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[2018] ZAFSHC 168
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Oos Vrystaat Kapp Bedryf Beperk v Cilliers (1521/2017) [2018] ZAFSHC 168 (23 October 2018)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
No: 1521/2017
In
the matter between:
OOS
VRYSTAAT KAAP BEDRYF
BEPERK
Plaintiff
and
FRIEDEL
CILLIERS
Defendant
JUDGMENT
CORAM:
NAIDOO J
HEARD ON:
17 OCTOBER 2018
DELIVERED ON:
23 OCTOBER 2018
[1]
The plaintiff issued summons against the defendant for payment of an
amount of R108 761.42, together with interest thereon and
costs. The
debt arose out of a finance agreement entered into between the
parties, which the defendant allegedly breached, giving
rise to the
institution of the action. The matter was set down for trial on 16,
17 and 19 October 2018. On the day before the trial
was scheduled to
commence, the parties agreed to separate two issues which were to be
determined by the court, and which could
be dispositive of the
action. To this end Heads of Argument were prepared and filed on 17
October 2018, and the matter was heard
on the same day. The two
issues, arising from the pleadings, relate to the lack of
jurisdiction by this court to hear this matter
and the applicability
and impact of the Consumer Protection Act 68 of 2008 (the CPA). Adv S
Tsangarakis appeared for the plaintiff
and Adv P Greyling for the
defendant.
[2]
The plaintiff based its cause of action upon the provisions of the
written finance agreement between the parties, mentioned
above, and
proceeded in terms thereof following an alleged breach of the
agreement by the defendant. One of the clauses relied
upon by the
plaintiff is clause 2.18, which reads as follows:
“
Tensy die
kredietopnemer binne drie maande na die uitreik van ‘n staat,
skriftelik per aangetekende pos teen enige debiet
of krediet of enige
inskrywing wat daarin verskyn beswaar maak, word dit vir alle
doeleindes geag dat die inhoud van die staat
korrek is en sal die
staat in enige regsgeding afdoende bewys dat die goedere en dienste
daarin vermeld deur die maatskappy aan
die kredietopnemer verskaf is
en dat die debiet en krediete of enige inskrywing wat daarin verskyn,
korrek is”
Loosely
translated, the essence of clause 2.18 is that unless the credit
receiver objects, in writing per registered post to a statement
or
any entry therein, within three months of the issue of such
statement, the contents of the statement will be regarded as correct,
and shall in any legal action be conclusive proof that the goods and
services mentioned therein were supplied by the company (plaintiff)
to the credit receiver (defendant), and that the debit and credit or
entry that appears therein, is correct.
[3]
I shall deal, firstly, with issue, of the applicability and impact of
the CPA. The defendant admits the contents of clause 2.18
in his plea
but pleads that such clause is without legal force or effect, as it
is in conflict with the provisions of the CPA and
has the effect that
the defendant waives his rights. Therefore it is a term that is
unfair, unreasonable and/or unlawful and which,
in terms of the CPA,
is null and void, and without effect. The plaintiff’s response
to this is that the provisions of the
CPA, as amended, do not afford
the defendant a defence in view of his failure to exhaust all t he
remedies available to him in
terms of the CPA. Therefore this court
does not have the jurisdiction to determine the matter in respect of
this defence, alternatively
this defence put forward by the defendant
is incomplete.
[4]
The applicable provision of the CPA is section 69, which provides as
follows:
“
69
Enforcement of rights by consumer
A
person contemplated in section 4 (1) may seek to enforce any right in
terms of this Act or in terms of a transaction
or
agreement, or otherwise resolve any dispute with a supplier, by-
(a)
referring the matter directly to the
Tribunal, if such a direct referral is permitted by this Act in the
case of the particular
dispute;
(b)
referring the matter to the applicable
ombud with jurisdiction, if the supplier is subject to the
jurisdiction of any such ombud;
(c)
if the matter does not concern a supplier contemplated in paragraph
(b)
-
(i)
referring the matter to the applicable
industry ombud, accredited in terms of section 82 (6), if the
supplier is subject to
any such ombud; or
(ii)
applying to the consumer court of the
province with jurisdiction over the matter, if there is such a
consumer court, subject to
the law establishing or governing that
consumer court;
(iii)
referring the matter to another alternative
dispute resolution agent contemplated in section 70; or
(iv)
filing a complaint with the Commission in
accordance with section 71; or
(d)
approaching a court with jurisdiction over the matter,
if
all other remedies available to that person in terms of national
legislation have been exhausted.”
