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[2022] ZAKZPHC 9
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Volkswagen Financial Services South Africa (Pty) Ltd v Pillay (7330/2020P) [2022] ZAKZPHC 9; 2022 (5) SA 639 (KZP) (1 April 2022)
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IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
Case
No: 7330/2020P
In
the matter between:
VOLKSWAGEN
FINANCIAL SERVICES
PLAINTIFF
SOUTH
AFRICA (PTY) LTD
and
JANINE
REANTE
PILLAY
DEFENDANT
ORDER
The
following order is granted:
1.
Summary judgment is granted in favour of the plaintiff against the
defendant
as follows:
1.1.
The plaintiff’s cancellation of the agreement relating to the
vehicle described in
paragraph 1.2 of this order is confirmed.
1.2.
The defendant is directed to return the vehicle described as a 2019
Volkswagen Amarok 3.0
TDI Hi-Line EX 4 MOT A/T D/C P/U with chassis
number: [....] and engine number: [....] (‘the vehicle’)
to the plaintiff.
1.3.
The defendant is directed to pay the costs of suit.
2.
The plaintiff is granted leave to apply to this court on the same
papers, duly
supplemented, insofar as it may be necessary, for an
order for any damages which it is entitled to, which will be
quantified once
the vehicle has been located and sold.
3.
The plaintiff shall allege and prove, in its action for any
outstanding damages,
that is has complied with the requirements set
out in para 20.3 of the substituted order granted in
FirstRand
Bank Limited t/a Wesbank v Davel
[2019] ZASCA 168
.
JUDGMENT
Bezuidenhout
AJ
[1]
The plaintiff, Volkswagen Financial Services South Africa (Pty) Ltd,
instituted
action against the defendant, Ms Janine Reante Pillay,
claiming inter alia confirmation of the termination of an agreement,
return
of a motor vehicle, and other related relief. The defendant
defended the matter and filed her plea on 21 September 2021. The
plaintiff
filed an application for summary judgment on 11 October
2021 which has been opposed by the defendant. The matter subsequently
came
before me as an opposed motion.
[2]
The plaintiff and the defendant entered into an agreement on 30
October
2019 in terms of which the plaintiff sold the defendant a
Volkswagen Amarok motor vehicle. The principal debt in respect
of the motor vehicle was R916 249.51, without finance charges. Once
those charges were added, the total principal debt amounted
to
R1 432 049.76. The monthly instalment was R19 958.58.
[3]
The defendant raised a number of defences in her plea. For reasons
which
will become apparent below, it is necessary to consider these
defences in conjunction with what was pleaded in the particulars of
claim. I will deal with the plaintiff’s and the defendant’s
affidavits in the summary judgment application later.
[4]
The plaintiff pleaded that it had concluded an electronically signed
instalment
agreement with the defendant on 30 October 2019 at
Pietermaritzburg. The defendant admitted the date and place but
denied that
she had signed the agreement. The averment that the
agreement was concluded electronically in terms of
section 13(3)
of
the
Electronic Communications and Transactions Act 25 of 2002
was
likewise denied, with no amplification pleaded.
[5]
The plaintiff pleaded that it was represented by a duly authorised
representative
and that the defendant had acted personally. The
defendant pleaded that no authorisation signature appears on the
quotation or
the agreement produced and attached by the plaintiff.
She admitted that she had acted personally.
[6]
The plaintiff pleaded that it had carried out an assessment in
accordance
with the requirements of section 81(2) of the National
Credit Act 34 of 2005 (‘the NCA’) and referred to a
finance
application, which was attached as part of the written
agreement. The defendant denied that the assessment was ‘concluded’
and put the plaintiff to the proof thereof.
[7]
The plaintiff pleaded a number of the general terms of the agreement,
as is usual in matters of this nature. The defendant responded by
admitting that the plaintiff had sold and delivered the vehicle
to
her. She pleaded further that the plaintiff had failed to conduct a
credit worthiness assessment and also that the monthly expenses
‘contained’ in the attached written agreement were
‘incorrect and not at all as per her bank statements’.
