v)
request or receive oral submissions;
(vi)
require that the matter be set down for hearing in open court:
Provided
that if the application is for an order declaring residential
property specially executable, the registrar must refer such
application to the court.
”
[37]
Rule
31(5) limits the authority of the Registrar to grant default judgment
to matters which relate to a debt or a liquidated demand.
The
courts have held that a liquidated demand includes the return for a
fixed or a definite thing.
[19]
This interpretation would include the return of a motor
vehicle. While the registrar may consider an application for default
judgement which includes the physical return of a motor vehicle, this
power is limited by the specific provisions of s130 of the
NCA.
[38]
S130
of the NCA requires judicial oversight of credit agreements by the
court where a credit provider seeks the enforcement of
the
agreement against the credit receiver.
[20]
This section emphasises the oversight role of the court to the
exclusion of any law to the contrary. Such exclusion, covers the
provisions of s23 of the Supreme Court Act.
“
130 (1)
Subject to section 2, a credit provider may approach the court for an
order to enforce a credit
agreement only if at the time the consumer
is in default and has been default under the credit agreement for at
least 20 days...
(2)
…
(3)
Despite any provision of law or contract to the contrary, in any
proceedings commenced in a court in
respect of a credit agreement to
which this Act applies, the court may determine the matter only if
the court is satisfied that:
(a)
in the case of proceedings which sections 127, 129 or 131 apply, the
proceedings required by those sections
have been complied with...
”
[39]
A clear reading of s130 of
the NCA read together with s23 of the Superior Courts Act, is that
the grant of default judgment in matters
under the NCA, must be dealt
with by the court. This does not include the registrar of the
court. The registrar of
the court is not a court.
[40]
I align myself with the
prevailing recent decisions of Tseu, Xulu and Seleka.
[41]
The
Constitutional Court has dealt decisively with the power of the
registrar to grant default judgement on credit agreement under
the
NCA in
Nkata
v First Rand Ban
k
[21]
Registrars have no such power.
[42]
The
Mollentz decision held that”
burdening
the court with procedural issues that can easily quickly and in a
less expensive manner be dealt with by the registrar
is not in the
interest of the administration of justice
..”
[22]
and “
it
could never have been the intention of the legislature that the
enforcement of credit agreements due to default should be determined
by the court and not the registrar
”
[23]
[43]
The practicalities of the
operation of a court cannot be equated to the interests of justice.
Particularly, when such practicalities
are contrary to the law and
the interpretation of that law in the pronouncement by the
Constitutional Court.
[44]
In
the Nkata decision the Constitutional Court held that the default
judgement granted by the registrar was in violation of the
pre-emptory provisions of the s 130 (3) of the NCA, was a nullity and
had no force in law.
[24]
As
such, the constitutional court held, the registrar had usurped
a power expressly left to the court by s130 of the NCA.
[25]
[45]
The Mollentze decision did
not have regard for these pronouncements of the
Constitutional Court, in arriving at its
decision.
[46]
I find that the registrar,
was not authorised to grant Absa Bank default judgement against the
applicant.
[47]
In these circumstances, it
is not necessary for me to consider the other grounds on which the
applicant relies to rescind the judgement
order or to consider
whether the applicant has shown good cause to meet the requirements
of recission.
[48]
In the result I make the
following order
48.1
the rule
nisi
is confirmed;
48.2
the judgment granted by
the registrar on 25 March 2022 is rescinded;
48.3
the first respondent is to
pay the applicant’s costs.
___________________________
DREYER AJ
ACTING JUDGE OF THE
HIGH COURT
Representation for the
applicant
Counsel Adv
Mafu
Instructed
by: MT
Klaas Incorporated
45
Stewart Drive
Baysville
East
London
Representation for
respondents
Counsel
Adv Kotze
Instructed
by
Strauss Daly Incorporated
c/o
Bax Kaplan Russell Incorporated
2
Clevedon Road
Selbourne
East
London
Date matter
heard: 11
August 2022
Date
judgment handed down: 31 January 2023
[1]
[2020] ZAGPPHC 319 (12 June 2020);
[2]
[2021] ZAKZPPHC 51 (23 August 2021
[3]
[2021]ZAGPPHC 128 ( 10 March 2021)
[4]
2016
(6) BCLR 794 (CC)
[5]
Act
34 of 2005
[6]
2022
(4) SA 597 (ML)
[7]
Act
10 of 2013
[8]
At
para [65] Mabusa J in Seleka
supra
@ para [13] to [15] after referring to the decision of
Master
of the High Court NO North Gauteng v Motala
2012
(3) SA 325
SCA
,
held
that the registrar’s power to grant default judgement
was prohibited by statute and where the registrar arrogates
such
powers, the judgement so granted was null and void.
[9]
Ibid @ para [ 75]
[10]
[2020]
1 All SA 303
(SCA), at paragraph [19]
[11]
(4526/2021)
[2022] ZAFSHC 197
(15 August 2022)
[12]
Gcasamba
decision at para [31]
[13]
The
Gcasamba decision at para [36]
[14]
Kubyana
v Standard Bank of South Africa
2014 (3) SA 56 (CC)
[15]
Sodo
v Chairman, African National Congress, Umtata Region
[1998] 1 All SA 45 (Tk)
[16]
Mann
v Sidney Hunt Motors (Pty) Ltd
1958 (2) SA 102
(G)
[17]
Oriental
Products (Pty) Ltd v Pegma 178 Investments Trading CC
2011 (2) SA 508
(SCA), at para [31]
[18]
Act 10 of 2013
[19]
.
Supreme Diamonds (Pty) Ltd v Du Bois
1979
(3) SA 444 (W).
[20]
The
Constitutional Court has in the decisions of
Sebola
& another v Standard Bank of South Africa & another
2012(5) SA 142 ( CC) and
Kubyana
v Standard Bank of South Africa Ltd
2014 (
4) BCLR 400
(CC) considered the judicial oversight role given
to the court under the National Credit Act
[21]
2016 (4) SA 257 (CC)
[22]
Mollentze decision @ para [38}
[23]
Ibid @ para [ 60]
[24]
Ibid @para [186]
[25]
Ibid@ para [187]