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[2018] ZANCHC 90
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Sonnenberg v Wesbank, A Division Of Firstrand Limited (1888/2017) [2018] ZANCHC 90 (23 November 2018)
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IN THE HIGH COURT OF SOUTH
AFRICA
NORTHERN CAPE DIVISION,
KIMBERLEY
Case
number: 1888/2017
Date
heard: 26-10-2018
Date
delivered: 23-11-2018
In
the matter between:-
LAETITIA
HENRIETTE
SONNENBERG
APPLICANT
AND
WESBANK,
A DIVISION OF FIRSTRAND LIMITED
RESPONDENT
JUDGMENT
GROENEWALDT
AJ
INTRODUCTION
[1]
The
applicant, Laetitia Henriette Sonnenberg, brought an application for
rescission of a default judgment against the respondent,
Wesbank
being a division of Firstrand Limited, a company with limited
liability incorporated in terms of the laws governing South
Africa.
[2]
In
the application dated 09 February 2018, the applicant moves for an
order in the following terms:
2.1
Condoning the late filing of the
application;
2.2
That the default judgment granted by the
Registrar of the above Honourable Court on 25 October 2017 under case
number 1888/2017
be set aside;
2.3
That the respondent pays the costs of
the application only in the event of opposition;
2.4
Further and/or alternate relief.
[3]
The applicant argued that the
application was brought in terms of Rule 42 (1) (a) of the Uniform
Rules of Court (where an order
is granted erroneously in the absence
of any party affected thereby) as well as the Common Law.
[4]
The kernel of the respondent's
opposition is that the judgment was not granted erroneously nor did
the applicant disclose a bona
fide defence.
BACKGROUND
[5]
The respondent issued summons
against the applicant on 16 August 2017, which action is premised on
an online instalment sale agreement
(hereafter referred to as "the
agreement") for the financing of a Chrysler 300 SRT8 motor
vehicle.
[6]
Default judgment was granted in
favour of the respondent on 25 October 2017 by the Registrar of this
court.
[7]
The applicant lodged this
application on 12 February 2018 whereafter it was opposed by the
respondent.
FACTUAL
MATRIX
[8]
It is common cause that the
applicant fell in arrears with her monthly instalments in terms of
the agreement.
[9]
She avers that she fell into
arrears after experiencing financial hardship due to adverse
business- and several unforeseen personal
circumstances beyond her
control.
[10]
According to the applicant, the summons came to her attention on 24
October 2017 by accident whilst
she was surveying a chest of drawers.
She states in her founding papers that the summons was placed amongst
other documents by
her domestic worker. The domestic worker had
extracted the summons from the gate where it was attached to,
presumably by the sheriff.
[11]
According to the founding papers, the
applicant made a payment arrangement with a certain Ms Viljoen, a
temporary employee at the
respondent's attorneys which entailed the
payment of a R20 000.00 by the end of October 2017 and the balance of
the arrears in
three further monthly instalments. This was in
addition to the normal monthly instalment in terms of the agreement.
The payment
of R20 000.00 was however only made on 02 November 2017.
[12]
The applicant further contends that the
said Ms Viljoen advised her that the action proceedings that were set
in motion would be
suspended. These contentions are denied by the
respondent. Needless to say that the default judgment was granted on
25 October
2018.
[13]
The applicant avers that knowledge of
the default judgment came to her attention on 07 November 2017 when
the Sheriff arrived at
her residence to attach the vehicle which
forms the subject matter of this case. Respondent's attorneys
subsequently suspended
the operation of the warrant of execution
against the property to investigate the authenticity of the alleged
payment arrangement.
After concluding that no such arrangement was
made, respondent's attorneys issued the sheriff with instructions on
07 December
2017 to execute upon the warrant.
[14]
The applicant then instructed attorneys
on 15 January 2018 pursuant to a further attempt by the sheriff to
execute the writ. Correspondence
ensued between the respective
attorneys and on 17 January 2018 after further settlement offers were
negotiated, the respondent's
attorneys advised applicant's attorneys
that their client is not prepared to accept a settlement offer and
that it regarded the
agreement cancelled.
[15]
Subsequent thereto, this application was
instituted.
[16]
In light of the finding that I make
hereunder the question whether Rule 42(1)(a) applies, becomes
superfluous.
COMMON
LAW
[17]
In
Promedia
Drukkers and Uitgewers ( Edms )Bp k v Kaimowitz and Others
1996 (4)
SA 411
at p417J
Van Reenen J
states:
"In terms of the common
law,
a
court
has
a
discretion
to grant rescission of judgment where sufficient or good
cause
has been shown.
But it is clear that in principle and in the long-standing practice
of our courts, the two essential elements of
sufficient
cause
for rescission of
a
judgment
by default are:
26.1
That the party seeking
relief must present
a
reasonable
and acceptable explanation for his or her default.
26.2
That on the merits such
party has
a
bona
fide defence, which prima facie, carries
some
prospects of
success".
An application under the common
law should be brought within a reasonable time and what is reasonable
depends upon the circumstances
of a case.
WILFUL
DEFAULT
[18]
The applicant's intentions in bringing
an application of this nature can only be determined by investigating
whether the applicant
would be successful if the order is granted or
whether the application is a trojan horse where the real intentions
are clandestinely
hidden.
[19]
It is also trite that there is no
exhaustive definition of what constitutes good cause and the courts
are enjoined with a discretion
which must be exercised judicially
after a proper consideration of all the relevant circumstances are
made.
