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[2016] ZAFSHC 75
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Moller v Standard Bank of South Africa Ltd (763/2014) [2016] ZAFSHC 75 (24 May 2016)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case number:
763/2014
In
the matter between:
HENDRICK
JOHANNES
MOLLER
Applicant
and
THE
STANDARD BANK OF SOUTH AFRICA
LTD
Respondent
HEARD
ON:
12 MAY 2016
JUDGMENT
BY: MOCUMIE,
J
DELIVERED
ON: 24 MAY 2016
MOCUMIE,
J
[1]
This is an application in terms of Rule 31(2)(b) of the Uniform Rules
of Court for rescission of a judgment by the applicant/defendant
granted in favour of the plaintiff/ respondent (respondent) under
Case No:763/2014, which judgment was obtained on 17 June 2014.
The application is opposed by the respondent.
[2]
The applicant is a resident of Bloemfontein and the defendant in the
main action wherein the default judgment was granted.
The
respondent is the Standard Bank of South Africa (Ltd) Pty (the bank)
a company duly registered and incorporated according
to the
laws of the Republic of South Africa,with its registered business
adress in Johannesburg, Gauteng Province.
[3]
The applicant sets out the background of the application in his
founding affidavit as follows. On 9 April 2010 he
entered into
an instalment sale agreement with the bank in terms of which the
latter sold him a motor vehicle, 2009 Cherry QQ3
0.8 TX with engine
number SQRS72FGBF00 527 and Chasis number LVVDB12A58D196731 for
an amount of R53 31 (fifty three thousand
three hundred and
eighty five rand and eleven cents).
[4] He alleges that
some time in 2012 he approached a debt counsellor and pursuant to
that, the latter approached the magistrate
court, Bloemfontein for an
application in terms of s88
[SD1]
(6) of the
National Credit Act 34 of 2005 (the NCA) for a restructuring of his
debts. The application was approved and an order
in his favour was
granted by the magistrate court on 1 March 2013.
Inter
alia
this order which can be found on page 35 of the paginated papers
stipulates ‘(d) Payment of R3000.00 will be made on a monthly
basis as from 29 April 2012 and will be paid to the appointed
National Payment Distribution Agency’
[5]
The applicant alleges further in his founding affidavit read with the
annexures appended thereto (annexures H1-H10) he complied
with the
order of March 2013 that it was the Payment Distribution Agency (PDA)
that defaulted in distributing the instalments
to the bank from
the date of effect. He was not aware that the PDA was not
distributing payments to the bank.
He admitted that there were
short payments for the month January until April. But intimated
that he complied with the March
2013 order. If given an opportunity
by this court,through rescinding the default judgment against him,he
will be able to prove
that defence in court.In other words, the
defence he is raising is
prima facie
bona fide
and has prospects of
succeeding in the main trial.
[6]
In its opposition of the application, the bank raises a point
in
limine
:Non-joinder of interested
parties.It avers that the applicant’s purported
bona
fide
defence is simply that he has
never defaulted on his payments in terms of the Restructrung of Debt
order. He then alleges that he
was not aware that no payments were
distributed by the PGA until such time that his debt counsellor was
called by the bank informing
her,the debt counsellor, in February
2016, of an attachment order already granted against him under Case
No 763/201 in order to
satisfy the judgment debt.
[7]
Mr Tsangirakis,for the bank,submitted that because the basis of the
applicant’s purported
bona
fide
defence is based on the verification and or confirmation of such
purported defence by the PGA;the applicant was duty bound to cite
the
PGA or even both the PGA as well as the debt counsellor. These are
parties who have a substantial interest in the subject matter.
He
submitted that,even in the event that this court may exercise it
discretion in favour of the applicant by not upholding the
point
in
limine
in its entirety, the applicant has also not appended any confirmatory
affidavits from the PGA and or the debt counsellor. To that
extent,
all the blame that he attributes to them , is hearsay evidence which
is not admissible in terms of the Law of Evidence
Amended Act.
[1]
Mr Tsangirakis, argued that on this basis alone, the application
ought to be dismissed with costs.
[8]
The requirements that an applicant must satisfy in a application for
rescission of a default judgment are set out in the seminal
decision
of
Grant
v Plumbers
[2]
where the court stated:
‘
An
applicant who applies under Rule of Court 43(Orange Free State)
[3]
to seet aside a judgment granted in default of appearance should with
the following requirements: (a) He must give s reasonable
explanation
of his default. If it appears that his default was wilful or that it
was due to gross negligence the Courtshould not
come to his
assistance. (b) His application must be
bona
fide
and not made with the intention of merely delaying plaintiff’s
claim. (c) He must show that he has a
bona
fide
defence to plaintiff’s claim. It is sufficient if he
makes out a
prima
facie
defence in the sense of setting out averments which, if established
at the trial. Would entitle him to the relief asked for.
