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[2021] ZAKZPHC 69
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Transsec (4) RF Ltd v Pillay (2847/2020P) [2021] ZAKZPHC 69 (2 February 2021)
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IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
Case
No: 2847/2020P
In
the matter between:
TRANSSEC
(4) RF
Ltd
APPLICANT
and
SIVANANTHA
KISTEN
PILLAY
RESPONDENT
JUDGMENT
Delivered
on 2 February 2021
Mossop
AJ:
[1] This
is an opposed application in which the plaintiff seeks summary
judgement against the defendant. In doing
so, the plaintiff seeks an
order for confirmation of the termination of an agreement in terms of
which a motor vehicle was sold
to the defendant (henceforth ‘
the
agreement
’), the return of that
motor vehicle, being a 2019 Toyota Quantum 2.5 D-4D Sesfikile 16S
motor-vehicle with engine number
[…] and chassis number […]
(henceforth ‘
the motor vehicle
’)
and attorney and client costs to be taxed.
[2] This
morning I had the pleasure of hearing argument from Ms. Franke, who
appears for the plaintiff, and Mr.
Pitman, who appears for the
defendant.
[3] The
plaintiff’s cause of action in its particulars of claim,
briefly put, is the following:
(a)
an
entity known as Potpale Investments (RF) (Pty) Ltd (henceforth
‘
Potpale
’)
concluded the agreement with the defendant in terms of which Potpale
sold to the defendant the motor-vehicle;
(b)
the
defendant was required to pay an initial deposit of R50,000.00 and
the first instalment of R13,589.04 on 1 October 2019 and
thereafter
71 equal instalments of R13,589.04 each;
(c)
failure
to pay any one instalment would grant Potpale the right to terminate
the agreement and repossess the motor vehicle;
(d)
on
8 March 2019, Potpale, the plaintiff, SA Taxi Development Finance Pty
Ltd and Transsec Security SPV (RF) Pty Ltd concluded a
written
agreement in terms of which it was agreed that Potpale could, from
time to time, offer to sell and/or cede to the plaintiff
the right
title and interest that Potpale held to credit agreements that it had
concluded with its customers;
(e)
on
29 October 2019, Potpale sold and/or ceded to the plaintiff all of
the former’s right, title and interest in and to the
agreement
with the defendant;
(f)
subsequent
thereto, the defendant breached the agreement by failing to pay
instalments due in terms thereof and by 17 January 2020
he was in
arrears with his installments in the total sum of R41,496.34;
(g)
the
plaintiff has cancelled the agreement by virtue of the issuing of the
summons and the total indebtedness of the defendant to
it as at the
date of termination is R504,371.40; and
(h)
the
defendant is liable to pay its costs on the scale as between attorney
and client.
[4] The
defendant entered an appearance to defend and on 7 September 2020
delivered his plea. In that plea, the
defendant pleaded,
inter
alia
, that he had entered into an oral
agreement with the plaintiff (represented by a Ms. Matlego) in terms
of which the plaintiff agreed
to provide him with a revised agreement
specifying that the defendant was to obtain his own short-term
vehicle insurance and credit
life insurance from Outsurance. The
defendant never received the revised agreement. To the plaintiff’s
allegation that he
had failed to pay instalments and was in arrears,
the defendant’s response was a ‘
vehement
’
denial and he pleaded that he had in ‘
good
faith
’ made an advance payment of
R50,000.00 to the plaintiff.
[5] Within
the period prescribed by the Uniform Rules of Court, the plaintiff
brought its application for summary
judgement. The defendant
delivered an opposing affidavit. In that affidavit, the defendant
raised the following defences:
(a)
in
limine
, he denied the
locus
standi
of the plaintiff, pleading that
he had no knowledge of the cession relied upon by the plaintiff. He
stated that the cession was
dated 8 March 2019 and he offered up
certain criticisms of the document bearing that date;
(b)
he
again pleaded the point about the insurance of the motor-vehicle
already referred to earlier in this judgement and he indicated
that
he intended to bring a ‘
counteraction
’
for the rectification of the sale agreement to exclude the portion
thereof relating to insurance;
(c)
he
denied that as of 17 January 2020 he was in arrears, again asserting
that he had made a payment of R50,000.00 and had been told
by one
‘
Precious
’,
who is apparently employed by the plaintiff, that he should sign the
agreement and take delivery of the motor vehicle and
start paying the
necessary installments once the amended agreement reflecting that he
did not require insurance was presented to
him. He claimed to have
recorded telephone conversations with Precious in this regard; and
(d)
he
pleaded an inability to pay thereafter arising out of
force
majeure
in respect of the period from
January 2019 to May 2020. I think that this is an error on his part:
the date ought to have been
from January 2020 as in January 2019 the
agreement had not yet been concluded. He alleged that the occurrence
of the
force majeure
resulted in a suspension of his obligation to pay his installments.
