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[2021] ZAGPPHC 28
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Grundlingh v MFC a division of Nedbank (59529/19) [2021] ZAGPPHC 28 (15 January 2021)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
(1)
REPORTABLE: NO
(2)
OF INTEREST TO
OTHER JUDGES: NO
(3)
REVISED.
15
January 2021
CASE
NO: 59529/19
In
the matter between:
DANIEL
LOUWRENS
GRUNDLINGH
Applicant
and
MFC
A DIVISION OF
NEDBANK
Respondent
J U D G M E N T
This matter was
enrolled for hearing on 19 October 2020. It was dealt with or
determined on the papers in terms of the Directives
of the Judge
President of this Division dated 25 March 2020, 24 April 2020, 11 May
2020 and 18 September 2020. The judgment
and order are
accordingly published and distributed electronically. The date
and time of hand-down is deemed to be 10:00
on 15 January 2021.
TEFFO, J
Introduction
[1]
This is an application for
the rescission of a default judgment granted against the applicant on
13 September 2019.
[2]
The application is
opposed.
The
parties
[3]
The applicant, Mr Daniel
Louwrens Grundlingh, is an adult male businessman and attorney.
The respondent is MFC, a division
of Nedbank Ltd and a credit
provider duly registered as such in terms of Act 34 of 2005 (“
the
National Credit Act
”).
Background
[4]
On or about 12 October
2016, the parties entered into a written credit agreement (“
the
agreement
”) in
terms of which the applicant purchased from the respondent a 2016
Toyota Hilux 2.8 GD-6 Raider 4x4 P/U A/Chassis Number:
AHTHA3CD903414508, Engine Number: 1GD0180317 (“
the
vehicle
”) for
the sum of R631 428,07.
[5]
The material terms of the
agreement were,
inter
alia
, that the
ownership of the vehicle would remain vested in the respondent until
all the amounts due to it by the applicant in terms
of the agreement
have been paid in full. The respondent would be entitled to
recover from the applicant collection costs
and default
administration charges incurred in enforcing the agreement.
Should the applicant commit any breach of the agreement,
then the
respondent would be entitled, after due demand and without prejudice
to any other rights it may have against the applicant
to cancel the
agreement, take repossession of the vehicle, retain all payments
already made in terms of the agreement by the applicant
and claim
payment of the difference between the balance outstanding and the
amount realised from the sale of the vehicle.
[6]
The respondent duly
complied with all its obligations in terms of the agreement and
delivered the vehicle to the applicant.
[7]
The applicant breached the
terms and conditions of the agreement by failing to make due and
punctual payments to the respondent
in terms of the agreement.
As a result, the respondent delivered a breach notice and a notice in
terms of section 129(1)(a)
of the NCA on 22 July 2019.
Subsequent thereto and on or about 13 August 2019, the respondent
issued summons against the
applicant. Summons was served on 19
August 2019 at the applicant’s chosen
domicilium
address and the respondent failed to deliver a notice of intention to
defend. On 3 September 2019, the respondent filed an application
for
default judgment with the Registrar of this Court. On 13
September 2019, default judgment was granted against the applicant.
[8]
It is this default
judgment that the applicant seeks to rescind.
The
applicant’s case
[9]
The applicant alleges that
on or about 16 September 2018, he communicated with the respondent
directly trying to make arrangements
to settle the outstanding
amounts. He was informed that summons was issued, however, the person
he spoke to did not know the exact
status of the matter. He
then informed the representative of the respondent, whose name has
not been disclosed, that he can
make a payment of R35 000,00 by
20 September 2019, another payment of R35 000,00 on 20 November
2019 and the remainder
of the arrears on 20 December 2019. The offer
was accepted by the respondent and he was advised to contact the
respondent’s
attorneys and inform them of the arrangement.
[10]
He contacted the
respondent’s attorneys on the same day. He spoke to a
certain Mrs Qaga and informed her about the arrangement
he had made
with the respondent. Mrs Qaga could not indicate to him what
the status of the matter was. Instead, she
sent him an email
stating that there was no default judgment on her file. She also
emailed him a copy of the summons. He subsequently
emailed her a
notice of intention to defend the matter.
[11]
He has never received the
summons prior to it being emailed to him and had no knowledge of
same. He does no longer reside
at 122 Old Kent Drive. His
details were amended on the respondent’s system. He was
advised that the respondent’s
calls are recorded. The
respondent can therefore easily verify his discussion with them.
[12]
On or about 19 September
2019, he contacted the respondent’s attorneys in order to
ascertain whether they had received his
notice of intention to defend
the action against him. They acknowledged receipt of same and
advised that they were awaiting
instructions from the respondent.
