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[2012] ZAGPPHC 300
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Standard Bank of SA Ltd v Koekemoer (70014/2011) [2012] ZAGPPHC 300 (20 November 2012)
REPORTABLE
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTH
GAUTENG, PRETORIA)
CASE
NO: 70014/2011
DATE:20/11/2012
In
the matter between:
STANDARD BANK OF SA
LTD.
..........................................
APPLICANT
and
PETRUS JACOBUS
KOEKEMOER
...................................
RESPONDENT
JUDGMENT
KUBUSHI
J
[1]
This is an opposed application for summary judgment. The applicant
seeks an order for: confirmation of the cancellation of the
Instalment Sale Agreement entered into between the applicant and the
respondent; the return of the motor vehicle as specified in
its
particulars of claim; postponement sine die of damages and costs of
suit.
[1]
The facts of the matter are that the applicant and the respondent
entered into an instalment sale agreement in terms of which
the
applicant sold a motor vehicle to the respondent. In terms of the
agreement the applicant remains the owner of the motor vehicle
for
the duration of the agreement until such time as the final instalment
shall have been paid.
[2]
A further term of the agreement is that in case the respondent
defaults in his obligations in terms of this agreement the applicant
is to send the respondent a written notice of the default with a
proposal for the respondent to refer the credit agreement to a
debt
counsellor, dispute resolution agent, consumer court or ombud with
jurisdiction, the intent being for the parties to resolve
any dispute
under the agreement.
[3]
The applicant alleges that the respondent has breached the terms of
the agreement in that he failed to make punctual monthly
payments of
the instalments. The applicant as a result elected to cancel the
agreement and has issued summons against the respondent
claiming
confirmation of the cancellation of the agreement; return of the
motor vehicle fully described as a 2008 Toyota Corolla
1.4 PROF
bearing engine number 4ZZV091646 and chassis number
AHTLA58E603019760; damages and costs of suit.
[5]
The applicant attached copies of notices in terms of section 86 (10)
of the National Credit Act 34 of 2005 (the Act) forwarded
to the
respondent, the National Credit Regulator and the respondent’s
debt counsellor, together with confirmation of their
delivery, to the
summons.
[6]
The application was first enrolled for hearing on the 20 April 2012
and on that date Davids AJ concluded that the section 86
(10) notices
were not properly delivered. The learned Judge postponed the matter
sine die and made an order in terms of section
130 (4) (b) (ii)
allowing fresh transmission of the notices before the matter is
enrolled again.
[7]
When the parties appeared before me on the 19 October 2012, the
applicant had according to its counsel complied with the order
made
of the 20 April 2012. According to counsel, the applicant sent, per
registered post, new section 86 (10) notices to the respondent,
the
National Credit Regulator and the respondent’s debt counsellor
on the 26 September 2012 and attached the respective proof
of posting
and the track and trace reports in respect of those notices.
[8]
At the hearing of the application the respondent’s counsel
argued a preliminary point that the applicant has still not
complied
with the provisions of section 129 (1) (b) of the Act in that:
firstly, the action by the applicant was premature in that
the
summons was issued before the respondent was provided with the
section 86 (10) notice by the applicant and that the fact that
the
respondent has now been provided a new notice does not avail the
applicant. I do not agree with him.
[9]
In terms of section 130 (4) (b) of the Act, where a court finds, in
proceedings before it, that a credit provider has not complied
with
the requirements of section 129 of the Act, it must adjourn the
proceedings and make an appropriate order setting out the
steps the
credit provider must complete before the matter may be resumed. See
SEBOLA & ANOTHER v STANDARD BANK OF SOUTH AFRICA
LTD &
ANOTHER
2012 (5) SA 142
(CC) at para [87].
[10]
In this instance, the court, correctly so, adjourned the matter on
the 20 April 2012 and gave an order setting out the steps
the credit
provider has to complete before the matter may be resumed. It is
common cause that the applicant has completed the steps
set out in
that order and consequently this point must be rejected.
[11]
Counsel also contended, that the service of the new notices cannot be
relied on because section 32 (4) of the Uniform Rules
of Court (the
Rules) bars the applicant from giving evidence not contained in the
founding affidavit to the summary judgment application.
He referred
me in this respect to the judgment in ROSSOUW v FIRSTRAND BANK LTD
2010 (6) SA 439
(SCA) at 454A - C and Erasmus: SUPERIOR COURT
PRACTICE at B1 - 229. This point, in my view, has no merit as well.