There is no amplification pleaded of what the correct amounts or
expenses were. It was also denied that the terms and conditions,
in
general, were discussed with her, and, in particular, that it was
explained to her that the plaintiff could recover possession
of the
vehicle should she be in breach of the agreement.
[8]
The plaintiff pleaded that the defendant was in breach of the
agreement
as she failed to make timeous payments. The plaintiff
further pleaded that the arrears amounted to R190 295.01 as at 15
September
2020, and attached a certificate of balance confirming the
balance. The defendant denied the contents of the paragraph and
pleaded
further that the certificate of balance did not set out how
the alleged arrears were calculated. There was no amplification of
the denial that she had failed to make timeous payments and no
particulars were pleaded of actual payments made.
[9]
The plaintiff pleaded that the defendant applied for debt review on
or
about 19 February 2020, which averment was admitted.
[10]
The plaintiff pleaded that it had not received any payments in terms
of a restructured
payment arrangement, and elected to cancel the
defendant’s debt review, as it was entitled to do so. The
defendant denied
the contents of the paragraph and pleaded further in
amplification that ‘no restructured arrangement was
received by
the plaintiff in terms of a counter proposal to the
standard proposal sent to the plaintiff’. (sic)
[11]
The plaintiff pleaded that it had drawn the notice of the termination
of the debt review
to the attention of the defendant, the debt
counsellor involved as well as the National Credit Regulator after a
period of sixty
days had elapsed. The plaintiff further pleaded that
it had terminated the debt review after ten business days had elapsed
following
the notice of termination. The defendant admitted these
averments and pleaded nothing further.
[12]
The plaintiff attached copies of the relevant notices in terms of
section 86(10) of the
NCA together with proof of service. The
defendant admitted these averments.
[13]
As
mentioned above, the plaintiff launched an application for summary
judgment. In terms of the amended Uniform rule 32(2)
(b)
,
a plaintiff is required to explain briefly why the defence pleaded
does not raise any issues for trial. In
Tumileng
Trading CC v National Security and Fire (Pty) Ltd
,
[1]
Binns-Ward J undertook a detailed analysis of the implications of the
amendments to the rule, and held that ‘a
plaintiff
is now required to engage with the content of the plea in order to
substantiate its averments that the defence is not
bona fide and has
been raised merely for the purposes of delay’
.
[2]
A court is furthermore
‘
not
charged with determining the substantive merit of a defence, nor with
determining its prospects of success. It is concerned
only with an
assessment of whether the pleaded defence is genuinely advanced, as
opposed to a sham put up for purposes of obtaining
delay
.’
[3]
[14]
The plaintiff, in its affidavit in support of summary judgment, dealt
with the various
defences raised by the defendant individually and
concluded that there was no merit in the defences raised. I will only
highlight
what was stated in respect of two of the defences.
[15]
In response to the defendant’s plea that the plaintiff had
failed to conduct an affordability
assessment, the plaintiff alleged
that it had conducted a full and proper assessment in accordance with
the information provided
by the defendant. This included three
months’ bank statements of the defendant’s Capitec bank
account as well as her
salary advice as proof of her income. The
plaintiff also obtained reports from the credit bureau. The plaintiff
further stated
that the defendant was required to fully and
truthfully declare her existing financial means and monthly
obligations. The defendant,
however, at no stage disclosed that she
had entered into a further credit agreement with MFC a few days
before entering into the
agreement with the plaintiff. This second
credit agreement with MFC did not yet reflect on the credit bureau’s
report. The
defendant’s bank statements also did not alert the
plaintiff to this second credit agreement as no instalment had yet
been
paid. It was submitted that the defendant had a duty to disclose
this agreement with MFC and it materially affected the plaintiff’s
ability to make a proper assessment.
[16]
The plaintiff also dealt with the defendant’s plea denying the
breach, the balance
outstanding, and the plaintiff’s failure to
set out how the arrears were calculated. The plaintiff, quite
correctly, stated
that the defendant bears the onus to prove payment
which entails an obligation to properly and fully provide the court
with proof
of all the payments made.
