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[2017] ZAKZDHC 25
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Naidu v Reserve Bank of the Republic of South Africa and Another (9898/2016) [2017] ZAKZDHC 25 (22 June 2017)
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IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL LOCAL DIVISION,
DURBAN
CASE
NO: 9898/2016
In
the matter between:
SIVAPRAGASEN
KRISHANAMURTHI
NAIDU
APPLICANT
and
THE
RESERVE BANK OF
THE
FIRST
RESPONDENT
REPUBLIC
OF SOUTH AFRICA
FIRST
RAND BANK
LIMITED
SECOND
RESPONDENT
ORDER
[1]
The application is dismissed with costs, such costs are to include
the costs of 29 November 2016 and 17 March 2017 and any reserved
costs.
JUDGMENT
HENRIQUES
J
Introduction
[1]
This is an urgent application instituted by the applicant,
[1]
in which he seeks the following
relief:
‘
(a)
To revoke and suspend the trading licenses of Wesbank, a division of
First Rand Bank Limited. A bank duly registered and incorporated
in
terms of the banking laws of the Republic of South Africa.
(b)
Reserve Bank of the Republic of South Africa to reprimand and
enlighten Wesbank of their failure to comply with the Banking
Code of
Conduct, Government regulatory acts as set down by law in the
Republic of South Africa.
(c)
To pay the applicants claim in reconvention dated 24 day of November
2011 an Annexure hereto attached as (A) for the sum of
(four million
and six hundred thousand rand with interest as claimed.)
(d)
Costs of suit.’
[2]
The application which is opposed by the first respondent was
subsequently also opposed by the second respondent,
[2]
pursuant to an application to
intervene, which was initially enrolled for hearing on 29 November
2016. On that date, Moodley J issued
orders in which the main
application was adjourned
sine
die,
and issued directives
for the filing of affidavits in the application to intervene as well
as the main application. The applicant
opposed the application to
intervene by First Rand Bank Limited.
[3]
When the intervention application served before me on 17 March 2017,
the applicant consented to First Rand Bank Limited intervening
in
these proceedings. Further orders were issued by consent, the effect
of which was to render the main application ripe for hearing
as an
opposed motion.
[3]
[4]
I must make mention of the fact that even though the applicant did
not file an affidavit in opposition to First Rand Bank Limited
intervening, I was satisfied that the second respondent had
established that it had a direct and substantial interest in the
subject
matter of the litigation and was entitled to intervene
despite the notice of opposition by the applicant. The nature of the
relief
which the applicant sought impacted directly on the second
respondent and it was entitled to intervene in these proceedings.
Background
facts
[5]
In order to contextualise the application it is necessary to briefly
set out the facts which precipitated this application.
[4]
In 2011, the second respondent
instituted action against the applicant in this court under case no.
9097/2011 in which it sought
inter
alia
the return of a
vehicle, a Mitsibushi Triton 3,5 MPI club cab, which it had financed
for the applicant pursuant to a credit instalment
agreement in March
2010. The action was instituted as a consequence of the applicant’s
alleged failure to make payment of
the instalments for a period of
time. The action was defended by the applicant who filed a claim in
reconvention as well as various
other counterclaims.
[6]
At the trial which proceeded before Ndamase AJ, the second respondent
consented to the applicant’s application for the
adjournment of
his counterclaims, and the trial proceeded in respect of the second
respondent’s claim.
[7]
The only remaining issues in the trial were whether or not the
applicant had received the s 129 notice in terms of the
National
Credit Act 34 of 2005
and whether or not he was in arrears. During
the course of his evidence, the applicant acknowledged receipt of the
s 129
notice as well as the fact that he was in arrears.
[8]
The trial court therefore had to decide whether the applicant was
justified in not paying the monthly instalment, his defence
at the
time being that he had given notice in terms of the ‘take-a-break’
clause.
