About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Free State High Court, Bloemfontein
SAFLII
>>
Databases
>>
South Africa: Free State High Court, Bloemfontein
>>
2015
>>
[2015] ZAFSHC 134
|
|
MBD Securitisation (Pty) Ltd v Booi (A263/2014) [2015] ZAFSHC 134; 2015 (5) SA 450 (FB) (2 July 2015)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
FREE
STATE HIGH COURT, BLOEMFONTEIN
REPUBLIC
OF
SOUTH AFRICA
Case
No. : A263/2014
In
the matter between:-
MBD
SECURITISATION (PTY) LTD
Applicant
and
NTHOMBI
FIKILE
BOOI
Respondent
CORAM:
DAFFUE,
J
et
WILLIAMS,
AJ
JUDGMENT
BY:
DAFFUE,
J
HEARD
ON:
1 JUNE
2015
DELIVERED
ON:
2 JULY
2015
I
INTRODUCTION
[1]
This is an appeal which has to be adjudicated by judges of the Free
State High Court in Bloemfontein. The judgment of
a magistrate
in Hennenman, a small Free State town some 180 km to the north of
Bloemfontein, is the subject of the appeal.
The appellant and
plaintiff in the court
a
quo,
is a company with its head and/or registered office apparently in
Johannesburg. It appears from the papers that appellant’s
address is [……….], Hyde Park, Johannesburg,
Gauteng. The respondent, and defendant in the court
a
quo,
is
resident and employed in the small town of Alice close to East London
in the Eastern Cape, approximately 620 km to the southeast
of
Bloemfontein and some 800 km from Hennenman. The cause of
action, whatever it may, did not arise in Hennenman or the Free
State
Province for that matter. There is no indication in the papers
where it has arisen, if at all. More details of
the
extraordinary facts will be recorded later.
II
THE
PARTIES
[2]
The appellant is MBD Securitisation (Pty) Ltd. Nothing more is
known of this company, save that it has a Johannesburg
address and
that its company’s secretary, Me Jennifer Williams signed a
special power of attorney in Johannesburg to nominate
attorneys to
act on its behalf in this appeal. Adv A R G Mundell SC argued
the appeal on its behalf.
[3]
Respondent is Me Nthombi Fikile Booi, a […….] year old
female employed by the Department of Health in Alice, Eastern
Cape
and also resident in Alice as mentioned above. Adv C D Pienaar
argued the appeal on her behalf.
III
THE
ORDER OF THE COURT
A
QUO
[4]
On 28 August 2014 the magistrate of Hennenman made the following
orders:
“
1.
That the judgment granted on 20 February 2012 under case number
582/2011 by the clerk of the court be and is hereby
rescinded; and
2.
Declaring that all benefit derived from the judgment granted by the
clerk of the court under case number 582/2011
on 20 February 2012 be
void ab initio
and that restitution take place; and
3.
Costs of this application on a scale as between attorney and client.”
[5]
Respondent in this appeal was the applicant in the court
a
quo
,
but for purposes of clarity the parties will be referred to as in
this court. Appellant did not file an opposing affidavit
in the
court
a
quo. Ex facie
the
appeal record appellant’s representative asked for a
postponement on 28 August 2014 which was declined by the court
a
quo
whereupon the matter was heard by that court without the advantage of
any argument on behalf of appellant. Judgment was apparently
granted by default. I shall return to this issue hereinlater.
IV
GROUNDS
OF APPEAL
[6]
Appellant relies on the following five grounds of appeal:
“
4.
The learned magistrate erred in law in finding that the clerk of the
court was not, in terms of the provisions of
the Magistrates Court
Rule 12(5), authorised to grant the relevant judgment by consent;
5. The learned
magistrate erred in law in finding that the appellant had not
complied with the relevant Magistrate’s
Court Rules in
obtaining the judgment by default;
6. The learned
magistrate erred in law in finding that, in applying for judgment,
the appellant had contravened
the provisions of
section
90(2)(k)(vi)(bb)
of the
National Credit Act, 2005
;
7. The learned
magistrate erred in law in granting an order which, in effect, set
aside the emoluments attachment
order that had been awarded in
appellant’s favour;
8.
The learned magistrate erred in law in granting costs in favour of
the applicant on the scale as between attorney
and client.”
V
THE
MATERIAL FACTS
[7]
In order to follow the evaluation of the evidence and legal
submissions it is necessary to set out the unbelievably peculiar
circumstances which culminated in the judgment of the court
a
quo
.
