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[2018] ZANCHC 24
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Ndlazi v Wesbank, A division of Firstrand Bank Limited (260/2017) [2018] ZANCHC 24 (25 April 2018)
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IN
THE HIGH COURT OF SOUTH AFRICA
(Northern
Cape High Court, Kimberley)
CASE
NO: 260/2017
DATE
HEARD: 20 APRIL 2018
DATE
DELIVERED: 25 APRIL 2018
In
the matter between:
NDLAZI,
JOSEPH
Applicant
and
WESBANK,
A DIVISION OF FIRSTRAND BANK
LIMITED
Respondent
Coram:
Olivier
J
JUDGMENT
Olivier
J:
[1.]
During
October 2015 the applicant, Mr Joseph Ndlazi, and the respondent,
Wesbank, a division of Firstrand Bank Limited, concluded
a written
instalment sale agreement in terms of which it was agreed that the
respondent would finance the applicant’s purchase
of a
vehicle. It seems to be common cause that the particular
agreement constituted a credit agreement, to which the provisions
of
the
National
Credit Act
[1]
(“
the
Act
”)
are applicable.
[2.]
During
June 2016 the applicant fell into arrears with the payment of the
monthly instalments in respect of the particular account.
When
the applicant received the respondent’s notice in terms of
section 129(1) of the Act he contacted the respondent’s
attorneys, and was referred to the respondent.
[3.]
The
respondent subsequently instituted an action, claiming
inter
alia
cancellation and an order for the repossession of the vehicle.
Summons was served on the applicant’s brother on 14 February
2017. According to the applicant he received the summons on
either 15 or 16 February 2017. The applicant then again
contacted the respondent’s attorney, and was once again told to
deal directly with the respondent.
[4.]
According
to the applicant he then made an offer, telephonically, to a
representative of the respondent to pay an amount of R150 000.00,
but it was rejected. I will revert to the alleged offer in due
course.
[5.]
The
applicant then appointed debt counsellors and applied for debt
review. The debt counsellor directed various e-mails to
the
respondent’s attorney, to which I will also revert.
[6.]
On 6
March 2017 default judgment was granted,
inter
alia
for cancellation of the agreement and repossession of the vehicle.
[7.]
During
March 2017, and within the applicable prescribed period, the
applicant lodged an application for rescission of the default
judgment. That application was withdrawn during June 2017,
according to the applicant due to certain deficiencies in his
founding affidavit in that application, more specifically because the
contents of that affidavit were according to him not correct
in all
respects. Also the defence raised by the applicant in the present
application was not raised in that affidavit.
[8.]
The
applicant lodged the present application on 30 November 2017, seeking
rescission, and also condonation for the fact that this
application
was brought outside the period prescribed in Uniform Rule 31(2)(b).
[9.]
It is
trite that, for purposes of condonation, the applicant has to explain
the fact that the application was brought outside the
prescribed
period and has to satisfy this court that he has a
bona
fide
defence, and that the granting of condonation should not cause
prejudice that could not adequately be addressed with an appropriate
costs order
[2]
.
[10.]
It is
equally trite that an applicant seeking rescission furthermore has to
explain the fact that no notice to defend was filed
within the
applicable prescribed period, and must show that the application for
rescission is
bona
fide
and not for purposes of delay
[3]
.
[11.]
Before
considering the evidence in this application it must unfortunately be
said that differences between the contents of the applicant’s
founding affidavit in the initial application and his founding
affidavit in the present application have put a question mark against
his credibility.
11.1
In his first affidavit the applicant claimed not have received the
notice required by section 129(1) of the Act, while he now
admits
having received it prior to the service of summons.
11.2
His admission in the present affidavit that he received the summons
well within the
dies
induciae
is irreconcilable with the version in his first affidavit,
according to which the existence of the summons had only come
to his
attention after the default judgment had already been granted.
