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[2017] ZANCHC 34
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Hattingh v Firstrand Bank Ltd (1299/16) [2017] ZANCHC 34 (28 April 2017)
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTHERN
CAPE HIGHT COURT
KIMBERLEY)
Case
number:
1299/16
Date
heard :
24/03/2017
Date
delivered:
28/04/2017
In
the matter of:
ANGUS
HATTINGH
APPLICANT
and
FIRSTRAND
BANK
LTD
RESPONDENT
Coram:
Snyders AJ
JUDGMENT
SNYDERS,
AJ
1.
This application was for the rescission of the default judgment
granted against applicant on 31 August 2016. Applicant
also prayed
for the setting aside for the result ant warrant of
execution.
2.
The opposition by the respondent is based on applicant's failure
to pass the criteria set out in r 31(2)(b)
of the Uniform
Rules of Court. In order for the rescission of judgment
application to pass muster, the applicant must
show good cause for
the rescission by:
2.1.
giving a reasonable explanation for the default;
2.2.
showing that the application is made
bona
fide;
2.3.
showing that he had a
bona fide
defence to the respondent's
claim which
prima facie
has some prospects of success.
3.
The applicant purchased a Nissan X Trail motor vehicle (the vehicle)
under financing from the respondent in terms of an
agreement dated 17
October 2014 ("the credit agreement"). During February
2016, the applicant approached JJM debt consellors
(JJM) to assist
him with his overindebtness as he was having difficulty in meeting
his financial obligations. To start the debt
review process, JJM sent
a notice in terms of s 86 of the National Credit Act, 2005 ("the
NCA") to the applicant's creditors,
including the respondent.
This s 86 notice informed the respondent that the applicant had
approached JJM to apply for debt review
in terms of s 86 of the NCA.
4.
On 08 March 2016, JJM sent an e-mail to the respondent with a
proposal to re-pay the debt in lower monthly installments. In said
e-
mail, JJM noted that the applicant could not afford to make any
higher re-payment offers and that any counter proposals will
be
declined.
5.
On 09 March 2016, the respondent replied to JJM's proposal and
intimated that the debt did not solve. This meant that the monthly
payments proposed over the period set out would not result in
the debt being extinguished. The respondent then rejected the
applicant 's proposal to re-pay the debt in monthly installments
of R3 100.00 over
89
months at 8.
75%
per annum. The respondent made a counter
proposal for the payment of 84 monthly installments of R3 311.28
at an interest rate
of 8.
75%.
6.
On the same day, JJM notified the respondent that the
account did solve and the counter proposal could thus
not be
accepted. The applicant and the respondent exchanged two more
e-mails during April and May 2016 with largely
the same content
as hereinbefore .
7.
On 02 May 2016, the respondent sent a s 86(10) notice in terms of the
NCA to JJM. Herein, the respondent intimated that
60
business days had expired since the applicant had
applied for debt counselling and
that they
were consequently terminating the debt review process
regarding the applicant's indebtedness
to the
respondent.
8.
On 22 June 2016, the respondent informed the applicant by way of e
mail that they would pursue legal action for the
recovery of
the vehicle. On 24 June 2016, the respondent re-sent the
counter proposal of 09 March 2016 to the
applicant. On 13 July
2016, JJM provided a further counter-proposal for 72
monthly payments of
R3 400.00 at an interest rate
of 8.75%. The respondent rejected this counter-proposal, stating that
the account did not solve.
9.
On 18 July 2016, JJM persisted that the account did
solve and that they would file a notice to defend
the
summons that was served on 06 July 2016 and requested a
copy thereof. The applicant did not defend
the action and
default judgment was granted against the applicant in
favour of the respondent on 31 August 2016 and
a warrant for delivery
issued for the vehicle.
10.
On 19 September 2016, the respondent's field agent contacted the
applicant and informed the applicant that he had
an
order for the return of the vehicle. On 26
September 2016, the applicant lodged a
debt review
application at the Swellendam Magistrate's Court, which application
was served on the respondent on 19 October 2016.