[8]
Respondent does not recall ever entering into an agreement with
appellant and the amount claimed is unknown to her. Let
it be
known at this stage already that her belief is justified as it is not
appellant’s case that a contractual relationship
exists or
existed between them. The origin of the debt is also unknown to
her and it was never explained to her. According
to her an
agent representing appellant approached her at her place of
employment and explained to her that she was indebted to
appellant in
the amount of R4 854,14. She never received a statement of
account in this regard. She does not deny signing
documents
presented to her, but mentions that she was embarrassed when
approached at work and just responded by signing the documents
presented for signature.
[9]
The documents that respondent refers to in her application for
rescission of judgment in the court
a
quo
are probably the notice in terms of s 129(1) of the National Credit
Act, 34 of 2005 (“the NCA”) which incorporated
a letter
of demand in terms of sections 56 and 58 of the Magistrates’
Court Act, 32 of 1944 (“the Act”)
and the consent
in terms of sections 45, 58 and 65J of the Act which documents are
dated 25 May 2011. The consent bears the
signatures of two
witnesses, one being Thinus Nel and the other Tania Nel, both of East
Londen, but with different addresses.
These two documents were
presented to the court
a
quo
with
the request for judgment by consent.
[10]
Ex
facie
the
notice in terms of s 129(1), incorporating the letter of demand,
appellant demanded payment of the amount of R4 854.14,
being the
amount outstanding to it as creditor in respect of goods sold and
delivered. In signing the consent respondent
confirmed receipt
of a letter in terms of s 129(1), acknowledged that the amount of R4
854,14 was due and payable and accepted
liability to appellant for
the debt, the costs of the letter of demand, further costs on an
attorney and client scale in the amount
of R2 452.92 plus 10%
collection commission on all payments received and 14% VAT thereon.
There is no indication in
either of these documents that the
appellant acted as cessionary of book debts; to the contrary the
documents are indicative of
a claim by appellant as creditor and the
letter of demand specifically refers to the cause of action as goods
sold and delivered
to respondent.
[11]
As indicated the consent referred to embodies consent to the issue of
an emoluments attachment order in the Hennenman magistrates’
court in terms of s 65J. Respondent also explicitly consented
in terms of s 45 to jurisdiction of that court in respect of
the
proceedings about to be instituted against her. The typed
document contains the names, Kempton Park and Nelspruit.
These
were deleted and the word “Hennenman” was inserted in
pen. Respondent did not initial or sign at the amendment.
It was never disclosed on whose initiative the Hennenman magistrates’
court was elected as the appropriate court and for
what reason.
It could never be the more convenient court to deal with the matter
in so far as appellant is from Johannesburg
and its attorney who
initiated the debt collection process is from Nelspruit, probably
about 600 km from Hennenman.
[12]
Some four and a half months after signature of the aforesaid
documents appellant’s attorney, Mr Gerhard van der Merwe
of
Nelspruit in Mpumalanga, prepared and signed a request for judgment
in accordance with the provisions of s 58 of the Act.
Mr
Van der Merwe instructed Badenhorst Attorneys of Henneman as his
local correspondents in the matter. The request
of judgment was
accompanied by the notice in terms s 129(1) incorporating the letter
of demand, the consent referred to above as
well as two affidavits by
one Renay Laura Greaver, a candidate attorney employed by Mr Van der
Merwe. In the first affidavit
the candidate attorney confirmed
under oath that sections 129 and 130 of the NCA had been complied
with, an aspect which I shall
consider again later. In the
second affidavit she makes astonishing hearsay statements, alleging
that appellant,
“…
has
purchased a number of debtors’ books from various companies.
During the transfer of the portfolio, the physical
file was not
supplied to the applicant (the appellant in this matter). All
attempts to obtain the documentation have been
unsuccessful and I
therefore submit that the original agreement as well as a copy cannot
be obtained as proof of the agreement.”
[13]
On 13 October 2011 an unidentified person signed the request for
judgment prepared by Mr Van der Merwe as if he was the magistrate
of
the Hennenman magistrates’ court. In terms hereof
judgment was granted in favour of appellant in the amount of
R4 854.14 plus interest at the rate of 15,5% per annum from date
of judgment to final payment, together with costs in the amount
of
R2 452.92 and sheriff’s fees to be added. It must be
mentioned in this regard that in the consent to judgment
respondent
also consented to an order in terms whereof the judgment debt shall
be paid in instalments of R300.00 per month and
the order of 13
October 2011 also stipulates that the judgment debt shall be paid in
instalments of R300.00 per month, to be paid
on or before the 7
th
day of the month following service of an emolument attachment order
granted pursuant to the judgment by consent.
