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[2021] ZAGPPHC 112
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X.S.W and Another v Firstrand Bank Limited (A309/18; 28722/16) [2021] ZAGPPHC 112 (17 February 2021)
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Certain
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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
17
February 2021
Appeal
Case: A309/18
Court
a Quo Case No: 28722/16
In
the matter between:
X[....]
S[....] W[....]
FIRST
APPELLANT
(FIRST
DEFENDANT
COURT
A QUO
)
X[....]
L[....] M[....]
SECOND
APPELLANT
(SECOND
DEFENDANT COURT
A QUO
)
and
FIRSTRAND
BANK LIMITED
RESPONDENT
(PLAINTIFF
COURT
A QUO
)
This
judgment is issued by the Judge whose name is reflected herein and is
submitted electronically to the parties/their legal representatives
by email. The judgment is further uploaded to the electronic file of
this matter on Caselines by the Judge or his/her secretary.
The date
of this judgment is deemed to be 17 February 2021.
JUDGMENT
COLLIS
J (RABIE J et LESO AJ concurring)
INTRODUCTION
(1)
This is an appeal, with leave of the
court
a quo
, against a judgment handed down under
case number: 28722/2016.
(2)
In the said judgment Heysteck AJ, granted
judgment against the appellants in favour of the respondent for
payment of the sum of
R 1 167 347.93 with interest thereon
at the variable rate of 1.1% above prime from 1 March 2018 to date of
payment with
costs on an attorney and client scale.
(3)
The
court a quo
,
on being served with an application for leave to appeal, deemed it
necessary to grant leave to appeal on only a limited aspect
that
being:
‘…
..whether
the plaintiff (in the court a quo) allowed ten business days to
elapsed since delivery of the notice to the defendants
(in the court
a quo) before it approached the Court for an order to enforce the
credit agreement as required by Section 130(1)(a).’
[1]
BACKGROUND
(4)
By way of background the following facts were
common cause before the
court a quo
:
4.1.
On or about 24 February 2011, the plaintiff and
the defendants concluded a home loan agreement. Pursuant thereto, a
bond was registered
in favour of the plaintiff as a continuing
security for the total amount owing from time to time by the
defendants to the plaintiff
in respect of all amounts advanced.
4.2.
The defendants committed a breach of the
provisions of the home loan agreement, as read with the bond, in that
they failed to pay
monthly instalments as and when they fell due.
4.3.
As a result of the breach so committed the
plaintiff then proceeded to address notices to the defendants in
terms of s 129(1)(a)
of the National Credit Act, Act 34 of 2005 (the
NCA).
4.4.
The notices were sent by registered post to both
the chosen domicilium and residential addresses of the defendants.
4.5.
At the hearing the parties were in agreement as
to the facts as they appear on the relevant postal documentation,
i.e. that the
notices were sent to the addresses reflected on the
notices by registered mail and that they were sent to the defendants
as allocated
on the relevant track reports.
4.6.
Further, that the relevant track and tracing
reports show the relevant addresses of the addressees together with
the corresponding
item number (being the registered letter).
4.7.
It reflects receipt by the original Post Office
on 17 March 2016 as well as that they were scanned last by the Edleen
branch on
31 March 2016.
4.8.
On the same day the ‘First Notification’
was sent to the recipient (i.e. the defendants). There is no further
indication
as to what happened thereafter, particularly as to whether
the item was collected, or else whether it had been returned.
LEGISLATIVE
FRAMEWORK
(5)
In order for this court to determine the scope of
this appeal, it will be apposite to have regard to the relevant
provisions specifically
section 129 and 130 of the National Credit
Act. The relevant sections are quoted hereunder for ease of
reference:
“
Section
129(1) If
the
consumer is in default under a credit agreement, the credit provider-
(a)
May draw the default to the notice of the
consumer in writing and propose that the consumer refer the credit
agreement to a debt
counsellor, alternative dispute resolution agent,
consumer court or ombud with jurisdiction, with the intent that the
parties resolve
any dispute under the agreement or develop and agree
on a plan to bring the payments under
the agreement up to date; and
(b)
subject to section 130(2), may not commence any
legal proceedings to enforce the agreement before-
(i)
first providing notice to the consumer, as
contemplated in paragraph (a),
or
(ii)
meeting any further requirements set out in
section 130…...”
