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[2018] ZAFSHC 118
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Khokho v Nedbank Limited (Divison of MFC) (1506/2017) [2018] ZAFSHC 118 (28 June 2018)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number: 1506/2017
In
the matter between:
NGAKA
DAVID
KHOKHO
Applicant
and
NEDBANK LIMITED
(DIVISION OF
MFC)
Respondent
CORAM: MHLAMBI J,
HEARD ON:
25 JUNE 2018
DELIVERED
ON:
28 JUNE 2018
MHLAMBI,
J
Introduction
[1]
This is an application for leave to appeal against the order for
summary judgment which was granted on 10 August 2017. The application
is opposed.
[2]
The grounds of appeal are stated as follows:
“
1. The
Honourable Court erred in not finding that the Respondent, by serving
Section 129 Notice dated the 18
th
February 2017 upon the Applicant, followed by the summons dated 28
March 2017, contravened the provisions of
Section 129(1)
of the
National Credit Act, 34 of 2005
.
The Honourable Court
ought to have find that, at the time the Respondent served the
Section 129
Notice dated 18
th
February 2017 upon the Applicant, the
Section 129
Notice dated 8
th
December 2016 to was not withdrawn by the Respondent.
2. The Honourable
Court erred in not finding that the
National Credit Act makes
provision that, while the dispute was under consideration by the
Ombudsman with jurisdiction, the Respondent was prohibited from
instituting legal action against the Applicant.
3. The Honourable
Court misdirected itself in finding that the Applicant referred its
dispute to the wrong Ombudsman for short term
insurance.
The Honourable Court,
despite been notified by the Applicant that the Ombudsman for short
term insurance, on behalf of the Applicant,
referred the said dispute
to the correct Ombudsman for Banking and the Ombudsman for Banking
acknowledge receipt thereof and the
Respondent was made aware of that
aspect. The Honourable Court ignored this crucial aspect.
4. The Honourable
Court erred in not finding that the defense raised by the Applicant
amounted to a triable issue which warranted
to be determined by the
trial court.
The Honourable Court
ought to have find that, at the time the Respondent served the second
Section 129
(1) notice dated 18
th
February 2017 upon the Applicant, the dispute regarding
Section 129
(1) notice dated 8yh December 2016 was already under consideration by
the Ombudsman for Banking and furthermore, proof of payment
attached
to the Applicant answering affidavit amounted to a bona fide defence.
The Honourable Court
ought to have find further that at the time the Respondent issued
Section 129
notice dated 8 December 2016, the Applicant was not in
arrears of the amount as reflected in the said notice. The Applicant
was
in advance with his payments.
5. The Honourable
Court misdirected itself by allowing the Respondent to file its
replying affidavit (referred to as the Respondent’s
response to
the Applicant’s Supplementary answering affidavit) and further
allowing the Respondent to refer to the said document
during
arguments. This is very bad law.
The Honourable Court,
despite having made it clear to the Respondent that it will not
consider the said document when delivering
its judgment, allowed the
Respondent to refer to the said replying affidavit during its
argument.
The Honourable Court
ought to have out rightly rejected the Respondent’s replying
affidavit and further barred the Respondent
from referring to the
said document, mereso
Rule 32
of Uniform Rules of this Honourable
Court does not allowed the Respondent to file further affidavits in
support of its application
for summary judgment.
6. The Honourable
Court erred in upholding the irregular judgment application brought
before it by the Respondent”.
[3]
The applicant filed heads of argument on 21 June 2018 and the order
or
ex tempore
judgment was assailed on the following grounds:
“
Introduction
1.
On the 10
th
of August 2017, The Respondent brought an application for summary
judgment against the Applicant.
2.
In its ex tempore judgment, the
honourable court granted summary judgment against the Applicant
advancing the following reasons:
2.1
that the Applicant referred his dispute to
the wrong forum, (Ombudsman for Short term insurance), instead of the
Ombudsman for Banking.
Therefore the dispute was before the Ombudsman
who had no jurisdiction.
2.2
Secondly, the Honourable Court indicated
that the Applicant does not have a defence to succeed in the trial.
3.