[14]
On 20 February 2012 an emolument attachment order was issued by the
Hennenman clerk of the court at the written request of
Mr Van der
Merwe dated as far back as 11 October 2011.
[15]
As late as 2 June 2014 respondent consulted with attorneys in East
Londen, Messrs Tinto, Du Plessis and Associates. This
firm of
attorneys contacted Mr Van der Merwe’s firm in Nelspruit and
eventually obtained various documents as requested in
order for them
to advise their client. On 7 July 2014 an application in terms
of Magistrates’ Court rule 49(8) was
issued. The relief
claimed in the notice of application was eventually granted by the
court
a
quo
on 28 August 2014 as stated above. As mentioned, appellant did
not file an answering affidavit and did not present any argument
in
support of any opposition. The application was enrolled for
hearing on 31 July 2014 on which date it was postponed by
agreement
for a week. On 7 August 2014 it was again postponed for three
weeks to 28 August 2014 on which date the court
a
quo
refused to postpone the matter a third time where after it granted
judgment in favour of respondent.
VI
APPEALABILITY
OF THE ORDER OF THE COURT
A
QUO
[16]
In order to be appealable, an order must be final in effect and not
susceptible to alteration, or put otherwise, it must be
definitive of
the rights of the parties. See
Zweni
v Minister of Law and Order
1993 (1) SA 523
(A) at 532I – 533B.
[17]
The Supreme Court of Appeal has recently reconsidered
Zweni
loc
cit
and indicated that the requirements stated in that judgment were
neither cast in stone, nor exhaustive. See
Absa
Bank v Mkhize
2014 (5) SA 16
(SCA) at para [17]. In order to determine
whether an order is final, one must have regard not to its form only,
but predominantly
to its effect, or put otherwise, an order
irreparably anticipates or precludes some of the relief claimed which
would or might
be given at the hearing, will be appealable. See
Jacobs
v Baumann NO
2009 (5) SA 432
(SCA) para [9]. See also
NDPP
v King
2010 (2) SACR 146
(SCA) at para [42].
[18]
In
Pitelli
v Everton Gardens Projects
2010 (5) SA 171
(SCA) the Supreme Court of Appeal found at para [27]
as follows:
“
[27]
An order is not final for the purposes of an appeal merely because it
takes effect, unless it is set aside. It
is final when the
proceedings of the court of first instance are complete and that
court is not capable of revisiting the order.
That leads one
ineluctably to the conclusion that an order that is taken
in
the absence of a party
is ordinarily not appealable (perhaps there might be cases in which
it is appealable, but for the moment I cannot think of one).
It
is not appealable because such an order
is
capable of being rescinded by the Court that granted it
,
and it is thus not final in its effect. In some cases an order
that is granted in the absence of a party might be rescindable
under
Rule 42(1)(a) and if it is not covered by that rule, as Van der
Merwe, J correctly found, it is any event capable of be rescinded
under the common law.”
(emphasis
added.)
[19]
The Supreme Court of Appeal furthermore held at para [31]:
“
It
seems to me that the appealability of an order must be dependent on
the nature of the order and not upon what the litigant chooses
to
make of it. An order made by default is by its nature not final
in its effect because it is capable of being revisited,
albeit that
condonation might be required for the delay. It is true that
once rescission has been refused, and an appeal
against that order
has been dismissed, the order is then not capable of being
revisited. But that order of the Court of Appeal
brings the
proceedings as a whole to an end and it is not then open to a
litigant to return to an order that was made midway
in proceedings.”
In
Pitelli
loc
cit
the court of first instance refused an application for postponement
where after the appellant’s counsel withdrew on the basis
that
he had no instructions to pursue the matter. The Supreme Court
of Appeal held that the subsequent order granted by the
court of
first instance was a default order which was susceptible to
rescission and not appealable. See also
Sparks
v David Polliack and Co (Pty) Ltd
1963 (2) SA 491
(T), a not too dissimilar matter where the defendant
also applied for a postponement of the trial and when that was
refused, his
attorney withdrew and judgment was entered against
defendant.
[20]
In
casu
Mr Badenhorst on behalf of the appellant asked for a further
postponement on 28 august 2014 which was not granted whereupon the
court
a
quo
granted judgment by default. It is not apparent from the record
whether Mr Badenhorst remained present until the orders were
granted,
but it is evident from the court
a
quo’s
notes
that no submissions by Mr Badenhorst were recorded. However Mr
Badenhorst had no reason to remain present.
[21]
I am of the view that appellant has not convinced us at all that the
court
a
quo’s
judgment is appealable. The authorities quoted above indicate
clearly to the contrary. The judgment was thus granted
by
default. Appellant would be entitled to apply for rescission of
the judgment of the court
a
quo
and whether or not he would be successful is not to be considered at
this stage. Obviously bearing in mind the delay, an
application
for condonation should be filed as well.
