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[2013] ZAKZPHC 27
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Standard Bank of South Africa Ltd v Artlayk Trading CC and Another (4588/12) [2013] ZAKZPHC 27 (3 June 2013)
IN THE KWAZULU-NATAL
HIGH COURT, PIETERMARITZBURG
REPUBLIC OF SOUTH
AFRICA
CASE NO. 4588/12
THE STANDARD BANK OF
SOUTH AFRICA LTD
...............
PLAINTIFF
and
ARTLAYK
TRADING CC
.............................................
1
ST
DEFENDANT
ASHANTH
SURESH
....................................................
2
ND
DEFENDANT
JUDGMENT
Delivered
on 03 June 2013
STRETCH AJ:
[1] On 3 February 2011
the plaintiff (hereinafter referred to as “the bank”)
entered into an instalment sale credit
agreement (“the
agreement”) with the first defendant (“the CC”) in
terms of which the bank sold to the
CC a Tata Novus truck (“the
vehicle”) for the sum of R433 002,24 to be paid off in agreed
monthly instalments. On the
same day the second defendant (“the
surety”) bound himself in favour of the bank as surety and
co-principal debtor
in solidum
with the CC for all amounts
owed by the CC to the bank in terms of the agreement.
[2] Subsequent to this,
the CC defaulted with respect to the monthly instalment payments in
terms of the agreement.
[3] The bank issued
summons against the CC for cancellation of the agreement and the
return of the vehicle, together with a claim
against both the CC and
the surety for payment of the outstanding balance owed to it, which
according to the bank’s certificate
of balance, was R324 753,39
as at 17 May 2012.
[4] The CC and the surety
delivered a notice of intention to defend, whereafter the bank filed
an application for summary judgment
in terms of rule 32 of the
uniform rules of this court (“the rules”).
[5] The CC and the surety
are opposing the application on the following grounds:
that the bank has failed
to comply with the provisions of section 129 of the National Credit
Act 34 of 2005 (“the Act”);
that as at 1 June 2012
(when the bank issued summons), the CC had made good its arrears
with the bank in terms of an arrangement
which it had entered into
with the bank during May 2012;
(c) that the bank was
reckless when it lent money to the CC as the CC was, at all times
material to the conclusion of the agreement,
over-indebted.
[6] For the reasons which
follow I do not deem it necessary to traverse the first and third
grounds raised by the defendants. They
are in any event spurious and
opportunistic.
[7] I now turn to deal
with the contention that the CC had made good its arrears in terms of
an arrangement.
[8] In brief, the history
of this matter is the following:
The bank’s notice
in terms of section 129 of the Act avers that as at 26 April 2012,
the CC was in arrears with its instalment
payments to the tune of
R27 233,64. The notice invites the CC to inter alia contact the bank
telephonically to resolve any dispute
or to develop an acceptable
plan to make good the arrears. The notice also states that should
the CC not respond to the invitation
within ten business days of it
having been delivered to the CC or of it having been sent to the CC
by way of registered mail,
the bank “may” approach the
court to enforce the agreement.
A further notice, dated
the same day, again invites the CC to telephone the bank “at
the number shown above” (notwithstanding
the fact that
ex
facie
the document, there is no number “shown above”),
to make arrangements to settle the arrears. The letter further
states
that the outstanding arrears amount (the total of which is
not clear at all but purports to be R27 233,64) could be settled at
any branch of the bank, or the CC could contact the bank to arrange
a new payment plan.
It appears that both of
these notices were posted by way of registered mail to the
defendants at both 33 Swallow Road and 33 Swallow
Street, Mountview,
Pietermaritzburg. According to the bank’s track and trace
reports the two notices posted to the Swallow
Street address were
delivered to the surety (also being the sole member of the CC), on 7
May 2012. The surety denies having taken
delivery of the notice in
terms of section 129 of the Act. He is silent with respect to the
second notice which, although it
purports to be a notice in terms of
section 72 of the Act, advising the CC that it may be blacklisted if
it does not pay up or
make a plan within 20 days, again draws to the
CC’s attention the fact and the amount of the arrears.
Despite having denied
receiving the notice in terms of section 129 of the Act, the CC, in
its affidavit deposed to by the surety
as its only member, admits
that it fell into arrears during May 2012. The member avers that
during or about this time, he contacted
the bank’s local
branch (I would imagine that would be the Pietermaritzburg one),
with a view to making representations
to it for a moratorium on the
monthly instalments with the intention of updating the arrears upon
the expiry of the moratorium
period. He avers that the manager of
the local branch referred him to the bank’s debt review
department, which department
in turn referred him to the legal
department. An employee at the bank’s collections call centre
advised him, so he says,
that his account was in arrears in the sum
of R24 233,64 and that he was to settle this amount by no later than
31 May 2012 in
order to stave off the issue of summons.
He says that he
thereafter borrowed R25 000,00 from a friend and settled the arrears
before the cut-off date in two instalments,
the first being R10
000,00 on 9 May 2012 and a second payment of
R15 00,00 on 30 May 2012.
Annexed to his affidavit resisting summary judgment is what I deem to
be
prima facie
proof of these payments as per a Nedbank
printout reflecting two items of a beneficiary payment history.
The respondents
accordingly contend that they had in any event, been part of the
development of an acceptable plan to bring the
payments up to date
and/or to arrange a new payment plan as coincidentally envisaged in
the section 129 and the section 72 notices.
