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[2021] ZAGPJHC 421
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Nedbank Limited v Yacoob (A3074/2020) [2021] ZAGPJHC 421; 2022 (2) SA 230 (GJ) (30 August 2021)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA,
GAUTENG
LOCAL DIVISION, JOHANNESBURG
Case
Number: A3074/2020
REPORTABLE:
YES
OF
INTEREST TO OTHER JUDGES: YES
REVISED.
NO
30
August 2021
In the matter between:
NEDBANK
LIMITED
Appellant
And
MOOLA
IMRAN
YACOOB
Respondent
JUDGMENT
Summary:
If it is impossible for the plaintiff to
produce the written contract relied on for his claim, substantive law
allows him to plead
and prove the conclusion of the contract and its
terms by way of secondary evidence.
A
rule of procedure, such as Magistrate Court rule 6(6) or the
equivalent High Court rule 18(6), which requires that contract be
attached to a pleading, cannot be construed to deprive the plaintiff
of his cause of action or of his right to prove the contract
by means
of secondary evidence of the contract.
An
application for condonation is not required in order to plead and
prove a contract in the absence of the agreement.
THE
COURT (FISHER J AND MATTHYSEN AJ)
Introduction
[1]
This
is an appeal against the refusal of a judgment by default handed down
in the Magistrate’s Court Boksburg.
[2]
The
matter was defended in that a plea (a bare denial) was filed but
there was no appearance for the defendant at the trial.
[3]
The
Magistrate, however, dismissed the application for default judgment
and made no order as to costs. The basis for dismissal was
that a
copy of the agreement relied on by the plaintiff was not attached to
the particulars of claim, it being pleaded by the plaintiff
that the
contract could not be found.
[4]
Whilst
the refusal of a judgment by default without a dismissal of the claim
itself may not always be appealable in that it is not
necessarily a
final order, the determination in this matter has final effect.
[1]
The Magistrate has determined that the plaintiff is not able to make
out any case absent an application for condonation. The appellant
argues that an application for condonation would not be appropriate
in the circumstances of the case and that this determination
puts it
out of court.
[5]
This
appeal is thus against the dismissal of the application for default
judgment on this ground.
[6]
There
are differing views in different divisions of the High Court as to
the effect of the inability to attach a copy of a contract
relied on
to the pleadings. These are dealt with in this appeal.
Procedural
history
[7]
During
2016 the appellant issued the summons against the respondent for
payment of R28 954.22 and ancillary relief. The claim is
for monies
lent and advanced in terms of a credit agreement relating to the use
of a credit card issued by the respondent. The
action was defended
and, after pleadings were closed, the matter was set down for trial
on 12 August 2020.
[8]
The
respondent had been represented by an attorney throughout but the
attorney withdrew on the day before trial. This caused the
matter to
be postponed in order for a new trial date to be arranged. Notice of
set down of the new date of 05 October 2020 was
served by sheriff at
the respondent’s residence on the respondent’s brother in
the respondent’s temporary absence.
The Respondent failed to
appear at the second trial hearing set down and, as a result, the
appellant brought the application for
judgment by default at the
trial.
[9]
The
Magistrate found that the appellant had failed at the hearing to
prove the credit agreement relied on. Her finding was based
on the
fact that the appellant did not attach to the particulars of claim a
copy of the actual credit agreement between the parties
but a
standard pro forma document. The appellant pleads that the reason for
this is that it cannot locate the actual application
form concluded.
It thus relied on its pro forma standard terms and conditions. The
salient terms relied on were also specifically
pleaded in the
particulars of claim.
[10]
There were also
summary judgment proceedings brought in the matter. The respondent,
in his affidavit resisting summary judgment,
did not deny having
received and used the credit card pursuant to a credit card agreement
between him and the appellant. His only
‘defence’ was
that he placed the outstanding amount in issue. He did not do this
with any particularity.
[11]
As we have said,
the Magistrate held that the only way in which the case could proceed
would be if a condonation application dealing
with the failure to
attach the contract was successfully brought. The Magistrate
erroneously relied on the provisions of Magistrates
Court rule 12 in
coming to this conclusion. Rule 12 deals with a Plaintiff’s
rights to direct a written request to the Court
or the Registrar to
request default judgment in circumstances where either the Defendant
had not delivered a notice of intention
to defend an action or the
Defendant is barred from delivering his plea. Rule 12 is therefore
not applicable in the current matter
as the pleadings were closed and
the case allocated a trial date.
[12]
Notwithstanding the erroneous
reference to rule 12, the question of whether an application for
condonation is appropriate at all still arises as an issue in this
appeal.