11.3
According to the first affidavit the offer upon which his defence is
now based was made to the respondent’s attorney
(and not to the
respondent itself), and only after the default judgment had already
been granted (and in other words at a time
when the instalment sale
agreement had already been cancelled by virtue of one of the orders
in that judgment). His present
version is of course that the
offer was made during a telephone call to the respondent itself and
that it was made before default
judgment, and therefore before
termination of the agreement and, rather significantly, within the
time constraints of section 129(3)
of the Act, upon which his defence
is now based.
11.4
The applicant blames these glaring inconsistencies on his “
state
of mind
”
at the time of deposing to the first affidavit. He does not
elaborate on what his “
state
of mind
”
was or on what had caused it. He does not attempt to describe
the contradictions as innocent mistakes, which raises
the question
whether he had intentionally (albeit because of his “
state
of mind
”)
misrepresented the facts.
11.5
The absence of a proper explanation in this regard is exacerbated by
the blatant misrepresentation in the present founding
affidavit
regarding the applicant’s knowledge of respondent’s
banking details, an issue to which I will also revert
in due course.
[12.]
In
explanation of the fact that the present application has not been
lodged timeously the applicant states that, after the withdrawal
of
the initial application for rescission, his attorney required “
a
further deposit
”
before proceeding with the new application, and that he was only able
to raise the necessary funds by 27 October 2017.
[13.]
He offers
no explanation for what had become of the R150 000.00 that he,
according to him, had wanted to pay to the respondent,
and why the
further deposit could not have been paid from that money. The
amount of the “
further
deposit
”
that was allegedly demanded has not been disclosed.
[14.]
Be that
as it may, according to the applicant his attorney then arranged an
appointment with counsel for 2 November 2017.
According to him
a further consultation took place between his attorney and counsel on
21 November 2017, after which he was required
to provide “
further
instructions
”,
which he provided on 23 November 2017.
[15.]
As
already mentioned the present application was then lodged on
30 November 2017. The applicant’s explanation of
the
approximately 5 month period between the withdrawal of the initial
application and the lodging of the present application leaves
much to
be desired and was in my view justifiably labelled as “
bald
and sketchy
”
by the respondent’s counsel, Mr Olivier. The applicant
also did not bother to obtain a confirmatory affidavit
by his
attorney to substantiate his explanation.
[16.]
He
offered no explanation of attempts that he had made, if any, between
March and October 2017 to raise funds with which to pay
his attorney,
or of why he had not been able to raise the necessary funds before
the end of October 2017.
[17.]
In my
view the applicant has not “
furnish(ed)
an explanation of his default sufficiently full to enable the Court
to understand
”
[4]
why it took so long to lodge this application.
[18.]
Mr
Olivier also contended that the applicant’s failure to give
notice of his intention to defend the action was wilful, because
he
knew that he had to give such notice if he wished to defend the
action, and what the period was within which he would have to
do so,
and because on his own version (of the rejection of his offer) he
would have known that the respondent was not going to
budge.
[19.]
The
applicant denied having been aware of the obligation to give notice
of his intention to defend, or of the
dies
induciae
,
and claimed not to have read the summons “
in
detail
”
when he received it. When regard is had to the contents of the
e-mails that the debt counsellor sent to the respondent’s
attorney on behalf of the applicant, and the repeated references
therein to the issue of the
dies
induciae
,
it is very difficult to believe what the applicant says in this
regard.
[20.]
The
applicant’s version is also, however, to the effect that he
assumed that the debt counsellor was going to take up the
issue of
the summons with the respondent’s attorney.
[21.]
This
explanation is to an extent borne out by the debt councillor’s
e-mails, dated 3 and 10 March 2017, to the respondent’s
attorney, in which it was made clear that, if the respondent’s
attorney did not sign a form (apparently for purposes of debt
review)
the action would be defended.
[22.]
Receipt
of these e-mails is not disputed. The deponent for the
respondent, however, and apparently in explanation of the fact
that
the e-mails were never responded to, contends that summons had
already at that stage been issued and that, accordingly, the
particular debt had at the time of the receipt of the e-mails already
been excluded from the debt review process in terms of the
Act.
[23.]
It
appears, in fact, from one of the e-mails that the application for
default judgment had already been lodged on 1 March 2017.