[22]
Mr Pienaar has also argued that the judgment is on a further basis
not appealable, it being the rescission of an emoluments
attachment
order granted on 20 February 2012 and not the judgment by consent
granted on 13 October 2011. He argued that insofar
as the emoluments
attachment order was set aside, it did not have the effect that the
proceedings of the court
a
quo
were complete and that that court was not capable of revisiting the
order. Mr Pienaar conceded that a cursory reading of
the
application leaves one with no doubt that respondent intended to have
the consent judgment set aside. Mr Mundell conceded
in this
regard that it would be the better approach to arrange with the court
a
quo
to amend its orders. He also conceded that the court
a
quo
(or the clerk of the court) did not have jurisdiction to issue an
emoluments attachment order. Notwithstanding respondent’s
consent it could only be issued out of the court where the debtor is
employed.
VII
LEGISLATION
AND RELEVANT AUTHORITIES
[23]
In so far as I may have erred in coming to the conclusion that the
judgment of the court
a
quo
is not appealable, I deem it appropriate to consider the following
relevant legislation and authorities where after I shall evaluate
the
facts and legal submissions by the parties under the next heading.
[24]
Section 58(1) of the Act reads as follows:
“
The
clerk of the court shall enter judgment in favour of the plaintiff if
the written request for judgment is accompanied by the
letter of
demand, if there is one, and the defendant’s written consent to
judgment.”
[25]
Magistrate’s Court Rule (MCR) 4(3) reads as follows:
“
A
consent to judgment in terms of Section 58 of the Act shall be signed
by the debtor and by two witnesses whose names shall be
stated in
full and whose addresses and telephone numbers shall also be
recorded.”
Subrule
4(4), prior to its amendment on 28 July 2014, read as follows:
“
Rules
12(6), (6A) and (7) apply to a request for judgment in terms of
Sections 57 and 58 of the Act.”
[26]
MCR 12(5) was amended several times, the last amendment being made on
23 August 2010 and it reads now as follows:
“
The
registrar or the clerk of the court shall refer to the court any
request for judgment on a claim founded on any cause of action
arising out of or based on an agreement governed by the
National
Credit Act, or
Credit Agreements Act, 1980 (Act No 75 of 1980), and
the court shall thereupon make such order or give such judgment as it
may
deem fit.”
There
can be no doubt that the legislature had in mind with MCR 12(5) and
its predecessors to ensure that the oversight function
of the court
in respect of credit agreements was established in order to protect
consumers.
[27]
On 27 June
2014 MCR 4(4)
was amended by the inclusion therein of an
express reference to MCR 12(5). The amendment came into
operation on 28 July 2014
and after the judgment by consent was
granted in the court
a
quo,
but before the judgment of the court
a
quo
appealed against.
[28]
As correctly conceded by appellant’s counsel there can be no
debate following the amendment of 28 July 2014 and the incorporation
into MCR 4(4) of a reference to MCR 12(5) that the clerk of the court
is not entitled to grant judgments by consent which are based
on a
cause of action arising from the
National Credit Act
(“the
NCA”). The clerk of the court is now obliged to refer the
request for judgment in terms of the NCA to a
magistrate for
determination.
[29]
MCR 12 deals with judgments by default which follow on service on the
defendant of a summons claiming relief and a consequent
judgment
entered or given in the absence of the party against whom it is
made. A consent judgment in terms of MCR 4 is not
a default
judgment within the meaning and definition of default judgment.
Consequently consent to judgment in terms of s
58 of the Act does not
fall within the ambit of MCR 12. Only those portions of MCR 12
which are specifically incorporated
into MCR 4(4) apply to a request
for judgment by consent and as indicated above, that excluded MCR
12(5) previously. If the
applicable section and the rules are
properly interpreted, it appears that the clerk of the court had the
necessary authority to
grant judgments by consent prior to 28 July
2014 even in the event of a claim founded on a cause of action
governed by the NCA.
I shall deal with this aspect in the
submissions of the parties herein later again.
[30]
The next issue turns around the jurisdiction of the Hennenman
Magistrate’s Court. The provisions of the Act as
well as
the NCA must be considered and I refer to s 45 of the Act and
sections 90(2)(k)(vi)(bb) and 91(a) of the NCA. In
terms of s
90(2)(k)(vi)(bb) a provision in a credit agreement is unlawful if it
contains a consent to jurisdiction of “
any
court seated outside the jurisdiction of a court having concurrent
jurisdiction and in which the consumer resides or works or
where the
goods in question (if any) are ordinarily kept.