It is on the basis of the aforementioned
ex tempore judgment that the Applicant filed his application for
leave to appeal, same
was filed on the 10
th
day of AUGUST 2017 and grounds are outlined therein.”
Background
[4]
The respondent, as the plaintiff in the summons, and the applicant,
as the defendant in the summons, concluded a written instalment
sale
agreement on or about 15 October 2013 in terms of which the plaintiff
sold a 2013 Jaguar XF 2.0 i4 for Luxury motor vehicle
to the
defendant. The total purchase price of the goods including VAT, stamp
duty and finance charges was R 857 494.80. The
defendant was
responsible to pay the aforesaid amount by means of 71
instalments of R11 909.65 each, the
first instalment
having been payable on 01 December 2013, subsequent instalments on
the first day of each succeeding month and
one final instalment of R
11 909.65 on 01 November 2019. The parties shall be referred to
as in convention.
[5]
When the defendant failed to comply with the provisions of the
agreement to make punctual payments, the defendant instituted
action
against the defendant by issuing a summons on 31 August 2016. Default
judgment was granted against the defendant on 23 September
2016 but
the court rescinded the judgment on 08 December 2016 on the basis
that the summons was premature as it
“
was
clearly issued one (1) day too early”
[1]
.
A fresh
summons was issued on 23 March 2017.
[6]
A notice of intention to defend was entered and filed on 04 April
2017, followed by an application for summary judgment which
was set
down for hearing on 11 May 2017. On that day it was removed from the
roll and enrolled for 8 June 2017. On 8 June 2017
the defendant filed
a supplementary answering affidavit and by agreement the court
granted an order postponing the matter to 10
August 2017; the
respondent/defendant to file a condonation application in respect of
the late filing of his supplementary affidavit
and the costs of that
application were reserved for later determination.
[7]
On 28 July 2017, when a notice of withdrawal of the defendant’s
supplementary answering affidavit was filed,
the
plaintiff also filed its affidavit to the respondent’s
supplementary answering affidavit. On 26 May 2017 the defendant
filed
a plea and a special plea. He also filed a notice in terms of Rule
30A on 31 July 2017 alleging that the applicant had committed
an
irregular step in the proceedings by filing a replying affidavit to
the defendant’s’ supplementary answering affidavit.
The
answering affidavit
[8]
The answering affidavit resisting the summary judgment application
was divided into three headings, namely, the noncompliance
with the
National Credit Act 34 of 2005 (“NCA”), the irregularity
of the plaintiff’s application for summary
judgment and the
punitive costs order
de bonis propriis.
The resistance under the first heading is
aimed at the two section 129 notices issued in terms of the NCA
dated 8 December
2016 and 18 February 2017 respectively, in that when
the latter was delivered, the former had not been withdrawn by the
plaintiff
and the defendant had, as at 14 February 2017, directed a
dispute to the office of the Ombudsman for Short- term insurance in
regard
to the arrear amount stated in the notice of 8 December 2016;
which was allegedly cleared on 3 and 4 October 2016. Consequently,
the summons issued on 28 March 2017 under case number 1506/2017 was
irregular as it was based on the irregular notice dated 18
February
2017. Despite the correspondence of 17 April 2017 addressed to the
plaintiffs’ attorneys notifying them of the irregularity
of the
notice and the summons, the plaintiff proceeded on 19 April 2017 to
apply for summary judgment.
[9]
As at 8 December 2016, the defendant was not in arears of the amount
stated in such notice as an amount of R 47 000.00
[2]
was paid on 3 and
4 October 2016 and the defendant therefore disputed being indebted to
the plaintiff in the amount stated in summons
as well as in the
supporting affidavit to the application for summary judgment.
Furthermore, the matter was referred to the Ombudsman
for
consideration
[3]
.
The
plaintiff’s contentions
[10]
The plaintiff submitted that the defendant resisted the application
for summary judgment on the grounds that:
“
(i) There was a
dispute of fact over his indebtedness and
(ii)
his
alleged indebtedness under the credit agreement was the subject
matter of a pending dispute with the Ombudsman for Short- term
insurance.”
[4]
[11]
It was argued on behalf of the plaintiff that the Ombudsman for short
term insurance did not have jurisdiction to entertain
the defendant’s
complaint. Clause 14.1 of the credit agreement drew to the
defendant’s attention the right to refer
the matter to the
Ombudsman for banking services
[5]
.