[20]
To consider whether the applicant has a
reasonable explanation for her default, I have to take into account
whether it was her intention
to defend the action throughout and what
her conduct was when she discovered that judgment was granted against
her. From the papers
it is clear that the applicant did not twiddle
thumbs by allowing the court process to unravel before her. She
actively participated
in engaging the respondent to salvage the
situation albeit be it after the judgment was granted. Furthermore, I
have also favourably
taken into account that the application for
rescission was brought within a reasonable time having due regard to
the circumstances
of the case. I am satisfied that the applicant has
given a reasonable and acceptable explanation for her delay.
[21]
It is also trite that a weak explanation
for default can be cancelled out in instances where a litigant is
able to put up a bona
fide defence which has not merely some
prospect, but a good prospect of success.
[1]
BONA
FIDE DEFENCE
[22]
In this respect the applicant has placed
reliance on the fact that the agreement was reckless as provided for
in Section 80 of the
National credit Act No 34 of 2005 in that the
credit provider failed to conduct an assessment as required by
Section 81(2) of the
aforesaid Act.
[23]
Section 81(2)(a)(iii) provides as
follows:
"A
credit provider must
not enter into
a
credit agreement without first taking
reasonable step' to assess
a)
The proposed customer's
(i)
General understanding and
appreciation of the risks and costs of the proposed credit, and of
the rights and obligations of
a
consumer under
a
credit agreement;
(ii)
Debt re-payment history
as
a
consumer under credit agreements;
(iii)
Existing financial means,
prospects and obligations".
[24]
In terms of Section 78(3) (b) of the
National credit Act:
"The financial means,
prospects and obligations of any other adult person within the
consumer's immediate family or household,
to the extent that the
consumer, or prospective consumer, and that other person customarily-
(i)
Share their respective
financial means: and
(ii)
Mutual/y bear their
respective financial obligations."
[25] It is
common cause that the financial means, prospects and obligations of
the applicant were assessed
in terms of the National Credit Act that
I alluded to above. In this respect the following affordability
assessment was performed
to determine the applicant's financial
means:
Net
Income
R21 676.33
Monthly Expenses
Rental
R 1 6 500.00
Rates Water and
Electricity
R 500.00
Total
Expenses
R1 7000.00
Disposable
Income
R4 676.33
[26] From
the above disposable income, the applicant has to service her
obligation in terms of the agreement
to the tune of R4 552.64 leaving
her with a net income of R123.69. The less said about the
affordability of this transaction the
better.
[27]
From the above affordability assessment
conducted by the respondent, it is abundantly clear that the credit
provider did not factor
the applicant's necessary monthly living
expenses such as food, policies, clothing, transport and the like in
conducting the assessment.
Common sense dictates that these expenses
must have been sourced from other means. The applicant contends that
these necessary
expenses are met by her husband who confirmed it to
the credit provider when the application for credit was made.
[28]
The respondent in its opposing papers
submits that it had no obligation to investigate the financial
affairs of the applicant's
husband as the parties are married out of
community of property. In this regard I refer to paragraph 87 of the
respondent's opposing
affidavit which reads:
"I submit that by virtue
of the Applicant's marital regime, the respondent had
no
obligation to
investigate anyone else's financial situation".
[29]
I find this submission unconvincing and
without merit to say the least. Surely it is clear from the
affordability assessment of
the applicant that she is unable to meet
her necessary monthly expenses and that those expenses must be
covered by another source.
In paragraph 63 of her founding papers the
applicant says the following:
"Although my husband
was
present when I
applied for vehicle finance, he was merely to confirm the household
expenses which are normally paid by him. No further
enquiry and/or
assessment were
done
of my husband's
financial means, prospects
and
obligation. I
respectfully submit that the respondent did not take the required
reasonable steps in its affordability assessment
before entering into
the agreement with
me."
[30]
Respondent's counsel, Advocate Olivier,
quite rightly submitted that those expenses were considered on the
premise of the applicant's
own papers but conceded, correctly so in
my view, that no assessment was done as far as the applicant's
husband's financial means,
prospects and obligations are concerned.
The respondent should therefore have taken reasonable steps to assess
the applicant's
husband's financial means, obligations and prospects
as envisioned by Section 78(3) (b) of the National Credit Act.
[31]
There is therefore merit in the
applicant's defence based on the respondent's own concession that it
had failed to assess the financial
means, prospects and obligations
of the applicant's husband, which individual is an adult person
within the consumer's immediate
family and household circle. The only
plausible inference that can be drawn from the facts is that the
applicant and her husband
share their financial obligations as
envisaged by Section 78(3) (b) of the National Credit Act. It
serves
mention that a bald averment that an
agreement is reckless is not sufficient to sustain a defence of
non-compliance with Section
81 (2)(a)(iii) of the National Credit
Act. The defence should be corroborated by facts as is the case in
this matter.
[32]
I am therefore satisfied that the
applicant has put up a bona fide defence which not merely has some
prospect, but reasonable prospect
of success. In terms of Section 83
of the National Credit Act, a Court can impose stringent measures to
remedy reckless agreements.
This is however for a trial court to
determine.
[33]
In the result the applicant has shown
good cause for a rescission order under the common law.
COSTS
[34]
I can find no reason why the practice of
costs following the cause should not be perpetuated in this instance.
I
accordingly make the following order:
1.
That the default judgment
granted by the Registrar of the above Court on 25 October 2017 under
the above case number be set aside.
2.
That the Respondent pays
the costs of this application.
S
J GROENEWALDT
ACTING
JUDGE
Northern
Cape Division, Kimberley
[1]
Melane v Santam Insurance Co. Ltd 1962(4) para E-F Pg 532