[9]
The trial court rejected the applicant’s defence that he was
justified in not paying his monthly instalments as a consequence
of
the ‘take-a-break’ clause and granted a money judgment in
favour of the second respondent. The applicant, who appeared
in
person at the trial, has not enrolled the counterclaims for hearing
nor has he appealed the orders granted in the action in
favour of the
second respondent.
[10]
Essentially, the applicant seeks the relief in his notice of motion
on the following grounds:
[10.1] The second respondent has
violated the banking code of conduct;
[10.2] The second respondent has
contravened its consumer installment contractual agreement;
[10.3] That as a consequence of
Wesbank’s contravention of the contractual installment
agreements terms and conditions,
the applicant has lost his family,
his health has deteriorated rapidly and he is in a serious financial
crisis.
[11]
The respondents essentially oppose the application and deny the
allegations contained in the applicant’s founding affidavit.
The grounds of opposition to the relief sought by the applicant are
essentially the same.
Issues
[12]
The issues which the court has to determine in this application are
the following:
[12.1] Does this court have
jurisdiction;
[12.2] Whether claim (c) which
is the claim for a money judgment is
lis pendens,
alternatively
res judicata
;
[12.3] Whether the court is
competent to grant the relief sought in the notice of motion?
SARB’s
application for condonation for the late filing of its answering
affidavit
[13]
Before dealing with these issues, it is necessary to deal with a
matter raised by the first respondent in its answering affidavit,
being an application for condonation for the late filing of its
answering affidavit. It is common cause that the affidavit has
been
filed out of time. It is trite that the first respondent must show
good cause as to why the late filing of its answering affidavit
should be condoned. ‘Good cause’ requires the first
respondent to explain the delay sufficiently so as to enable the
court to understand how it came about and to assess the first
respondent’s conduct and motive and, in addition, for the court
to satisfy itself that the first respondent has a
bona
fide
defence.
[5]
[14]
Having regard to the first respondent’s answering affidavit
[6]
and the explanation set out, it is my
view that the first respondent has satisfactorily explained the
delay. It has not been dilatory
or reckless, nor has it intentionally
disregarded the rules of court. I am also not convinced that the
first respondent’s
non-compliance with the rules has been done
intentionally to delay and frustrate the applicant in his claim. In
addition, I am
satisfied that the first respondent has a
bona
fide
defence to the
application. Consequently, to the extent necessary, the first
respondent is granted condonation for the late filing
of its
answering affidavit.
[7]
Applicant’s
opposition to the filing of the first respondent’s heads of
argument
[15]
At the hearing of the matter the applicant filed a notice entitled
‘Urgent Attention Denying First Respondent Heads of
Argument’.
In essence he objected to the first respondent having served its
heads of argument. The notice recorded this was
not provided for in
the court order of 17 March 2017. Even though the order of 17 March
2017 made provision for the filing of heads
of argument, Mr
Thatcher
SC
, who appeared for the
first respondent, agreed to argue the matter on the affidavits of the
first respondent only.
[16]
The preliminaries dealt with, I now propose to deal with the grounds
of opposition raised by the respondents.
This
court has no jurisdiction to hear the application
[17]
The applicant submits that this court has jurisdiction to deal with
this application as the cause of action which was the subject
matter
of a trial in this court under case no. 9097/2011 arose in the
jurisdiction of this court.
[18]
In terms of
s 21(1)
of the
Superior Courts Act 10 of 2013
, a division
has jurisdiction over all persons ‘residing or being in,
and in relation to all causes arising . . .within,
its area of
jurisdiction. . . .’
[19]
It is common cause that the first respondent has its registered
address and principal office in Pretoria.
[8]
[20]
In terms of s 3 of the Banks Act 94 of 1990, the following provisions
are made:
‘
For
the registration as banks. . .and for the other purposes of this Act
there shall, as part of the Reserve Bank, be an office
in Pretoria
called the Office for Banks, and at the head of such office shall be
a person to be styled the Registrar of Banks.’
[21]
The Office for Banks has its offices in Pretoria.
[9]
The Office for Banks, headed by the
Registrar of Banks, is a body which deals with the registration of
banks and the general administration
of the Banks Act. Both the
Office for Banks and the Registrar of Banks are based in Pretoria and
form part of the first respondent.
