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[2016] ZAFSHC 11
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Locke v Absa Bank (5214/2014) [2016] ZAFSHC 11 (28 January 2016)
SAFLII
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Certain
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IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Application
Number: 5214/2014
In
the matter between:
WILLEM
JOHANNES NATHANIEL
LOCKE
Applicant
IDENTITY
NUMBER: [.........]
and
ABSA
BANK
Respondent
Registration
number: 1986/004794/06
HEARD
ON:
12 NOVEMBER 2015
JUDGMENT
BY:
BOKWA, AJ
DELIVERED
ON:
28
JANUARY 2016
A
INTRODUCTION
[1]
An instalment sale agreement was concluded on 07/12/2010 by the
applicant and the respondent in respect of a 2009 Chevrolet
Cruze 1.6
LS motor car. The applicant was obliged to pay 72 instalments
monthly of R3 409.79 to the respondent.
[2]
During 2014 the applicant was involved in a divorce as a result, his
financial position changed dramatically which resulted
in him falling
in arrears with the payment of his monthly instalment in respect of
the vehicle to the respondent. As a result,
the respondent
instituted legal action against the applicant by issuing summons on
25/11/2014. As it is apparent from the
sheriff’s return
of service, the summons were served by affixing to the main entrance
of the applicant’s address being
the applicant’s
domicilium citandi et executandi
, at [.........], Vaalpark.
[3]
On 05/02/2015, Judgment by Default was granted in favour of the
respondent against the applicant for inter alia, return of the
vehicle, 2009, Chevrolet Cruze 1.6 LS with engine number F16D34596361
and chassis number KL1PD5D65AK534378. Although applicant
claims
that he did not receive the summons, he does not deny that at the
time that the summons were served, he still lived at the
same address
namely [.........], Vaalpark.
[4]
In these proceedings, applicant seeks rescission of Judgment granted
against him on 05/02/2015. There was also an arrangement
between the parties that although judgment was obtained the
respondent would pend a warrant of execution for delivery of goods
pending the outcome of the application for rescission of Judgment.
[5]
In the circumstances, it is the applicant’s contention that he
is entitled to rescission on the basis that he did not
receive the
summons firstly, and secondly, that he has a good defence to the
claim of the respondent on the basis that the respondent
had not
complied with the provisions of
Section 129(1)(a)
of the
National
Credit Act, 34 of 2005
read with
Section 130
,
65
(2) and
168
of the
same act.
[6]
It is not in dispute that the respondent addressed a notice complying
with
Section 129
(1)(a) of the NCA to the applicant and that this
notice, was delivered to the applicant at his chosen
domicilium
.
What is in dispute is that the said notice was not brought to the
attention of the applicant because, although sent to the
applicant’s
chosen
domicilium citandi
, it was received by a person other
than the applicant who is also unknown to the applicant.
[7]
Furthermore it is also not in dispute that the respondent made
various attempts to notify the applicant that it was in arrears
with
its monthly instalments. The respondent filed its opposition on
17/04/2015 and proceeded to file the opposing affidavit
on
22/05/2015. Applicant replied on 18/06/2015 and the matter was
ripe for argument on 12/11/2015.
B
FACTS
Applicant’s
case
[8]
The applicant seeks rescission of judgment granted by default against
it in favour of the respondent on 05/02/2015 on the basis
that he did
not receive the summons. Applicant submits that it has a good
defence in law to the claim of the respondent because
the respondent
did not strictly comply with the provisions of
Section 129
(1)(a) of
the National Credit Act 34 of 2005 (the NCA), read with Section 130,
65(2) and 168, which it submits had to be given
effect to, prior to
the respondent issuing summons and obtaining default judgment as a
consequence thereof.
[9]
Applicant contends that the respondent’s failure to serve the
Section 129 (1)(a), resulted in the action not being brought
to its
attention. Had the said notice been served in compliance with
the provisions of the act, applicant would have rectified
the arrears
which at the time was R5 845.66, after which it would have
performed in terms of the agreement, until the vehicle
was fully
paid.
[10]
The applicant attached annexure “C” which is a copy of
the respondent’s proof of delivery, stating that the
letter in
terms of Section 129 of the NCA, was sent by way of an e-telegram and
was received by one FJ Koene who is described as
the son-in-law of
the applicant. Applicant deny that he knew the recipient of the
letter. Needless to say, the e-telegram
delivery report
indicates that the address of delivery is [.........], Vaalpark and
the postal code being 1947.