”
Section
91(a) extends the above prohibition to supplementary agreements.
See also s 95 of the NCA read with s 91(a).
A credit provider
is prohibited in terms of s 91(a) to directly or indirectly require
or induce a consumer to enter into a supplementary
agreement, or sign
any document, that contains a provision that would be unlawful if it
were included in the credit agreement.
See also s 95 of the NCA
relating to deferral of amounts due under an existing credit
agreement.
[31]
There is no doubt that the Hennenman Magistrate’s Court never
had any jurisdiction over the person of respondent in accordance
with
s 28 of the Act. She is not resident or employed in that
district and was never resident or employed there. Section
29
of the Act does not apply as the whole cause of action did not arise
in the Hennenman Magistrate’s Court.
[32]
Section 45(1) contains the following proviso
“
Provided
that no court other than a court having jurisdiction under section 28
shall, except where such consent is given specifically
with reference
to particular proceedings
already
instituted or
about
to be instituted
in such court, have jurisdiction in such matter”.
(Emphasis
added)
Section
45(2) of the Act reads as follows:
“
Any
provision in a contract existing at the commencement of the Act or
thereafter entered into, whereby a person
undertakes
that, when proceedings have been or are about to be instituted, he
will give such consent
to jurisdiction as is contemplated in the proviso to sub-section (1),
shall be
null
and void
.”
(Emphasis
added)
[33]
Section 90(2)(k)(vi)(bb) precludes a credit agreement as defined in
the NCA from including a consent by a consumer to the jurisdiction
of
a court seated outside the area of jurisdiction in which the customer
resides or works or where the goods in question, if any,
are
ordinarily kept.
[34]
There can be no doubt that both the Act and the NCA prohibit a
provision in a contract embodying consent to jurisdiction to
a
specific district by one of the parties. The proviso to section
45(1) appears to provide for an exception to the common
law
principles and those contained in the Act as well as the NCA.
It should be scrutinised carefully. I am of the view
that the
interpretation of statutes as recently summarised by Wallis JA in
Natal
Joint Municipal Pension Fund v Endumeni Municipality
,
2012 (4) SA 593
(SCA)
must
be considered and I quote the following passages:
“
[18]
……Interpretation is the process of attributing meaning
to the words used in a document, be it legislation, some
other
statutory instrument, or contract, having
regard
to the context
provided by reading the particular provision or provisions in the
light of the
document
as a whole
and the
circumstances
attendant upon its coming into existence
.
Whatever the nature of the document, consideration must be given to
the
language
used
in the light of the ordinary rules of grammar and syntax;
the
context
in which the provision appear;
the
apparent purpose to which it is directed and the material known to
those responsible for its production
.
Where more than one meaning is possible each possibility must be
weighed in the light of all these factors. The process
is
objective, not subjective.
A
sensible meaning is to be preferred to one that leads to insensible
or unbusinesslike results or undermines the apparent purpose
of the
document
.”
“
[19]
…. from the outset one considers the context and the language
together, with neither pre-dominating over the other.
This is
the approach that courts in South Africa should now follow, …”
“
[25]
…. Most words can bear several different meanings or shades of
meaning and to try to ascertain their meaning in the
abstract,
divorced
from the broad context
of their use, is an
unhelpful
exercise. The expression can mean no more than that, when the
provision is read in context, that is the appropriate meaning
to give
to the language used. At the other extreme, where the context
makes it plain that adhering to the meaning suggested
by apparently
plain language would lead to a glaring absurdity, the court will
ascribe a meaning to the language that avoids absurdity.
This
is said to involve a departure from the plain meaning of the words
used.”
“
[26]
… In resolving the problem, the
apparent
purpose
of the provision and the
context
in which it occurs will be
important
guides to the correct interpretation
.
An interpretation will not be given that leads to impractical,
unbusinesslike or oppressive consequences or that will stultify
the
broader operation of the legislation or contract under
consideration.”
(emphasis added)
…
.
“
[35]
Even if it might be found that respondent validly consented to the
jurisdiction of the Hennenman Magistrate’s Court in
casu
,
such consent could only have been in respect of the institution of
proceedings in that court, i.e. the issuing of summons until
judgment
is granted or the request for judgment by consent . Section 65J
of the Act is clear. It provides that only
the court of the
district in which the employer of the judgment debtor resides,
carries on business or is employed, or if the judgment
debtor is
employed by the State in which the judgment debtor is employed, has
jurisdiction to issue and emoluments attachment order.