[9] In its practice note
for purposes of this application, the bank refers to the aforesaid as
being “bold unsubstantiated
statements that there was an
agreement, entered into with an employee of the plaintiff, to settle
the arrears.” In its heads
of argument, the bank criticises the
defendants for failing to state who they made the averred
arrangements with and whether this
person was authorised to vary the
agreement entered into between the bank and the CC (an agreement
which, as contended for by the
bank, contains a no variation clause
and as such any verbal agreement would be of no force or effect).
(10) The bank further
avers that upon the default of the CC in respect of any instalment
payment, the bank (in terms of the agreement)
is entitled to cancel
the agreement and to claim the full balance outstanding. This is of
course perfectly correct. However, I
have some reservations regarding
the bank’s admitted conduct in this regard.
(11) It is contended on
the respondents’ behalf that the various invitations to –
contact the bank to make
settlement arrangements
contact the bank to
arrange a new payment plan
contact the bank
(amongst others) to resolve any dispute
allowing the CC a period
of 20 days to make good the default before blacklisting would be
considered
allowing the CC a period
of ten days to “respond” to the section 129 notice (as
opposed to allowing the CC a period
of ten days to actually make
good the default itself)
are capable of being
construed as invitations in various forms to digress from the
non-variation clause reflected in the agreement.
[12] I am inclined to
agree.
[13] A further concern
which I have regarding the bank’s application at this stage of
the proceedings is whether the affidavit
of the bank’s
“collections legal manager, legal, credit rehabilitations and
recoveries, personal and business banking
credit” (as he
describes himself ) not only meets the requirements of rule 32(2) of
the rules, but whether (regard being
had to the respondents’
claims of substantial further payments) it is such that it can safely
be accepted that the amount
which the deponent avers is due, is due
as a result not only of non-compliance with the agreement but also
that no payments had
been effected during the month of May as
contended for by the respondents. I would, for example, in an
application of this nature
have expected the deponent to make a
factual averment in his affidavit (regard being had to the
information he says is reliable
and readily available) as to the
number of instalments the CC was in arrears with at the time he
deposed to the affidavit, and
to give a brief overview of the CC’s
payment history as at that date (being 7 September 2012 and a
substantial period of
time after the issue of the certificate of
balance).
[14] In deciding whether
or not to grant summary judgment (and whether to accept the affidavit
of the bank’s deponent), I
am guided by the principle that I
should look at the matter on all the documents which are properly
before me. See:
Maharaj v Barclays
National Bank Ltd
1976 (1) SA 418
(A)
at 423;
Trust Bank van
Afrika Bpk v Haarhoff
1986 (4) SA 446
(NC)
[15] I cannot ignore the
averment made on oath (supported by a printout) that the CC had duly
complied with a telephonic instruction
given by one of the bank’s
employees in order to stave off summons as at 31 May 2012. In this
regard I refer to the case
of
FirstRand Bank Ltd v Huganel
Trust
2012 (3) SA 167
(WCC) at 178A-C.
In this matter, the
bank official who had deposed to the affidavit in support of the
application for summary judgment had been
employed by the bank as a
litigation administrator. In his affidavit he not only said that he
had knowledge of the facts set out
in the summons and in the
particulars of claim, but also stated that:
all the records,
documentation and files were under his control;
he had studied and
examined all the aforesaid documents and had personal knowledge of
their contents;
the aforesaid matters
had been allocated to him by the bank by virtue of the fact that he
was personally in control of them (
sic
).
[16] Davis J, after a
careful analysis of the relevant cases, found that the bank
official’s averment of sufficient knowledge
(as in the
affidavit before me) fell short of the requirements of subrule (2).
Regarding this, the learned judge inter alia stated:
‘
By contrast,
there will be cases where, given the defence raised, some further
knowledge is required beyond an examination of the
documentation. In
other words, knowledge of a personal nature may be required if it is
relevant to the contractual relationship
as alleged by the defendant
and, if the defendant’s version is proved, could constitute an
adequate defence to the claim
.’
[17] I am of the view
that this is one of those cases. Even if my view errs on the side of
caution, the bank cannot overcome the
hurdle of what I believe to be
a fatal defect in its affidavit,
viz
the
using of the words “I verily believe that the defendant does
not have a bona fide defence”, instead of the words
“in
my opinion there is no bona fide defence” as required by virtue
of the provisions of rule 32(2).
[18] This averment is
essential and in my view a failure to make it can in a case of this
nature result in summary judgment being
refused. See:
Group Areas
Development Board v Hassim
1964 (2) 327 (T)
[19] In
Afcol
Manufacturing Ltd v Pillay; Afcol Manufacturing Ltd v
Buo
[1996] 1 All SA 426
(SE) at 432d
it was indeed held that the
wording of the rule must be strictly adhered to and that the words “I
verily believe” are
not sufficient. Applied to the facts and
circumstances of the case before me, I adhere to this view.
[20] I am in any event
satisfied that the respondents have substantially complied with the
requirements of rule 32(3)(b) in that
they have adequately disclosed
the nature and grounds for their defence and the material facts
relied upon for what I deem to be
a defence which is triable on the
basis that it appears to be both bona fide and good in law.
[21] In the premises the
order which I make is as follows:
ORDER
:
The application for
summary judgment is refused.
The defendants are
granted leave to defend.
Costs are reserved.
___________
STRETCH AJ
Appearances /
Appearances
For the Plaintiff
:
Mr. A. Flemming
Instructed by
:
Stupel & Berman Inc C/o Stowell & Co. Pietermaritzburg
For the Defendants
:
Mr.K. Chetty
Instructed
by
: Swaleh Mahomed Attorneys.
Pietermaritzburg
Date
of Hearing
: 11 December 2012
Date of Filing of
Judgment
: 03 June 2013