He need not deal with the merits of the case and produce evidence
that the probabilities are actually in his favour.’
[9]
As a general rule, any person who has a substantial and material
interest in the subject matter should be joined in the
proceedings.
[4]
Particularly , as in this case, the applicant’s purported
bona
fide
defence hinges entirely on the other parties not before the court.
Surely, the decision that will be made by any court on
the basis of
the applicant’s alleged
bona
fide
defence will have a direct impact on them in that they may be held
responsible for this default to a large or small degree.
Thus
the matter cannot be disposed of without them before the court to
either confirm the applicant’s alleged
bona
fide
defence or deny it. This general rule has been cristalised in
Rule 10 (1) of the Uniform Rules of Court.
[5]
In their absence at least confirmatory affidavits from them should
have been appended and put before this court.
[10]
There are divergent schools of thought on whether a court has a
discretion in a matter of this nature i.e whether it can decide
to do
without interested party not joined by one of the parties before the
court. Older authorities
[6]
support the notion that a court has no such discretion.
The other school of thought – later authorities indicate
that a
court has a discretion based on the values underpining the NCA. I am
inclined to hold that the failure to cite or join the
PGA and or debt
counsellor is not fatal to this application. The actual
persons/parties in the agreement are the applicant and
the bank, and
both are before the court now. Not to allow the applicant to present
its case now would amount to this court shutting
its door for him,
which will fly in the face of his enshrined right to access this
court as encapsulated in s34 of the Constitution
of this country.
[7]
[11]
An issue linked to the exercise of the discretion of this court in
the determination of the point
in
limine
is the role and responsibility of the PGA in the scheme of things
under the NCA. And in particular, in a case where the
consumer’s default to pay in terms of the Restribution of Debt
order is in question. Judging from the number of judgments
in
this respect, clearly, ther are divergent schools of thought on the
matter. As Ms Collins contended with reliance on
Absa
Bank Ltd v Hanekom and Another
,
[8]
‘[a] PDA distributes funds to the creditors such as the
applicants on behalf of the respondent in line with the order and
the
PDA, is as such, the consumer’s agent for that purpose.
Failure by the PDA to fulfil its mandate, cannot, in law
and based on
equity, be visited upon the creditor in the position of the
applicant. To the extent that the PDA is a statutory
entity
created under the NCA to facilitate process under the NCA any express
provision to that effect, no one can be expect the
legislation
putting any burden on a consumer such as monitoring whether the
PGA/debt counsellor is distributing the instalments
in accordance
with the court order in place at any time’. Mr
Tsangarakis contended for the other school of thought
with reference
to
Firstrand
Bank Limited v Leonard Peter Ortell & 1 Other
[9]
which espouses that a PGA/debt counsellor identified and appointed by
a consumer is an agent of the consumer. His or her
failure to
pay in accordance with a court order is imputed to the consumer.
In other words the consumer bears the responsibility
to ensure that
there is compliance with the restruction of his or her debt order.
S(he) cannot be heard to put the blame at the
door step of he
PGA/debt counsellor in the event that the latter defaults on
distributing the payments to the debtor(s).
[12]
In the light of the Preamble of the NCA
[10]
which aims: ‘to ….. prohibit certain unfair credit and
credit-marketing practices….,coupled with a measure
of
fairness and equity’, I am inclined to associate myself with
the thinking espoused by the court in
Nedbank
Limited v Thompson
[11]
(2014) to the effect that a consumer cannot be burdened with any
responsibility of monitoring a aprty/institution(s)he has no control
over for purposes of the implementation of the court order(s) in
terms of the NCA. Otherwise the underlying purpose of the
NCA
is negated.
[13]
Even if I so hold,the applicant’s failure to file confirmatory
affidavits of the PGA or debt counsellor renders his evidence
with
reference to them as hearsay evidence which cannot be admitted in
terms of the Law of Evidence Amended Act.
[12]
The point is, if I set aside a court order which was properly granted
in this court and the parties on whose evidence the purported
defence
above ependent are not before the court to verify such purported
bona
fide
defence,I would not be acting fairly or even prudently towards the
bank. Equality before the law refers equality and protection
of all
parties or litigants before the court. Its a two way street. Not only
to benefit the consumer in all cases regardless of
non-compliance
with the law on his or her part.In any event,it is not as if the
applicant can never approach the court on the basis
of an improved
application. As the application for rescission stands now, it is
defective and not compliant with Rule 31(2) (b).