Therefore even if judgment could have been granted in terms of the
consent to jurisdiction by the Henneman Magistrate’s Court,
the
judgment creditor was duty-bound to obtain an extract from the
Hennenman Magistrate’s Court judgment and refer the matter
to
the Alice Magistrate’s Court for the emoluments attachment
order to be issued there.
[36]
I have quoted the proviso to s 45 of the Act above. It is also
necessary to quote the first part of the section which
reads as
follows:
“
1.
Subject to the provisions of Section forty-six, the Court shall have
jurisdiction to determine any action or proceeding
otherwise beyond
jurisdiction, if the
parties
consent in writing thereto
:”
In
McClaren
v Badenhorst
2011 (1) SA 214
(ECG) at para [12] the court found that “consent”
in the proviso to s 45(1) cannot be interpreted to mean the consent
of only one of the parties, the section being clear that “the
parties” (plural) must consent in writing. All
the
parties to the action or proceedings must therefore consent and if
only one of the parties consents to the jurisdiction of
the court,
such consent is null and void. The requirement of consent by
both parties could be satisfied by the written consent
of the
defendant and the issue of summons by the plaintiff alleging the
consent of the parties. See
Suid-Westelike
Transvaalse Landbou Koöperasie v Kotze
[2000] 1 All SA 170
(NC) at 177B – C.
[37]
It must be considered whether the consent to judgment signed by
respondent
in
casu
constitutes
a credit agreement as contemplated in the NCA, and if not, whether it
is a supplementary agreement to the initial credit
agreement.
In the consent to judgment respondent agreed that payment of the
amount owed by her be deferred and costs, fees
in respect of
collection commission as well as interest shall be payable in terms
of the agreement to appellant. See in this
regard s 8(4)(f) of
the NCA and
Carter
Trading (Pty) Ltd v Blignaut
2010 (2) SA 46
(ECP) at paras [17] and [18] and
Friend
v Sendal
2015 (1) SA 395
(GP) at para [10]. Unlike in the last-mentioned
judgment, it is not appellant’s case that it is not a credit
provider
and that it was not required to comply with the provisions
of sections 129 and 130 of the NCA.
[38]
The NCA serves to promote
inter
alia
a consistent and harmonised system of debt enforcement and the
protection of consumers is a significant purpose of the NCA and
this
shall be given full consideration in adjudicating this appeal.
[39]
It is also necessary to establish whether the prerequisites set out
in s 58 of the Act read with rule 4 of the MCR have been
met.
Rule 4(1) reads as follows:
“
(1)(a)
The letter of demand referred to in Section 57 and 58 of the Act
shall contain particulars about the nature
and amount of the claim.
(b)
Where the original cause of action is a credit agreement under the
National Credit Act, 2005
, the letter of demand referred to in
Section 58 of the Act must deal of each of the relevant provisions of
Section 129
and
130
of the
National Credit Act, 2005
,
and
allege that each one has been complied with
.”
(Emphasis
added)
The
letter of demand as contemplated should be a demand issued after
compliance with the provisions of
s 129
of the NCA. It cannot
be incorporated in the
s 129
notice. See
African
Bank v Myambo
2010 (6) SA 298
(GNP) at 310 – 314. Compliance with
s 130
of the NCA includes that at least ten business days must have elapsed
since the credit provider delivered a notice to the consumer
as
contemplated in
s 129(1)
of the NCA before proceedings are commenced
in a court, such proceedings to include those under
s 58.
The
proposals to be contained in the
s 129
notice must be such that the
consumer can respond thereto. The consumer should be informed
that debt enforcement proceedings
will follow if the consumer fails
to respond to the notice or reject the proposals. As stated by
the Supreme Court of Appeal,
the purpose of
s 129(1)(a)
of the NCA is
to resolve a dispute under a credit agreement or to develop and agree
on a plan to bring the agreement up to date
prior to enforcement of
that agreement and in order to avoid enforcement in the event that
the matter is successfully resolved.
The notice is a necessary
step before legal proceedings may be instituted. Compliance
with the provisions of
s 129(1)(a)
is thus mandatory notwithstanding
the use of the word
“
may”
.
See
Nedbank
Ltd and Others v National Credit Regulator
2011 (3) SA 581
(SCA) at paras [8], [9] and [14].