[6] Each
of these defences needs to be carefully considered. I intend to deal
firstly with the point in limine
and thereafter with the other
defences.
[7] As
regards the question of
locus standi
,
it is not clear what the relevance of the document concluded on 8
March 2019 is. Mr. Pitman’s submissions in this regards
seem to
be valid and well taken. It may be, as Ms. Franke, argued that it is
missing something that would establish its relevance
to the matter at
hand. At the moment, it is not possible to determine its relevance.
However, it was clearly pleaded that the actual
cession relied upon
by the plaintiff was concluded on 29 October 2019.
[8]
Cession
has been defined as a bilateral juristic act in terms of which a
right is transferred by agreement between the transferor
(cedent) and
transferee (cessio
nary).
[1]
Generally, no formalities are required for the antecedent obligatory
agreement or the act of cession although the parties may agree
on the
formalities with which the cession is to comply.
[2]
A cession may thus be written or oral, may be either express or
tacit, or may be inferred from the conduct of the parties.
[3]
[9] The
plaintiff has not pleaded that there were any formalities that needed
to be complied with regarding the
cession and, on his own version,
the defendant plainly has no knowledge thereof. Accordingly, the
plaintiff is within its rights
to simply plead that cession occurred.
[10] The
defendant has alleged in his plea and in his affidavit resisting
summary judgment that he has no knowledge
of the cession and
therefore he denies that it had occurred. That may well be so. The
reality is that
cession, in order to be effective, does not
require the prior knowledge, consent, concurrence or cooperation
of the debtor.
The debtor has no right of veto. The cession is
complete when the cedent and the cessionary reach finality on the act
of cession.
It follows that the debtor is not actively engaged in the
process of cession. The reason for this is that it should not in
principle
matter to the debtor whether he renders his performance to
the cedent or to the cessionary.
[11] The
defendant’s denial of the
locus
standi
of the plaintiff is accordingly,
in my view, not a meritorious denial. In my view, the plaintiff has
established its
locus standi
and the point
in limine
must fail.
[12] Considering
the remaining defences raised by the defendant, the most significant
is that he alleges that he
was not in arrears with his installments
as of 17 January 2020. The basis of this submission appears to be his
contention in his
plea that he made a payment in ‘
good
faith
’ of R50,000.00 and his
further assertion in his affidavit opposing summary judgment that
such payment ‘
more than covered
any amount allegedly due at that stage
’.
The plaintiff has pleaded that the defendant paid the R50,000.00
deposit but does not suggest that any other payments in
that amount
were made. The defendant admits payment of that amount but has not
pleaded that he made another payment in that amount.
It is safe to
concluded therefore that only one payment in that amount was made.
[13] In
my view, there is also no merit in this defence. Firstly, the payment
was not a payment in ‘
good faith
’
as claimed by the defendant. It was a requirement of the agreement. A
consideration of the agreement reveals that the credit
advanced or
the value of goods provided to the defendant was the amount of
R468,035.93. To that amount had to be added the charges
in respect of
an initiation fee in the amount of R2,990.00 and further charges in
the amount of R2,555.33. The total of those amounts
is R473,581.26.
The agreement, however, records that the total of the amount advanced
was R423,581.26. The reason for the difference
in the two amounts is
because the agreement records that from the total of the all the
charges it was necessary to ‘
Deduct
deposit required
’ in the amount
of R50,000.00. That deduction accounts precisely for the difference
between the two figures.
[14] The
deposit having been applied to reduce the value of the loan to
himself, the defendant is not in a position
to apply it again to
unpaid installments.
[15] The
suggestion that he was advised by Precious that he only had to start
paying installments when he received
the amended agreement can safely
be rejected on at least two grounds. Firstly, any such agreement
would constitute a variation
of the agreement. The agreement,
however, contains a clause that the agreement is the entire
agreement, that no variation would
be effective unless reduced to
writing and that by signature of the agreement any prior agreements
between the parties would be
cancelled. The sequence pleaded by the
defendant is that the alleged agreement with Precious was struck and
he then signed the
agreement In so doing, he negated the alleged
prior agreement. Secondly, if the defendant did have telephone
recordings of his
discussions with Precious as he alleges, the very
least that could be expected of him would be to put it up. He did not
do so.
