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[2016] ZAGPPHC 299
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Wesbank t/a Nissan Finance a Division of Firstrand Bank Ltd v Macheke (15991/2015) [2016] ZAGPPHC 299 (22 April 2016)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA,
GAUTENG
DIVISION, PRETORIA
CASE
NO: 15991/2015
DATE:
22 APRIL 2016
In the matter
between:
WESBANK t/a
NISSAN FINANCE
A DIVISION OF
FIRSTRAND BANK
LTD
.............................................................................
Plaintiff
And
JOHN
MACHEKE
...................................................................................................................
Defendant
JUDGMENT
TEFFO, J:
INTRODUCTION
[1] The plaintiff
applies for summary judgment against the defendant for payment of the
sum of R138 920,16 plus interest and costs.
The claim arises from an
instalment sale agreement (“the agreement’) concluded
between the parties on 15 January 2008
in terms of which the
plaintiff sold to the defendant, a 2008 Nissan Hardbody 2400i SE
HiRider (J22) {“the vehicle")
for the purchase price of
R367 589,52. In terms of the agreement the defendant was obliged to
make an initial payment of R5 162,41
and thereafter 70 consecutive
monthly instalment payments of R5 162,41 each together with a further
final payment of R5 162,41.
The agreement provided, as usual, that
ownership of the vehicle would remain vested in the plaintiff until
the full amount owed
under the agreement had been paid.
[2] The plaintiff
duly complied with all its obligations in terms of the agreement
which included the delivery of the vehicle to
the defendant.
[3] The defendant
defaulted with his monthly payment obligations under the agreement.
It is alleged in the plaintiff’s particulars
of claim that as a
result of the defendant’s material breach of the agreement, the
plaintiff lawfully repossessed the vehicle
and that the amount
claimed represents the difference between the balance outstanding on
the instalment agreement and the proceeds
of the vehicle sold. The
outstanding balance on the agreement prior to the sale of the vehicle
was the sum of R212 232,15 and the
amount for the proceeds of sale of
the vehicle was R66 120,00.
[4] The agreement is
governed by the National Credit Act 34 of 2005 (“the Act').
[5] The particulars
of claim further allege that the plaintiff sent the defendant a
notice in terms of section 127(5) of the Act
by mail and prepaid
registered mail, to which the defendant failed to respond. It is also
alleged that a notice in terms of section
129(1)(a) of the Act was
delivered to the defendant by the sheriff to the defendant’s
chosen address. The two notices were
annexed to the summons together
with the sheriff’s return of service of the notice in terms of
section 129(1)(a).
[6] Further
allegations made were that a period of ten days had elapsed since the
delivery of the section 129(1)(a) notice to the
defendant and he did
not pay the full outstanding amount or make suitable payment
arrangements. It was also averred that the matter
is not before a
Tribunal or a Debt Counsellor or an alternative Dispute Resolution
Agent or Consumer Court or Ombud with jurisdiction.
[7] Summons were
issued in January 2015 and served upon the defendant on 10 March
2015. On 23 March 2015 the defendant filed a notice
of intention to
defend the action. Eventually the plaintiff applied for summary
judgment.
[8] The application
is opposed.
DISCUSSION
[9] In the affidavit
resisting summary judgment the defendant contended that the action
flows from his voluntary surrender of the
vehicle to the plaintiff
and that despite this the plaintiff contravened the provisions of
section 127 of the Act in that it failed
to give him a notice in
terms of section 127(2) wherein it stated the estimated value of the
vehicle and a notice in terms of section
127(5). It was pointed out
that the failure by the plaintiff to give the defendant a notice in
terms of section 127(2) of the Act
has made him not to be able to
invoke the provisions of subsections (3) and (4) of section 127 of
the Act. Basically the defendant
disputes that the vehicle was sold
for the best price reasonably obtainable.
[10] The defendant
further contended that he was unable to determine the outstanding
amount under the agreement as according to
him the plaintiff did not
lawfully demand the remaining settlement amount as provided for in
section 127(7). It was argued that
the plaintiff contravened the
provisions of section 127(8) of the Act and has unlawfully instituted
the action in the High Court
and not in the Magistrate’s Court
as was required of it in terms of the Act.
[11] It was also
contended that the plaintiff is guilty of an offence in terms of
section 127(10) and that the action should be
set aside and a
complaint be laid with the National Credit Regulator Tribunal (“
the Tribunal”). A further submission
was made on behalf of the
defendant that the relief claimed defeats the purpose of the Act as
contained in section 3 (d), (e),
(g) and (h).
[12] I find it
necessary to deal with the question whether the jurisdiction of the
High Court has been ousted by the provisions
of section 127(8)(a) of
the Act. The section reads as follows:
“If a
consumer-
(a) fails to pay an
amount demanded in terms of subsection
(7) within 10
business days after receiving a demand notice, the credit provider
may commence proceedings in terms of the Magistrate’s
Court Act
for judgment enforcing the credit agreement; or..."