[13]
[14]
Lastly the issue of costs. The general rule on costs
[14]
is applicable. I was not addressed to the contrary.
[15]
In the result, the following order is granted.
ORDER
‘
1.
The application for rescission of judgment under : Case No 763/2012
is dismissed with costs.
2.
Costs
to be costs on party and party scale.’
_______________
B.C.
MOCUMIE, J
On
behalf of applicant: Adv L Collins
Instructed
by:
P.S. Du Plessis
M.C.
Rijkheer Inc t/a Jordaans Rijkheer &
Partners
Bloemfontein
On
behalf of respondent: Adv S Tsangarakis
Instructed
by:
HILL, McHARDY & HERBST INC
7
COLLINS ROAD
ARBORETUM
Bloemfontein
/PC
[1]
Law of
Evidence Amendment Act, 45 of 1998.
[2]
Grant v
Plumbers (Pty) Ltd
1949 (2) SA 470
(O)
.
See also
Morkel
v Absa Ltd and Another
1996
(1) SA 899
at 903E.
[3]
Now Rule
31(1)(b) of the Uniform Rules of Court.
[4]
Vitorakis
v Wolf
1973
(3) SA 928
(W) at 930D-H.
[5]
Rule 10(1)
provides: “Any number of persons, each of whom has a claim,
whether jointly, jointly and severally, separately
or in the
alternative, may join as plaintiff in one action agains the same
defendant or defendants against whom any or more persons
proposing
to join as plantiff would, if he brought a separate action, he
entitled to bring such action provided that the right
to relief of
the persons proposing to join as plaintiffs depends upon the
determination of substantially the same question of
law or fact
which, if seperte actions were instituted, would arise on such
action and provided that there my be a joinder conditionally
upon
the clai of any other plaintiff failing.”
[6]
Harding
v Basson
1995 (4) SA 499
(C) at 501H-I
;
Marais
v Pongola Sugar Milling Co Ltd
1961 (2) SA 698
(N) at 702F-I,
Khumalo
v Wilkins
1972 (2) SA 470
(N);
Wholesale
Provision Supplies CC v Exim
1995 (1) SA 150
(T) at 158D.
[7]
S34 of the
Constitution of the Republic of South Africa, Act 108 of 1996
provides that: “everyone has the right to have
any dispute
that can be resolved by the application of law decided in a fair
public hearing before the court or, where appropriate,
another
independent and impartial tribunal or forum.”
[8]
Absa
Bank Ltd v Hanekom and Another Case No: 1487/2011 (unreported
judgment delivered on 31 July 2014).
[9]
Firstrand
Bank Limited v Leonard Peter Ortell & 1 Other
[10]
The
Preamble of the
National Credit Act 34, 2005
states that it aims:
“to promote a fair and non-discriminatory marketplace for
access to consumer credit and for that purpose
to provide for the
general regulation of consumer credit and improved standards of
consumer information; to promote black economic
empowerment and
ownership within the consumer credit industry; to prohibit certain
unfair credit and crdit-marketing practices;
to promote responsible
credit grating and use and for that purpose to prohibit reckless
credit granting; to provide for re-organisation
in cases of
over-indebtedness; to regulate credit information; to provide for
registration of credit bureaux, credit providers
and debt
counselling services; to establish national norms and standards
relating to consumer credit; to promote a consistent
enforcement
framework relating to consumer credit; to establish the National
Credit Regulator and the National Consumer Tribunal;
to repeal the
Usury Act, 1968, and the Credit Agreements Act, 1980; and to provide
for related incidental matters.”
[11]
Nedbank
Limited v Thompson (2014) ZAGP JHC 88 and cases cited therein.
[12]
See
footnote 1.
[13]
Rule
31(2)(b) provides that: “a defendant may within 20 days after
he or she has knowledge of such judgment apply to court
upon notice
to the plaintiff to set aside such judgment and the court may, upon
good cause shown, set aside the default judgment
on such terms as to
it seems meet.”
[14]
The general
rule of costs is to the effect that the party that loses must be the
costs of the winning party unless exceptional
circumstances dictate
otherwise.
[SD1]
I
was wondering if you have a specific section that he relied on. So
that we can put it in the footnotes for consistency. I have
attached
the whole section in the supporting documents