(6)
Section 130 provides as follows:
“
(1) Subject
to subsection (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 in default under that credit
agreement for at least twenty business days and-
(a)
at least 10 business days have elapsed since the
credit provider delivered notice to the consumer as contemplated in
section 86(10),
or section 129(1), as the case may be;……
(b)
in the case of a notice contemplated in section
129(1), the consumer has-
(i)
has not responded to that notice; or
(ii)
responded to the notice by rejecting the credit
provider’s proposal; and
(c)
………….”
(7)
Having
regard to the common facts placed before the
court
a quo
,
it is so that a period of ten business days
had
not elapsed before the respondent approached this court for
enforcement of the credit agreement in question. This much was
conceded by the
court
a quo
.
[2]
(8)
In
casu
,
the first notification was dispatched by the relevant post office on
31 March 2016 and the summons subsequently issued on 11 April
2016.
[3]
The actual
service of the summons however only occurred on 28 April 2016.
[4]
ARGUMENTS
ADVANCED ON BEHALF OF THE APPELLANTS
(9)
In determining the question in this appeal the
arguments advanced on behalf of the appellants can succinctly be
tabulated as the
following:
9.1
Mr Nxumalo on behalf of the appellants had argued
that the provisions of section 130(1) read with section 129 of the
National Credit
Act should be interpreted to mean that enforcement of
a credit agreement should not commence before at least a period of
ten business
days has elapsed since the credit provider has delivered
the notices contemplated in section 129;
9.2
that enforcement of a credit agreement commences
with the
issuing
of
summons and not the
service
of summons;
9.3
that having regard to the time frames applicable
in the present instance, that the summons of the respondent was
issued
prematurely, in that ten business days had not elapsed before the
respondent proceeded to issue its summons;
9.4
that the notice as contemplated in section 129 of
the NCA is designed to prevent unnecessary litigation and premature
foreclosures
on consumer assets and that the purpose of the NCA is to
be significantly consumer friendly and envisages a court-avoidant
procedure.
9.5
As a consequence of the premature issuing of the
summons, the appellants had argued it precluded them from exercising
their rights
afforded to them, as envisaged in the provisions of
section 129.
9.6
In support of the above arguments so advanced,
the appellants had placed reliance on the Constitutional Court
decision of Sebola
and Another v Standard Bank of South African Ltd
and Another
[2012] ZACC; 2012
(5) SA 142 (CC), wherein it was held
that compliance with the provisions of section 129 read with section
130 of the NCA should
have been pleaded by a credit provider who
wishes to enforce a credit agreement. Albeit that compliance with the
provisions of
section 129 and 130 of the NCA was indeed, pleaded by
the credit provider in question, these averments were not true as the
issuing
of the summons had taken place before ten business days had
expired upon the section 129 notice having been dispatched to the
consumers.
ARGUMENTS
ADVANCED ON BEHALF THE RESPONDENT
(10)
Counsel
on behalf of the respondent had submitted that this court in applying
the stare decisis principle, is bound by the Full
Court decision of
this division where in De Beer v Nedbank
[5]
it was held
that the date of service of the summons is determinative of the date
of calculation of commencement of legal proceedings,
unless this
court is of the opinion that the De Beer decision was clearly wrong;
(11)
Furthermore,
that at common law, legal proceedings are commenced with the service
of the summons and that unless the summons is
served on a defendant,
proceedings which ensued in the absence of service of the summons may
be set aside as being irregular;
[6]
(12)
It was also submitted by Ms Strydom that statutes
such as the NCA must be interpreted with due regard to their purpose
and within
their context. In this regard section 2(1) of the NCA
expressly requires a purposive approach to the statute’s
construction.
JUDGMENT
COURT A QUO
(13)
In its judgment Heysteck AJ had placed reliance
on the
ratio
of Kubyana v Standard Bank of South Africa Ltd
2014 (3) SA 56
(CC)
specifically para 53 where the following was held:
“
Once a
credit provider has produced the track and trace report indicating
that the s 129 notice was sent to the correct branch of
the Post
Office and has shown that a notification was sent to the consumer by
the Post Office, that credit provider would generally
have shown that
it has discharged its obligations under the Act to effect delivery.