[17]
Uniform
rule 32(3)
(b)
sets out what is required of a defendant. In
Breitenbach
v Fiat SA (Edms) Bpk
[4]
the court held that
‘
All
that is required is that the defendant's defence be not set out so
baldly vaguely or laconically that the Court, with due regard
to all
the circumstances, receives the impression that the defendant has, or
may have, dishonestly sought to avoid the dangers
inherent in
the presentation of a fuller or clearer version of the defence which
he claims to have
.’
[18]
A defendant is required to disclose fully the nature and grounds of
its defence and the
material facts relied upon. A defendant also has
to demonstrate that it has a
bona fide
defence to the action.
In
Tumileng Trading
, Binns-Ward J held as follows:
‘
The
assessment of whether a defence is bona fide is made with regard to
the manner in which it has been substantiated in the opposing
affidavit, viz upon a consideration of the extent to which 'the
nature and grounds of the defence and the material facts relied
upon
therefor' have been canvassed by the deponent. That was the method by
which the court traditionally tested, insofar as it
was possible on
paper, whether the defence described by the defendant was
'contrived', in other words, not bona fide. And the amended
subrule
32(3)
(b)
implies
that it should continue to be the indicated method
.’
[5]
[19]
The defendant’s affidavit opposing summary judgment dealt only
with a limited number
of issues, and by no means addressed all the
issues referred to by the plaintiff when it dealt with the defences
raised in the
defendant’s plea.
[20]
The first issue the defendant dealt with was her application for debt
review. She alleged
that after she had applied for debt review on or
about February 2020 and
‘
whilst
in the period of making application for debt review and attending to
sending out the relevant notices, the country was placed
into
lockdown level 5 for a period of time, whereafter the lockdown
restrictions were lifted gradually, however it was still impossible
for me to attend the offices of the Debt Counsellor and/or the
attorney to do the necessary in order sign documents for debt
review’.
It
is not clear what the defendant is attempting to convey as it not
stated in response to anything contained in the plaintiff’s
affidavit. It appears as if the defendant is attempting to justify
not fully completing or complying with the debt review process.
[21]
The next issue which the defendant addresses is the notice in terms
of section 129 of the
NCA. She alleges that the plaintiff failed to
attach and failed to deliver a notice in terms of section 129 of the
NCA, in terms
of which she would have been directed to refer the
matter to
inter alia
a debt counsellor within ten days. Seen
against the fact that the defendant admitted in her plea that she
received the plaintiff’s
notice in terms of section 86(10) of
the NCA, these allegations likewise make no sense.
[22]
The defendant addresses the issue of her alleged breach by stating
that she had been making
payments ‘in terms of the restructured
payment’ and attaches to her affidavit a schedule reflecting
payments made on
certain dates as well as closing balances. She
further alleges that the plaintiff had been receiving regular monthly
payments,
and, in fact, ‘actually received more than double’
than what is set out in the original agreement. The defendant denies
that she is indebted to the plaintiff. A perusal of the attached
schedule however shows sporadic payments made between April 2020
and
November 2021 - definitely not regular monthly payments. The payments
made furthermore do not come anywhere close to the monthly
instalment
of R19 958.58 in terms of the agreement, and the closing balance
of R970 172.80 on 9 April 2020 increases to R1
149 321.62 on 10
November 2021.
[23]
Not only has none of this been pleaded but the defendant is being
untruthful when she states
that she has been making ‘regular
monthly payments’ and paid more than double than what she was
required to.
[24]
The defendant also alleged that her debt counsellor sent out ‘the
necessary form
17.1’ to the plaintiff and that no counter
proposal ‘was ever received by the Debt Counsellor in order to
negotiate
a reduced instalment’. This was likewise not pleaded,
and also contradicts what was previously stated, namely that the
defendant
was making payments in terms of ‘the restructured
payment’. The defendant’s proposal is furthermore not
attached
to the affidavit. The defendant further does not provide any
information as to what steps the debt counsellor took when he or she
did not receive a counter proposal from the plaintiff.
