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[2018] ZAGPPHC 724
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Wesbank A Division of Firstrand v Magaladi (62969/2013) [2018] ZAGPPHC 724 (13 February 2018)
IN THE REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURTOF SOUTH
AFRICA
(GAUTENG DIVISION, PRETORIA)
CASE NO: 62969/2013
13/2/2018
WESBANK
A DIVISION OF FIRSTRAND
APPLICANT/PLAINTIFF
And
KGOROSHI
SAMUEL MAGALADI
RESPONDENT/DEFENDANT
JUDGMENT
KHUMALO J
Introduction
[1]
This is an interlocutory application in
which the Applicant seeks an interim attachment of a motor vehicle
for its preservation
pending the finalisation of an action.
[2]
On 19 November 2008 , the Applicant, a
registered credit provider under the National Credit Act, 34 of 2005
(the NCA), and the Respondent
concluded a written instalment sale
agreement in terms of which Applicant sold a motor vehicle to the
Respondent The Applicant
was furthermore to retain ownership until
final payment of the purchase price.
[3]
The interim relief the Applicant is
seeking in this application is for an order directing the Respondent
to deliver the vehicle
into the possession of the Sheriff who is to
deliver it to the Applicant who shall then, at its own expense,
transport and retain
the vehicle under security at its premises
situated at Plot 50 Zandfontein in Pretoria, pending the outcome of
the action.
[4]
The common cause facts are that the
Respondent is substantially in arrears with the monthly instalments
payable under the agreement,
having stopped payment when a dispute
arose between the parties. The Applicant on 2 October 2013 instituted
an action against the
Respondent for the breach, claiming, among
other things, confirmation of cancellation of the sale agreement and
return of the vehicle.
[5]
This has been a long and protracted
action. A year and a half lapsed after the Respondent had entered an
appearance to defend the
action and before he served his Plea in May
2015. This Application was launched on 30 November 2016, a year and a
half after the
Plea, following the postponement of the trial on 6 May
2016. It was set down for hearing on 2 February 2017, postponed
several
times until I heard the matter on 7 February 2018 a year
later.
[6]
The function and purpose of an interim
attachment order is to protect the leased or partially paid for goods
against deterioration
and damage and to keep them in safekeeping
until the case
between the parties
has been finalised. Its purpose is not to enforce remedies or
obligations
under the credit
agreement and the remedy does not form part and parcel of the debt
enforcement process envisaged in the NCA. See
in this regard J M Otto
The
National
Credit Act Explained
para 44.4.
See also the unreported judgment in
S
A Taxi Securitisation (Pty) Ltd v H W Young
Case
No. 10249/2008 (CPD).
[7]
The claim for interim attachment of
goods pending the outcome of vindicatory or quasi-vindicatory
proceedings is well-established
at common law: See
Morrison
v African Guarantee and Indemnity Co Ltd
1936
(1) Ph M 35 (T);
Loader v De Beer
1947 (1) SA 87
(W);
Van
Rhyn v Reef Developments (Pty) Ltd
1973
(1) SA 488
(W) at 492. In
SA Taxi
Securitisation (Pty) Ltd v Chesane
{26382/2009)
[2010] ZAGPJHC 30;
2010 (6) SA 557
(GSJ), Boruchowitz J pointed out
that the NCA ' does not expressly indicate that the common law remedy
has been abrogated but has
in fact, textual indications to the
contrary.
[8]
To succeed in this application the
Applicant is required to establish and satisfy the well-established
requirements for the grant
of an interim interdict. The Applicant is
required to show: (a) that the right which it seeks to enforce is
clear or, if not clear,
is
prima
facie
established, though open to
some doubt; (b) that, if the right is only
prima
facie
established there is a
well-grounded apprehension of irreparable harm if the interim relief
is not granted; (c) that the balance
of convenience favours the
granting of interim relief; and (d) that the applicant has no other
satisfactory remedy.
[9]
In the Applicant's founding affidavit
its alleged that for the fact that the agreement has been cancelled
due to the Respondent's
breach, it has a right to be in possession of
a vehicle, or at least a
prima facie
right.