[22]
First Rand Bank Limited does not have a registered address nor does
it have its principle place of business within the area
of
jurisdiction of this court.
[10]
The respondents make the point that
the applicant has not in either his founding affidavit or in his
replying affidavit alluded
to any allegations to disclose that this
court has jurisdiction to deal with the application, all the more so
if one considers
the relief which the applicant seeks in the notice
of motion in paragraph (a), namely that the first respondent revoke
and suspend
the trading licences of Wesbank.
[23]
The first respondent and the Office for Banks have their registered
address and their principal offices in Pretoria at 370
Helen Joseph
Street, Pretoria.
[24]
It is common cause that the application was served at a branch of the
first respondent. This branch is essentially a note depot
and is used
for the distribution of cash. It is neither the registered address
nor the principal office of the first respondent
nor the Office for
Banks.
[25]
In the absence of sufficient allegations as to why the court has
jurisdiction, this point
in limine
appears to be a good one
and the application falls to be dismissed on this ground alone. In
the event that I am wrong in this conclusion,
and given the fact that
the applicant appears in person, I propose to deal with the remainder
of the grounds of opposition raised
and the relief sought.
The
revocation and suspension of Wesbank’s trading licences
[26]
In paragraphs 2 to 9 of his founding affidavit, the applicant submits
that the first respondent ought to suspend and revoke
the second
respondent’s trading licences for the following reasons:
‘
2.
Wesbank
has violated the Banking Code of Conduct, including government
regulatory acts as set down by law, by illegal activities
in varying
summaries. Not limited to the aforesaid acts (paragraph two).
3.
Wesbank
contravened its consumer installment contractual agreement as set
down, with the applicant.
4.
The
Banking Code of Conduct has been contravened by Wesbank employee’s
unethical behaviour, misrepresentation and deceit.
5.
The
Banking Code of Conduct has been contravened in the High Court DBN
KZN, by Wesbank. Wesbank representative Consul disobeyed
the uniform
court rules as laid down by this high court. Further Wesbank
representative Consul abused the rule fair and equal justice
for all.
Wesbank and its representative’s violated the Banking Code of
Conduct in serious white collar irregularities.
.
. .
7.
After
complying with all Wesbanks contractual installment agreement terms
and conditions the applicant is still harassed
by Wesbank’s
representatives, at random. The applicant has not received a
repudiated letter in regard to his claim, from
Wesbank, to date. As a
result of Wesbank’s actions the applicant lost his family,
health deteriorated rapidly and is in a
serious financial crisis, his
status as platinum banker destroyed.
.
. .
9.
As
a consequence of the aforementioned it is compulsory that the Reserve
Bank of South Africa enforce the order as claimed by the
applicant.
Wesbank has violated the Banking Code of Conduct, committed serious
white collar illegalities and disobeyed the uniform
Rules of the High
Court Durban KZN, including disregard for law and order, justice as
set down in the Republic of South Africa.
The applicant has therefore
made a direct application to the Reserve Bank, in view of the
aforesaid.’
[11]
[27]
In essence, the applicant has alleged that the second respondent is
guilty of ‘unethical behaviour, misrepresentation
and deceit’.
This is a conclusion drawn by the applicant and no specific acts in
support of such conclusion have been enumerated
in the founding
affidavit.
[28]
The reference to a ‘trading licence’ by the applicant is
incorrect. In terms of s 17 of the Banks Act, the Registrar
of Banks
may on application by an institution for registration as a bank,
grant such an institution authorisation to operate as
a bank.
Sections 23 and 24 of the Banks Act set out the procedure and
circumstances under which the Registrar of Banks has the
power to
cancel or suspend the registration of a bank. Section 25 of the Banks
Act provides that the Registrar of Banks may on
application to the
High Court apply for an order cancelling or suspending the
registration of a bank.
[29]
Consequently, the Banks Act only makes provision for the Registrar of
Banks to make such application and not the applicant.