[13]
The
Magistrate also put some store by the contention of the respondent in
the pleadings to the effect that it had not had notice
as required by
section 129 of the National Credit Act.
[2]
That the point was pleaded, is indicative of a defendant scrambling
about for technical defences which have no foundation. This
point
need not be dealt with in any detail. It suffices to say that it is
settled law that the lack of proper notice is not a defence
to the
appellant’s claim and that at best it can lead to a
postponement for the purpose of allowing for compliance with the
section.
[3]
Issues
for determination
[14]
The questions which
arise in this appeal are (i) whether a plaintiff in the predicament
of the appellant may still proceed to claim
under the missing
contract and (ii) if so, what processes and principles apply to the
making of such a claim.
We
shall deal with each question in turn.
Can
a plaintiff who is not in possession of the contract relied on claim
thereunder?
[15]
The Magistrate
obviously sought to place reliance on the requirements of
Magistrate’s Court rule 6(6) which provides a copy
of a
contract or part thereof relied on to be attached to the pleadings
concerned.
[16]
The
Magistrate relied on the decision in
Moosa
& Others NNO v Hassam & Others NNO
[4]
for
her finding that, without condonation, the claim would not be capable
of proper pleading or proof.
[17]
Moosa
dealt with the contention that the failure to
attach the contract was an irregular step whereas this case deals
with a trial hearing
albeit in default of appearance. Thus the
inquiry in
Moosa
was somewhat different. Furthermore, in
Moosa
the court was provided with facts on
affidavit which indicated that the plaintiffs were indeed in
possession of a copy of the agreement.
[18]
We
agree with Rogers J in
ABSA
Bank Ltd v Zalvest Twenty (Pty) Ltd and Another
[5]
that
Moosa
is not authority for the proposition that a plaintiff is deprived of
its cause of action merely because it is unable to attach
a copy of
the agreement to its pleading.
[19]
Rogers
J in
Zalwest
succinctly put the position thus
[6]
‘
A
rule which purported to say that a party to a written contract was
deprived of a cause of action if the written document was destroyed
or lost would be
ultra vires
.
But the rules say no such thing. Rule 18(6)[ the equivalent of
Magistrate’s Court rule 6] is formulated on the assumption
that
the pleader is able to attach a copy of the written contract. In
those circumstances the copy (or relevant part thereof) must
be
annexed. Rule 18(6) is not intended to compel compliance with the
impossible. (I might add that it was only in 1987 that rule
18(6) was
amended to require a pleader to annex a written copy of the contract
on which he relied. Prior to that time the general
position was that
a pleader was not required to annex a copy of the contract’.
[20]
The
substantive law of evidence prescribes that the original signed
contract is the best evidence that a valid contract was concluded
and
the general rule is thus that the original must be produced. But, if
it is impossible for the plaintiff to produce the written
contract or
a copy thereof, substantive law allows him to plead and prove the
conclusion of the contract and its terms by way of
secondary
evidence.
[7]
A rule of procedure
such as Magistrate Court rule 6(6) or the equivalent High Court rule
18(6) cannot, in our determination, be
construed to deprive the
plaintiff of his cause of action or of his right to adduce secondary
evidence of the contract.
[21]
We,
like Rogers J, also respectfully disagree with proposition in
Moosa
that
‘in the absence of the written agreement the basis of the
[plaintiffs’] cause of action does not appear
ex
facie
the
pleadings’.
[8]
[22]
Provided
a plaintiff pleads the conclusion of the contract and the material
terms, the particulars of claim will disclose a cause
of action. The
failure to attach a contract will, in the absence of a properly
pleaded explanation for such failure, be in breach
of the procedural
rules pertaining to pleadings – but this does not deprive the
pleader of a cause of action. This was the
position taken by a full
bench of this court in the unreported judgment in
Silver
v Nedbank
and
we agree with it
.
[9]
[23]
The appellant has
therefore pleaded a cause of action.
[24]
We now move to deal
with the manner of pleading and process which needs to be followed in
bringing proceedings where the contract
is missing or destroyed.
Pleadings
and process where it is not possible to attach the contract.
[25]
The process to be
adopted where the pleader is unable to attach the contract on which
the claim is founded is obviously fact specific.
At very least, the
reason for this inability should be fully pleaded. The date, place,
parties and circumstances of the conclusion
of the contract should
also be properly set out to the extent possible as these are
procedural requirements. It is important also
that the salient terms
relied on be properly pleaded. The manner in which the plaintiff will
seek to establish the terms also requires
to be fully pleaded. If
this is not properly done, the pleadings may be attacked as
excipiable for being vague or irregular. As
we have said, they are
not, however, excipiable for disclosing no cause of action merely
because of the absent agreement.