[10]
Its also alleged that since the
Applicant is the owner of the vehicle and seeks vindicatory relief,
it is not incumbent upon it
to allege or prove well founded
apprehension of irreparable harm, the harm being presumed.
Notwithstanding, it has a well founded
apprehension of irreparable
harm in that the vehicle is the only security that the Applicant has
for the sums owing to it by the
Respondent. The vehicle is being
diminished in value on a daily basis and will, in future, not retain
sufficient value to discharge
the sums owing by the Respondent.
[11]
The Applicant has no say to the manner
in which the Respondent drives or operates the vehicle on a daily
basis and therefore powerless
to protect its interest. It is not
receiving the agreed monthly instalments payment which is the quid
pro quo for the inevitable
reduction in the value of the vehicle so
that as the vehicle reduces in value, the principal debt owing to the
Applicant likewise
reduces. Under the circumstances the debt is
increasing as no payments are made whilst the value of the vehicle
diminishes, which
erodes on the Applicant's interest or right of
recourse against the Respondent.
[12]
On the other hand the Respondent is
utilising the vehicle as a taxi and receives an income daily. However
Respondent 's use of the
vehicle severely harms the prospects of
Applicant's recovery of the debt as even though he is remunerated for
its use he still
fails to make any payment towards settlement of the
loan advanced to him by the Applicant whilst the vehicle is losing
its value.
It is argued that the balance of convenience favours the
Applicant in the granting of the interim interdict.
[13]
It is Applicant's contention that
pending the main action and in the absence of the interim relief
sought, the Applicant has no
method of preventing the Respondent from
causing any further depreciation of the value of the vehicle. Further
that Applicant has
no alternative remedy available to it and unlikely
that it will be able to recover its damages at the end of the action,
unless
able to secure payment of those damages by means of interim
possession and protection of the vehicle.
[14]
The Respondent opposes the granting of
the interim relief on the grounds that he is employed by Cottonfields
Shopping Centre as
well as Wingrin Centre by organising the taxi rank
and cleaning services associated with the taxi rank and uses the
vehicle to
render his employment services. He ·uses the
vehicle to transport the employee to and from their respective
centres which
averages on 80 km a day and receives a small
remuneration from his employer.
[15]
He reckons that the Applicant will
suffer no prejudice whilst he remains in possession of the vehicle
as:
[15.1] the vehicle is
currently insured and will be repaired if it is damaged.
[15.2] The vehicle
will depreciate whether in his possession or in the possession of the
Applicant.
[15.3] The Applicant
has claimed for damages in its particulars of claim and will be
compensated for any that are proven
at trial, therefore suffering no
prejudice.
[16] He
alleges he will conversely, be highly prejudiced if the vehicle is
taken away from him as he will
not be able to render his employment
services and therefore needs the vehicle in order to comply with the
terms of his employment.
[17] It is
trite that for the grant of an interim attachment order it is a
prerequisite that any agreement
under which the respondent has the
right to possess the vehicles first be cancelled. See
Steyns
Foundry {Pty} Ltd v Peacock1965
(4) SA 549 (T).;
First
Consolidated Leasing and Finance Corporation Ltd v NM Plant Hire
{Pty} Ltd
1988 (4) SA 924
(W).
[18] In
the present matter the Applicant has purported to have cancelled the
instalment sale agreement due
to Respondent's breach of the agreement
by failing to pay the monthly instalments due. It is common cause the
Respondent has persisted
in his default even after the institution of
the claim, alleging that proper calculation of the debt should be
made. The Applicant
is accordingly qualified to claim interim
recovery of the vehicle.
[19] The
Respondent wants to retain possession of the vehicle so that he can
continue earning an income
at his employment, whilst the vehicle
deteriorates, when he is not paying the monthly instalments that are
the
quid pro quo
of the benefit he derives from such
possession and the depreciation of the vehicle. He has effectively
suspended his obligations
that flow from the agreement resulting in
the escalation of the debt, however insisting on retaining and using
the vehicle. As
a result of his actions the Applicant is not only
deprived of the monthly instalments but its security is
deteriorating, therefore
Applicant is highly exposed. The prejudice
the Applicant will suffer is glaringly evident. To deprive the
Applicant preservation
of its security under such circumstances would
be unjustifiable.