(my
emphasis)
[5]
The defendant invoked the provisions of the CPA in his plea and, in
its replication, the plaintiff correctly pointed out the
requirements
to be met in such an instance. Mr Greyling submitted in his Heads of
Argument that clause 7 of the agreement between
the parties entitles
but does not oblige them to engage in alternate dispute resolution,
from which I gather that the defendant
denies that he is obliged to
proceed as stipulated in section 69 of the CPA. From a careful
reading of clause 7, it is clear that
reference is made to
sections
134
,
136
and
137
(3) of the
National Credit Act 34 of 2005
, and not
the CPA. That argument is misplaced and cannot, therefore, avail the
defendant.
[6]
There is no indication in the papers that the defendant proceeded to
enforce his rights in terms of the CPA, the provisions
of which are
clear and unambiguous. He was obliged to exhaust all the remedies
provided for in
section 69(a)
– (c) before approaching a court
with jurisdiction to determine the matter. He has also made no
averments to this effect
in his papers. In the matter of
Joroy
4440 CC v Potgieter and Another 2016(3) SA 465 (FB),
the court as
per Reinders J, held at para [8] that the legislature was very
specific in prescribing the redress that a customer
has in terms of
this section. The court then referred to the Constitutional Court
case of
Chirwa v Transnet Ltd and Others
[2007] ZACC 23
; 2008(4)
SA 367 (CC)
, in which the principle was laid down that where a
specialised framework has been created for the resolution of
disputes, parties
must pursue their claims primarily through such
mechanisms. I align myself with the views in Joroy and Chirwa. The
defendant’s
reliance on the provisions of the CPA cannot avail
him and has no prospect of success, in the face of his failure to
pursue his
claim within the framework stipulated therein.
[7]
I deal now with the issue of the jurisdiction of this court to hear
this matter. The defendant raised as a special plea to the
plaintiff’s summons, that this court does not have jurisdiction
to hear this matter. The special plea is based on the provisions
of
clause 2.13 of the finance agreement, which provides as follows:
“
Vir enige
geregtelike prosesse wat die maatskappy mag instel teen die kliënt
op wie die Wet van toepassing is, om geldsomme
wat hom toekom
kragtens voorskotte en krediet aan die krediet-opnemer verleen en
voorgeskiet te verhaal, stem hy toe tot die jurisdiksie
van enige
bevoegde hof wat die maatskappy op besluit met dien verstande dat
indien in ‘n bepaalde geval die landdroshof gelyklopende
jurisdiksie het, die maatskappy verplig sal wees om die voormelde
geregtelike prosesse in te stel in die landdroshof waarin die
kredietopnemer woon of werk of waar goedere betrokke by die dispuut,
gewoonweg gehou word. Die maatskappy en die kliënt bly
egter te
alle tye geregtig, om sy/die kliënt se uitsluitlike diskresie,
enige geskil tussen die kliënt en die maatskappy
by wyse van
arbitrasie te laat besleg. In laasgenoemde geval geld die
bepalingsbvan klousule 2.14 hieronder”
The
essence of clause 2.13 is that in the event that the plaintiff
institutes any legal proceedings against the defendant for recovery
of monies owed to the plaintiff, he consents to the jurisdiction of
any competent court, on the understanding that in any given
case
where the magistrates’ court has concurrent jurisdiction, the
plaintiff will be obliged to institute such legal proceedings
in the
magistrates’ court where the defendant lives or works, or where
the goods, relevant to the dispute between the parties,
are
ordinarily held.
