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[2012] ZAFSHC 10
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Kuhl v Imperial Bank Ltd (5639/2010) [2012] ZAFSHC 10 (9 February 2012)
FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Case No.: 5639/2010
In the matter between:
JAMES WILLIAM JOHN
KUHL
….................................................
Applicant
and
IMPERIAL BANK
LIMITED
…...................................................
Respondent
JUDGMENT:
LEKALE, J
HEARD ON:
2
FEBRUARY 2012
_______________________________________________________
DELIVERED ON:
9 FEBRUARY 2012
_______________________________________________________
INTRODUCTION
[1] This is an opposed
application for rescission of a judgment issued in default of a plea
in this court on the 20
th
April 2011 for delivery of a
motor vehicle which was the subject matter of a credit agreement
governed by the provisions of the
National Credit Act no 34 of 2005
(NCA).
BACKGROUND
[2] Applicant entered
into the relevant agreement and accepted delivery of the motor
vehicle on or about the 10
th
June 2008. The agreement was
eventually ceded to the respondent after a debt re-arrangement order
had been issued.
[3] In 2009 the applicant
consulted a debt counsellor who determined that he was over indebted.
On the 27
th
October 2009 the magistrate’s court at
Klerksdorp issued a debt re-arrangement order in terms of section
87(1)(b)(ii) of
NCA with the respondent’s consent. The order
fixed monthly instalments in respect of the debt due to the
respondent at R1
086,34.
[4] The debt
re-arrangement order further appointed Consumer Protection Excellence
(CPE) as the payment distribution agent (PDA)
for the purpose of
fulfilling the applicant’s obligations to the affected credit
providers.
[5] On or about the 10
th
of November 2010 the respondent issued summons against the applicant
in terms of the credit agreement as it stood before it was
amended by
the re-arrangement order.
[6] Upon receipt of the
summons the applicant approached his debt counsellor, who also
happens to be his attorney, for assistance.
The said attorney
directed a letter to the respondent’s attorneys drawing their
attention to the existence of the debt re-arrangement
order, among
others.
[7] When no satisfactory
response was received from the respondent’s attorney, an
appearance to defend the matter was entered
through the applicant’s
correspondent attorneys in Bloemfontein. Instructions to that effect
were given per electronic mail
by the applicant’s attorneys in
Potchefstroom.
[8] The respondent,
eventually, delivered a notice of bar against the applicant after
placing him on terms by way of a letter.
[9] Judgment was,
thereafter, taken by default when the applicant’s plea was not
delivered within the prescribed time period.
[10] On the 8
th
July 2011 the applicant was alerted to the existence of the judgment.
He, thereupon, informed his attorney accordingly who, in
turn,
verified the information. The present application was, thereafter,
launched on the grounds that:
the applicant was not
in wilful default with regard to the delivery of his plea and the
default was attributable to innocent
miscommunication between his
Potchefstroom attorneys and their Bloemfontein correspondents;
the debt claimed was
subject to a re-arrangement order and the agreement was not legally
terminated because the respondent failed
to comply with the
provisions of the Credit Agreement regulating cancellation in so
far as it did not send any notice of cancellation
to the debt
counsellor, among others.
[11] The respondent
delivered an opposing affidavit in terms of which it, effectively,
admitted that the applicant’s debts
were re-structured by the
court order but maintains that:
11.1 the applicant was
not in compliance with the court order because he did not pay for
certain months and, when he did pay, he
paid amounts lesser than
those ordered by the court;
11.2 the applicant has
not furnished any proof of payment to the PDA.
[12] The respondent,
further, enclosed a copy of a notice of withdrawal from the debt
re-arrangement order and/or agreement dated
the 16 February 2010 as
proof that it notified the applicant and the debt counsellor
accordingly.
ISSUES
[13] The parties are,
effectively, in dispute over the following questions:
13.1 whether or not
failure to deliver a plea can, fairly and in law, be attributed to
the applicant; and
13.2 whether or not the
applicant has shown good cause for rescission regard being had to the
fact that he did not furnish any documents
from which it could,
objectively, be assessed if he was in compliance with the debt
re-arrangement order.