[16] Other
than the payment of R50,000.00, the only other payment made by the
defendant was one of R13,600.00 made
on 4 October 2019. That payment
appears to have been made late as it was due by 1 October 2019. Why
he made that payment in the
light of his alleged agreement with
Precious is not clear. He has not suggested that he made installment
payments in November or
December 2019 or in January 2020. He was
clearly thus in arrears. He has not offered any explanation for that
failure.
[17] If
the defendant believed that he was not required to pay for the
insurance then the agreement is quite clear
what the installments are
without that charge being included. That amount should have been paid
by him as a gesture of ‘
good
faith
’, a concept with which he
appears to be familiar.
[18] It
follows that this defence must likewise fail.
[19] A
further defence raised by the defendant is that of
force
majeure
. I have carefully read the
agreement. There is no such clause in the agreement.
If such a
clause is not included in an agreement, the position then is
regulated by the common-law.
[20] In
terms of the common law doctrine of ‘
supervening
impossibility
’, each party’s obligation to perform in
terms of an agreement, and their respective rights to receive
performance under
that agreement, will be extinguished in the event
that the performance by a party of its obligation becomes objectively
impossible
as a result of unforeseeable and unavoidable events, which
are not the fault of any party to that agreement.
[21] As
a general rule, impossibility of performance brought about by
force
majeur
will excuse performance of a contract. But this is not invariably so.
In each case it is necessary to consider the nature of the
contract,
the relation of the parties, the circumstances of the case, and the
nature of the impossibility invoked by the one party,
to see whether
the general rule ought, in the particular circumstances of the case,
to be applied
.
[4]
[22] The
rule will not avail a party if the impossibility is self-created, nor
if the impossibility is due to that
party’s faul
t.
[5]
Sa
ve
possibly in circumstances where a plaintiff seeks specific
performance, the onus of proving the impossibility will lie upon the
party raising it.
[23] The
event must render performance absolutely or objectively impossible.
The fact that
force
majeure
has made it uneconomical for a party to carry out its obligations
does not mean that performance has become impossible.
[6]
[24] There
was no national lockdown in January and February 2020 or in March
until 27 March 2020. It is a matter
of general knowledge that
on
Monday, 23 March 2020, the President of the Republic announced that
South Africa would enter a nationwide lockdown for a period
of
twenty-one days commencing at midnight on Thursday, 26 March 2020.
[25] There
is no explanation forthcoming from the defendant why he made no
payments preceding the declaration of
the nationwide lockdown. If his
explanation is that his payment of R50,000.00 placed him in credit
for that period, he is mistaken,
as previously explained. However,
assuming for the purposes of argument that there is merit in that
proposition, if the installment
was simply the amount in respect of
the motor vehicle component of the agreement then his credit was
depleted at the end of February
2020 and he would have had to make a
payment at the beginning of March 2020. If the installment was the
motor vehicle component
and the insurance component then his credit
would have been depleted by the end of January 2020. No matter how
one looks at the
facts, the defendant was in arrears by the end of
February 2020 at the latest on his version. Mr. Pitman accepted that
he was in
arrears. The failure to pay the installment due at the
beginning of March 2020 remains unexplained.
[26] While
there may be some merit in the fact that the defendant could not
generate income after March 2020, this
in my view does not avail him.
Accepting as I do that the payment of the sum of R50,000.00 was not a
payment in ‘
good faith’,
he
was in arrears in respect of the months of November and December 2019
and January, February and March 2020. In such circumstances,
the
plaintiff was entitled to cancel the agreement, as it has done.
[27] That
brings me to the final defence raised, that of rectification of the
agreement. The essential contention
of the defendant is that the
agreement ought not to have included an amount in respect of
insurance, which he would arrange independently.
He asserts in this
regard that he already had insurance in place that would, and did,
cover the motor vehicle.
[28] It
is evident from this defence that it is not a complete defence to the
plaintiff’s claim. It covers
only the insurance component of
the claim.
[29] As
pointed out previously, the agreement sets out fully the individual
components comprising the total that
the defendant was to repay. The
instalment in respect of the motor vehicle was R10,646.01.
Interestingly, where this total is recorded
in the agreement, the
following wording appears:
‘
Total
Instalment Payable which relates to finance excluding Credit
Insurance costs and Tracking connection fee’
[30] This
wording would tend to suggest that it was not compulsory for the
defendant to avail himself of the insurance
offered by Potpale.
[31] The
issue of insurance was dealt with separately in the agreement and
totaled R2,943.03.
[32] At
the base of the agreement, the following wording appears:
‘
Any
amount reflected as R nil/R0.00 indicates that this has not been
selected or provided. If insurance cover has not been selected
you
will not be entitled to any of the cover benefits normally offered
under the Policy.’