[11]
The applicant contends that when the respondent applied for default
judgment against it, it did not comply with the provisions
of Section
129 read with 130 of the Act which states that a credit provider must
“draw the default to the notice of the consumer
in writing and
propose that the consumer refer the credit agreement to a debt
counsellor…”. The applicant submits
further in its
heads of argument that “In clause 7 of the Respondent’s
particulars of claim in its application for
default judgment, the
Respondent indicates to the Honourable Court that it complied with
the provisions of the National credit
Act, while in fact
, the
Respondent, on its own version did not comply with these provisions
as the Respondent caused the letter of Demand to be delivered
by way
of e-telegram, which is not a mode of delivery contemplated by the
National Credit Act, and
is therefore in conflict with
section 65(2)
and section 168 of the Act.
The contract entered into between the
Applicant and the Respondent does not provide for service by way of
e-telegram either.”
[12]
The applicant takes issues with the averments made by the respondent
in its application for default judgment especially paragraph
7 of the
particulars of claim where it is stated that “
A copy hereto
and marked Annexure “D” was delivered and signed for by
the Defendant
”. Applicant relies on the provision of
Section 168 of the NCA that there was no service upon it, which
provides as
follows:
“
Unless
otherwise provided for in this Act, a notice, order or other document
that, in terms of this Act must be served on a person
will have been
properly served when it has been either-
a.-
delivered to that person; or
b.-
sent by registered mail to that person’s last known address.”
The
Respondent’s Case
[13]
The respondent denies that the applicant has made out a case for the
relief it claims. Respondent submits that the applicant
did not
show any reason why the judgment granted on 05/02/2015 against the
applicant should be rescinded. Respondent submits
further that
it complied with the provisions of Section 129 (1)(a) read with 130
and 65(2) of the NCA and therefore that proper
notice was given to
the applicant.
[14]
Respondent submits that it is common cause that the applicant fell
into arrears with the instalments of its motor vehicle:
“
I
confirm that I was in arrears when my vehicle was attached and
removed.”
Respondent
therefore submits that it did comply with the peremptory requirements
of Section 129 of the NCA and was entitled to issue
summons and
obtain judgment.
[15]
In his confirmatory affidavit filed in support of the respondent’s
opposing affidavit, Mr. Johan Buys provides
details on
various attempts made to collect payments from the applicant and
these include:
“
11.1
12 September 2014 - A visit to the Applicant home and a
card s left with a worker on the
premises;
11.2
17 September 2014 - A further visit to the home of the
Applicant and a letter
is left in the post box;
11.3
3 October 2014 - A further visit to the home of the Applicant
and a letter is left
with a lady working in the house;
11.4
10 October 2014 - A further visit to the home of the Applicant
and a final letter
is left with a young lady;
11.5
17 November 2014 - A voice message was left for the Applicant; and
11.6
17 November 2014 - Cell phone message to Applicant
informing him that
his account is in arrears.”
[16]
In response to this allegations the applicant submits in reply as
follows in paragraph 8 at page 66:
“
The
content of paragraph 12.1 through to 12.4 is noted. I
acknowledge that I was in arrears on the date judgment was granted
in
my absence. The remainder of the averments are irrelevant to
this application in that averments, whether factually correct
or not,
cannot and do not cure the fact that I never received the letter of
demand in terms of section 129. I was supposed
to have been
given an opportunity to bring the arrears in respect of the vehicle
up to date or to avail myself of the rights afforded
to every debtor
in terms of
section 129
of the
National Credit Act. The
procedures set out in terms of
section 129
are REQUIRED PROCEDURES
and the credit provider, the Respondent, must therefore comply.”
C
ISSUES TO BE DETERMINED
[17]
What needs to be determined in the present case, is whether a notice
under
Section 129(1)(a)
of “the NCA” is “delivered”
within the meaning of the provisions of “the NCA” to the
address
selected by the consumer, irrespective of whether it comes to
the attention of the consumer.