The credit provider is at that stage entitled
to aver that it has
done what is necessary to ensure that the notice reached the
consumer. It then falls on the consumer to explain
why it is not
reasonable to expect the notice to have reached her attention if she
wishes to escape the consequences of that notice.
And it makes sense
for the consumer to bear this burden of rebutting the inference of
delivery, for the information regarding the
reasonableness of her
conduct generally lies solely within her knowledge. In the absence of
such an explanation the credit provider’s
averment will stand.
Put differently, even if there is evidence indicating that the
section 129 notice did not reach the consumer’s
attention, that
will not amount to an indication disproving delivery if the reason
for non-receipt is the consumer’s unreasonable
behaviour.”
Premised on this
judgment the
court a quo
had found in the absence of any
rebuttal evidence presented by the appellants, wherein they
challenged the delivery of the section
129 notice, the court accepted
that the respondent had complied with the provisions of the NCA.
(14)
At paragraph 18 of the same judgment, it was also
held:
‘
It is well
established that statutes must be interpreted with due regard to
their purpose and within their context. This general
principle
buttressed by s 2(1) of the Act, which expressly requires a purposive
approach to the statute’s construction. Furthermore,
legislation must be understood holistically and, it goes without
saying, interpreted within the relevant framework of constitutional
rights and norms. However, that does not mean that ordinary meaning
and clear language may be discarded, for interpretation is
not
divination and courts must respect the separation of powers when
construing Acts of Parliament.’
It was further held
at paragraph [21] that:” the correct interpretation of s 129 is
one that strikes an appropriate balance
between the competing
interest of both parties to a credit agreement.”
(15)
Taking therefore into account the different
wording employed in section 129 and 130 of the NCA, regarding whether
the credit provider
had complied with the provisions set out in these
two sections and having regard to the provisions of the NCA
holistically and
also striking a balance between the competing
interest, the
court a quo
therefore concluded that the correct date for purposes of section 130
of the NCA is not the date of issuing of the summons but
rather the
date as to when the summons is served on the consumer. This is
the same reasoning employed by Ellis AJ in the
earlier decision of
Nedbank Ltd vs Mokhonoana
2010 (5) SA 551
(GNP).
(16)
The reasoning employed by the
court
a quo
, I could find no criticism with. Not
only was the
court a quo
satisfied that there had been compliance with the provisions of
section 129 read with section 130 of the NCA, but in the absence
of
any rebuttal evidence presented by the appellants wherein they
challenged receipt of the section 129 notice, the
court
a quo
correctly found that the respondent had
complied with the provision of the NCA.
(17)
In the
present instance, not only did the appellants
[7]
deny receipt
of the section 129 notice in their plea, but as held by Kubyana
mentioned above, the reasonableness of their conduct
lies solely
within their knowledge. As such, they ought to have taken the court
into their confidence to explain the reason as
to why the section 129
notice was never received by them and in the absence of doing so, the
court
a quo
correctly found that the respondent had complied with the provisions
of section 129 read with section 130 of the NCA.
ORDER
(18)
In the result the following order is proposed:
18.1
The appeal is dismissed with costs.
C.
COLLIS
JUDGE
OF THE HIGH COURT
I
AGREE
P. RABIE
JUDGE OF THE HIGH
COURT
I
AGREE
M.
LESO
ACTING JUDGE OF
THE HIGH COURT
Appearances
Counsel
for the Appellants
: Adv. S. Nxumalo
Attorney
for the Appellants
: Twala Attorneys
Counsel
for the Respondent :
Adv. D. Strydom
Attorney
for the Respondent :
Bezuidenhout Van Zyl & Associates
Inc.
Date
of Hearing
:
04 November 2020
Date
of Judgment
: 17 February 2021
Judgment
transmitted electronically.
[1]
Record Vol 2 p 170
[2]
Judgment Heysteck AJ Volume 2 para 18 p
157
[3]
Volume 1 pages 38 (First Notification) & 1 (Date issuing of
summons) respectively.
[4]
Volume 1 pages 50A & 50B respectively. Sheriff returns of
service.
[5]
De Beer v Nedbank (A431/2017) [2018] ZAGPHC delivered 16 May 2018
para 21-23
[6]
LAWSA Vol 3 (Part 1) Second Ed para 86 p 52
[7]
Defendant’s Plea Record Volume I p 55 para 14 & 15