[20]
Levenberg AJ recognising the tragedy of this situation in SA Taxi
Securitisation (Pty) Ltd v Mbatha
& 2 Similar cases 2011 {1) SA
310 (GSJ) on [36] noted that "the credit provider's prospects of
recovering from the consumer
are often effectively limited to the
recovery of the creditor's security. if lenders are unable to recover
the deteriorating security,
such as motor cars, promptly, the
consequences would be economically disastrous for asset-based
lenders, especially those lending
to the less affluent."
[21]
Moreover, the courts have to ensure that the interests of both
parties are balanced taking all the
relevant factors into
consideration. Which is what was intended by the legislature in the
enactment of the NCA. The Respondent
alleges to have suspended
payment due to the litigation, all things being fair, all the
elements of the agreement will have to
be suspended including
Respondent's possession of the vehicle. The court cannot sanction the
retention and use of the vehicle by
the Respondent, for profit as a
taxi, in a manner that will result in its deterioration at the time
when it has suspended the fulfilment
of its obligations under the
agreement. The Respondent's continued possession of the vehicle is
causing irreparable harm to the
Applicant.
[22]
I am satisfied that the applicant has
established a clear right to cancellation and restoration of the
vehicle in the pending action.
Although Applicant has likewise
established irreparable loss it will suffer if preservation is not
ordered, generally, irreparable
harm is presumed since the
Plaintiff's claim is a vindicatory one; see
Stern
and Ruskin NO v Appleson
1951 (3) SA
800
(W) at 813.
[23]
The balance of convenience are also in
favour of the granting of the interim relief. The Respondent has
indicated his intention
to continue using the vehicle for earning an
income without paying his instalment. The vehicle will certainly
continue to deteriorate
if Respondent retains its possession,
diminishing in value, whereas in Applicant's possession there is
certainty of its preservation
until the dispute is resolved;
Mathews
v Mathews
1935 TPD 124
at 128.
[24]
Generally speaking the fourth
requirement, lack of any other ordinary remedy, follows as a natural
corollary on proof of irreparable
loss; see
Ncongwane
v Molorane
1941 OPD 125
at 130. The
·Applicant therefore need not show that he has no other
satisfactory remedy. A person who is entitled to vindicate
property
in the hands of another cannot be forced by the actions of that
person to accept merely the value of the property; see
Cowen
&
Hammond
v Campbell
1906
TH 191
and
Fedsure Life Assurance Co Ltd v Worldwide African Investment Holdings
(Pty) Ltd.
[25]
Under the circumstances, the following
order is granted:
Pending the final outcome of the
action instituted by the applicant against the respondent:
1.
The Respondent is directed to deliver
into the possession of the sheriff the 2008 VOLKSWAGEN CRAFFTER 50
P/V HR 80, with ENGINE
NUMBER: BJK046953 and CHASSIS NUMBER
WV1ZZZ2EZ060138 ("the vehicle") who shall deliver the
vehicle to the Applicant who
shall, in turn, at its own expense:
1.1
transport the vehicle to its garaged premise situate at Zandfontein,
plot 50,
Beverley Road, Zandfontein, Pretoria;
1.2.
retain the vehicle at such garaged premises under security.
2.
The Applicant shall not use the vehicle
or permit that it be used.
3.
In the event the Respondent fails to
comply with the contents of paragraph 1 above within five (S) days of
the service of this order
on the Respondent 's attorneys, the sheriff
is authorised and directed to take the vehicle into his possession
form wherever he
may find the vehicle and return the vehicle to the
Applicant .
4.
Costs to be costs in the main action
NV KHUMALO J
JUDGE
OF THE HIGH COURT
GAUTENG
DIVISION, PRETORIA
On
behalf of Applicant: ADV
AP ELLIS
Instructed
by STRAUSS
DALY INCORPORATED
Tel: 010 201 8600
Ref:
J BOTHA /WES 207/1585
On behalf of
Respondent: MONGWEKA
Instructed by :
W
WESSELLS & PARTNERS INC
Ref: J ERASMUS/BS/LM146