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[2012] ZANCHC 53
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Man Financial Services (Pty) Ltd v Van der Westhuizen (1875/2011) [2012] ZANCHC 53 (21 September 2012)
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IN
THE HIGH COURT OF SOUTH AFRICA
(Northern
Cape High Court, Kimberley)
Saakno: / Case number:
1875 / 2011
Datum verhoor: / Date
heard:
14/09/2012
Datum gelewer: / Date
delivered:
21/09/2012
In
the matter between:
MAN
FINANCIAL SERVICES (SA) (PTY) LTD
(Registration
Number: 1997/011686/07)
................
Applicant
and
JURGENS
JOHANNES VAN DER WESTHUIZEN
(Identity
Number: )
...............................................
Respondent
Coram:
Lacock,
J
JUDGMENT
LACOCK, J
[1] The applicant
hereto is a credit provider as defined in the National Credit Act,
No. 34 of 2005 (the NCA). During September
2008 and again in January
2011 the applicant and the respondent entered into two written
instalment sale agreements in terms whereof
the applicant sold a 2008
MAN TGA 27.440 BBS L truck and a 2011 MAN TGS 26.480 BLS LX truck to
the respondent respectively. These
are credit agreements in terms of
the NCA.
In respect of the
first agreement, the purchase price and finance charges had to be
paid in monthly instalments over a period
of 5 years, and in
respect of the second agreement the purchase price and finance
charges had to be paid over a period of 4
years.
In terms of the said
agreements ownership of the trucks remained vested in the applicant
until fulfillment of all its obligations
under the agreements by
the respondent.
[2] It is common cause
that the respondent defaulted under the agreements by falling in
arrears with the monthly instalments due
in terms thereof.
[3] By reason of the
aforesaid, the applicant had the following letter addressed to the
respondent on 12 October 2011:
“
1. We address this letter
to you on instructions received from our client, MAN Financial
Services (SA) (Pty) Ltd. You entered into
an agreement with our
client in respect of a 08 MAN TGA27.440 BBS-L and a 11 MAN TGS 26.480
BLSLX 6X4 T/T and you have subsequently
failed to comply with the
terms thereof in that you are currently in arrears with payment of
the instalments as indicated hereunder:
On 7 October 2011, the
outstanding indebtedness in account number: 77773636 amounted to
R590,716.27. You were in default with
payments thereon in the
amount of R88,873.68, with interest thereon calculated at the rate
of 9,000% per annum, compounded
monthly from 7 October 2011 to date
of payment.
On 7 October 2011, the
outstanding indebtedness in account number: 80574016 amounted to
R1,228,149.82. You were in default with
payments thereon in the
amount of R120,664.62 with interest thereon calculated at the rate
of 12,000% per annum, compounded
monthly from 7 October 2011 to
date of payment.
2. Kindly note that we herewith
draw the default to your attention and propose that you refer the
credit agreement to a debt counsellor,
alternative dispute resolution
agent, consumer court or ombud with jurisdiction, with the intent to
resolve any dispute under the
agreement or develop and agree on a
plan to bring the payments in terms of the agreement up to date.
3. Kindly note that if 10 (ten)
business days lapse from the date of delivery of this notice and you
have not responded to the notice
or responded by rejecting the
proposals, our client will proceed to institute action against you
for recovery of the full outstanding
amount of the indebtedness
together with an order that the goods be handed back to MAN FS.
4. We herewith demand payment of
the arrears as described and if not paid within the above mentioned
10 days MAN FS will cancel
the agreement and demand return of the
goods financed.
5. We trust that this matter will
receive your urgent attention and kindly note that this letter is
sent to you in terms of
Section 129
of the
National Credit Act No. 34
of 2005
.
”
The letter was served
on the respondent on 14 October 2011.
[4] The respondent
failed to pay the arrear instalments within the 10 day period
stipulated in the letter, whereupon the applicant
had a second letter
addressed to the respondent on 31 October 2011, reading,
“
1. You are in arrears with
payment of your instalments. Man Financial Services (SA) (Pty) Ltd
has cancelled the credit agreements.
2. We suggest that you urgently
arrange with our offices for the removal of the goods to avoid the
costs involved in urgent High
Court proceedings and the costs if we
have to instruct the Sheriff to attach and remove the goods.
”
[5] On 15 November 2011
the applicant filed the present notice of motion, claiming the
following final relief:
“
1. That the Respondent be
and is hereby ordered to return and handover to the Applicant the
goods listed in paragraphs 1.1 and 1.2.
infra, failing which the
Sheriff be and is hereby authorized to attach said goods wherever and
in whomever’s possession same
may be found and to return and
hand same over to the Applicant:
The 2008 M.A.N. TGA 27.440 BBS
L with chassis number HW9-0273 and engine number 51519120191912,
along with all relevant documents
in respect thereof;
The 2011 M.A.N. TGS 26.480 BLS
LX 6X4 T/T C/C with chassis number: AAM78W0002PX23836 and engine
number 51524320372449, along
with all relevant documents in respect
thereof;
2. That the Respondent be ordered
to pay the costs of this Application on a scale as between Attorney
and own client;
3. Granting the Applicant such
other and/or alternative relief as the honourable Court deems fit.
”
[6] The crisp point for
determination in this matter is whether the two instalment sale
agreements had been properly cancelled.