[33] Any
doubt about whether the insurance offered by Potpale was compulsory
is swept aside by this wording. It
was thus not required of the
defendant to agree to the insurance offered by Potpale. He could
quite easily have crossed the insurance
clause out. It was his choice
to accept it. There are no amounts reflected on the agreement as
being ‘
R nil
’
(there are such recordals, however, in respect, of an extended
warranty agreement and a motor plan). This can only mean
that the
defendant chose to take out the insurance offered by Potpale which he
now seeks to distance himself from. This is reinforced
by the
contents of annexure ‘VV3’ to the plaintiff’s
application for summary judgment which is an insurance proposal
in
respect of insurance offered by Guardrisk insurance company. The
defendant signed this on 23 August 2019 and he also signed
a credit
life proposal on that date as well.
[34] Moreover,
the defendant has provided no explanation for why he signed the
short-term insurance proposal and
the credit life proposal if this
was contrary to what he had agreed with the representative of
Potpale. These documents have simply
been ignored by him and their
contents not considered.
[35] The
defendant asserts that he did not require the insurance offered by
Potpale because he already had insurance
in place through Outsurance
and puts up documentation to that effect. However, that insurance is
not in his name, but in the name
of ‘
CT
Tours
’. This appears to be a
registered company as the registration number thereof is recorded as
being ‘
1994/010719/06
.
How the defendant is connected to that entity is never revealed. It
is recorded that the company is a ‘
Leisure
& Recreation – Tour Operator’
.
[36] I
am mindful of the fact that, in general, a dispute relating to the
rectification of documents, whether it
be the plaintiff or the
defendant that seeks such rectification, cannot be resolved in a
summary judgement application.
[7]
[37] Ms.
Franke has argued in her heads of argument that the agreement
contains a non-variation agreement which
precludes rectification as a
valid defence. I have considered that clause. Its wording does not
appear to me to exclude an entitlement
to claim rectification. The
exclusion of a parties right to claim rectification must be clear and
unambiguous.
[8]
[38] But
that is not the end of the matter. Even if the defendant were to seek
rectification and succeed in that
claim, his defence would be in no
better position. Having found that he is in in arrears, he will still
remain in default for not
paying at the very least the motor vehicle
component of the instalment. In any event, his conduct in signing the
proposals, the
fact that he paid the first instalment in the amount
that included the insurance component and the fact that the insurance
with
Outsurance is not in his name but in the name of another
company, leads me inexorably to the conclusion that he has not put up
a
bona fide
defence to the plaintiff’s claim.
Order
[40] In
the circumstances, I grant summary judgment against the defendant
for:
1.
Confirmation
of the termination of the agreement concluded between the plaintiff
and defendant on 27 August 2019;
2.
Return
of a 2019 Toyota Quantum 2.5 D-4D Sesfikile 16S motor-vehicle with
engine number […] and chassis number […];
and
3.
Costs
on the scale as between attorney and client.
MOSSOP
AJ
APPEARANCES
Date
of Hearing: 2
February 2021
Date of
Judgment: 2
February 2021
Counsel for
Plaintiff: Advocate
S. Franke
Instructed
by: Mary-Lou
Bester Incorporated
Counsel for
Defendant: Advocate M. B. Pitman
Instructed
by:
Amith Luckan and Company
[1]
LTA Engineering Co Ltd v Seacat Investments (Pty) Ltd
1974 (1) SA
747
(A) at 762A.
[2]
National Sorghum Breweries Ltd v Corpcapital Bank Ltd
2006 (6) SA
208
(SCA) at para 1.
[3]
Botha v Fick
[1994] ZASCA 184
;
1995 (2) SA 750
(A) at 762B-H and 778F-G.
[4]
MV Snow Crystal, Transnet Ltd t/a National Ports Authority v Owner
of MV Snow Crystal
[2008] ZASCA 27
;
2008 (4) SA 111
(SCA) at para
[28]
.
[5]
MV
Snow Crystal, Transnet Ltd t/a National Ports Authority, supra.
[6]
Yodaiken v Angehrn and Piel
1914 TPD 254
at 260.
[7]
Malcomess
Scania (Pty) Ltd v Vermaak
1984 (1) SA 297
(W) 299E at 299F to G;
Jarrosen Estates (Edms) Bpk v Oosthuizen 1985 (3) SA 550 (NC).
[8]
Jarrosen
Estates (Edms) Bpk v Oosthuizen
1985 (3) SA 550
(NC) at 553D;
Leyland SA (Pty) Ltd v Rex Evans Motors (Pty) Ltd 1980 (4) SA271 (W)
at 273.