The defendant’s complaint to the Ombudsman for short term
insurance was dated 14 February 2017 and it was in reaction to
the
plaintiff’s notice in terms of section 129 of the NCA to the
defendant on 8 December 2016. The 10 day period provided
for in
section 130 (1) (a) of the NCA had long since lapsed and the
defendant’s contention that the summons was premature
was
without merit
[6]
.
[11]
Despite his dispute that he was not indebted to the plaintiff in the
amount stated in the section 129 notice and the summons,
the
defendant failed to state that he was not indebted to the plaintiff
at all or to disclose to the court the extent of his indebtedness.
Despite the contents of paragraph 7.2 of the particulars of claim
wherein it is alleged that the last payment received from the
defendant was on 27 October 2016 in the amount of R 12 684.79
and that no further payments had been received from him ever
since
and that he was in arears with at least 5 months’ instalments,
the defendant failed to mention that any payments were
made
subsequent to October 2016
[7]
.
Furthermore, the defendant failed to attack the certificate of
balance which he agreed would impose on him the onus to satisfy
the
court that the amount mentioned therein was incorrect. It was
submitted that the defences put up by the defendant fell dismally
short of constituting a
bona
fide
defence.
Applicable
law
Section
129 (1) of the NCA provides that:
“
(1) If the
consumer is in default under a credit agreement, the credit provider-
(a)
may draw the default to the notice of the
consumer in writing and propose that the consumer refer the credit
agreement to a debt
counsellor, alternative dispute resolution agent,
consumer court or ombud with jurisdiction, with the intent that the
parties resolve
any dispute under the agreement or develop and agree
on a plan to bring the payments under the agreement up to date; and
(b)
subject to section 130(2), may not commence any legal proceedings to
enforce the agreement before-
(i) first providing
notice to the consumer, as contemplated in paragraph (a), or in
section 86(10), as the case may be; and
(ii) meeting any
further requirements set out in section 130.
[12]
Section 130 (3) (c) of the NCA provides that:
“
(
3)
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)……..
(b)
……..
(c)
that the credit provider has not approached the court-
(i) during the time
that the matter was before a debt counsellor, alternative dispute
resolution agent, consumer court or the ombud
with jurisdiction;”
Section
134 (1) (a) (i) (ii)
“
(1) As an
alternative to filing a complaint with the National Credit Regulator
in terms of section 136, a person may refer a matter
that could be
the subject of such a complaint as follows:
(a)
If the credit provider concerned is a financial institution as
defined in the Financial Services Ombud Schemes Act, 2004 (Act
No. 37
of 2004), the matter-
(i) may be referred
only to the ombud with jurisdiction to resolve a complaint or settle
a matter involving that credit provider,
as determined in accordance
with sections 13 and 14 of that Act; and
(ii) must be
procedurally resolved as if it were a complaint in terms of that Act;
Uniform
Rule 32 (3) (b) provides that:
Upon the hearing of an
application for summary judgment the defendant may-
(a) …….
(b) Satisfy the court
by affidavit (which shall be delivered before noon on the court day
but one preceding the day on which the
application is to be heard) or
with the leave of the court by oral evidence of himself or of any
other person who can swear positively
to the fact that he has bona
fide defence to the action; such affidavit or evidence shall disclose
fully the nature and grounds
of the defence and the material facts
relied upon therefor.”
[13]
The opposing affidavit must disclose fully the nature and grounds of
and the material facts relied upon by the defendant for
his defence.
The purpose of the affidavit is to satisfy the court that the
defendant has a
bona
fide
defence
and whether the affidavit does so
“
fully”
is determined by
that consideration.
[8]
Summary
judgment is therefore granted on the supposition that the plaintiff’s
claim is unimpeachable because the defendant
has no proper
defence.
[9]
It was intended to
prevent sham defences from defeating the rights of parties by delay,
and at the same time causing great loss
to plaintiffs who were
endeavouring to enforce their rights.
