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[2019] ZALMPPHC 13
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Firstrand Bank Limited t/a Wesbank v Mabotja and Others (2265/2018, 4690/2018, 3681/2018, 2987/2018, 5724/2018, 6162/2018, 5726/2018, 1363/2018, 6160/2018, 6159/2018, 1767/2018) [2019] ZALMPPHC 13 (19 March 2019)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(LIMPOPO
DIVISION, POLOKWANE)
Case No: 2265/2018
FIRSTRAND
BANK LIMITEDT/A WESBANK
PLAINTIFF
and
MPHELA CALTON MABOTJA
DEFENDANT
Case
no.4690/2018
FIRSTRAND BANK LIMITED
t/a WESBANK
PLAINTIFF
and
NTVL FUNERAL AND
COFFINS CC
DEFENDANT
And
3681/2018
FIRSTRAND BANK LIMITED
T/A WESBANK
PLAINTIFF
And
TAISEN
SHIPALANA
DEFENDANT
Case
no: 2987/2018
FIRSTRAND BANK LIMITED
T/A WESBANK
PLAINTIFF
And
SAMSON
MOLEA
DEFENDANT
and
CASE
NO: 5724/2018
FIRSTRAND BANK LIMITED
T/A WESBANK
PLAINITFF
and
DIKOMOS AND SONS
BUSINESS ENTERPRISE t/a
DIKOMOSO AND SONS
BUSINESS ENTERPRISE
Defendant
Case
no: 6162/2018
FIRSTRAND BANK LIMITED
PLAINTIFF
And
PETER PELOKGOLO
MAKUA
DEFENDANT
And
CASE
NO: 5726/2018
FIRSTRAND BANK LIMITED
T/A WESBANK
PLAINTIFF
AND
JLA BRATS – CK
2011/098809/23
DEFENDANT
AND
Case
No: 1363/2018
TOYOTA FINANCIAL
SERVICES SA LTD
PLAINTIFF
AND
JOZI MARKETING AND
PROJECTS PTY LTD
DEFENDANT
AND
CASE
NO: 6160/2018
FIRSTRAND BANK LIMITED
T/A WESBANK
PLAINTIFF
And
MERCY
MABADZHABADZHA
DEFENDANT
And
CASE
NO: 6159/2018
FIRSTRAND BANK LIMITED
T/A WESBANK
PLAINTIFF
And
TSHABELANGKENO
SUPPLIERS
DEFENDANT
And
CASE
NO: 1767/2018
NEDBANK LTD T/A MFC
PLAINTIFF
And
PETRUS JOHANNES
SEEGERS
DEFENDANT
JUDGMENT
MULLER
J:
[1]
Several similar matters came before me in the unopposed court for
default judgment.
The attention of counsel, who appeared in these
matters, were drawn to the similarly worded letters of demand
attached to the papers.
They were requested to present argument
whether or not the plaintiffs made an election in the letters of
demand, in each case,
to adhere to the contracts or whether they have
elected to cancel the contracts. The applications were postponed
until 15 March
2019 to afford them the opportunity to prepare and
present argument.
[2]
Mr Jacobsz appeared on behalf of all the plaintiffs when the matters
were called.
The court is grateful for his assistance.
[3]
At the commencement of the proceedings counsel intimated that the
papers filed in
case no 2265/2018 will be used during the argument
and that any order the court might make will apply to all the
applications for
default judgment. The argument proceeded on that
basis.
[4]
For a proper understanding of the issues, it will necessary to set
out the background
facts as recounted in the particulars of claim.
[5]
The plaintiff is a bank and a registered credit provider. It entered
into a written
instalment sale agreement with the defendant in terms
whereof it sold a motor vehicle to the defendant. The ownership of
the vehicle
remained with the plaintiff until such time that it was
full paid. The vehicle was delivered to the defendant. The defendant
breached
the terms of the contract by failing to pay the monthly
instalments on the due dates as provided in the contract and is in
default
with the payments of the instalments for longer than 20 days.
[6]
As a result of its breach of contract the attorney of the plaintiff
delivered to the defendant a letter
of demand in terms of section 129
of the National Credit Act.
[1]
The contents of the said letter of demand reads as follows:
“
We
have been instructed by our client,
FIRSTRAND
BANK LIMITED T/A WESBANK
that
the above mentioned Credit Agreement is in arrears with an amount of
R
15 632.94.
The
next instalment in the amount of
R
3 538.87
is
due and payable on
31/03/2018.
The
total balance outstanding under the Credit Agreement amounts to
R
74 853.84.
You are requested to make
contact with our client on telephone number: 011 649 4593 to make
suitable repayment arrangements, for
the arrear amount.
If you fail to make
suitable repayment arrangements, you have the following options:
1.
Pay
the full arrear amount within 10 (ten) business days from the date of
posting or acceptance of the this letter;
or
2.
Refer
the Credit Agreement to a Debt Counsellor, alternative Dispute
Resolution Agent, Consumer Court or Ombudsman with jurisdiction,
in
order to resolve any dispute under the Credit Agreement or to develop
and agree a payment arrangement to bring the above arrear
amount up
to date.