[26]
The
cogency of the secondary evidence led on the pleadings will determine
whether the contract is sufficiently proved. There is
no ‘best
evidence rule’ when it comes to secondary evidence. Once a
litigant is, by force of the circumstances, relieved
of the
obligation to produce the original document any evidence which proves
the contract is admissible.
[10]
[27]
This raises the
question whether it is necessary for condonation as to the absence of
the contract to be applied for and granted
in order for the matter to
proceed.
[28]
The purpose of
condonation is to seek that the lack of compliance (i.e. the failure
to attach the contract) be forgiven for good
cause. This presupposes
fault which is excused by the court, thus allowing reliance on
secondary evidence of the contract. If the
document is missing or
destroyed for reasons not attributable to the plaintiff, is he still
called on to make out this case in
order to get condonation as a
precondition of the making of a claim? What if the loss of the
document is entirely and unforgivably
attributable to the plaintiff -
does this preclude condonation and thus reliance on the contract?
Thus, is the blameworthiness
or otherwise of the plaintiff in
relation to the inability to produce the original contract
dispositive of its ability to make
out its cause of action? Clearly
the answers to these questions must be in the negative.
[29]
The responsibility
or otherwise for the loss of the document is only relevant to the
extent that it impacts ultimately on the proof
the contract. Thus, an
application for condonation is neither required nor would it be of
any real assistance in these circumstances.
[30]
We now move to deal
with a discussion on the facts of this case in light of the above
principles.
Discussion
[31]
The appellant
pleaded that it could not find the agreement. It pleaded and produced
evidence of the conclusion of a credit agreement
and pleaded and
proved that the pro forma document attached were the usual terms
which it contracted on if a client entered into
a credit card
agreement. It produced evidence of statements sent in relation to the
use of the card which it alleged was in terms
of the credit
agreement. The respondent, as we have said, does not dispute that a
credit agreement was concluded and that he used
the credit card which
was issued pursuant thereto for the purposes of concluding credit
transactions in accordance with the contract.
[32]
The appellant
relied on a certificate of balance which it was agreed in terms of
the contract proved would constitutes
prima
facie
proof of the contents thereof.
Conclusion
[33]
We are therefore of
the view that the appeal should be upheld. It would serve no purpose
to send the matter back to the Magistrate’s
Court for
determination. This Court has all the evidence that is needed to
itself determine the case.
Costs
of the appeal
[34]
The refusal of the
order by default was not as result of a point raised by the
respondent. The appeal was not opposed. In the circumstances
we do
not deem it fair to impose a cost order against the respondent.
Order
[35]
Thus we order as
follows:
1.
The appeal is upheld.
2.
The order of the Court a quo is set aside
and replaced with the following order:
‘
(
a)The
Defendant is ordered to pay to the Plaintiff the sum of R28 954.22;
(b) Interest is to be
paid on the aforesaid amount at the rate of 18.65% per annum from 13
June 2016 to date of final payment.
(c) The Defendant
shall pay the costs of suit.’
FISHER
J
HIGH
COURT JUDGE
GAUTENG
LOCAL DIVISION, JOHANNESBURG
MATTHYSEN
AJ
ACTING
JUDGE OF THE HIGH COURT
GAUTENG
LOCAL DIVISION, JOHANNESBURG
Date
of Hearing:
19 July 2021.
Judgment
Delivered:
30
August 2021.
APPEARANCES:
For
the Appellant
:
Adv K Meyer.
Instructed
by
:
Smit Jones and Pratt Attorneys,
Johannesburg.
For
the Respondent
: No appearance.
[1]
See the discussion in relation to appealability of determinations in
judgments by default in
FirstRand
Bank Limited v Malakeng
[2016] ZASCA 169
24 November 2016 at paras
[11] to [13].
[2]
34
of 2005.
[3]
SA
Taxi Development Finance (Pty) Limited v Phalafala
2013
ZA GP GHC55.
[4]
2010
(2) SA 410
(KZP).
[5]
[2013]
ZAWCHC 169
;
2014 (2) SA 119
(WCC) (6 November 2013).
[6]
At
para 12.
[7]
See
Transnet
Ltd v Newlyn Investments (Pty) Ltd
2011
(5) SA 543
(SCA)
at paras 4-5 and 17-19;
Singh
v Govender Brothers Construction
1986
(3) SA 613
(N)
at 616J-617D);
[8]
Moosa
at
para 18.
[9]
Case no
A3013/2013 [ 22 January 2014]
[10]
See
Transnet
Ltd v Newlyn Investments (Pty) Ltd n. 5 at
paras
4-5 and 16-19.