It is trite that cancellation
of the agreements is a prerequisite for entitlement to the relief
claimed in paragraph 1 of the notice
of motion. In
Absa Bank Ltd v
De Villiers
,
2009 (5) SA 40
(CPD), a full bench of that Division
had to consider the following issue:
“
[19] It follows from the
aforesaid that in terms of the general principles of our law of
contract an order authorizing the attachment
of a vehicle that is the
subject of an instalment agreement would be granted by the court as a
claim ancillary to the cancellation
of the instalment agreement. As
mentioned before, second respondent held that, absent a claim for the
cancellation of the instalment
agreement, applicant was not legally
entitled to a final order for the attachment of the vehicle. This
decision of the second respondent
is in accordance with the
principles of our common law. What has to be decided is whether the
NCA, and in particular
Part C
of Ch 6, has introduced a procedure at
variance with our common law, which entitles applicant to repossess
the vehicle in the absence
of the cancellation of this instalment
agreement.
”
In a well reasoned
judgment, Fourie J answered this question as follows at 51J to 52A,
“
[35] In view of the
aforegoing I conclude that applicant’s reliance on the
provisions of
s 131
read with
s 127(2)
– (9) as substantiation
for the submission that the legislature has introduced a procedure
whereby the credit provider is
entitled to the return of the goods,
without cancelling the relevant instalment agreement, is without
merit.
”
and
“
I accordingly conclude
that upon a proper interpretation of the relevant provisions of the
NCA the legislature has not done away
with the requirement of a claim
for the cancellation of an instalment agreement prior to the granting
of an attachment order in
terms of
s 131
of the NCA.
”
(at 52H)
The aforesaid legal
exposition applies to the granting of an interim attachment order as
well. (See
SA Taxi Securitisation v Chesane
,
2010 (6) SA 557
(GSJ) at 559F).
[7] It will be noted
that the applicant did not apply for either an order of cancellation
of the agreements or for an order confirming
the alleged cancellation
of the agreements.
7.1. In its supporting
affidavit the applicant
inter alia
alleges that, in terms of
the agreements, it is entitled to cancel same in the event of the
respondent defaulting in terms thereof.
What is therefore relied upon
on the papers, is a
lex commissoria
allegedly contained in the
written agreements. However no such contractual right of cancellation
is embodied in any one of the
written agreements. This was conceded
by Adv Olivier, appearing for the applicant.
7.2. Neither in its
papers nor in argument did the applicant rely on a common law right
of cancellation.
[8] Mr Olivier
submitted that the provisions of
section 123
read with
sections 129
and
130
of the NCA afforded the applicant a right of cancellation of
the agreements in question. Since the procedural requirements of the
said provisions had been met, so Mr. Olivier argued, the applicant
was entitled to cancel the agreements as it did in terms of
the
letters quoted hereinbefore.
8.1. A similar argument
was raised before Horwitz AJ in
Absa Bank Limited v Havenga and
Similar Cases
,
2010 (5) SA 523
(GNP), the facts of which were on
all fours with the facts in this matter. At page 537 A-D the learned
judge rejected this argument
in the following terms:
“
As regards the latter
point, and as I have indicated above, the fact that an agreement does
not contain an express cancellation
provision is not to say that
cancellation is therefore never possible: the common law may well
avail the credit provider. But in
that instance the appropriate
allegations must be made in the founding papers, and not some absurd
allegation, based on a template,
that the agreement contains an
express provision to that effect. As regards this category of cases
(where the agreement contains
no cancellation clause), it was
submitted to me that the allegations in the particulars of claim or
founding affidavit, that the
credit provider had complied with the
provisions of
ss 123
and
129
of the
National Credit Act were
sufficient to found an action for cancellation because, so the
submission went, those provisions created, and afforded the credit
provider, a right to cancellation. Those provisions of the Act do no
such thing. The right to cancel an agreement arises out of
an
application of the rules of the law of contract. Sections 123 and 129
are procedural in nature. They prescribe the procedure
that the
credit provider must follow in those instances in which the latter
enjoys a right of cancellation, no matter how that
right arises.
”
I agree with this
reasoning.
[9] In as much as
reliance was placed on the following wording of the relevant
contracts, viz,
“
Indien die huurder
wanpresteer, kan die Kredietverskaffer-
19.2.1 …
19.2.2 met geregtelike stappe
begin om hierdie ooreenkoms af te dwing, insluitende terugname van
besit van die goedere en verhaling
van invorderingskoste en
wanprestasie – administrasiekoste van die Huurder indien-”,
for a right of
cancellation thereof, I once again find myself in agreement with
Horwitz AJ where he dealt at 538C of his said judgment
with a similar
submission thus:
“
There is one provision
which gives the plaintiff the right to-
‘
enforce
this agreement including retaking possession of the goods and recover
collection costs and default administration charges
from the
Purchaser…
’
That provision could refer to a
temporary attachment order, pending compliance by the defendant (the
consumer) with his obligations
under the agreement. It does not imply
a right to cancel the agreement.
”
[10] By reason of the
aforesaid no vested right to cancel the said agreements had been
established or relied upon. It therefore
follows that the applicant
is not entitled to the repossession or attachment of the goods sold
under the agreements.
[11] Since, as
mentioned above, the applicant did not rely on a common law right of
cancellation, and as explicitly confirmed by
Mr Olivier, I do not
find it necessary to deal with Mr Janse van Rensburg’s
alternative submission i.e. that a period of
10 days notice is
unreasonably short under the common law, and would in any event not
have afforded the applicant a right of cancellation.
[12]
WHEREFORE THE
FOLLOWING ORDER IS MADE:
THE APPLICATION IS
DISMISSED WITH COSTS.
_________________
HJ LACOCK
JUDGE
For
the Applicant:
Adv. D.A. Olivier oio Duncan & Rothman
Inc.
For
the 1
st
Respondent:
Adv. Janse van Rensburg oio Elliott, Maris, Wilmans & Hay