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[2021] ZAKZPHC 51
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Xulu v Standard Bank of South Africa Limited and Others (1570/21; 2909/14) [2021] ZAKZPHC 51 (23 August 2021)
IN
THE HIGH COURT OF SOUTH AFRICA,
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
Case
No: 1570/21 (and 2909/14)
In
the matter between:
RUTH
OLLINA GUGULETHU SNOTHILE
XULU
Applicant
and
STANDARD
BANK OF SOUTH AFRICA LIMITED
First
Respondent
SHACKLETON
CREDIT MANAGEMENT (PTY) LTD
Second
Respondent
SHERIFF
JOHANNESBURG CENTRAL
Third
Respondent
ORDER
The
following order shall issue:
(a) The
default judgments and / or court orders granted by the Registrar of
this court, on 22 April 2014
and 12 October 2016 under case number
2909/14, respectively, be and are hereby rescinded;
(b) All
execution steps taken pursuant to the above court orders be and are
hereby set aside, and
(c) Costs
against the Second Respondent.
JUDGMENT
NKOSI
J,
[1] This
is an application for rescission (based on the provisions of rule 42,
alternatively, common law grounds)
of two default judgments granted
by the registrar of this court, on 22 April 2014 and 12 October 2016,
respectively, together with
an order setting aside all execution
steps taken pursuant thereto, and costs against the second
respondent. The second respondent
only opposes the application.
[2] The
application has its sequel from a written instalment sale agreement
concluded between the applicant and
the first respondent, on 25
September 2012 (“the credit agreement”). The credit
agreement relates to the purchase of
the motor vehicle, described as
a 2011 BMW 118i 5 Door A/T with specified engine and chassis numbers.
[3] The
applicant subsequently breached the credit agreement by failing to
pay the monthly instalments thus triggering
the terms which entitled
the first respondent to approach a court for the cancellation of the
credit agreement and the immediate
return of the vehicle.
[4] On
22 April 2014, the registrar granted a default judgement (the first
one) against the applicant and in favour
of the first respondent for,
inter alia, confirmation of termination of the credit agreement and
the return of the vehicle (annexure
“FA1”to the founding
affidavit). Once the vehicle had been repossessed, assessed, valued
and sold on public auction,
the registrar granted a further default
judgment or order (the second one) for payment of damages and further
expenses in an amount
of R 320 920.64 ostensibly incurred when the
net proceeds of the sale of the vehicle were insufficient to
discharge the applicant’s
obligations under the credit
agreement (annexure “FA2” to the founding affidavit).
[5] Apparently,
the applicant did not attempt to resolve the matter until the claim
was ceded to the second respondent
who also attempted, through its
lawyers between 2017 to 2021, to contact the applicant in order to
reach a settlement, but to no
avail (annexure “JAB6” to
the answering affidavit). The status quo prevailed until the writ was
issued attaching funds
held in the applicant’s credit account
on the First National Bank, on 10 February 2021. The third respondent
executed on
the writ issued pursuant to the second default judgment
and no relief is sought from him.
[6] The
default judgment orders are impugned primarily on two grounds.
Firstly, the applicant contends that the
aforesaid orders were
erroneously sought and erroneously granted in her absence, as
contemplated by rule 42 of the Uniform Rules
of Court, alternatively,
the common law, because the registrar does not and did not have the
powers to grant them under s 130(3)
of the National Credit Act 34 of
2005 (“the NCA”). This, therefore, renders the court
orders null and void.
[7] Secondly,
it was irregular for the first respondent to approach this court, for
the second default order, without
giving the applicant any further
notification of those proceedings, since she had a right to be heard
and to give her version of
events. In addition, the applicant claims
that the summons commencing action never came to her attention
despite the sheriff’s
return of service pointing to the
contrary (annexure “FA5” to the founding affidavit). The
applicant says she only
became aware of the legal proceedings and
default judgments against her for the first time, around 12 February
2021, when the second
respondent attached her bank account.
[8] In
its reply, the second respondent vehemently disagrees with the
applicant’s claims as these are misleading.
It avers that all
the procedural requirements envisaged in the NCA were met and /or
complied with before and after approaching
the court for the relief
sought but the applicant failed to respond despite being served with
the requisite notifications.
[9] The
second respondent contends that the default judgments which are
impugned were not granted erroneously as
the registrar was authorised
(in terms of rule 31(5)
(b)
of the Uniform Rules of Court, read
with
s 23
of the
Superior Courts Act 10 of 2013
) to do so, after
proper service of the summons to the applicant, which she failed to
defend. The second respondent further contends
that the first
respondent was entitled to supplement its papers as authorised by the
court, and approach court without further
notice to the applicant in
order to apply for the shortfall that was due to it.
[10] It
is undeniable that the credit agreement in question is a credit
agreement which is governed by the NCA.
It is also in plain sight
that, in any proceedings in which a court is approached for an order
to enforce such an agreement, compliance
with the provisions of
s
130(1)
and (3) is peremptory and has to be alleged and proved.
Likewise, when the legal relief that is required is merely an order
enforcing
the remaining obligations of a consumer under a credit
agreement, compliance with
s 130(1)
(a)
and
(b)
,
s
130(2)
(a)
and
(b)
and
s 130(3)
(a)
to
(c)
has to be alleged and proved.
[11] The
issue for determination is whether or not the two default judgments
were erroneously sought and erroneously
granted in the absence of the
applicant, in terms of
rule 42
of Uniform Rules of Court in that:
(a) The
registrar did not have any powers under s 130(3) of the NCA to grant
the orders against the applicant
as the statute only empowers the
court, not the registrar, to determine the matter;
(b) There
has not been proper service of the combined summons to the applicant;
and
(c) The
application papers, in seeking the second default judgment were not
served on the applicant.