[25]
With reference to the plaintiff’’s allegations that it
conducted an assessment
of the defendant’s means, the defendant
stated that if the plaintiff had only gone through the bank
statements presented
to it, ‘then they have failed to do a
proper credit assessment as to my affordability and means’. No
response is provided
to the allegations made by the plaintiff
regarding the credit agreement concluded with MFC a few days before
the present agreement
was concluded. There is also no indication as
to what else the plaintiff should have done in order to conduct a
proper credit assessment.
[26]
In argument before me, counsel for the plaintiff, Mr K Gounden,
submitted that the defendant
had failed to disclose a
bona fide
defence. He also submitted that what was set out in the defendant’s
opposing affidavit differed from what was pleaded in
the defendant’s
plea. He also submitted that new issues were raised in the heads of
argument filed on behalf of the defendant
that were not previously
raised in either the plea or the opposing affidavit.
[27]
Counsel for the defendant, Mr A Gevers, made a number of submissions
in his heads of argument
but before me concentrated his efforts
mostly on one issue, which requires closer scrutiny.
[28]
It was submitted, with reference to the defendant’s denial
that the plaintiff
was entitled to cancel the defendant’s debt
review, that the plaintiff was obliged in terms of section 86(5)
(b)
of the NCA to participate in good faith. Section 86(5)
(b)
reads as follows:
‘
(5) A
consumer who applies to a debt counsellor, and each credit provider
contemplated in subsection (4) (
b
),
must—
. .
.
(
b
)
participate
in good faith in the review and in any negotiations designed to
result in responsible debt re-arrangement.
’
It
was also submitted that it is necessary to ‘read into’
section 86(10) of the NCA that a credit provider may only
terminate a
debt review if he is acting in good faith. None of this was pleaded
by the defendant nor was it raised in her opposing
affidavit.
[29]
Defendant’s
counsel referred to
Mercedes
Benz Financial Services SA v Dunga
[6]
where Blignault J suggested that ‘
the
implication of a proviso into s 86(10), to the effect that a credit
provider may only terminate a debt review if he is acting
in good
faith
’
would avoid any unfortunate results of a misinterpretation of section
86(10). He however held that it was ‘not necessary
to define
the precise ambit of the suggested “good faith”
criterion’.
[7]
[30]
I was also
referred to
SA
Taxi Securitisation (Pty) Ltd v Ndobela
[8]
where the court agreed ‘
that
good faith is an important requirement of debt review and failure to
act in good faith can lead to the termination of the debt
review by
the credit provider declared invalid’
.
[9]
The court held that it will depend on the facts and circumstances
whether a credit provider had failed to act in good faith.
[10]
The court stressed that submissions from the bar were not sufficient
and that enough facts must be placed before the court.
[11]
[31]
It is clear from the defendant’s plea and opposing affidavit
that no facts in this
regard were placed before me.
[32]
A submission was made in the heads of argument that the defendant was
facing impossibilities
as regards ‘timeously attending to the
debt review proceedings’ and that the plaintiff had failed to
respond to the
defendant’s proposal with a counter proposal,
and that this was an indication that the plaintiff had failed to act
in good
faith. As mentioned before, none of this was pleaded or
raised in the opposing affidavit.
[33]
It was also
submitted that the lack of an averment in the particulars of claim or
summons that the plaintiff complied with his obligations
to act in
good faith, as contemplated in section 86(5) of the NCA, renders the
particulars of claim excipiable. Reliance was placed
on
Pottas
and others v FirstRand Bank Ltd and others
.
[12]
In this matter, the plaintiff issued summons in which the only
averment relevant to the NCA was that the plaintiff had complied
with
the provisions of the NCA and, in particular, sections 129 and 130
thereof. Nothing further. Alkema J held that a number of
averments
should have been contained in the summons – one of them being
that the credit provider participated in good faith.
[34]
Counsel for
the defendant also referred me to
SA
Taxi Securitisation (Pty) Ltd v Miya L
[13]
where Ncube AJ found that the debt review process in that matter had
not been terminated properly because of the lack of participation
in
good faith by the applicant. The facts relating to the debt review
process were fully pleaded and the process included a proposal
by the
debt counsellor, a rejection by the applicant, and a counter
proposal. After the debt counsellor filed an application at
the
magistrates’ court, the applicant terminated the debt review.