[12]
The new notices and their respective proof of posting and/or delivery
are in my view not new evidence as contemplated in rule
32 (4) of the
Rules or as discussed in the ROSSOUW - judgment above. This is
evidence, if it can be referred to as such, that was
ordered by the
court. The provisions of section 130 (4) (b) are per se peremptory
with no discretion available to the court for
deviation. The court
was, therefore, obliged to adjourn the matter and to give direction
to the applicant as to what to do if it
intended proceeding with the
matter. The notices are therefore the outcome of that order. See
STANDARD BANK OF SOUTH AFRICA LTD
v ROCKHILL
2010 (5) SA 252
(GSJ) at
para [18].
[13]
In relation to the main action, the respondent, firstly, contended
that the cancellation of the agreement was premature in
that the
applicant did not comply with clause
12.2
of the agreement which obliged the applicant to serve the respondent
with a letter of demand before taking action against him.
The
applicant’s counsel, on the other hand, submitted that proper
notice of default had been given to the respondent and
that it took
effect from the time it was communicated.
[4]
In terms of rule 32 (3) (b) of the Rules a respondent resisting
summary judgment application must set out in his or her affidavit
facts which if proved at the trial, will constitute an answer to the
applicant’s claim. See BREITENBACH v FIAT SA (EDMS)
BPK
1976
(2) SA 226
(T) at 227G - H.
[5]
It is correct, as argued by the respondent’s counsel, that
where an agreement lays down a procedure for cancellation,
that
procedure must be followed or a purported cancellation will be
ineffective. See BEKKER v SCHMIDT BOU ONTWIKKEL1NGS CC &
OTHERS
[2007] 4 All SA 1231
(C) at paras [13]-[17].
[6]
It is, however, not the case in this instance. A thorough perusal of
the agreement does not reveal any cancellation clause that
the
applicant should have followed in order to cancel the agreement.
Clause 12.2 of the agreement, which the respondent relies
on for his
defence, states as follows:
‘
indien
u wanpresteer wat betref u verpiigtinge ingevolge hierdie Ooreenkoms,
sal ons u skriftelik kennis gee van sodanige wanprestasie
waarin u
versoek sal word om die wanprestasie reg te stel en u verwittig word
dat u hierdie Ooreenkoms kan verwys na ‘n skuldberader
(as u ‘n
natuurlike persoon is), ‘n alternatiewe geskilbeslegtingsagent,
die verbruikershof of 'n ombudsman met jurisdiksie,
met die oog
daarop om enige geskil ingevolge hierdie Ooreenkoms op te los, of om
in te stem tot 'n plan om die terugbetalings wat
betaalbaar is
ingevolge hierdie Ooreenkoms by te bring.”
As
is apparent the above clause does not have anything to do with the
cancellation of the agreement and the respondent is thus wrong
to
rely on it. This clause clearly relates to the requirements of
section 129 (1) (a) of the Act which requires a credit provider
to
notify a consumer of the steps the consumer should take to remedy a
default emanating from a credit agreement. Section 129 (1)
(a) is the
first step which a credit provider should take in order to enforce a
credit agreement.
[18]
Even if the conclusion I made in the above paragraph is wrong, I take
a view that in the circumstances of this case it would
have been
unnecessary for the applicant to proceed in terms of clause 12.2 of
the agreement when the respondent had already applied
for a review of
his debts. Section 130 (1) (a) of the Act, inter alia provides that a
credit provider may approach a court to enforce
a credit agreement if
at least 10 business days have elapsed after the credit provider
delivered a section 86 (10) notice to the
consumer. In my
understanding of this provision, in order for a credit provider to
enforce a credit agreement where a consumer
has applied for a debt
review, the credit provider need not start the court process by
issuing a section 129 notice. The credit
provider is entitled after
10 business days after the delivery of the section 86 (10) notice to
directly approach a court for enforcement.
See FIRST NATIONAL BANK
LTD v JP STEENKAMP case number 57644/2011 (GNP) (11 May 2012)
unreported.
[19]
What remains to be determined is whether the agreement has been
cancelled or not and if so whether the applicant was entitled
to
cancel it. In respect of these issues the applicant’s counsel
referred me to the following judgments: SWART vVQSLQO
1955 (1) SA 100
(A); MIDDELBURGSE STADSRAAD v TRANS-NATAL STEEN KOOL KORPORAS1E BPK
1987 (2) SA 244
(T) at 249A - G; DU PLESSiS v GOVERNMENT OF THE
REPUBLIC OF NAMIBIA
1995 (1) SA 603
(Nm) at 605C - F SINGH v McCarthy
retail ltd t/a mcintosh motors
[2000] ZASCA 129
;
2000 (4) SA 795
(SCA); WIN TWICE
PROPERTIES (PTY) LTD v BINOS
2004 (4) SA 436
(W) and ENGELBRECHT v
MERRY HILL (PTY) LTD
2006 (3) SA 238
(E) at 244G.