The applicant
confirmed that the respondent's field agent
contacted him on
26
October 2016 regarding the default judgment that was granted against
him and warrant for delivery.
11.
The issues to be decided are whether the applicant has filed this
application within the prescribed time periods and whether
the
applicant meets the requirements of r 31(2)(b) of the Uniform Rules
of Court.
12.
The respondent raises the point that this application was filed
outside of the time period set out in R 31(2). The rule
states that
the application for rescission of judgment must be made within 20
days after the applicant became aware of the judgment.
The respondent
avers that the applicant became aware of the judgment on one of the
following two dates:
12.1.
On 18 July 2016, when JJM was informed by the respondent
via e-mail
that the summons was served on 6 July 2016;
12.2.
Alternatively, on 19 September 2016, when the respondent's
field
agent advised the applicant that an order was granted by the court
for the return of the motor vehicle.
13.
The applicant alleges that JJM never informed him of the e-mail
from respondent dated 18 July 2016. To exascerbate matters, the
applicant left his
domicilium
address as set out in the credit
agreement and re located to Swellendam without notifying the
respondent of
his change of address. Paragraph 18 of the
credit agreement places a burden on the applicant to
notify
the respondent of a change
in the
domicilium
address. As it is, the summons
was served on 6 July 2016 at the address that applicant
no longer resided at.
14.
The respondent's first ground stands to fail as the test is not when
the applicant became aware of the service of the
summons but when the
applicant became aware of the default judgment. The field agent
merely notified the applicant on 19
September 2016 that an order had
been granted for the return of the vehicle. I am not satisfied that
his words adequently conveyed
the fact that default judgment had been
granted. The applicant became aware of the default judgment on 21
October 2016 when he
was contacted by the 2nd field agent. I am
of the view that this application was filed within the 20 day time
period prescribed
in r 31(2).
15.
In
Colyn
v Tiger Food Industries
[1]
,
the
SCA dealt with the default of an attorney to timeously respond to
proceedings on behalf of an applicant.
In
that matter, the applicant too sought the rescission of
default judgment granted against him. The court
held that the default by an attorney will only
assist an applicant to a
point.
16.
I am of the view that the appointment of a
debt counsellor is analogous to the
appointment of an
attorney. Both represent the consumer / client as an agent. A
debt counsellor is specifically appointed
to offer proffesional
advice on a consumer's methods of debt re payment. The debt
counsellor consults with the consumer, negotiates
with creditors on
his behalf, sends out prescribed notices in terms of the NCA,
institutes debts proceedings on behalf of the consumer
and appears in
court to take such orders on behalf of the consumer. In
causa
the applicant further explained his default with reference to his
belief that the negotiations between the debt counsellor and the
respondent were ongoing.
17.
The applicant in showing good cause for the default must have, by
necessity, included an explanation from JJM. Said debt
cousellor was
available in these proceedings but merely deposed to a confirmatory
affidavit without providing any futher
explanation
in either the founding or confirmatory affdavit. In
the
Colyn
v
Tiger Foods
mat ter, it was held as
follows:
"I
have reservations about accepting that the defendant's
explanation of the default as
satisfactory. I have
no doubt that he wanted to defend the action throughout and that it
was not his fault that the summary
judgment
application was not brought to his attention.
But the reason why it was not brought to his
attention is not
explained at all. The documents were swallowed up somehow in
the offices of his attorneys
as a result of what appears
to be inexcusable inefficiency on their part. It is difficult to
regard this as a reasonable explanation.
While the courts are slow
to penalize a litigant for his attorney's inept
conduct of litigation,
there comes a point
where there is no alternative but to make the client bear the
consequences of
the negligence of his
attorneys (Saloojee and Another NNO v
Minister of Community
Development).