As such, the
applicant does not have
locus
standi
to bring such
application to obtain the suspension, alternatively, the cancellation
of the registration of a bank, by a court.
[30]
Having regard to the founding affidavit and replying affidavits and
argument presented at the opposed motion, the applicant
has not
reported the matter to the Registrar of Banks or to the first
respondent. The closest he has come is to reporting the matter
to the
banking ombudsman, who has indicated that it will not intervene in
these proceedings. Consequently, there could be no basis
upon which
the Registrar of Banks or the first respondent could apply to the
court for the revocation and suspension of Wesbank’s
‘trading
licences’.
[31]
I may add that it would appear that the applicant’s complaint
against the second respondent lies in the fact that it
obtained a
judgment against him in May 2014 pursuant to a trial. It is common
cause that the applicant has not prosecuted an appeal
against that
judgment.
The
order seeking the South African Reserve Bank to reprimand and
enlighten Wesbank of their failure to comply with the Banking
Code of
Conduct
[32]
The applicant does not set out any facts in support of this relief
and it appears that he relies on paragraphs 2 to 9 of his
founding
affidavit. Firstly, the applicant refers to the Banking Code of
Conduct. The respondents have pointed out that there is
no Banking
Code of Conduct and the applicant must have intended to refer to the
Code of Banking Practice. This is a voluntary code
agreed to by those
banks who are members of the Banking Association of South Africa.
Such code deals with standards of banking
services to clients which
banks agree to uphold and/or dispute resolution mechanisms in the
event of the bank not resolving a client’s
complaint to the
latter’s satisfaction. In such instances, the ombudsman for
banking services may thereafter be approached.
[12]
[33]
Neither the Registrar of Banks nor the first respondent has the power
to reprimand banks. Section 6(6) of the Banks Act empowers
the
Registrar of Banks to issue a directive to a bank. Such directive may
be in writing which may constitute a non-financial sanction
or a
directive requiring the bank to cease or refrain from engaging in any
act, omission or course of conduct or to perform such
acts necessary
to remedy a situation.
[34]
The relevant portion of s 6(6) provide as follows:
‘
(a)
The
Registrar may from time to time, in writing, after consultation with
the relevant bank. . .issue a directive to such a bank.
. .regarding
the application of the Act.
(b)
The
directive contemplated in paragraph
(a)
may
include the issuing of a non- financial sanction or a directive
requiring a bank. . .within the period specified in the
directive,
to-
(i)
cease
or refrain from engaging in any act, omission or course of conduct or
to perform such acts necessary to remedy the situation;
(ii)
perform
such acts necessary to comply with the directive or to effect the
changes required to give effect to the directive; or
(iii)
provide
the Registrar with such information and documents relating to the
matter specified in the directive.’
[35]
It would appear that it is only the Registrar of Banks who has the
power to decide whether to issue such directive and this
decision can
only be taken after having consulted with the bank in question, and
only in so far as the Banks Act applies to the
conduct complained of.
Such decision by the Registrar of Banks is also subject to internal
review procedures as provided for in
s 9 of the Banks Act. In
addition, the Registrar of Banks’ power to cancel or suspend a
bank’s registration or decision
to issue a directive is an
administrative action falling solely within the discretion of the
Registrar of Banks. Consequently,
the court cannot direct the
Registrar to take such a decision to issue a directive.
[36]
There is no indication in the founding affidavit that the applicant
has reported any conduct of the second respondent to the
Registrar of
Banks warranting the issue of a directive. In addition, the applicant
has not put up a copy of his ‘direct application’
to the
first respondent nor does he in his application papers set out any
facts from which this court or the Registrar of Banks
can conclude
that such complaint must firstly be dealt with by the second
respondent, failing which the Registrar of Banks. In
addition, any
complaint that he may have falling within the Code of Banking
Practice must be referred to the banking ombudsman.
[37]
Consequently, the applicant has not made out a case for the relief he
seeks in paragraph (b) of the notice of motion.