When the e-mail of 3 March 2017 was received, and made it clear that
the debt counsellor was under the misapprehension that debt
counselling was still possible, the respondent’s attorney did
not inform the debt counsellor of the fact that debt counselling
was
no longer possible, or of the pending application for default
judgment. Instead the application for default judgment
was
proceeded with, and default judgment obtained while the respondent’s
attorney knew that the debt counsellor was acting
on behalf of the
applicant and could relay to him the respondent’s intention to
proceed with an application for default judgment.
In terms of
Uniform Rule 19(5) the applicant would at that stage still have been
entitled to file a notice of his intention to
defend, which would
have prevented the granting of default judgment.
[24.]
Even if
it is to be assumed that the applicant knew of the requirement to
file a notice of intention to defend within a specific
time, there is
no reason not to accept that the applicant believed that the debt
counsellor was going to deal with the summons
and its requirements.
It is, as already said, to an extent borne out by the contents of the
debt counsellor’s e-mails.
[25.]
On the
evidence I am therefore not prepared to find that the applicant had
wilfully and deliberately decided not to defend the action.
[26.]
This
brings me to the defence raised by the applicant. In his
founding affidavit it was set out as follows:
24.1
It was only when default judgment was granted, including an order of
cancellation of the agreement,
that the agreement was effectively
terminated.
24.2
Prior to that an offer had been made to the respondent “
to
pay an amount of R150 000.00 on
(the)
account
”.
This amount would have been sufficient to cover the arrears as far as
the instalments were concerned, and “
probably
also the … default administration charges and the reasonable
costs of enforcing the agreement up to that point in
time
”.
24.3
The offer was rejected by a representative of the respondent.
However, in terms of section 129(3)
of the Act the respondent had
been obliged to accept the offer, and to provide the applicant with
details of a bank account into
which he could make the payment.
24.4
Had the respondent done so, the applicant would have made the payment
and the agreement would then
in terms of the provisions of section
129(3) have been reinstated by operation of law.
[27.]
The
provisions of section 129(3) of the Act read as follows:
“
Subject
to subsection (4), a consumer may at any time before the credit
provider has cancelled the agreement, remedy a default in
such credit
agreement by paying to the credit provider all amounts that are
overdue, together with the credit provider’s
prescribed default
administration charges and reasonable costs of enforcing the
agreement up to the time the default was remedied.”
[28.]
The
provisions of subsection (4) are not applicable in the present
matter.
[29.]
The
provisions of clause 13.6 of the agreement are, according to the copy
annexed to the founding affidavit, more or less similar
to those of
section 129(3), but the applicant has not in his founding affidavit
relied on (or even referred to) those contractual
provisions in
support of his application.
[30.]
Insofar
as the provisions of clause 13.6 may nevertheless be relevant, they
would have to be interpreted with the provisions of
section 129(3) of
the Act in mind
[5]
.
[31.]
As
regards the requirement in section 129(3) that the agreement must not
have already been cancelled, the present founding affidavit
contains
an averment that this agreement was cancelled when default judgment
was granted, which would of course have been before
the offer was
allegedly made. This averment was admitted in the answering
affidavit. It is also borne out by the fact
that the default
judgment included an order reading “
Cancellation
of the Agreement
”
(As opposed to an order confirming a prior cancellation).
[32.]
Mr
Olivier nevertheless argued that the agreement had in fact been
cancelled when the summons was served. In support of his
submission he referred to the averment in paragraph 18 of the
particulars of claim that “…
.
The Plaintiff (had) elected to cancel the Agreement, alternatively
cancels the Agreement herewith
”.
[33.]
It is
trite that service of summons could serve as notice of
cancellation
[6]
. The first
problem is, however, that the averment had been made in the
alternative. The order of cancellation may suggest
that the main
averment was abandoned, otherwise one would have expected an order
confirming a cancellation, rather than an order
cancelling the
agreement. Secondly the admission regarding the cancellation has not
been withdrawn. In the circumstances
I will proceed on the
basis that the agreement was cancelled through the default judgment.
[34.]