D
THE LAW
The
National Credit Regulation Act 34 of 2005
[18]
Section 129(1)(a) deals with the required procedure before debt
enforcement. Subsection 1 reads as follows:
“
If
the consumer is in default under a credit agreement, the credit
provider –
(a)
May draw the default to the notice of the consumer in writing and
propose
that the consumer refer the credit agreement to a debt
counsellor, alternative dispute resolution agent, consumer court or
ombud
with jurisdiction, with the intent that the parties resolve any
dispute under the agreement or develop and agree on a plan to bring
the payment under the agreement up to date; and
(b)
subject to section 130(2), may not commence any legal proceedings to
enforce
the agreement before –
(i)
first providing notice to the consumer, as contemplated in paragraph
(a), or in section
86(10), as the case may be; and
(ii)
meeting any
further requirements set out in section 130.”
[1]
[19]
Section 130 of the NCA deals with debt procedures in a Court.
The relevant provision of 130 reads:
“
(1)
Subject to subsection (2), a credit provider may approach the court
for an order to enforce a credit agreement
only if, at that time, the
consumer is in default and has been in default under that credit
agreement for at least 20 business
days and –
(a)
at least 10 business days have elapsed since the credit provider
delivered a notice to the
consumer as contemplated in section 86(9),
or section 129(1), as the case may be;
(b)
in the case of a notice contemplated in section 129(1), the consumer
has –
(i)
not responded to that notice; or
(ii)
responded to the notice by rejecting the credit provider’s
proposals; and
(c)
in the case of an instalment agreement, secured loan, or lease, the
consumer has not surrendered
the relevant property to the credit
provider as contemplated in section 127.….
(3)
Despite any provision of law or contract to the contrary, in any
proceedings commenced in
a court in respect of a credit agreement to
which this Act applies, the court may determine the matter only if
the court is satisfied
that –
(a)
in the case of proceedings to which sections 127, 129 or 131 apply,
the
procedures required by those sections have been complied with;
……
(4)
In any proceedings contemplated in this section, if the court
determines that –
…
..
(b)
the credit provider has not complied with the relevant provisions of
this Act, as contemplated
in subsection (3)(a)…the court must
-
(i)
adjourn the matter before it; and
(ii)
make an appropriate order setting out the steps the credit provider
must complete before the matter may be
resumed”.
[2]
[20]
Both section 129 and 130 do not define acceptable modes of delivery
under the statute. It is section 65 and 168 which
deals with
delivery of documentation under the Act. Section 65 is entitled
“right to receive documents”.
Sub section 1 and 2
states as follows:
“
(1)
Every document that is required to be delivered to a consumer in
terms of this Act must be delivered
in the prescribed manner, if
any.
(2)
If no method has been prescribed for the delivery of a particular
document to a consumer,
the person required to deliver that document
must –
(a)
make the document available to the consumer through one or more of
the following mechanisms
–
(i)
in person at the business premises of the credit provider, or at any
other location designated
by the consumer but at the consumer’s
expense, or by ordinary mail;
(ii)
by fax;
(iii)
by email; or
(iv)
by printable web-page; and
(b)
deliver it to the consumer in the manner chosen by the consumer from
the options made available
in terms of paragraph (a).”
[3]
[20]
Section 96 entitled “Address for notice”, reads:
“
(1)
Whenever a party to a credit agreement is required or wishes to give
legal notice to the other party for any
purpose contemplated in the
agreement, this Act or any other law, the party giving notice must
deliver that notice to the other
party at –
(a)
the address of that other party as set out in the agreement, unless
paragraph (b) applies;
or
(b)
the address most recently provided by the recipient in accordance
with subsection (2)
(2)
A party to a credit agreement may change their address by delivering
to the other party
a written notice of the new address by hand,
registered mail, or electronic mail, if that other party has provided
an email address.”
[4]
[21]
Section 168, entitled “Serving documents”, states as
follows:
“
Unless
otherwise provided in this Act, a notice, order or other document
that, in terms of this Act, must be served on a person
will have
been properly served when it has been either –
(a)
delivered to that person; or
(b)
sent by
registered mail to that person’s last known address.”
[5]
[22]
Section 129 requires the credit provider to “draw the default
to the notice of the consumer in writing”.
However it
does not state how this must be done. The word deliver is not
defined in the NCA itself but in the Regulations.