[8]
The defendant, in his special plea avers that, by virtue of the
agreement between the parties, this court does not have jurisdiction
to hear this matter because the plaintiff, in terms of clause 2.13,
was obliged to institute legal proceedings in the Smithfield
magistrates’ court, where the defendant lives and works. In the
alternative, the defendant pleads that section 90(2)(k)(vi)
(aa) of
the National Credit Act 34 of 2005 (the NCA) stipulates that where a
summons is issued in a High Court in circumstances
where the
Magistrates’ Court has concurrent jurisdiction, it is an
unlawful practice. The defendant pleads further that,
in terms of the
common law, this court, consequently, does not have jurisdiction to
hear this matter. In his address to court,
Mr Greyling conceded that
the plea in its current form avers that this court’s
jurisdiction has been ousted by clause 2.13.
His stance during oral
argument changed somewhat and he conceded that this court has
jurisdiction to hear the matter. He argued
that while this court has
jurisdiction, it should not entertain this matter, as plaintiff bound
itself, in terms of clause 2.13
to institute proceedings in the
Magistrates’ Court. Institution of the action in the High Court
is an abuse of the process
of court and deprives the defendant access
to justice in that the cost of litigation is higher in the High
Court.
[9]
I mention that after the defendant entered an appearance to defend,
the plaintiff brought an application for Summary Judgment.
This
application was adjourned on three occasions before it was finally
dealt with. Mr Tsanagrakis submitted, without any dispute
from the
defendant, that each adjournment was at the request of the defendant.
For the sake of completeness, I tabulate the dates
of the various
adjournments: the first adjournment was granted by Mbhele AJ (as she
then was) on 28 May 2015, when the matter was
adjourned to 11 June
2015. Van Zyl J adjourned the matter on 11 June 2015 to 25 June 2016.
On the latter date Williams AJ adjourned
the matter to 6 August 2015.
Jordaan J dealt with the summary judgment application and an
application for condonation for the late
filing of the defendant’s
affidavit opposing summary judgment, on 6 August 2015. An order was
made in respect of the condonation
application, the summary judgment
application was dismissed and the defendant was given leave to defend
the action. The defendant
was legally represented throughout the
summary judgment proceedings.
[10]
The High Court derives its jurisdiction from
section 21
of the
Superior Courts Act 10 of 2013
, and clearly does have jurisdiction
over the parties, particularly the defendant, in this matter. It has
been held in a number
of matters that where the Magistrates’
Court has concurrent jurisdiction with the High Court, instituting
action in the High
Court impacts negatively on the defendant’s
access to justice, as the costs of litigating in the High Court can
be prohibitively
high.
Section 90(2)(k)(vi)(aa)
of the NCA makes
it
unlawful to have a provision in a credit agreement consenting to the
jurisdiction of the High Court while the Magistrate’s
Court has
concurrent jurisdiction. This is a salutary provision as it aims to
ensure access to justice for ordinary members of
society, in keeping
with its objectives of promoting a fair and non-discriminatory
marketplace for access to consumer credit and
to prohibit certain
unfair credit and credit marketing pr actices. It seems that the
defendant misunderstood the provisions of
this section and averred in
paragraph 1.5 of his special plea that the section makes it unlawful
to issue summons in the High Court
where the Magistrates’ Court
has concurrent jurisdiction. This situation in this matter is not
that there is a provision
in the agreement consenting to the
jurisdiction of the High Court while the Magistrates’ Court has
concurrent jurisdiction,
but that there was agreement to proceed in
the Magistrates’ Court, which by implication acknowledges that
this court has
jurisdiction to hear the matter. The reliance on
section 90(2)(k)(vi)(aa)
is therefore misplaced.