[13] This issue has
been the subject of debate in our division. There has been
conflicting decisions regarding this aspect and ultimately
a decision
of the full court in Nedbank Ltd v Mateman, Nedbank Ltd v Stringer
2008 JOL 21210
(T) settled it. Two separate matters were heard by the
full court of this division after the plaintiff, Nedbank Ltd, sued
the defendants,
Mateman and Stringer, for payment of money and also
sought an order declaring certain properties in each case executable.
The defendants
in both matters failed to enter appearance to defend
the actions and the plaintiff applied for default judgment. The
registrar
referred both matters to court in terms of Rule
31(5)(b)(iv). The full court had to determine whether the registrar
had jurisdiction
to entertain applications for default judgments
governed by the Act in cases where the defendants are resident or
employed or the
subject property is situated in the jurisdiction of
another court, whether a High Court had concurrent jurisdiction with
the Magistrate’s
Court. In a similar matter, ABSA Bank Ltd v
Myburgh
2009 (3) SA 340
(T), my brother Bertelsman transferred the
matter to the Magistrate’s Court after finding that the
registrar correctly refused
to grant default judgment. The full court
differed and held that there was nothing in the Act that indicates
that there was an
intention to oust the High Court’s
jurisdiction. It is clear that section 127 of the Act creates a
special process in terms
of which it grants a consumer a right to
surrender goods under a credit agreement. It does not deal and was
not intended to deal,
with the jurisdiction of the High Court or the
ousting thereof. It is settled law that the High Court has concurrent
jurisdiction
with any Magistrate’s Court in its area of
jurisdiction (see Standard Credit Corporation Ltd v Bester
1987 (1)
SA 812
(W)). It is, however, also settled law that the plaintiff runs
a risk if he/she sues in the High Court on a claim justiciable in
the
Magistrate’s Court of only being allowed to recover costs on
the Magistrate’s Court scale. Under the circumstances
it is my
view that the contention by the defendant that the plaintiff
contravened the provisions of section 127(8) and has unlawfully
instituted the claim in the High Court, has no merit.
[14] I turn to the
merits. In terms of the provisions of section 127(1)(a) and (b) of
the Act a consumer under an instalment agreement,
secured loan or
lease of movable goods may give written notice to the credit provider
to terminate the agreement. If the goods
are in the credit provider’s
possession, the consumer may require the credit provider to sell the
goods. Alternatively, if
the goods are in the possession of the
consumer he or she may return the goods to the credit provider’s
place of business
during ordinary business hours, within five
business days after the date of the notice, or within such other
period or at such
other time or place as may be agreed to with the
credit provider.
[15] Section 127 of
the Act grants to a consumer who has purchased goods pursuant to an
instalment sale agreement, a right to unilaterally
terminate a credit
agreement by deciding to return the goods to the credit provider so
that the credit provider may sell the goods
so returned in order to
settle the account of the consumer. The obligations imposed upon a
credit provider by section 127 essentially
require the credit
provider to undertake the sale of the goods returned to it and to
settle the consumer’s indebtedness to
it out of the proceeds of
such sale.
[16] Section
127(2)(a) and (b) requires the credit provider within 10 business
days after receiving a notice in terms of section
(1)(b)(i), or
receiving goods tendered in terms of section (1)(b)(ii), to give the
consumer written notice setting out the estimated
value of the goods
and any other prescribed information.
[17] Section 127(3)
provides that within 10 business days after receiving a notice under
subsection (2), the consumer may unconditionally
withdraw the notice
to terminate the agreement in terms of subsection (1)(a) and resume
possession of any goods that are in the
credit provider’s
possession, unless the consumer is in default under the agreement (my
emphasis).
[18] In terms of the
provisions of section 127(4) if the consumer (a) responds to a notice
as contemplated in subsection (3), the
credit provider must return
the goods to the consumer unless the consumer is in default under
the credit agreement; or (b) does
not respond to a notice as
contemplated in subsection (3), the credit provider must sell the
goods as soon as practicable for the
best price reasonably possible.
[19] On his own
version the defendant avers that these proceedings flow from his
voluntary surrender of the vehicle to the credit
provider. It is
common cause between the parties that the vehicle was returned to the
credit provider because the consumer was
in default of his monthly
payments in terms of the agreement. The effect of the voluntary
surrender is to terminate the agreement
between the parties (Maqeda v
Toyota Financial Services and Others
[2014] JOL 32532
(EDM)). When
the consumer returns the goods to the credit provider, he/she does
not only lose possession of the goods but he/she
brings an end the
right that he or she held over the property. It was argued that at
the time the vehicle was sold, the defendant
was many months in
arrears. It is common cause between the parties that the plaintiff
did not send the section 127(2)(b) notice
to the defendant. No
allegation is made that the defendant as consumer, gave written
notice to the plaintiff, as credit provider,
of the termination of
the agreement as provided for in section 127(1)(a) of the Act. In
Sebola and Another v Standard Bank of SA
Ltd
2012 (5) SA 142
(CC) it
was pointed out that the main objective of the Act is to protect
consumers and that an interpretation of the Act calls
for a careful
balancing of the competing interests of consumers and credit provides
(see also Kubyana v Standard Bank of SA
2014 (3) SA 56
(CC)).