APPLICANT’S
VERSION AND CONTENTIONS
[14] The applicant
delivered a deposition by his attorney in terms of which it is
explained that the plea was sent per electronic
mail to his
Bloemfontein attorneys and a confirmation or a read report was duly
received. He also enclosed a further affidavit
from his Bloemfontein
Attorney to the effect that no receipt of such a pleading can be
traced in their system as well as the fact
that the secretary, to
whose electronic mail address the plea was sent, has since left the
attorney’s employ.
[15] With regard to
whether or not the applicant was in compliance with the debt
re-arrangement order, the applicant’s attorney
replied on
affidavit that the PDA had deducted its fees erroneously from the
payments made for the benefit of the respondent and
paid over R1
057,85 instead of R1 086,34 as ordered by the court. The applicant’s
version is further to the effect that he
could not access statements
for payments made before the 10
th
February 2010 as the PDA
had changed its computer systems during or about February or March
2010. He is still waiting for the relevant
documents and hopes to
furnish them as soon as they are available.
RESPONDENT’S
VERSION AND CONTENTIONS
[16] The respondent’s
position is that no satisfactory explanation for the default has been
furnished and that the applicant
has failed to proof that he complied
with the relevant order. In this regard Mr Snellenburg, appearing for
the respondent, contends
that the applicant could, at least, have
furnished his bank statements showing that he paid over to the PDA.
APPLICABLE
PRINCIPLES
[17] As correctly
submitted by Mr Snellenburg, the onus is generally on the defendant
to proof the alleged payment as well as the
debt in respect of which
such payment was made. (See
ITALTILE PRODUCTS (PTY) LTD v TOUCH
OF CLASS
1982 (1) SA 288
(O) at 290D – H.)
[18] The parties are,
effectively, in agreement that, in order for an applicant for
rescission to succeed at common law, he is expected
to give a
reasonable explanation of his default and to show that he has a
bona
fide
defence which
prima facie
has some prospect of
success. (See
COLYN v TIGER FOOD INDUSTRIES LTD t/a MEADOW FEED
MILLS (CAPE)
2003 (6) SA 1
(SCA) at 9D – F.)
[19] It suffices, for
rescission purposes, if the applicant sets out averments which, if
established at the trial, would entitle
him to the relief he seeks.
(See
GRANT v PLUMBERS (PTY) LTD
1949 (2) SA 470
(O) at
476).
[20] In appropriate
cases, where no blame can be attributed to a litigant, the courts are
reluctant to penalise a litigant on account
of the conduct of his
attorney. (See
SALOOJEE AND ANOTHER, NNO v MINISTER OF
COMMUNITY DEVELOPMENT
1965 (2) SA 135
(A) at 140H –
141A).
[21] Where the consumer
is in default on the debt re-arrangement order, the credit provider
is entitled to withdraw from the re-arrangement
and to enforce the
original credit agreement by,
inter alia
, complying with its
provisions. (See
FIRSTRAND BANK v FILLIS
2010 (6) SA
565
(E).
[22] In an application
for rescission of judgment the court is not enjoined to scrutinise
too closely whether the defence is well
founded. It is sufficient if
it appears to the court that there are,
prima facie
,
sufficient reasons for allowing the defendant to lay, before the
trial court, the facts which he thinks are necessary to meet
the
plaintiff’s claim. (See
RGS PROPERTIES v ETHEKWINI
MUNICIPALITY
2010 (6) SA 572
(KZG) at 575D – F).
FINDINGS
[23] The explanation
furnished for and on behalf of the applicant for the default appears
plausible regard being had to the fact
that the secretary, to whose
electronic mail address the plea was sent, is no longer in the employ
of the applicant’s Bloemfontein
attorney. There exists, in my
view, a reasonable possibility that, had she been available she would
have, most probably, been able
to shed more light on the issue. In
this regard it is worth noting that instructions relating to
appearance to defend were also
sent per e-mail and were,
undisputedly, received.