The applicant filed an answering affidavit in the magistrates’
court and thereafter issued summons. This is clearly not authority
for the proposition that a failure to plead participation in
good
faith by a plaintiff would render the particulars of claim
excipiable. The facts in any event differ completely from those
in
the present matter.
[35]
I have not been able to find any authority in which
Pottas
was
followed to the extent that a failure to plead
participation in good faith would render the particulars
of
claim excipiable , perhaps for good reason . Countless similar
matters serve before the courts on a regular basis and
I have yet to
come across one where a plaintiff has pleaded that it participated in
good faith. In my view, a defendant who wishes
to rely on a credit
provider’s lack of participation in good faith in the debt
review process, should plead the relevant
facts properly to enable
the court to consider whether or not a credit provider failed to act
in good faith when participating
in the process. As far as
Pottas
is concerned, I respectfully disagree with the finding that a
failure to plead participation in good faith renders the particulars
of claim excipiable.
[36]
As far as good faith is concerned, it of course goes both ways, as a
consumer, such as
the defendant, also has to act in good faith. In
Ndobela
the court held that:
‘
The
duty to act in good faith is not only confined to credit providers,
it extents to consumers as well. It is a reciprocal duty
on both
parties to engage meaningfully in a debt review negotiations. What I
imply is that a consumer is not permitted to sit back
when he or she
does not receive any counter proposal or response from the credit
provider and allow the 60 business days to pass
before raising an
argument that the credit provider acted in bad faith. The consumer
has a reciprocal duty to act diligently and
proactively the moment it
becomes clear that the credit provider is not engaging in good faith
or does not respond to his or her
proposals for debt review.
’
[14]
[37]
Given the lack of averments and allegations in the defendant’s
plea and opposing
affidavit, I cannot find that the defendant has
disclosed fully a defence in this regard.
[38]
I requested
counsel for the defendant to address me on the defendant ‘s
failure to deal with all the issues raised by the
plaintiff, and
specifically the issue regarding the other finance agreement entered
into with MFC. It was submitted that a defendant
does not have the
duty to respond to everything in a plaintiff’s affidavit, and,
in particular, not
ad
seriatim
to each paragraph. This unfortunately flies in the face of what was
held in
Tumileng
Trading,
where
it was held that a defendant is ‘expected to engage with the
plaintiff’s averments concerning the pleaded defence’.
[15]
A warning was sounded that a defendant who fails to deal with the
argumentative matter in its opposing affidavit, ‘does so
at its
peril’.
[16]
[39]
Defendant’s counsel also urged me to exercise my discretion in
favour of the defendant
and to refer the matter back for the
resumption of the debt review.
[40]
Plaintiff’s
counsel, in reply, referred to
Standard
Bank v Panayiotts
[17]
where it was held that a consumer cannot claim to be over-indebted
whilst at the same time retaining possession of the goods forming
the
subject matter of the agreement. The goods should be sold to reduce
the indebtedness. Similar views were expressed in
FirstRand
Bank v Barnard
[18]
and in
FirstRand
Bank v Obeholster
.
[19]
[41]
I agree with these views. The defendant is in possession of what is
considered a luxury
utility vehicle priced at close to a million rand
whilst paying very little in return. I have no doubt that the matter
is only
being defended for the purpose of causing a delay. The
defendant clearly has no
bona fide
defence and is merely
trying to avoid the inevitable. What is of great concern is that the
defendant applied for debt review a
mere four months after purchasing
the vehicle. I cannot find any reason to exercise my discretion in
favour of the defendant.
[42]
At the
conclusion of the hearing, I requested plaintiff’s counsel to
provide me with a draft order, should I decide to grant
summary
judgment, which makes provision for an order that the plaintiff
should allege and prove any outstanding damages, in line
with the
order granted in
FirstRand
Bank Limited t/a Wesbank v Davel
.