Should you choose to
refer the Agreement to a Debt Counsellor, you shall be liable to pay
an application fee to the Debt Counsellor
as prescribed by Schedule 2
of the Regulations of the aforementioned Act.
Should you fail to adhere
to this notice, legal action will be instituted against you claiming:
a)
Cancellation
of the Agreement;
b)
Return
of the goods ;
c)
An
Order declaring all payments already made to be forfeited ;
d)
Damages
for depreciation of the goods to be assessed after the goods have
been placed in possession of our client ;
e)
Costs
of suit on the Attorney and Client Scale.
3.
This
notice also serves to advise you that
FIRSTRAND
BANK T/A WESBANK
has
elected to claim immediate payment of all of the instalments (both
arrear and future instalments) owing in terms of the agreement
should
the demand not be complied with.
4.
Should
you not comply with the demands contained in this letter,
FIRSTRAND
BANK LIMITED T/A WESBANK
will,
without notice, cancel the agreement”
[7]
The
claim of the plaintiff was formulated in the particulars of claim as:
“
1.
Cancellation of the Agreement;
[2]
2.
That the Defendant be ordered to return the following Motor Vehicle
to the Plaintiff:
2008 ISUZU KB360 V6 LX
P/U D/C
ENGINE NUMBER:
10H9E72480098
CHASSIS NUMBER:
ADM2RD27C73435186
3. That the Damages
component of the plaintiff’s Claim, arising out of the
Defendant’s breach of the Agreement entered
into between the
parties, be postponed
sine die
;
4. That the Defendant be
ordered to pay the Plaintiff’s costs of suit;
5. Further and/or
alternative relief”
[8]
The credit agreement contains the following provisions appertaining
to breach of contract:
“
12.2.
Upon the occurrence of any of the abovementioned events, we shall be
entitled, at our election and without prejudice to:
12.2.1 claim
immediate payment of the outstanding balance together with the
interest and all amounts owing or claimable by
us, irrespective of
whether or not such amounts are due at that stage; or
12.2.2 take repossession
of the Goods in terms of an attachment order and retain all payments
already made in terms hereof by yourself
and to claim as liquidated
damages, payment of the difference between the balance outstanding
and the market value of the goods
determined in accordance with
clause 11.5.2.3, which amount shall be immediately due and payable.
12.3. if we elect to
enforce the Agreement a notice will be sent to you, which will set
out:
12.3.1 the details of
your default;
12.3.2 the period within
which we require you to rectify the default; and
12.3.3 your rights to
refer this Agreement to a debt counsellor, alternative dispute
resolution agent, Consumer Court or an Ombudsman
with jurisdiction,
with the intention of resolving any disputes or developing and
agreeing on a plan to bring your payments under
this Agreement up to
date.
12.4. Any legal
proceedings will not be commenced against you unless;
12.4.1. You have been in
default for at least 20 (twenty) business days;
12.4.2. At least 10 (ten)
business days have elapsed since the default letter or notice
referred above has been delivered (which
10) business day period may
run concurrently with the 20 (twenty) business day default period);
12.4.3. You have failed
to respond to the default letter or you have responded by rejecting
our proposal;
12.4.4. You have not
surrendered the Goods to us in terms of Section 127 of the Act.
12.5. should we elect to
terminate this Agreement in terms of Section 123 of the Act, the same
procedure set out in 12.3 above,
will be followed prior thereto.”
[9]
Two questions have arisen from the wording of the demand. The first
is whether the
plaintiff, in the written demand, has made an election
to cancel the agreement or whether it has elected to claim specific
performance.
The second question is whether the plaintiff was
entitled to cancel the agreement and claim return of the vehicle and
damages.
[10]
The contract contains a
lex commissoria
which permits the
plaintiff the right to demand performance of the defendant’s
obligations in terms of the agreement, or,
in the alternative, to
claim for cancellation of the agreement; retain past payments of the
instalments; to recover possession
of the vehicle sold to the
defendant and to claim damages.
[11]
The right to claim cancellation ceases once the election is made to
claim upon the contract.
[3]
A
plaintiff must abide its election. A party who makes the election
need to appreciate that it has a choice between two known
possibilities. It is the election of one these two alternative rights
which establishes the basis of the plaintiff’s cause
of action
and the remedy.
[12]
A party waives a right if it is established that the party:
“
with
full knowledge of [its] right, decided to abandon it, whether
expressly or by conduct plainly inconsistent with the intention
to
enforce it.”
[4]
[13]
It was held in
Feinstein
v Niggli and Another
[5]
that:
“
And
election generally involves a waiver: one right is waived by choosing
to exercise another right which is inconsistent with the
former.
Indeed, election and waiver have been equated as being species of the
same general legal concept.”
[6]
[14]
In
Thomas
v Henry and Another
[7]
such an election was also described as a waiver of a right:
“
Once
the innocent party has decided to cancel – and has communicated
his decision to the other party – he has, of course,
exercised
his election. He then no longer has a choice of remedies and may not,
without the consent of the other party, undo his
decision. The
concept of election is therefore not appropriate in regard to conduct
which appears to be in conflict with an intention
to rely on the
chosen remedy. It is perhaps more accurate to designate such conduct
as a waiver or abandonment of an accrued right..”