[40]
Another procedural requirement of s 58(1) of the Act is that the
consent in writing to judgment in favour of a creditor can
be for the
amount of the debt and the costs claimed in the letter of demand, or
for any other amount. In
casu
the costs of the letter of
demand is set out to be R17,00 excluding VAT, but respondent was
requested to sign a consent to judgment
in the capital amount of
R4 854,14 and a further amount of R2 452,92 in respect of
appellant’s legal costs, much
of which have not even been
incurred by then. The reference to “any other amount”
is apparently a reference to
a lesser amount than the full amount of
the claim and costs. See: Jones and Buckle,
The Civil
Practice of the Magistrates’ Courts of South Africa
,
vol 1 at Act 372 and Act 377.
VIII
EVALUATION
OF THE FACTS AND SUBMISSIONS OF THE PARTIES
[41]
The court
a
quo
has set aside the emoluments attachment order granted on 20 February
2012. That order is not before us but it was apparently
issued
by the clerk of the court. It could not have been issued by the
Hennenman Magistrate’s Court in light of the
provisions of s
65J of the Act, an aspect that does not have to be discussed any
further as Mr Mundell has correctly conceded this.
Appellant
was not entitled to such an order and it was also not entitled to any
benefits obtained as a result of that order.
Consequently, and
if it was the intention, the court
a
quo
would have been correct in setting aside the order of 20 February
2012 and to have granted the further relief. This is apparently
not what the learned magistrate had in mind when he granted his order
of 28 August 2014 if his reasons supplied in terms of MCR
51 are
considered. The wrong order was requested in the notice of
application, although the tenor of the respondent’s
founding
affidavit indicates that she sought the setting aside of the consent
judgment.
[42]
In so far as the parties probably had in mind that the court
a
quo
intended to set aside the consent judgment granted at the request of
appellant, which is obviously not the case as the order stands,
it is
apposite to briefly make the following comments. It is
uncertain whether we can entertain the appeal on the grounds
relied
upon on the basis of the existing order. Appellant should have
seen to it that the obviously patent errors be corrected
by the
magistrate prior to lodging appeal procedure. This could have
been done in terms of s 36(1)(c) of the Act or by requesting
the
respondent to consent to rescission or variation of the judgment.
[43]
The procedure followed by appellant by incorporating the notice in
terms of s 129(1) of the NCA with the letter of demand in
terms of
sections 56 and 58 of the Act is fatally incorrect based on the
authorities quoted above. The fact that appellant
waited for
ten days to expire before application was made for judgment by
consent did not cure the fatal defect. There was
no compliance
with MCR 4 in this regard and the court
a
quo
was
correct in stating that the “
relevant
rules
”
,
excluding rule 12(5), were complied with.
[44]
Furthermore both the consent to judgment and the letter of demand
refer to appellant as the plaintiff and apparent credit provider.
No reference is made in any of the documents to the fact that
plaintiff is merely a purchaser of certain book debts of a specific
and identified credit provider. The allegations in the
documents prepared by appellant’s attorney – the notice
in terms of s 129(1) and the consent to judgment - are therefore
blatantly false. The candidate attorney’s affidavit,
indicating that neither the original agreement, nor a copy thereof
could be found and that when appellant purchased the book debts,
the
“
physical
file was not supplied to the applicant
(the
present appellant)”, is inadmissible hearsay. The resultant
judgment is no doubt one of the reasons why the legislature
deemed it
fit to ensure that judicial oversight was made obligatory in all
proceedings against consumers in terms of the NCA.
[45]
The appellant did not consent to the jurisdiction of the Hennenman
Magistrate’s Court. Its attorney at the time,
Mr Van der
Merwe of Nelspruit in Mpumalanga, decided for a reason still unknown
to us that proceedings had to be instituted in
Hennenman
notwithstanding the addresses of the parties and the fact that the
cause of action, not to speak of the whole cause of
action, a
requirement in the Magistrates’ Court - did not arise in that
district. Appellant also did not sign the consent
to judgment
and no averment was made in the application for judgment that the
parties, it included, consented to the jurisdiction
of the Hennenman
Magistrate’s Court. This is on its own fatal for
appellant’s case.
[46]
In view of the purpose of the NCA set out in s 3 and briefly referred
to above, I am of the view that the proviso to s 45(1)
of the Act
does not apply in the circumstances with which the respondent was
confronted. The legislature in all probabilities
had in mind to
make it as convenient as possible for parties to approach a court in
order to obtain speedy resolution of a dispute.
Examples where
parties may prefer to consent to jurisdiction of a particular court
are in abundance, especially bearing in mind
the requirement in the
Magistrates’ Court that the whole cause of action must have
arisen in the jurisdiction of a court
for that court to adjudicate
the matter, unless s 28 of the Act applies. Respondent was
tricked into consenting to jurisdiction
of a court in another
province and about 800 km from her home. It would make a
mockery of our judicial system if we were
to find that her consent
was suitably covered by the proviso in s 45 of the Act, bearing in
mind all relevant circumstances.