[24] Even if I am wrong
in the aforegoing finding, I am satisfied that none of the ineptitude
and remissness involved in the default
can fairly be attributed to
the applicant. It is clear from the explanation offered by the
attorney that the intention was always
to defend the matter. In this
regard a letter directed to the respondent’s attorneys, before
appearance to defend was entered,
clearly indicates that the
intention was to resolve the matter the soonest.
[25] Over-indebtedness
and strained financial circumstances are no defence to the merits of
a claim for payment of a debt. Debt
review, as a statutory process,
does not seek to relieve the consumer of his contractual obligations
but aims to achieve either
a voluntary debt restructuring or a debt
re-arrangement by the magistrate’s court. (See
COLLETT v
FIRSTRAND BANK LTD
2011 (4) SA 508
(A) at paragraph [10]).
[26] For the applicant in
this matter to succeed in showing a
bona fide
case which,
prima facie
, carries some prospect of success, he does not
have to show that he is not indebted to the respondent. He only has
to show that
he is in compliance with the debt re-arrangement order
as issued by the magistrate’s court.
[27] It is correct, as
contended for the respondent, that it is not forthrightly averred for
the applicant that he has paid for
the three-month period commencing
from November 2009 to and including January 2010. It is only alluded
that payments were and are
being made to the PDA which has to pay
over to the relevant credit providers.
[28] I am, however,
persuaded to exercise the court’s overriding discretion in
favour of granting the application because
there exists a reasonable
possibility that payments were made to the PDA. In this regard it
should be noted that it is averred,
on behalf of the applicant, that
the necessary documentation was requested from the PDA but had not
been received when the deposition
was made. I am, thus, satisfied
that the applicant has,
prima facie
, placed sufficient reasons
before the court to allow him to lay before the trial court the facts
that he thinks are necessary to
meet the respondent’s claim. It
is, further, possible that, had the respondent’s case in the
summons disclosed the
existence of the debt re-arrangement order and
failure by the applicant to comply therewith, the applicant would
have had ample
opportunity to amass the necessary information and
documentation to sufficiently show compliance with the order.
[29] In the light of the
aforegoing it is not necessary for me to engage with the alleged
failure by the respondent to place the
applicant in
mora
as
required by the agreement
COSTS
[30] The respondent
contends that the applicant should be saddled with the costs of the
application because he seeks an indulgence
and the application was
occasioned by his side.
[31] On behalf of the
applicant, Mr Tsangarakis requests the court to award costs, if
appropriate, against the applicant on a magistrate’s
court
scale because the amount claimed falls within the quantitative
jurisdiction of that court.
[32] In response, Mr
Snellenburg retorts that this court also has jurisdiction to
entertain the claim.
[33] I can find no reason
to deprive the respondent of part of its costs. As pointed out by Mr
Snellenburg, the action was equally
justiciable in the High Court and
there exists no evidence to suggest any malice or untoward motive on
the part of the respondent
when it approached this court by way of
action.
[34] Indeed the applicant
seeks an indulgence from the court and it cannot be argued, with any
measure of conviction, that the respondent
had no just cause for
opposing the application bearing in mind the meagre information
supplied by the applicant to establish his
bona fides
in
launching the application as well as the fact that short payments
were, admittedly, made on the order, (See generally
BREITENBACH
v FIAT SA
1976 (2) SA 226
(T)).
ORDER
[35] In the result, the
judgment granted in default of the plea against the applicant on the
20 April 2011 is hereby rescinded.
[36] The applicant is
granted leave to generally defend the matter by,
inter alia
,
delivering his plea within the prescribed period calculated from the
date of this order.
[37] The applicant is,
further, ordered to pay the costs of the application.
_______________
L. J. LEKALE, J
On behalf of the
applicant: Adv. S. Tsangarakis
Instructed by:
Kramer, Weihmann &
Joubert Inc
BLOEMFONTEIN
On behalf of the
respondent: Adv. N. Snellenburg
Instructed by:
Rossouws Attorneys
BLOEMFONTEIN
/eb