On 20 September 2019, he received correspondence from the
respondent’s attorneys
stating that the notice of intention to
defend was out of time and will not be condoned.
[13]
Pursuant thereto, he
contacted the respondent and their legal representatives and
requested them to send him the order. On 2 October
2019, he attended
court. He could not locate the file or the order. He sent an
email to the respondent’s attorneys
advising them of the
developments and also tried to resolve the matter.
[14]
On 16 October 2019, the
respondent’s attorneys emailed the order to him. He
requested the respondent’s attorneys
on numerous occasions that
they should get together and resolve the matter. They promised
to come back to him but they did
not.
[15]
At all relevant times he
had the intention of defending the matter. The service address
on the respondent’s system is
different to the one they
utilized. He contacted the respondent not knowing that summons
was issued against him and made
an arrangement which is now denied
because of a judgment the respondent did not know it existed at the
time. He was not in
wilful default of entering appearance to
defend.
[16]
With regard to alleged
arrangement made between the parties, the applicant further contends
that the respondent can easily prove
the recording of the
conversation between him and its representative. He also
contends that he did not receive the section
129 notice. He
never had the opportunity in terms of the NCA to exercise his
rights. The agreement attached to the
particulars of claim was
never concluded as it was not countersigned. The certificate of
balance was also not attached to the particulars
of claim.
The
respondent’s case
[17]
The respondent denies that
the applicant is entitled to the rescission of the default judgment.
It contends that when the
applicant communicated with its
representative on 16 September 2019, default judgment had already
been granted against him.
[18]
The respondent further
denies that an agreement was ever reached between it and the
applicant. It clearly submitted that the
applicant was informed
on 20 September 2019 that it had obtained default judgment against
him on 13 September 2019.
[19]
The respondent also deny
that the applicant’s details were amended on its system.
It contends that it was a term of
the agreement between the parties
that the applicant would notify it in writing of any change of his
domicilium
address.
According to it the applicant did not at any stage, inform it of any
change of his
domicilium
address that was provided by him in the agreement.
[20]
The respondent contends
that the section 129 notice was sent to the
domicilium
address provided by the applicant in the agreement. It submitted that
the credit agreement does not need to be countersigned in
order for
it to be valid and binding. With regard to the issue pertaining
to non-attachment of the certificate of balance
to the summons, it
was contended that it does not mean that the respondent’s cause
of action was not established.
[21]
According to the
respondent, the applicant failed to make allegations which satisfy
the requirements of either Rule 31(2) or Rule
42(1) to entitle him to
the rescission of the judgment.
The
issue
[22]
Have the requirements for
rescission of judgment been met?
Applicable
legal principles
[23]
The application was
brought in terms of Rule 31, alternatively Rule 42 of the Uniform
Rules of Court.
[24]
In terms of Rule 31(2)(b)
of the Uniform Rules of Court, a defendant may, within 20 days after
he has knowledge of a default judgment,
apply to court to set aside
such judgment.
[25]
The applicant for
rescission has to show “
good
cause
” by:
(a) giving a reasonable explanation for his default; (b)
showing that his application is made
bona
fide
and not made with
the intention to delay the plaintiff’s claim; and (c) showing
that he has a
bona fide
defence to the plaintiff’s claim which
prima
facie
has some
prospects of success
[1]
.
The court may also take into account the prejudice to the parties.
The
bona fide
defence needs to be established
prima
facie
only. It
is not necessary to deal fully with the merits of the case or to
prove the case
[2]
.
It is sufficient to set out the facts, which if established at the
trial, would constitute a good defence
[3]
and such defence must have existed at the time of the judgment
[4]
.
The court has a wide discretion in evaluating “
good
cause
” in order
to ensure that justice is done between the parties
[5]
.
[26]
The judge considering the
application for rescission of judgment should not, in determining
whether good or sufficient cause has
been proven, look at the
adequacy or otherwise of the explanation of the default or failure in
isolation. The explanation,
be it good, bad, or indifferent,
must be considered in the light of the nature of the defence, and in
the light of all of the facts
and circumstances of the case as a
whole. The presence of wilful default does not necessarily
negative the establishment
of a just or sufficient cause. Even
when finding a wilful default, the court is enjoined to exercise
whether the defence
raised by the person who seeks relief shows the
existence of an issue which is fit for trial
[6]
.