The
Regulation contains the following definition:
“’
delivered’
unless otherwise provided for, means sending a document by hand, by
fax, by email, or registered mail to an address
chosen in the
agreement by the proposed recipient, if no such address is available,
the recipient’s registered address. _
_ _ _”
[6]
[23]
The purpose of the NCA is explicitly stated in section 3:
“
The
purposes of this Act is to promote and advance the social and
economic welfare of South Africans, promote a fair, transparent,
competitive, sustainable, responsible, efficient, effective and
accessible credit market and industry, and to protect consumers
by -
….”
[7]
[24]
The preamble to the NCA also indicates its purpose:
“
To
promote a fair and non-discriminatory market place for access to
consumer credit and for that purpose to provide for the general
regulation of the consumer credit and improved standards of consumer
information; _ _ _; to promote responsible credit granting
and use
and for that purpose to prohibit reckless credit granting; …”
[8]
Case
law
[25]
Section 129(1)(a) does not require the consumer to receive the
notice. The credit provider discharges its obligation
of
delivering the notice by sending it to the postal address selected by
the consumer.
Munien
vs BMW Financial Services (SA) (Pty) Ltd and Another.
[9]
At paragraph 22 of the judgment Wallis J. (as he then was) stated as
follows:
“
It
follows that in my judgment, provided the credit provider delivered
the notice in the manner chosen by the consumer in the agreement
and
such manner was one specified in section 65(2)(a), it is irrelevant
whether the notice in fact came to the attention of the
consumer.
As the consumer has the right to choose the manner in which notice is
to be given it is for the consumer to ensure
that the method chosen
will be one that is reasonably certain to bring any notice to his or
her attention.”
[26]
When delivering the majority judgment, Mhlantla AJA, in the matter of
Kubyana v Standard Bank of South Africa LTD
[2014] ZACC 1
at
paragraph 31 stated as follows:
“
These
statutory provisions were comprehensively treated in
Sebola
and I agree with what was stated there. For present purposes
three features merit emphasis. First, there is no general
requirement that the notice be brought to the consumer’s
subjective attention by the credit provider, or that personal service
on the consumer is necessary for valid delivery under the Act.
I am minded to agree with the High Court that, had the legislation
meant either of these aspects to be a necessary condition for
delivery, express provision would have been made for them.
Thus, while the section 129 obligation on the credit provider is to
“draw the default to the notice of the consumer in writing”,
this obligation is discharged, in the words of section 65(2), by
“[making} the document available to the consumer”.
This accords with section 130(1)(b)(i), which provides that a credit
provider may seek to enforce its rights if a consumer has
not
responded to a section 129 notice. While a credit provider must
take certain steps to ensure that a consumer is adequately
informed
of her rights, such a credit provider cannot be non-suited or
hamstrung if the consumer unreasonably fails to engage with
or make
use of the information provided. In other words, it is the use
of an acceptable mode of delivery – the taking
of certain steps
to apprise the consumer of the notice – which the statute
requires of the credit provider, not the bringing
of the contents of
the section 129 notice to the consumer’s subjective
attention.”
[10]
[27]
The Judge went further at paragraph 35 and stated as follows:
“
If
the credit provider complies with the requirements set out in [31] to
[33] above and receives no response from the consumer within
the
period designated by the Act, I fail to see what more can be expected
of it. Certainly, the Act imposes no further hurdles
and the
credit provider is entitled to enforce its rights under the credit
agreement. It deserves re-emphasis that the purpose
of the Act
is not only to protect consumers, but also to create a “harmonised
system of debt restructuring, enforcement and
judgment,
which
places priority on the eventual satisfaction of all responsible
consumer obligations under credit agreements.”
Indeed,
if the consumer has unreasonably failed to respond to the section 129
notice, she will have eschewed reliance on the consensual
dispute
resolution mechanisms provided for by the Act. She will not
subsequently be entitled to disrupt enforcement proceedings
by
claiming that the credit provider has failed to discharge its
statutory notice obligations.”
[11]
E
ANALYSIS
[28]
The applicant’s main argument is that the respondent failed to
comply with section 129 of the National Creditors Act
34 of 2005 in
that the purported notice was not drawn to the notice of the
applicant in writing. Conversely the respondent
submitted that
it complied with the peremptory requirements of section 129 and 130
and 65(2) of the NCA.