[20] I find the
contention by the defendant strange that failure by the plaintiff to
give him notice in terms of section 127(2)
made him not to be able to
invoke the provisions of subsections (3) and (4). He does not allege
that after he had voluntarily surrendered
the vehicle he enquired
about the estimated value of the vehicle or any other relevant
prescribed information and/or showed any
interest of settling the
arrears which were more than R200 000,00. One would have expected
that a consumer surrendering the vehicle
does this because he is in
default with his monthly payments and must realise that the vehicle
will probably be resold. The defendant
did nothing after voluntarily
surrendering the vehicle and only after the sale of the vehicle he
alleges that had he been served
with the section 127(2) notice he
would have considered the options available in terms of subsections
(3) and (4).
[21] The provisions
of sections 127(3) and 127(4) make it clear that the election to
withdraw the notice to terminate the credit
agreement can only be
done by a consumer who is not in default under the agreement.
Although I do not condone the failure of the
plaintiff to give notice
to the defendant in terms of section 127(2), I cannot see how the
defendant could have invoked the provisions
of section 127(3) and
section 127(4) given the fact that he has been in default of his
payment obligations under the agreement
and is still in default.
Nothing is said in his affidavit resisting the summary judgment
regarding the default of his obligations
under the agreement. He does
not allege that the agreement between him and the plaintiff is still
alive. Accordingly it is my view
that the delivery of the section
127(2) notice to the defendant would not have made any difference.
[22] The defendant
further disputed that he was served with the notice in terms of
section 127(5). The notice in terms of section
127(5) of the Act has
been annexed to the summons. It was submitted on behalf of the
defendant that there is no proof that the
notice was sent to the
defendant. Counsel for the plaintiff argued that the notice was sent
to the same address where the section
129(1)(a) notice was delivered.
The notice in terms of section 129(1) was delivered at the address of
the defendant through the
sheriff. The same address appears on the
section 127(5) notice which was allegedly sent to the defendant by
ordinary mail on 30
April 2014, a day after the sale of the property.
[23] Section 127(5)
provides that after selling any goods in terms of this section, a
credit provider must -
(a) credit or debit
the consumer with a payment or charge equivalent to the proceeds of
the sale less any expenses reasonably incurred
by the credit provider
in connection with the sale of the goods; and
(b) give the
consumer a written notice stating the settlement value of the
agreement immediately before the sale, the gross amount
realised on
the sale, the net proceeds of the sale after deducting the credit
provider’s permitted default charges, if applicable,
and
reasonable costs allowed under paragraph (a), and the amount credited
or debited to the consumer’s account.
It is significant
that section 65(2)(a)(i) of the Act provides that ‘deliver/
includes the making available of the document
to the consumer by
ordinary mail. Unlike in sections 129 and 130 of the Act there is no
requirement in section 127(5) that anything
must be drawn to the
notice of the consumer or that the notice must be ‘delivered to
the consumer (compare Sebola paras [61]
to [66] at 162C to 164D).
[24] It is my view
that the sending of the section 127(5) notice to the defendant by
ordinary mail was sufficient. I further find
that the plaintiff
complied with the provisions of the Act. In terms of section
130(3)(a) of the Act, the court may only determine
a matter in
respect of proceedings to which section 127 of the Act applies, if
the procedures required by section 127 have been
complied with.
Section 130(4)(b) further provides that in the event of the credit
provider not having complied with the provisions
of the Act as
contemplated in section 30(3)(a), the court must adjourn the matter
and make an appropriate order setting out the
steps that the credit
provider must take before the matter may be resumed.
[25] I have already
ruled that there has not been any contravention of the provisions of
section 127(8) of the Act. I therefore
do not find any basis for the
postponement of this matter. The defendant is not without a remedy.
If he is not satisfied with the
sale of the goods and believes that
the vehicle was not sold as reasonably practicable or for the best
price reasonably obtainable,
he can approach the Tribunal for the
review of the sale in terms of the provisions of section 128 of the
Act.
[26] I am satisfied
under the circumstances that the defendant does not have a bona fide
defence to the plaintiff’s claim.
The plaintiff is therefore
entitled to the relief sought.
[27] In the result I
make the following order:
27.1 I grant summary
judgment against the defendant for payment of the amount of R138
920,16 to the plaintiff with costs together
with interest on the
aforesaid amount of R138 920,16 calculated at a fixed interest rate
of 18% per annum from 30 April 2014 to
the date of final payment.
27.2 The defendant
is ordered to pay the costs of this application on the scale
applicable in the Magistrate’s Court.
M J TEFFO
JUDGE OF THE HIGH
COURT OF SOUTH AFRICA
GAUTENG DIVISION,
PRETORIA
FOR THE PLAINTIFF
J H GROENEWALD
INSTRUCTED BY
HACK STUPEL & ROSS ATTORNEYS
FOR THE DEFENDANT
L DU PREEZ
INSTRUCTED BY
LOMBARD ATTORNEYS
HEARD ON 18 MAY
2015
HANDED DOWN ON 22
APRIL 2016