[27]
Rule 42(1) reads:
“
(1) The court may, in
addition to any other powers it may have, mero motu or upon the
application
of any party affected, rescind or vary:
(a)
An order or
judgment erroneously sought or erroneously granted in the absence of
any party affected thereby;
(b)
an order or
judgment in which there is an ambiguity or a patent error or
omission;
(c)
an order or
judgment granted as the result of a mistake common to the parties.
”
Discussion
[28]
The applicant did not file
a replying affidavit. In the absence of the replying affidavit, the
version of the respondent as outlined
in the answering affidavit
remains uncontested
[7]
.
Explanation
of the default
[29]
The applicant alleges that
he never received the summons. He did not know anything about
the summons until he, on his own
accord, contacted the respondent
directly in order to try and resolve the matter. He further
alleges that the
domicilium
address that he initially provided to the respondent which is
contained in the credit agreement has been changed on the
respondent’s
system. The allegations have been denied by the
respondent. The applicant does not give details as to when and how he
had notified
the respondent about his change of the
domicilium
address. He does not attach any proof thereof. He does not state the
new address in his affidavit.
[30]
Summons was served on the
applicant on 19 August 2019 at 122 Old Kent Drive, Midstream by
affixing to the principal door.
The address is the chosen
domicilium
citandi et executandi
of the applicant. Clause 22 of the agreement provides that:
“
(1) Whenever a party to a credit
agreement is required or wishes to give legal notice to the other
party
for any purpose contemplated in the agreement, this Act or any
other law, the party giving notice must deliver that notice to the
other party at –
(a)
the address of that
other party as set out in the agreement, unless paragraph (b) applies
or
(b)
the address most
recently provided by the recipient in accordance with subsection (2).
(2)
A party to a credit agreement may change their address by delivering
to the other party
a written notice of the new address by hand,
registered mail, or electronic mail, if that other party has provided
an email address.
”
[31]
Without any proof and/or
details of how and when the applicant notified the respondent of his
change of the address he chose as
his
domicilium
address as recorded in the credit agreement concluded between the
parties, I am not persuaded the applicant has indeed informed
the
respondent of his change of his
domicilium
address.
[32]
The version of the
applicant regarding the fact that he voluntarily approached the
respondent directly in order to resolve the matter
also does not add
up when one takes into consideration that he alleges that he did not
receive summons. Summons was served at his
domicilium
address on 19 August 2019. On 16 September 2019 (not 2018) he
communicated with the respondent directly in order to resolve
the
matter. Could this have been a coincidence that at the time when the
default judgment had been applied for and then granted
on 13
September 2019, suddenly the applicant who was not aware that summons
has been issued against him, contacted the respondent
directly on 16
September 2019 to try and resolve the matter? Having regard to
the above, I conclude that the explanation
given is not cogent and
reasonable. The respondent cannot be faulted for serving the summons
at the
domicilium
address provided by the applicant in the credit agreement. The
applicant should have ensured that the change of address,
if ever it
happened, has been communicated properly as per the agreement to the
respondent.
Is the
application made
bona fide
?
[33]
The default judgment was
already granted on 16 September 2019 when the applicant communicated
with the respondent. The respondent’s
attorneys sent an email
to the applicant on 20 September 2019 notifying him that the default
judgment was granted on 13 September
2019. I agree with the
respondent that whatever discussions that allegedly took place
between the applicant and the respondent
on 16 September 2019 are
irrelevant for the purposes of this application. It is clear
from the applicant’s version
that as at the date he
communicated with the respondent (16 September 2019), there were
amounts due and owing in terms of the credit
agreement. As at the
time when the summons was issued, there were arrears on the account
of the applicant.
[34]
The applicant does not
deny that he owed the money on the account. He clearly explains that
he contacted the respondent directly
and tried to make arrangements
for payment. It cannot therefore be said that as at the time
when the respondent applied for
default judgment, it was not entitled
to it. I find that the application is not made
bona
fide
.
Does
the applicant have a
bona fide
defence to the respondent’s
claim?
[35]
The applicant
consistently submits that an arrangement was made between the parties
regarding how he was to pay the outstanding
amount. It was argued
that a compromise was reached between the parties to try and avoid
litigation. Relying on the decision
of
Gollach
& Gompert (1967) (Pty) Ltd v Universal Mills and Produce Co (Pty)
Ltd
[8]
,
it was submitted in the applicant’s heads of argument that if
it is found that a compromise had been reached, that is an
absolute
defence against the action of the respondent and the application
should succeed.
[36]
Default judgment was
already granted on 13 September 2019. When the applicant
communicated with the respondent on 16 September
2019 (the day he
alleges a compromise was reached), default judgment was already
granted. No arrangement or compromise could
have been reached
between the parties. The applicant also failed to produce the
arrangement that has been concluded between the
parties. The
principles outlined in the decision of
Gollach
& Gomperts
[9]
are therefore not applicable in the present matter.