The
order in which the applicant seeks a money judgment in terms of which
the respondents are directed to pay the applicant’s
claim in
reconvention dated 24 of November 2011 in the sum of R4 600 000
with interest as claimed
[38]
The respondents take the view that this claim for a money judgment is
either
res judicata
or
lis pendens.
At
the hearing of the matter the applicant conceded that the claim in
reconvention forms the subject matter of the action in this
court
under case no. 9097/2011. The applicant confirmed that his claim in
reconvention was adjourned
sine
die
when the trial
proceeded in May of 2014 and that he has not been able to enrol the
counterclaims for hearing as the court file had
been archived.
[39]
Consequently, it would appear that the claim in reconvention is
pending before the court and is consequently
lis
pendens.
[40]
In addition, such claim in reconvention has only been filed as
against the second respondent and not against the first respondent
and the applicant cannot obtain this relief against the first
respondent. In the premises, this court cannot grant the relief
sought in paragraph (c) of the notice of motion.
Conclusion
[41]
It would appear that this court cannot grant any of the relief prayed
for in paragraphs (a) to (c) of the notice of motion.
In addition, in
light of the fact that the applicant has been unsuccessful in this
application, there is no reason to depart from
the normal rule that
costs follow the result.
[42]
In the premises the order I issue is the following:
The
application is dismissed with costs, such costs are to include the
costs of 29 November 2016 and 17 March 2017 and any reserved
costs.
______________________
HENRIQUES
J
Case
Information
Application
heard on:
18 April 2017
Judgment
handed down on:
22 June 2017
Applicant
appears in person:
Mr S K Naidu
[...],
Durban 4091 KZN
Cell:
[...]
Appearances
Counsel
for the first respondent:
Mr G R Thatcher
SC instructed by:
T
G R Attorney
c/o Shepstone & Wylie
24 Richefond Circle
Ridgeside Office Park
Umhlanga Rocks
Email: smith@wylie.co.za
Tel
no.
031 – 575 7000
Counsel
for the second respondent: Mr M C
Tucker instructed by:
Strauss,
Daly Incorporated
9
th
Floor
Strauss Daly Place
41 Richefond Circle
Ridgeside Office Park
Umhlanga Rocks
Ref: V Naidu/cn/WES69/1143
[1]
The application papers were issued on
30 September 2016.
[2]
In the first respondent’s
answering affidavit deposed to on 23 November 2016, the non-joinder
of First Rand Bank Limited
was raised.
[3]
Although the applicant challenged the
validity of the orders of Moodley J, he agreed to the order allowing
First Rand Bank Limited
to intervene, for the sake of expediency and
as he had been advised by the Judge President in writing of what
steps to follow
should he wish to challenge Moodley J’s
orders.
[4]
This has been gleaned from the papers
filed, more specifically the founding affidavit filed by the second
respondent in the application
to intervene.
[5]
Silber v Ozen Wholesalers (Pty)
Ltd
1954 (2) SA 345
(A) at
353A;
Dalhouzie v Bruwer
1970 (4) SA 566
(C) at 571A and 572C.
[6]
Deposed to by Robert Urry, paras
35-56 thereof.
[7]
I may add that at the hearing on 17
March 2017, all parties concerned including the applicant, indicated
that they were desirous
of having the matter heard as a matter of
urgency. In the light of the applicant’s difficulties with the
orders granted
by Moodley J on 29 November 2016, and the fact that
he wanted an investigation conducted in regard thereto, (page 48 of
the indexed
papers), I deemed it prudent to issue further orders in
relation to the late filing of the affidavits and also allow the
second
respondent to intervene in these proceedings after obtaining
the applicant’s consent. It is for this reason that such
orders
were granted to that effect by consent.
[8]
Indexed papers at 19, paras 22-25.
[9]
Indexed papers at 53, paras 6-7.
[10]
Indexed papers at 53, paras 6-7.
[11]
Indexed papers at 5-6.
[12]
The applicant appears to have made an
approach to the ombudsman for banking services who has declined to
intervene.