[29]
It is not the applicant’s case that it vacated its chosen
domicilium citandi et executandi
address. The summons
were served by affixing at the applicant’s chosen address in
line with the sheriff’s return
of service. The instalment
agreement states as follows at paragraph 25:
“
25
CHOSEN ADDRESS
25.1
The Purchaser chooses the address set out above under his name as his
address at which all notices and legal
process in terms of this
agreement may be served on or delivered to him.”
[30]
The question is therefore whether the fact that the notice was not
received personally by the applicant, though delivered at
his chosen
address, means that the respondent did not comply with section 129
(1)(a). In terms of section 65(2)(b)
“
the
notice was delivered to the consumer in the manner chosen by the
consumer”
.
He
gave this address in the instalment agreement. Although the
notice was received by one FJ Koene, for the purpose of section
65(2)(b) it was delivered to the applicant’s chosen address.
[31]
The applicant does not deny that the respondent made various attempts
to bring to his attention that he was in arrears with
his
instalments. These attempts are listed in the respondent’s
opposing affidavit briefly as follows:
“
A
visit to the applicant’s home by the respondent’s agent,
on 12/09/2014 where a card was left with a worker found on
the
premises. A visit on 17/09/2014 where a letter was left in his
post box. A further visit to the home of the applicant
on
03/10/2014 where a letter was left with a domestic worker. A
visit on 10/10/2014 to applicant’s home where a final
letter of
demand was left with a young lady. Voice messages left on the
applicant’s cell phone informing him his account
was in
arrears.”
[32]
In the replying affidavit the applicant does not deny that all this
efforts were made or that they did not come to his attention
and that
he failed to give any acceptable responses. In my view, this
cannot be the actions expected out of a reasonable
consumer.
The purpose of the Act was not to give unreasonable consumers an
unfair advantage against credit providers acting
in good faith to
recoup monies owed to them. In the dictum of Mhlantla AJA in
Kubyana v Standard Bank at paragraph 38, the
judge stated as follows:
“
However,
it is also the case that a consumer will not be entitled to rely on a
credit provider’s alleged non-compliance with
section 129 if
she has been unreasonably remiss in failing to engage with the
notice. The notion of a “reasonable consumer”
implies obligations for both credit providers and consumers.”
[12]
[33]
Mr. Anton Roux on behalf of the respondent, submitted that when the
notice in terms of section 129(1)(a) was delivered to the
address of
the applicant, the post office workers were on strike at the time.
The respondent elected to dispatch the notice
by way of e-telegram.
It is common cause that the e-telegram notice was delivered at the
chosen address of the applicant.
It is not in dispute that the
applicant was residing at that address. What is in dispute is
that the recipient of the notice
is known or related to the
applicant. Applicant denies that the said letter came to his
attention in the circumstances.
[34]
I am of the opinion that the notice delivered to the applicant was
within the provision of section 65 of the NCA. In
the premise,
the respondent has complied with the provision of sections 129(1)(a)
and 130 of the NCA.
[35]
It is common cause that the applicant fell into arrears with the
instalment of his motor vehicle. In my view the applicant
does
not have any reasonable prospects in succeeding in his application of
rescission of the judgment granted against him.
The balance of
convenience is not in the applicant’s favour. The
respondent will be prejudiced if it cannot take the
vehicle in
question in its possession to avoid the risks of depreciation in
value, wear and tear and possible damages.
[36]
In the result the application is dismissed with costs.
_______________
I.R.O
BOKWA, AJ
On
behalf of the applicant:
Ms. Magda Vermeulen
Instructed by:
C/O
Shardelow Smith Attorneys
On
behalf of the respondent:
Mr. LA Roux (Counsel for Respondent)
Instructed by:
Strauss Daly
Inc.
/PC
[1]
The
National Credit Act 34 of 2005
[2]
National
Credit Act 34 of 2005
[3]
The
National Credit Act 34 of 2005
[4]
The
National Credit Act 34 of 2005
[5]
The
National Credit Act 34 of 2005
[6]
Regulation
1
, Definitions
[7]
The
National Credit Act 34 of 2005
[8]
The
National Credit Act 34 of 2005
[9]
2010
(1) SA 549
(KZD) at 555 A – I.
[10]
Kubyana v Standard Bank of South Africa LTD [2014] ZACC 1
[11]
Kubyana
supra
[12]
Kubyana
supra