[11]
Clause 2.13 appears to me to have been inserted in the agreement for
the benefit of the defendant. Although the provision stipulates
that
the plaintiff is obliged (verplig) to institute proceedings in the
Magistrates’ Court, this does not oust the jurisdiction
of the
High Court. (See
Firstrand Bank Ltd v
Horing and Another (2134/2017)
[2017] ZAFSHC 142
(31 August
2017
, a decision of this court).
The contention of the defendant in this regard, as it appear in the
papers, is that the
obligation of the plaintiff to institute
proceedings in the Magistrates’ Court excludes the jurisdiction
of this court. Parties
are not permitted to insert provisions in a
contract between them, which renders a statutory provision
inapplicable or unenforceable.
[Foize
Africa (Pty) Ltd v Foize Beheer BV and Others
2013 (3) SA 91
(SCA)].
Therefore, this plea raised by the
defendant will not avail him. In any event Mr Greyling correctly
conceded that the jurisdiction
of this court was not ousted by the
provisions of clause 2.13.
[12]
It is trite that the parties are bound by the pleadings in a matter,
and such determination as a court is required to make,
for example in
a special plea, must be based on the pleadings as they are presented
to the court. The plaintiff’s response
to the special plea
regarding jurisdiction and the averment that clause 2.18 is unlawful
because it is in conflict with the CPA,
arise out of the pleadings.
There were some submissions which Mr Greyling made from the Bar,
which do not appear from the pleadings,
namely that the institution
of proceedings in the High Court is an abuse of process, that the
matter should be transferred to the
Magistrates’ Court
(although the court may do so
meru motu
) and that the
submissions regarding the defendant’s financial standing. The
plaintiff had no opportunity to properly respond
to these submissions
and the court is constrained to pay any heed to them. It seems that
Mr Greyling relies on the judgment in
Nedbank Limited v Thobejane,
case no. 84041/15 and 12 other matters,
emanating from the High
Court, Pretoria, an (as yet) unreported judgment, handed down in
September 2018, where the court dealt extensively
with the conduct of
banks in bringing mortgage bond foreclosure matters to the High Court
where in many instances the Magistrates’
Court has concurrent
jurisdiction. The court dealt extensively with the aspect of access
to justice for people who live in poverty
and socio-economic
inequality, and was of the view that if a party attempts to bypass
the Magistrates’ Court, such a litigant
is actually defying the
attempt by the legislature to bring justice to the people.
(Para
74).
In
paragraph 76
, the court held that it is an abuse
of process to allow a matter which can be decided in the Magistrates’
court to be heard
in the High Court, simply because it has concurrent
jurisdiction.
[13]
In my view, the type of cases dealt with in the Nedbank matter can be
distinguished from the present matter. The defendant,
in this case,
was legally represented from the outset, when litigation commenced in
the High Court. The summons was issued on 26
March 2015 and the
defendant entered an appearance to defend on 15 April 2015. His legal
representatives clearly had access to
and perused the plaintiff’s
summons and the finance agreement (which was attached to the summons)
containing all the provisions
upon which the plaintiff’s cause
of action was based, including clause 2.13. The plaintiff, in
its replication, specifically
pleaded that the defendant, either
expressly or tacitly, by his actions and/or his conduct during the
litigation, submitted himself
to the jurisdiction of this court. As
indicated earlier, the defendant on three occasions requested the
court to adjourn the summary
judgment application, and such request
was made an order of court on each occasion. The defendant then filed
an application seeking
condonation for the late filing of his
affidavit opposing summary judgment. On the fourth appearance in
respect of the summary
judgment application, such condonation was
granted, the summary judgment application was dismissed and the
defendant was given
leave to defend the action.