[12]
I
consider it to be settled law that the registrar is not endowed with
any powers under s 130(1) to (3) of the NCA to grant orders
to
enforce either a credit agreement or the remaining obligations of a
consumer in terms of a credit agreement. I believe the question
of
that power has been sufficiently or thoroughly broached and
trammelled in a number of court judgments.
[1]
[13] It
appears to me that the question still lingers in the minds of some
litigants. Counsel for the second respondent
contends, in his written
submissions, that the applicant’s reliance on a lack of
authority by the registrar under s 130(3)
of the NCA, is misplaced
because the provisions of s 130 only applies when:
(a) A
credit provider approaches the court for an order to enforce a credit
agreement; and,
(b) In
the case of the instalment agreement, the consumer has not
surrendered the relevant property to the
credit provider as
contemplated in s 127 of the NCA,
[14]
Counsel
further submits that the first respondent did not approach the court
in terms of s 130, and did not seek an order to enforce
a credit
agreement (the agreement was cancelled) but sought default judgment
pursuant to a liquidated demand which included the
delivery of goods
(rule 31(5) of the Uniform Rules of Court;
s 23
of the
Superior
Courts Act; and
Allied
Bakeries (Pty) Ltd v Pitzer
[2]
).
[15] I
am inclined to respectfully disagree with the submission. It appears
to me that, even in instances where
a credit provider approaches a
court for an order of cancellation of a credit agreement governed by
the NCA, the provisions of
s 130(1)
to (3) cannot be wished away.
[16] The
narrow approach, proposed above, seems to be contrary to the spirit
and purport of the NCA.
Section 130(3)
of the NCA provides as
follows:
‘
Despite
any provision of law or contract to the contrary,
in
any proceedings commenced in a court in respect of a credit agreement
to which this Act applies
,
the court may determine the matter
only
if the court
is satisfied that –
(a)
in
the case of proceedings to which sections 127, 129 or 131 apply, the
procedures required by those sections have been complied
with;
(b)
. . .
(c)
. . .’ (my
emphasis)
[17] Obviously,
there are instances where the registrar has not been empowered, and
cannot consider matters in
respect of which the NCA apply. Such
matters can only be dealt with by the courts (and not by the
registrars) as contemplated in
s 130(1) to (3). That applies to any
proceedings commenced in a court, regardless of the type of default,
the type of the credit
agreement and the contemplated relief sought
by the credit provider.
[18]
The
cases referred to in paragraph 12 above contain the sound exposition
of the current law on the subject. See, also the recent
decision of
the Supreme Court of Appeal, in
FirstRand
Bank Limited t/a Wesbank v Davel (University of Free State Law Clinic
(as
amicus
curiae
).
[3]
[19]
From
the aforegoing, I hold the view that the registrar had usurped powers
she does not have and that both default judgments fall
to be set
aside. The second and third issues, therefore, become academic. I
need to indicate, however, the following: firstly,
that although some
reliance was placed on common law as an alternative for the relief
sought, not one iota of evidence was tendered
to prove the same;
secondly, that there was proper service of the combined summons; and
thirdly, that the second default judgment
(for damages) also becomes
a nullity on a further and different ground that the first respondent
failed to serve the application
on the applicant.
[4]
[20] Insofar
as the costs of suit are concerned, such normally follow the result.
The applicant achieved a wholesome
success in the matter and there
are no reasons to deny her costs.
[21] In
the result, I grant the order in accordance with the amended notice
of motion in the following terms:
(a) The
default judgments and / or court orders granted by the Registrar of
this court, on 22 April 2014
and 12 October 2016 under case number
2909/14, respectively, be and are hereby rescinded;
(b) All
execution steps taken pursuant to the above court orders be and are
hereby set aside, and
(c) Costs
against the Second Respondent.
NKOSI
J
APPEARANCES
DATE
OF HEARING: 03
AUGUST 2021
DATE
JUDGMENT HANDED DOWN: 23
AUGUST 2021
ON
BEHALF OF THE APPLICANT: MR
HLARANE LEGOABE
(Instructed
by VDT Attorneys
c/o
Grant & Swanepoel Attorneys
Suite
1, the Mews
Redlands
Estate
1
George Macfarlane Lane
Pietermaritzburg
Tell:
033 342 0375
Email:
holly@gsalaw.co.za
)
ON
BEHALF OF THE SECOND RESPONDENT: W
J PIETERSEN
(Instructed
by Lynn & Main Incorporated
3
On Crescent Crescent
Montrose
Pietermaritzburg
Kwazulu-Nata
Ref:
P Rajoo/ts/SB56412
Email:
pravikar @ Imb.co.za
[1]
See
Master
of the High Court North Gauteng v Motala NO
2012 (3) SA 325
(SCA);
Nkata
v FirstRand Bank
[2016] ZACC 12
,
2016 (4) SA 257
(CC),
2016 (6) BCLR 794
(CC) paras
163 to 189 of Jafta J’s judgment;
Seleka
v Fast Issuer SPV (RF) Limited and another
[2021] ZAGPPHC 128;
Theu
v FirstRand Auto Receivables (RF) Limited and another
[2020] ZAGPPHC 319.
[2]
Allied
Bakeries (Pty) Ltd v Pitzer
1962 (1) SA 339
(SR).
[3]
FirstRand
Bank Limited t/a Wesbank v Davel (University of Free State Law
Clinic
(as
amicus
curiae
)
[2019] ZASCA 168
, [2020]. All SA 303 (SCA).
[4]
See
DF
Scott (EP) (Pty)
Ltd v
Golden Valley Supermarket
2002 (6) SA 297
(SCA) para 9 at 301J to 302A.