Even
if one takes a benign view, the inadequacy of this
explanation may well justify a refusal of
rescission on
that account unless, perhaps, the weak explanation is cancelled
out by the defendant
being able to put
up a bona fide defence which has not merely some
prospect, but a good prospect of success
(Melane v Santam Insurance
Co
Ltd)."
[2]
18.
I find the applicant's explanation for the default herein
unsatisfactory, bordering on non-existant.
19.
•
The
applicant's failure to provide a satisfactory explanation for
the default may be ameliorated by a
bona
fide
defence
which has not merely some prospects, but
a good prospect of
success
[3]
20.
The applicant's defence was based on the respondent's failure
to comply with s 86(10) of the NCA when terminating
the debt
review. Applicant, correctly so, conceded that the respondent had
correctly and validly terminated the debt
review
in compliance with s 86( 10).
21.
The second leg of the defence was that the respondent had not
negotiated in good faith as required by s 86(5) of the NCA. This
section is mandatory on both the applicant and respondent who:
21.1
must comply with all reasonable requests to facilitate the
evaluation of the applicants indebtedness and the prospect
of
possible debt re-arrangement (s 86(5)(a));
21.2
negotiate in good faith regarding applicant's debt re
arrangement (s 86(5)(b));
22.
The applicant made an offer to the respondent to re-arrange the debt
on 8 March 2016 . It is common cause that on such
proposal, there was
a disclaimer indicating that no counter proposal can be entertained.
Nevertheless, the respondent provided
a counter-proposal to which the
applicant made a further proposal. The applicant's defence was that
the further proposal made by
applicant was more advantageous than
respondent's counter-proposal. Thus the respondent's failure to
accept same was a breach of
s 86(5) (b). The respondent did not
accept the counter-proposal as the debt did not solve. The applicant
tried, without success,
to prove that the debt did solve and provided
the respondent with the calculation to substantiate this. The
respondent's failure
to accept or understand such calculation cannot
be seen as a failure to negotiate in good faith.
23.
The respondent continued to attempt negotiations after the s 86 (10)
termination. I cannot find, as argued by applicant,
on a plain
reading of s 86 that this continued negotiation by the
respondent had revived the debt review process between
the parties.
Before the s 86(10) termination, the respondent was under an
obligation to negotiate in good faith. After the s 86(
10)
termination, the respondent was under no obligation but had a
discretion to negotiate with the applicant. The respondent's
conduct
after the termination notice was sent was merely to re-send the
counter-proposal dated 9 March 2016. This did not
show an
intention on the part of the respondent to distance itself from the
termination notice nor to have waived its rights in
terms of said
notice.
24.
On the facts, the applicant was unable to put up a defence that
had good prospects of success. His prospects
were,
in fact, so remote that it cannot be said he had a
bona fide
defence. Accordingly the applicant has not shown good cause for
the rescission.
25.
Section 130(4)(c) of the NCA stipulates that if a court determines
that a credit agreement is subject to pending debt
review, it
may adjourn proceedings sought to enforce the agreement until final
determination of the debt review. A pending debt
review is as defined
in part D Chapter 4 of the NCA. Therein, s 86 makes provision for a
debt review process, which the respondent
herein had validly
terminated. The legal framework creates a right for the respondent to
proceed with the enforcement of the credit
agreement and having
validly done so, I can find no reason to interfere.
26.
There is no reason why costs should not follow the result. I am
mindful of the applicant's financial position but can find no
justification why costs should not be awarded against the applicant.
WHEREFORE
THE FOLLOWING ORDER IS MADE:
1.
The application is dismissed with costs.
___________________
J.A
SNYDERS
ACTING
JUDGE
On
behalf of Applicant:
Adv J Els
(Hugo Mathweson & Oosthuizen Inc)
On
behalf of Respondent:
Adv Stanton (Mervyn Joel Smith)
[1]
Colyn v Tiger Food
Industries
Ltd t/a Meadow Feed Mills (Cape)
2003 (6) SA 1
(SCA)
at
para
12
[2]
At
para 12
[3]
Colyn
v Tiger Foods Industries at para 12