[10]
The
Defence
[14]
It is evident that the defendant wanted to hold the time still and
captive to 8 December 2016 and built his castle of a defence
around
that date. It is clear that his interpretation of the NCA is
incorrect. Mr Khokho, on behalf of the defendant, referred
me to
Absa
v Mkhize & another
[11]
in support of his submission that the subsequent section 129 notices
were irregular. However, this decision did not support the
submissions made. It is incomprehensible why the defendant referred
his complaint to the ombud without jurisdiction when it was
clearly
brought to his attention on more than one occasion to whom he should
address his complaint in the event of a dispute or
an attempt towards
a resolution. Besides, when he referred the matter to the ombud for
insurance on 14 February 2017, the ten day
period within which he had
to react, had lapsed and the credit provider’s right to enforce
the credit agreement had been
triggered
[12]
.
Furthermore, it is incorrect that as at 18 February 2017 the
complaint was before the ombud with jurisdiction for purposes of
section 130 of the NCA; and no proof of acknowledgment of receipt of
the complaint by the said ombud was provided. The reliance
by the
defendant on the non-compliance of the provisions of the NCA by the
plaintiff was untenable and did not constitute a defence.
[15]
Save to refer to the payments made during 3 and 4 October 2016 to
“
clear
the arrears”
[13]
,
no
allegation is made in the papers that since that time and up to the
issue of the summons, additional payments were made to liquidate
the
debt. What the defendant presents in his papers is a bare denial of
his indebtedness. What is as clear as a pole above water,
is the
defendant’s inclination to concentrate on irrelevant collateral
issues instead of addressing the real issues. He was
afforded the
opportunity to supplement his papers or defence but failed to do so.
On the day of the hearing of the summary judgment
application, he
filed a supplementary answering affidavit which caused the matter to
be postponed, only to be withdrawn at a later
stage. In my view, the
defendant’s conduct throughout the litigation process was of a
delaying nature and dragged out the
process unnecessarily.
Conclusion
[16]
If a court hearing an application for summary judgment is satisfied
that a defendant has no bona fide defence to a plaintiff’s
claim and grants summary judgment as a consequence, it should be slow
thereafter to grant leave to appeal, lest it undermine the
very
purpose of the procedure
[14]
.
In the
ex
tempore
judgment
that is being appealed against, it was mentioned
[15]
that the respondent’s counsel
“
conceded
that indeed, there are no sufficient grounds on which this
application should not be granted.”
In the
circumstances, I am of the opinion that the appeal would have no
reasonable prospect of success and the application for leave
to
appeal should therefore fail.
Costs
[17]
In the result, costs should follow the event.
[18]
I therefore make the following order:
Order
The
application for leave to appeal is dismissed with costs.
____________
MHLAMBI,
J
Counsel
for the Applicant: Adv ND Khokho
Instructed
by: Rampai Attorneys
63
Kellner Street
Westdene
Bloemfontein
Counsel
for Respondents: Adv WA Van Aswegen
Instructed
by: McIntyre & Van Der Post
12
Barnes Street Westdene
Bloemfontein
[1]
Ngaka
David Khokho v Nedbank Limited (of which MFC is a division)
Case No: 4715/2016) [2016] ZAFSHC ( 8 December 2016)
[2]
Answering
affidavit paragraph 16
[3]
Answering
affidavit paragraph 17
[4]
Plaintiff’s heads of argument paragraph 4
[5]
Plaintiff’s
heads of argument paragraph 11
[6]
Plaintiff’s
heads of argument paragraph 12
[7]
Plaintiff’s
heads of argument paragraph 19
[8]
Civil Procedure in the Superior Courts, Author: Derek Harms
[9]
Maharaj v Barclays
National Bank Ltd
1976 (1) SA 418
(A)
[10]
Joob Joob Investments (Pty) Ltd v Stocks Mavudla Zek Joint Venture
2009 (5) SA 1
(SCA) para 31
[11]
2013 JDR
2187 (SCA)- Now reported at 2014 (5) SA 16 (SCA)
[12]
Changing
Tides 17 (Pty) Ltd N.O. v PJ Delport Case No: 44741/2014 GNP
[13]
Annexure
“NDK 3” on page 3 of answering affidavit
[14]
Majola v Nitro Securitisation
2012 (1) SA 226
(SCA) at 232 para 25
.
[15]
lines 8-12 of the judgment