[20]
Such an order was not included in the application for summary
judgment, and the applicant’s counsel expressed doubt that
such
an order would be appropriate. It has become practice in this
division to grant such an order in applications for default
judgments
in matters involving the return of motor vehicles. As the order in
Davel
was in fact granted in respect of a summary judgment application, I
can see no reason why it should not form part of the order
when
granting summary judgment. It would ensure that the defendant’s
rights are sufficiently protected.
[43]
I accordingly make the following order:
1.
Summary judgment is granted in favour of the plaintiff against the
defendant
as follows:
1.1.
The plaintiff’s cancellation of the agreement relating to the
vehicle described in
paragraph 1.2 of this order is confirmed.
1.2.
The defendant is directed to return the vehicle described as a 2019
Volkswagen Amarok 3.0
TDI Hi-Line EX 4 MOT A/T D/C P/U with chassis
number: [....] and engine number: [....] (‘the vehicle’)
to the plaintiff.
1.3.
The defendant is directed to pay the costs of suit.
2.
The plaintiff is granted leave to apply to this court on the same
papers, duly
supplemented, insofar as it may be necessary, for an
order for any damages which it is entitled to, which will be
quantified once
the vehicle has been located and sold.
3.
The plaintiff shall allege and prove, in its action for any
outstanding damages,
that is has complied with the requirements set
out in para 20.3 of the substituted order granted in
FirstRand
Bank Limited t/a Wesbank v Davel
[2019] ZASCA 168
.
BEZUIDENHOUT
AJ
Date
of hearing : 17 March 2022
Date
of judgment: 1 April 2022
Appearances:
For
the Plaintiff: Mr A
Gounden
Instructed
by:
Allen Attorneys Inc
57
Swapo Road
Durban
North
Tel
031 563 2358
Ref
: Mr G. Allen/VOL8/0006
Email
:
thirusha@allenattorneys.co.za
c/o
Botha & Olivier
239
Peter Kerchhoff Street
Pietermaritzburg
For
the Defendant: Mr A Gevers
Instructed
by:
A.Bothma Attorney at Law
Suite
13A
114
Interstate Avenue
Umgeni
Business Park
Durban
Tel
083 463 7891
Email:
adri@bothmalaw.co.za
c/o
Debt Solve
61
Manning Avenue
Mountain
Rise
Cell
083 786 9936
Ref
AB/DS/IAKV/PILLAY, JR/005(VW)
[1]
Tumileng
Trading CC v National Security and Fire (Pty) Ltd
2020 (6) SA 624 (WCC).
[2]
Ibid para 22.
[3]
Ibid para 23.
[4]
Breitenbach
v Fiat SA (Edms) Bpk
1976
(2) SA 226
(T) at 229A.
[5]
Tumileng
Trading CC v National Security and Fire (Pty) Ltd
2020 (6) SA 624
(WCC) para 25.
[6]
Mercedes
Benz Financial Services South Africa (Pty) Ltd v Dunga
2011
(1) SA 374
(WCC) para 48.
[7]
Ibid para 51.
[8]
SA
Taxi Securitisation (Pty) Ltd v Ndobela
[2011]
ZAGPJHC 14.
[9]
Ibid para 21.
[10]
Ibid.
[11]
Ibid para 22.
[12]
Pottas
and others v FirstRand Bank Ltd and others
[2015]
JOL 32803 (ECP).
[13]
SA
Taxi Securitisation (Pty) Ltd v Miya L
2012
JDR 1020 (KZP).
[14]
SA
Taxi Securitisation (Pty) Ltd v Ndobela
[2011]
ZAGPJHC 14 para 22.
[15]
Tumileng
Trading CC v National Security and Fire (Pty) Ltd
2020 (6) SA 624
(WCC)
para
24.
[16]
Ibid para 41.
[17]
Standard
Bank of South Africa Ltd v Panayiotts
2009 (3) SA 363 (W).
[18]
FirstRand
Bank Limited v Barnard
2015 JDR 1614 (GP) paras 25 and 30.
[19]
FirstRand
Bank Ltd v Obeholster
[2018] ZAGPPHC 522 para 43.
[20]
FirstRand
Bank Limited t/a Wesbank v Davel
[2019] ZASCA 168
;
[2020] 1 All SA 303
(SCA) para 20.3 of the
substituted order.