In his
founding affidavit the applicant failed to provide particulars of the
date of the telephone call during which he allegedly
made the offer,
or of the lady (representative of the respondent) to whom the offer
had been made. This left the respondent
with no other option
than to deny the allegation of an offer.
[35.]
In his
replying affidavit the applicant then claimed to have forgotten the
person’s name, but made an allegation that records
of his cell
phone calls would substantiate the fact of that call. To date
there has been no attempt to disclose those records,
or to explain
why it could not be done.
[36.]
The
question is also why the respondent would have rejected an offer of
an amount which would, it seems to be common cause, have
been far
more than the arrears.
[37.]
Even if
it were however to be assumed, for the moment, that the applicant has
provided sufficient detail of the alleged offer, the
defence would in
my view be destined to fail. The reason for this is simply that
the applicant did not in fact pay the arrears.
That is what the
provisions of section 129(3) required him to do. The provisions
required payment, and not merely a tender
of payment
[7]
,
and the fact that the representative of the respondent had according
to the applicant rejected the offer is therefore irrelevant
for
purposes of a defence based of the provisions of section 129(3) of
the Act. For the same reason the applicant’s
submission
that the respondent had been obliged to accept his offer, is wrong in
law.
[38.]
Mr Eilert
pointed out that that the
dictum
in the majority judgment in
Nkata
v FirstRand Bank Limited and Others
[8]
that the “
consent
or cooperation
”
was not required for the purposes of payment in terms of section
129(3) is not applicable here, because in that matter the
arrears had
been paid. Only the costs and charges remained outstanding.
He also pointed out that dicta in the main
judgment suggested that a
tender of payment would be sufficient
[9]
.
[39.]
Mr Eilert
did not, however, explain why, if the cooperation of the credit
provider is not required for purposes of payment of the
costs and
charges, it would be a requirement for payment of the arrears.
I can conceive of no reason why not. In fact,
the majority
Nkata
judgment was to the effect that, whereas payment of the overdue
amounts was a requirement of section 129(3), the same would not
apply
to costs and charges if the credit provider has not quantified and
demanded payment thereof first
[10]
.
[40.]
It is
clear from the majority
Nkata
judgment that, for purposes of section 129(3) of the Act, the
consumer’s position as regards the arrears must be
distinguished
from the consumer’s position as regards the costs
and charges. The consumer is expected to be the
“
protagonist
”
[11]
as far as the overdue amounts are concerned and is expected to know
or to establish what the total of these amounts is and to pay
it.
As far as costs and charges are concerned, and due to the nature
thereof, the provisions of section 129(3) do not require
the consumer
to “
take
proactive steps to find out what the costs would be for reinstatement
to be effected
”
[12]
.
If the credit provider has not itself taken steps to have the costs
and charges quantified and demanded, payment thereof
would not be a
requirement for reinstatement in terms of section 129(3).
[41.]
The
dictum
in para [70] of the main judgment in the
Nkata
matter that “
at
least
”
a tender of payment of the costs would be required for reinstatement,
must be seen in this light. It has nothing to
do with
requirement in section 129(3) of payment of “
all
amounts that are overdue
”.
[42.]
Section
129(3) affords a consumer who would otherwise, according to the
normal contractual principles, have committed a breach which
would
actually have afforded the innocent party with an election whether or
not to proceed with the agreement, an extraordinary
remedy. As long
as the innocent party has not yet cancelled the contract, the guilty
party would in effect be the one who has the
option which the
innocent party would normally have had, had the provisions of the Act
not been applicable
[13]
. In
my view the word “
paying
”
in section 129(3) should therefore be interpreted, as far as the
arrears are concerned, to require actual payment thereof.
This
is, in my opinion, also the clear implication of the majority
Nkata
judgment.
[43.]
It is not
necessary to consider whether the applicant’s alleged offer “
to
pay an amount of R150 000.00 on
(the)
account
”
could in any event be said to have been intended to convey not only a
tender of payment of the arrears, but also of whatever
the amounts of
the costs and applicable charges were. The fact is that no payment
was actually made in respect of the arrears.