[20]
The right to cancel an agreement arises out of an application of the
rules of the law of contract. It is a trite principle
of the law of
contract that the right of a party to cancel an agreement, is not
only restricted to cases in which there is a contractually
agreed
procedure. In the absence of such an express term allowing for
cancellation of a contract, the common law may avail the
party
seeking to cancel.
An
innocent party may thus cancel a contract by reason of a breach of a
material term by the other party to the contract, or the
breach of a
term that the innocent party has by notice to the defaulting party
made material. See ABSA BANK v HAVENGA & SIMILAR
CASES
2010 (5)
SA 533
(GNP) at 535D-H.
[21]
Therefore, before a credit provider becomes entitled to claim a final
order authorising attachment of a motor vehicle, as is
in this
instance, the repossession of the motor vehicle, that credit provider
must first cancel the relevant agreement with the
consumer The credit
provider must have that right to cancel the agreement.
[22] A summons in this instance was
served on the respondent on the 11 December 2011. The applicant in
paragraph 4.4 of its particulars
of claim set out what it purports to
be the cancellation clause of the agreement between it and the
respondent. After a thorough
perusal of the agreement, as already
alluded, I could not come across any cancellation clause in the
agreement correlating to this
paragraph. On this discrepancy on the
part of the applicant I respectfully align myself with the strong
sentiments expressed by
Horwitz AJ in ABSA BANK v HAVENGA &
SIMILAR CASES above at 5351 - 536J.
[23]
Where the innocent party seeks to rely on the common law for the
cancellation of the agreement, such allegation must be made
in the
founding papers. In this instance, the applicant alleged the
following in paragraph 7 of its particulars of claim:
“
The
plaintiff has accordingly cancelled the Agreement alternatively
elects to cancel the Agreement herewith."
Based
on the above, I am of the view that, to the extent that a notice of
cancellation was required, the service of the summons
on the
respondent and the fact that the election to cancel the agreement was
expressly stated therein, served that purpose.
[24]
The applicant was also entitled to cancel the agreement due to the
seriousness of the default. In terms of the agreement the
respondent
was to pay a monthly instalment of R3 985.35. At the time of the
issue of the summons he was in arrears in the amount
of R172 659.06
together with interest thereon at the rate of 10.69% per annum from
18 September 2011 to date of payment. This is
as per the Certificate
of Balance attached to the summons and dated the 21 October 2011. The
amount in arrears was quiet substantial
and justified the
cancellation of the agreement. See SINGH v McCARTHY RETAIL LTD t/a
MclNTOSH MOTORS above at paras [11] - [14].
[18]
Based on the aforesaid, I am of the opinion that, the respondent’s
defence falls short of the requirements of rule 32
(3) (b) of the
Rules and must therefore be rejected.
[19]
The agreement having been cancelled, it follows that the applicant is
entitled to the return of the motor vehicle.
[20]
Debt relief in terms of the Act is meant to alleviate a consumer’s
indebtedness, and in circumstances like the present
one, where the
creditor seeks return of goods in which ownership vests in the
creditor, the relief should be applicable only in
respect of a claim
where there is outstanding deficiency after the realisation of a
credit provider’s security and not in
respect of a claim for
the return of the security. See SA TAXI SECURITISATION (PTY) LTD v
ALBERT CAMPHER unreported ECG case no.
5081/2009 at para 14 and SA
TAXI SECURITISATION (PTY) LTD v M BATH A
2011 (1) SA 310
(GSJ) at
para [35],
[21]
That being the case, the respondent in this instance, can therefore
not avail himself of the defence based on overindebtedness.
As a
result all the other technical defences in terms of the Act, which he
relies on, cannot, in my view, find application in this
instance. The
defences may be raised should the applicant proceed with its claim
for damages against him.
[22]
Consequently I grant summary judgment against the respondent in
favour of the applicant in the following terms:
22.1
The cancellation of the Instalment Sale Agreement between the
applicant and the respondent is confirmed.
22.2
The respondent is ordered to immediately return to the applicant the
motor vehicle fully described as a 2008 Toyota Corolla
1.4 PROF
bearing
engine number 4ZZV091646 and chassis
number AHTLA58E603019760.
29.3 The damages claim is postponed
sine die.
29.4 The respondent to pay costs of
suit on an attorney and client scale.
E.M.
KUBUSHC
JUDGE
OF THE HIGH COURT
HEARD
ON THE : 19 OCTOBER 2012
DATE
OF JUDGMENT : 20 NOVEMBER 2012
APPLICANTS’
COUNSEL : ADV J VAN DER MERWE
APPLICANTS’
ATTORNEYS : VEZI & DE BEER INC
RESPONDENT’S
COUNSEL : ADV C J VAN EEDEN
RESPONDENT’S
ATTORNEYS : VAN DER HOVEN ATTORNEYS
C/O
ERNS DU PLESSIS ATTORNEYS