[14]
The defendant did not, even once, in his affidavit opposing summary
judgment or during any of the four appearances in court
raise any
objection to the jurisdiction of this court. Mr Tsangarakis pointed
out that parties held a conference in terms of Uniform
Rule 37
on 19
September 2017. The minute of such conference records under the
heading “Oorplasing Na ‘n Ander Hof” (Transfer
to
Another Court) the notation “Nie van toepassing nie” (not
applicable). It is clear that as late as September 2017,
it was not
within the contemplation of the defendant to object to the
jurisdiction of this court, and that he in fact submitted
himself to
the jurisdiction of this court. There is a long line of cases in our
law where it has been held that where a person
submits himself by a
positive act or negatively by not objecting to the jurisdiction of
the court, he may confer jurisdiction on
that court
[Mediterranean
Shipping Co v Speedwhale Shipping Co Ltd and Another 1986(4) SA 329
(D); Bonugli and Another v Standard Bank of South
Africa (Ltd)
2012(5) SA 202 (SCA)]
[15]
The Bonugli matter dealt with the issue of submission to the court’s
jurisdiction in an application for summary judgment.
The court at
para 23, citing the Mediterranean Shipping case with approval, held
that the second appellant in that case “invoked
the
jurisdiction of the trial court for relief which was, as prayed for
by him, to dismiss the Respondent’s application for
summary
judgment with attorney and client costs and to grant him leave to
defend the respondent’s action on its merits. On
the facts of
this case we therefore conclude that by not contesting the competence
of the court below to grant summary judgment,
the Second Appellant….,
by his conduct, unequivocally submitted to its jurisdiction…”
This
is the exact situation that prevails in the present case. The
defendant, by seeking and obtaining an order to dismiss the
plaintiff’s application for summary judgment and grant him
leave to defend the matter on its merits, without contesting the
jurisdiction of the court to do so, “unequivocally submitted to
its jurisdiction”. As I indicated earlier, clause 2.13
was
inserted for the benefit of the defendant, but he waived that benefit
when he submitted himself to the jurisdiction of this
court. It
does not, in my view, now avail the defendant to contest the
jurisdiction of this court. However, in view of the
defendant’s
concession in respect of this court’s jurisdiction to hear this
matter, it is not necessary to deal further
with this aspect. Mr
Greyling submitted that the court should transfer this matter to the
Magistrates’ court for hearing,
in the interests of granting
the defendant access to justice.
[16]
This matter had reached the advanced stage of being set down for
trial before this court, when the parties decided to separate
the two
issues mentioned above. While this court has the power to order the
transfer of the matter to the Magistrates’ Court,
this, to my
mind, would serve little purpose at this stage. The issue of costs
seems to be the main motivating factor for the defendant’s
request to transfer the matter to the Magistrates’ Court. In a
case such as this, where the plaintiff agreed to institute
proceedings in the Magistrates’ Court but proceeds in the High
Court, the court should show its displeasure by making the
appropriate costs order. The plaintiff, can hardly complain,
therefore, if costs are awarded on the Magistrates’ Court
scale.
The award of costs is in the discretion of the court hearing a
matter, and while the practise is that costs follow the result, it
is
open to the court to deviate from the usual practice by making a
costs order that it deems equitable or one that will demonstrate
its
displeasure at the conduct of a party to the proceedings. I note that
in this matter the defendant agreed to pay costs
on the
attorney and client scale
[17]
In summary, therefore, I find that the two points raised by the
defendant and separated for determination by this court, were
not
well taken. For the reasons set out above, the pleas that this court
lacks jurisdiction to hear this matter, and that clause
2.18 is
unenforceable due to being in conflict with the CPA must fail.
[18]
In the circumstances, the following order is made:
18.1 The two special
points raised by the defendant are dismissed.
18.2 The defendant is
ordered to pay the plaintiff’s attorney and client costs on the
Magistrates’ Court scale.
________________
S.
NAIDOO, J
On
behalf of Applicant: Adv. S Tsangarakis
Instructed
by: Symington & De Kok
169B
Nelson Mandela Drive
Bloemfontein
(Ref:
PAC Jacobs/MLC0762)
On
behalf of Respondent: Adv. P Greyling
Instructed
by: Steenkamp & Jansen Inc
63
Krause Street
Oranjesig
Bloemfontein
(R
Coetzee/CIL2/0001)