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[2012] ZAKZPHC 12
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Subramanian v Standard Bank Ltd (7008/11) [2012] ZAKZPHC 12 (13 March 2012)
In
the KwaZulu-Natal High Court, Pietermaritzburg
Republic
of South Africa
Case
No 7008/11
In
the matter between :
R
G Subramanian
….........................................................................................
Applicant
and
Standard
Bank Limited
….............................................................................
Respondent
Judgment
Lopes
J
[1] On the 3
rd
August 2007
the applicant concluded an instalment sale agreement with the
respondent bank to enable her to purchase a motor vehicle.
It is
common cause that she and her husband, to whom she was married in
community of property, got into financial difficulties
as a result of
which she defaulted on her repayments to the respondent. Pursuant to
their financial difficulties the applicant
and her husband applied to
Fidelity Debt Counselling Services (Pty) Ltd for debt review. Their
application for debt review was
successful, and their creditors were
notified accordingly. On the 9
th
February 2011 the
respondent addressed a letter by registered post to the applicant’s
chosen domicilium citandi et executandi
in terms of the instalment
sale agreement, terminating the debt review in terms of s 86(10) of
the National Credit Act, 2005 (‘the
Act’). On the 5
th
August 2011 the respondent applied to the Registrar of this court for
default judgment in terms of the instalment sale agreement,
which was
granted on the 12
th
August 2011.
[2] The respondent first became aware
of the default judgment taken against her on the 5
th
September 2011 when a tracing agent arrived at her home with a
warrant of delivery. On the 28
th
September 2011 the
applicant instituted this application for rescission of that
judgment. Mr
Blomkamp
, who appeared for the applicant,
submitted that the applicant had satisfied the requirements for a
rescission in that she had demonstrated
:-
a reasonable explanation for her
default, which was neither willful nor due to gross negligence;
a bona fide application demonstrating
a bona fide defence to the respondent’s claim;
‘
good cause’ for the
rescission as required by Rule 31(2)(b) of the Uniform Rules of this
Court.
[3] I deal firstly with the bona fide
defence. Mr
Blomkamp
has submitted that the papers demonstrate
:-
(a) that the applicant was married in
community of property to her husband Yegan Subramanian; and
(b) that it was a condition subject to
which the instalment sale agreement was concluded, that the
applicant’s husband consented
to her concluding the agreement.
[4] There can be no doubt that the
respondent was well aware of the above facts. I say this because it
is evident from the copy
of the instalment sale agreement put up by
the respondent that it was a suspensive condition of the instalment
sale agreement that
the applicant’s husband’s consent was
necessary. There would have been no reason to request that consent
had the applicant
been married out of community of property.
[5] In the notification of the
acceptance of the application for debt review sent to the respondent
by Fidelity Debt Counselling
Services (Pty) Ltd, it recorded that the
applicants for debt review in that application were both the
applicant and her husband.
Their identification numbers were provided
as were their physical and postal addresses.
[6] As the applicant and her husband
were married in community of property, her husband was jointly and
severally liable for the
repayment of her debts. ‘Community of
property is a universal economic partnership of the spouses. All
their assets and liabilities
are merged in a joint estate, in which
both spouses, irrespective of their financial contributions, hold
equal shares’ –
H R Hahlo
The South African Law of
Husband and Wife
, H R Hahlo, 5
th
ed, pages 157 –
158. This is so despite the fact that the respondent was entitled to
bring its action against the applicant
only – see subsec 17(5)
of the
Matrimonial Property Act, 1984
which provides :-
‘
Where a debt is recoverable
from a joint estate, the spouse who incurred the debt or both spouses
jointly may be sued therefor,
…’
[7] It is correct, as pointed out by
Mr
Ramdhani
for the respondent, that the applicant was the
only party to the instalment sale agreement, and it is only the debt
review process
in respect of that instalment sale agreement which the
respondent sought to terminate. (see :
Collett v Firstrand Bank
2011 (4) SA 508
(SCA) at 517, paragraph 14.)
[8] But the corollary of community
assets is community of debts. ‘Die de man ofte wjif touwt, die
trouwt oock de schulden.’
‘Just as the assets of the
spouses become common property, so their debts become joint
liabilities’ – Hahlo op
cit, at 169 – 170.
[9] Subsec 86(10) of the Act provides
that if a consumer is in default under a credit agreement that is
being reviewed in terms
of s 86, the credit provider in respect of
that credit agreement may give notice to terminate the review after
the lapse of a period
of at least 60 days after the date upon which
the consumer applied for the debt review.
[10] Whilst the respondent may have
been entitled to terminate the debt review process, in order validly
to do so it was required
to give notice to the applicant. But what of
the applicant’s spouse? He is liable for the debts of the
applicant and his
rights are directly affected by the decision to
terminate the debt review process. In those circumstances it would
accord with
justice were he to be given the same notice of the
termination of the process as was afforded by the respondent to the
applicant.
That the respondent did not attempt to do so cannot be
ascribed to ignorance. It was clear from the documentation sent to it
that
both the applicant and her husband had applied for debt review.
[11] In those circumstances the
interests of the applicant’s husband were prejudiced by the
failure of the bank to notify
him of the cancellation of the debt
review process. Having not properly cancelled the debt review process
the respondent was not
entitled to have issued summons against the
applicant (see : subsec 88(3) of the Act). Although somewhat
distinguishable on the
facts, the decision in
M V Zammit and
another v The Standard Bank of SA Limited
(Case No 7593/10) (an
as yet unreported decision of Rall AJ in this division) would appear
to support this reasoning. Accordingly
the judgment against her was
one which should not have been granted, and it falls to be set aside.
Having reached this conclusion
it is unnecessary for me to consider
the other defences on the merits raised by Mr
Blomkamp
.
[12] The judgment falls within the
ambit of Rule 31(2)(b) of the Uniform Rules of this Court. The
default of the applicant was neither
willful nor negligent. The
circumstances were such that the respondent was aware from the
notification sent to it by the debt review
counsellor, that the
physical and postal address of the applicant was not the same as it
was in the original agreement in terms
of which the applicant chose
the address used as her domilicium citandi et executandi. Although
strictly speaking this is not a
notification of a change of
domilicium address in terms of the instalment sale agreement, it
would be unfortunate to suggest in
those circumstances that the
respondent had no notice of the change of the applicant’s
address.
[13] The applicant has accordingly
shown the necessary ‘good cause’ required by the rule.
[14] In all the circumstances I grant
the following order :-
The default judgment granted on the
12
th
August 2011 against the applicant under the above
case number is rescinded.
The applicant is granted leave to
defend the action brought against her by the respondent.
The warrant of delivery issued on the
17
th
August 2011 directing the sheriff of this court to
seize the 2005 Tata Indica 1.4LX is set aside.
The respondent is directed to return
the motor vehicle forthwith to the applicant.
The respondent is directed to pay the
costs of this application.
Date of hearing : 6
th
March
2012
Date of judgment : 13
th
March 2012
Counsel for the Applicant : P C
Blomkamp (instructed by W H A Compton)
Counsel for the Respondent : D
Ramdhani (instructed by Strauss Daly Incorporated)