Section
129 notice
[37]
The applicant contended
that he did not receive the section 129 notice before the summons was
issued. The respondent contended that
the section 129 notice was sent
to the applicant’s
domicilium
address and proof thereof has been attached to the answering
affidavit. The allegation has not been contested as no replying
affidavit
had been filed. In the absence of proof of a written
notification to the respondent regarding the applicant’s change
of the
domicilium
address, I find that the section 129 notice was sent to the correct
domicilium
address as provided for in the credit agreement.
[38]
In
Kubyana
v Standard Bank of South Africa Limited
[10]
,
the Constitutional Court held that section 129 of the National Credit
Act does not require a credit provider to prove that a notice
by
registered post actually came to the attention of the consumer. If a
consumer has elected to receive notices by post, a credit
provider
must prove: (a) the sending of the notice by registered mail; (b)
that the notice reached the correct post office; and
(c) that the
post office sent a notice to the correct address of the consumer to
collect the section 129 notice. Once these steps
have been proved,
the credit provider would have discharged its obligations in terms of
section 129. The burden then shifts to
the consumer to explain why
the notice still did not reach him. Unless there is a good reason
from the consumer why the notice
was not collected from the post
office, a court will allow the credit provider to enforce the credit
agreement and seek judgment.
[39]
Having considered the
matter, I find that the respondent has discharged its obligations in
terms of section 129 by establishing
that the notice was sent by
registered mail to the correct address, it reached the correct post
office and the post office sent
a notice to the correct address of
the consumer to collect the section 129 notice. I have already
concluded that the section
129 notice was sent to the applicant’s
correct
domicilium
provided in the credit agreement. Under the circumstances, I am not
persuaded that there is a good reason from the consumer why
the
notice was not collected from the post office.
The
agreement
[40]
The applicant contends
that the agreement attached to the summons was never concluded as it
was not countersigned. The respondent
correctly submitted that
the credit agreement does not need to be countersigned in order for
it to be valid and binding.
Non-attachment
of the certificate of balance
[41]
One of the defences raised
by the applicant is that the certificate of balance was not attached
to the summons. Strange enough
from his own version, the
applicant agrees that there were amounts due and payable to the
respondent on his account which prompted
him to contact the
respondent directly and try to make an arrangement for payment.
He concedes that he breached the agreement
by failing to make due and
punctual payments as he was obliged to. This defence, in my
view, is immaterial. It does
not assist the applicant.
[42]
Under the circumstances I
conclude that the applicant has no
bona
fide
defence to the
respondent’s action. The applicant was in arrears in the
amount of R56 473,31 at the time the summons
was issued.
Rule
42(1
)
[43]
No allegations have been
made regarding the provisions of Rule 42(1) of the Uniform Rules of
Court. The Rule is therefore not applicable
in this matter.
[44]
I am persuaded that the
respondent was entitled to the default judgment at the time it was
applied for. The application for
rescission of judgment should
accordingly fail.
[45]
In the result the
following order is made:
1.
The application for the
rescission of the default judgment granted against the applicant on
13 September 2019 is dismissed.
2.
The applicant is ordered
to pay the costs of the application.
M J TEFFO
JUDGE OF THE HIGH COURT
GAUTENG DIVISION, PRETORIA
Appearances
For the applicant
C L H Harms
Instructed by
Grundlingh Attorneys
For the respondent
J Minnaar
Instructed by
Hammond Pole Majola
Date of hearing
19 October 2020
Date handed down
15 January 2021
[1]
Colyn
v Tiger Foods Industries Ltd t/a Meadow Feed Mills
2003
(6) SA 1
(SCA) par 11
[2]
Standard
Bank of South Africa Ltd v El-Naddaf
1999 (4) SA 779
(W) 784
[3]
PLJ
van Rensburg & Vennote v Den Dulk
1971 (1) SA 112
(W);
Sanderson
Technitool (Pty) Ltd v Intermemal (Pty) Ltd
1980
(4) SA 573 (W)
[4]
Swadif
(Pty) Ltd v Dyka
1978 (1) SA 928
(A) at 939
[5]
Wahl
v Prinswil Beleggings (Edms) Bpk
1984 (1) SA 457 (T)
[6]
Harris
v Absa t/a Volkskas
2006
(4) SA 527 (T)
[7]
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
1984 (3) SA 623 (A)
[8]
1978
(1) SA 914 (SCA)
[9]
Supra
[10]
2014
(3) SA 56
(CC)