Even appellant was
inconvenienced by the selection of the forum
in
casu.
Its
attorney had to appoint correspondents to act on his behalf and
thereby causing an increase in costs. Two sets of attorneys
were never called for and cannot be supported. When the
application for rescission was issued, Mr Van der Merwe and his
client were caught by surprise. Notwithstanding two
postponements they did not succeed in filing answering affidavits in
order to contest the application. I am of the view that
respondent’s consent could not be relied upon as it was in
direct conflict with s 45(2) of the Act and s 90(2)(k)(vi)(bb) of the
NCA read with s 91(a).
[47]
The court
a
quo
granted costs on an attorney and client scale and it is blamed by
appellant for not giving reasons for such an order. It
might be
so that no reasons were given by the court
a
quo
,
but bearing in mind the background, there can be no doubt that the
court
a
quo
was perfectly correct in granting a punitive costs order. The
application was initially postponed for one week by agreement
between
the parties, apparently because appellant’s legal
representative was not ready to proceed, where after it was postponed
at the request of appellant’s legal representative for a
further period of three weeks and on the last date, 28 August 2014,
a
further postponement was sought unsuccessfully as appellant had
failed to file any papers. The appellant, who decided to
institute action in the small town of Hennenman some 800km from
respondent’s hometown of Alice in the Eastern Cape, must
blame
itself for the predicament. It should never have followed the
procedure it did and it should never have instituted
action the
Hennenman Magistrate’s Court. A serious abuse of process
has occurred and there is no reason to find fault
with the punitive
costs order.
IX
ABUSE
OF PROCESS
[48]
I must say a few things in conclusion. The claim is for an
amount of just over R4 000,00. The cause of action
is
unknown, but we know that appellant did not sell any goods to
respondent as alleged. The attorney and client costs, claimed
to be incurred before action was instituted, is alleged to be
R2 452,92. However when the statement of account is
scrutinised
it is evident that respondent consented to costs still to
be incurred in future. Instead of issuing summons in Alice
where
respondent works and resides, or where the whole cause of
action had arisen if that could be established, plaintiff, a
Johannesburg
company, instructed a Nelspruit attorney some 400km away
who elected to approach the Hennenman Magistrate’s Court for
judgment
based on a dubious procedure. The Hennenman court is
some 600km away from Nelspruit and a second set of attorneys had to
be instructed to act as correspondents. This caused respondent
to instruct local attorneys in East Londen who also had to
appoint
correspondents in Hennenman for the rescission application.
When appellant decided to appeal, it instructed its Johannesburg
attorneys who instructed Bloemfontein attorneys as correspondents and
the East Londen attorneys had to do the same. The legal
costs
must be over R250 000,00 by now, bearing in mind the several
firms of attorneys involved and the fact that appellant
elected to
appoint senior counsel from Johannesburg to argue the appeal and
respondent decided to make use of a senior junior of
the local bar.
There is no explanation why the Hennenman Magistrate’s Court
was elected. Two possible reasons
come to mind, i.e. (i) the
personnel of that court deliver services of professional and high
quality standard in an efficient manner,
ensuring thereby that court
processes are dealt with swiftly and in accordance with the rules.
The other reason is too ghastly
to contemplate. Absolutely no
finding is made in this regard as I do not have any facts to point in
such direction, but it
is possible that there is a link between the
appellant and/or a legal representative on the one hand and someone
or more than one
person at the Hennenman Magistrate’s Court and
that favours can be obtained unduly. My attention has been
drawn to
Circular 030/2014 by the Department of Justice and
Constitutional Development dated17 March 2014. Therefore I am of the
view that
the interests of justice require that copies of this
judgment be sent to the Law Society for the Northern Provinces, the
Minister
of Justice and Constitutional Development and the National
Credit Regulator for their attention and investigation if so
required.
X
ORDER
[49]
Consequently the following orders are made:
1.
The
appeal is dismissed with costs.
2.
The
registrar of the court is directed to forward copies of this judgment
to the Law Society for the Northern Provinces, the Minister
of
Justice and Constitutional Development and the National Credit
Regulator.
_______________
J.
P. DAFFUE, J
I
concur.
_______________
A.
WILLIAMS,
AJ
On behalf of the
appellant:
Adv. A. R. G. Mundell SC
Instructed
by:
Bezuidenhouts
Attorneys
BLOEMFONTEIN
On behalf of the
respondent: Adv. C. D.
Pienaar
Instructed
by:
Lovius
Block
BLOEMFONTEIN
/eb