[8]
[15] It is
necessary to return to the contents of the letter of demand. It is a
question of fact whether an election
has been made. A statement in
terms whereof a specific and unequivocal election or choice is made
is conclusive proof of such an
election or choice. There is no doubt
from the contents of the letter of demand that the plaintiff was
keenly aware of its rights
and its obligations in terms of the
lex
commissoria
contained in the contract. The letter of demand
conveys in no uncertain terms knowledge on the part of the plaintiff
of the right
to cancel and an awareness of the right to abide by the
contract. The letter of demand is by no means unequivocal. It
contains,
on the one hand, an election to cancel the contract by
stating:
“
Should
you fail to adhere to this notice, legal action will be instituted
against you claiming:
a)
Cancellation
of the agreement…”
[16]
On the other hand, it also contains an election by the plaintiff to
adhere to the contract:
“
FIRSTRAND
BANK T/A WESBANK has elected to claim immediate payment of all the
instalments”
[17]
The final paragraph of the letter of demand reads:
“
Should
you not comply with the demands contained in this letter,
FIRSTRAND
BANK T/A WESBANK
will, without further notice, cancel the agreement.”
[18]
In the final paragraph the plaintiff impermissibly conflated the two
conflicting remedies by recording that the
plaintiff will cancel the
contract if either of the two demands contained in the preceding
paragraphs of the letter of demand are
not complied with.
[9]
[19] It is to
be noted that clause 12.2.1 read with clause 12.3 of the contract
requires of the plaintiff to follow
a prescribed procedure if the
plaintiff elected to adhere to the contract. Clause 12.2.2 read with
clause 12.5 also requires of
the plaintiff to follow a similar
procedure if the plaintiff has elected to cancel the contract.
[20] Instead of
making an election between the rights in clause 12.2.1 and 12.2.2,
the plaintiff in paragraph 3 of the letter
of demand, has elected to
adhere to the contract and to simultaneously cancel the contract, in
paragraph 2 thereof.
[21]
It is the very purpose of the demand to unequivocally inform the
defendant which of the two rights the plaintiff
has elected to
pursue.
[10]
The use of the
words ‘
legal
action will be instituted against you
’
and ‘
elect
to claim immediate payment of the instalments’
in the letter of demand conveyed to the reader that a particular
election was made. The plaintiff knew full well when the letter
of
demand was drafted that it was obliged to make a choice between
enforcing the contract and the dissolution of the contract.
The
plaintiff cannot blow hot and cold at the same time. The election of
both remedies is not permitted and is ineffectual.
[11]
[22]
In the result default judgment must be refused.
ORDER
The application for
default judgment in each of the following actions is dismissed:
Case no 2265/2018
Case no 4690/2018
Case no 3681/2018
Case no 2987/2018
Case no 5724/2018
Case no 6162/2018
Case no 5726/2018
Case no 1363/2018
Case no 6160/2018
Case no 6159/2018
Case no 1767/2018
GC MULLER
JUDGE OF THE HIGH
COURT OF LIMPOPO: POLOKWANE
APPEARANCES
For Plaintiffs
: Adv
PSAJ JACOBSZ
Argued
on
15 March 2019
Judgment
on
19 March
2019
[1]
Act 34 of 2005.
[2]
The plaintiff
claimed for judicial cancellation of the contract. See
Sonia
v Wheeler
1958 (1) SA 555
(A) 561A-C.
[3]
Schuurman
v Davey
1908
TS 664
at 670-671;
Angehrn
& Piel v Federal Cold Storage Co
1908 TS 761
at 786-7;
Custom
Credit Corporation (Pty) Ltd v Shembe
1972 (3) SA 462
(A) 470A.
[4]
Mahabeer v
Sharma NO and Another
1985 (3) SA 729
(A) 736J-737A.
[5]
1981 SA (2) 684
(A).
[6]
698 G-H.
[7]
1985 (3) SA 889
(A).
[8]
896 D-G.
[9]
The
plaintiff retained the right under the common law, to claim
rescission of the contract and to claim damages, when specific
performance of the contract is claimed and the defendant has failed
to comply with a judgment of a court to perform its obligations
in
terms of the contract. It is open to the plaintiff, should the
defendant fail to comply with the order of court for specific
performance, to claim for cancellation of the agreement and damages
in the same action. See
Custom
Credit Corporation (Pty) Ltd v Shembe
(fn 3) at 470D.
[10]
Jaffer v
Falante
1959
(4) SA 360
(C) 362F-363E;
Datacolor
International (Pty) Ltd v Intamarket (Pty) Ltd
[2000] ZASCA 82
;
2001
(2) SA 284
(SCA) par 29.
[11]
Kwagga Kamma Estates CC and
Another v Flangan
[1994] ZASCA 137
;
1995 (2)
SA 367
(A) 375C-F.