Nothing prevented
the applicant from making payment, at the very least, of an amount
which would have fully settled the arrears
[14]
.
On his own version he knew that the amount which he according to him
had available, would have been sufficient to settle
the arrears.
There is in any event no indication in the founding affidavit that
the applicant had attempted to obtain particulars
of the arrears
amount before making the offer, or that he would not have been able
to obtain those particulars from the respondent.
[44.]
The
reason for not having made the payment is, in view of the above, not
really relevant, at least not for the purposes of section
129(3) of
the Act. The applicant’s version in this regard can in
any event, in my view, safely be rejected on the papers:
39.1
In his founding affidavit he emphatically stated “
I
did not, and still do not, possess any bank details of the
Respondent
”,
and explained that the monthly instalment “
was
always deducted by way of a debit order
”.
39.2
In the answering affidavit the respondent’s deponent exposed
this version to be complete false.
It appeared that the
applicant had in fact, in the past, on more than one occasion made
payments into the bank account of the respondent.
39.3
In his replying affidavit the applicant admitted those payments, and
also that what he had said in
his founding affidavit was
“
unfortunately
not correct
”.
No explanation was tendered for this and the only inference that can
be drawn is that the applicant had in his founding
affidavit
deliberately misrepresented the facts in this regard.
39.4
The new explanation in the replying affidavit,
viz
that the account of the respondent that the payment would have had to
be made to, would have depended on the particular bank the
payment
would be made from, makes no sense. He never said that the
R150 000.00 would have been paid from a different
account to the
one that he had in the past successfully made payments from.
[45.]
Even if
the applicant’s explanation of the late application could be
regarded as sufficient, which in my view is not the case,
his
application for rescission therefore stands to be dismissed on the
basis that he has not shown, even
prima
facie
,
that the defence raised by him would succeed were he to be given
leave to defend.
[46.]
As far as
costs are concerned the normal position would be that they would
follow the result. Mr Olivier conceded, however,
that on the
facts of this matter, and with specific reference to the fact that
the respondent’s attorney did not respond
to the e-mail of 3
March 2017, the respondent should bear its own costs. No costs
order will therefore be made.
[47.]
In the
premises the following order is made:
The
application is dismissed.
______________________
C
J OLIVIER
JUDGE
NORTHERN
CAPE DIVISION
For the
Applicant:
ADV A EILLERT
(Instructed by
L
K Sullaphen & Associates
)
For the 1
st
and 2
nd
Respondent:
ADV A D OLIVIER
(Instructed by
Duncan
& Rothman Inc.
)
[1]
34 of 2005
[2]
Compare
Pansolutions Holdings Ltd v P&G General Dealers and
Repairers CC
2011 (5) SA 608
(KZD) at 611F
[3]
Compare
Grant v Plumbers (Pty) Ltd
1949 (2) SA 470
(O) at 476
to 477
[4]
Silber v Ozen Wholesalers (Pty) Ltd
[1954] 2 All SA 296
(A)
at 302 (Also reported as 1954 (2) SA 345 (A))
[5]
Compare
De Bruin v Firstrand Bank Limited t/a Wesbank
[2017]
ZAGPJHC 132 (5 May 2017) para’s 38 and 51
[6]
See
Nedcor Bank Ltd trading
inter alia
as
Nedbank v Mooipan Voer & Graanverspreiders CC
[2002] 3 All
SA 477
(T) para 13;
Alpha Properties (Pty) Ltd v Export Import
Union (Pty) Ltd
1946 WLD 486
at 519-520
[7]
Compare
De Bruin,
supra
(footnote 4), para’s 39
and 40
[8]
[2016]
ZACC 12
para [104]
[9]
See para’s [68] to [70]
[10]
See para’s [123] to [125]
[11]
See para [104]
[12]
See [122]
[13]
Compare
Mostert v Firstrand Bank t/a RMB
Private Bank
(198/2017)
[2018] ZASCA
54
para [25]
[14]
If it is to be assumed, for the moment, that the applicant did not
have particulars of the charges and costs at that stage.