Moroe v Absa Bank Limited t/a Bankfin (A62/2004) [2005] ZAFSHC 33 (3 March 2005)

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[2005] ZAFSHC 33
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Moroe v Absa Bank Limited t/a Bankfin (A62/2004) [2005] ZAFSHC 33 (3 March 2005)

IN THE SUPREME
COURT OF SOUTH AFRICA
(ORANGE
FREE STATE PROVINCIAL DIVISION)
Appeal No. :
A62/2004
In
the appeal of:
KAMOHELO
ISAAC MOROE
Appellant
and
ABSA
BANK LIMITED t/a BANKFIN
Respondent
CORAM
:
MALHERBE
JP
et
KRUGER
J
JUDGMENT:
KRUGER
J
HEARD ON:
13
DECEMBER 2004
DELIVERED ON:
3
MARCH 2005
[1] Appellant appeals
against a judgment in the magistrate’s court at Welkom cancelling
the instalment sale agreement between the
parties and ordering
appellant to pay damages calculated in terms of the agreement.
Appellant failed to comply with the rules relating
to appeals and
also lodged no heads of argument. In view of the fact that appellant
is acting in person, condonation should be granted.
[2] The
respondent claimed cancellation of an instalment sale agreement
concerning a motor vehicle and related relief in the magistrates’
court, Welkom.
[3] In his plea the
appellant stated:
“
(a) that it was a term of the
contract, implied by the law, that the plaintiff would only be
entitled to the relief set out in the
contract and the law if failure
by the defendant to effect payment as agreed was wrongful and/or
unlawful;
(b) that
defendant’s failure to effect payment was not as a result of any
wrongful and/or unlawful conduct on his part but was solely
as a
result of wrongful and/or unlawful misrepresentation on the part of
plaintiff’s employee or employees who, at all material
times, were
acting in the course and within the scope of their employment with
the plaintiff.”
[4] In response to the
allegation that he had failed to make payments in terms of the
agreement, the appellant admitted non-payment,
but alleged that his
failure “was due to the fact that plaintiff rendered performance
impossible for him”.
[5] When asked for
further particulars, as to the alleged misrepresentations, appellant
stated:
“1.1 Plaintiff’s
employees,
inter alia
,
advised defendant:
1.1.1 to resign from his stable job in
order for his loan application lodged with the plaintiff to be
approved;
1.1.2 that his employment, was the
sole impediment to his application being approved;
1.1.3 that after his resignation, the
loan application would be approved.”
[6] In response to the
question in what respect respondent rendered performance by appellant
impossible, appellant stated:
“2. Plaintiff’s
employees:
2.1 made defendant to resign from his
stable job which was his sole source of income;
2.2 The aforesaid resignation on the
advice of plaintiff’s employees resulted in defendant losing income
and thus rendered it impossible
for defendant to keep up with his
obligation in terms of the contract and thus rendered performance
impossible.”
[7] At the trial, held on
29 January 2003, the appellant was legally represented by an
attorney. Respondent’s attorney at the outset
made the submission
that the appellant (defendant) should bear the duty to begin leading
evidence. Appellant’s attorney told the
magistrate that he was
“more than satisfied with that”.
[8] Thereafter the
appellant testified as well as Mr. Mokwena, a business consultant.
The respondent closed its case without leading
evidence.
[9] Appellant testified
that he had worked for Sanlam for three years, the fourth year he
resigned. He did not resign voluntarily.
He was forced to resign by
Louisa Venter and Willie Oelofse from Absa. They told him to resign
from Sanlam and to get a confirmation
letter that he had indeed
resigned.
[10] In January 2001
appellant saw an advertisement about a franchise for Legal Power
Africa. He made enquiries and was told that
Mr. Walter Mokwena was
the representative in Bloemfontein whom he had to contact. Appellant
and Walter Mokwena went to find Legal
Power Africa. In Carletonville
they found Jannel, who is the owner of Legal Power Africa. Jannel
had another branch in Klerksdorp.
The head office of the franchise
was in Cape Town. Appellant decided he wanted to purchase the
franchise and drew up a business
plan. He asked Mr. Mokwena to help
him.
[11] Appellant wanted to
continue working for Sanlam, and stated this in his business plan.
Appellant wanted the manager that he
had taken with him to Cape Town
for training to manage the business. Louisa Venter told him that
they could not approve his loan
whilst he was still employed. Mr.
Mokwena, who was chosen by the Banking Council of South Africa to
help people who wanted to
apply for loans from the major banks,
helped appellant to prepare his business plan. Appellant called him
his financial adviser.
Mr. Mokwena advised appellant not to resign
from his work and to employ a manager to manage his business until
the business got
on its feet.
[12] Appellant submitted
the business plan to Absa, where Louisa Venter worked with this
application for a loan. It took very long
to process the
application. Towards the end of February appellant took leave so
that he could go to Cape Town with the person that
had been hired to
act as manager. Appellant went to Cape Town with this person for
training while appellant was still employed
at Sanlam.
[13] From Cape Town
appellant phoned the Welkom branch of Absa, and spoke to Louisa
Venter. She asked appellant to come to their
offices when he
returned from Cape Town. They made an appointment to see each other
two days later. When appellant arrived two days
later, they took the
appellant’s business plan and called Willie Oelofse from
Bloemfontein. While he was talking on the telephone,
he told the
appellant that his loan had been approved and asked him if he could
resign any time sooner if he was still working.
Appellant asked
Louisa Venter how long it was going to take to access the money after
resigning. She told him not longer than a
week.
[14] Appellant went to
speak to his manager at Sanlam, and told him that he wanted to
resign, that he had found finance, but Absa
could not finance him as
yet because he was still employed. His manager said he should write
his letter of resignation himself.
The appellant wrote the letter
and his manager acknowledged that he had indeed resigned.
[15] The letter of
resignation was forwarded to Bloemfontein, and on that day appellant
was told that his loan application with Absa
had been approved and
that his business Bank account would be opened.
[16] In the event,
appellant did not receive the loan from Absa. He was told the loan
had been turned down. He could not go back
to his previous work at
Sanlam because the three days grace he had been given had elapsed.
[17] After appellant had
resigned, his car was still in his possession. He could only afford
to pay one instalment after he had
resigned. He went to Louisa
Venter and explained his problem to her, and she told him not to
worry. She contacted one Ian Meintjies
at Bankfin. Appellant was
told that Meintjies was the manager. Appellant’s car was
repossessed in February 2002, a couple
of months later.
[18] Louisa Venter told
appellant that one Moses at the Johannesburg Head Office was
responsible for refusing the loan. Appellant
requested Mr. Mokwena
to speak to Moses. They spent about 45 minutes on the telephone.
Moses told Mr. Mokwena that the loan was
not going to be approved,
apparently also because appellant did not have any assets.
[19] Appellant phoned the
Absa Hotline to lodge his complaint. The manager was very
interested to help but when he heard about
the bank adjudicator (Mr.
Mokwena), he was no longer interested and told appellant that he
should go back to Louisa Venter as she
was the one who had told him
to resign from his work, not Absa Bank.
[20] In cross-examination
appellant said that he did not sign any application form for a loan.
It was put to the appellant that
neither Louisa Venter nor Oelofse
were employed by Absa Bank. He could not dispute that, but said
that at the time they were
employed by Absa.
[21] Appellant called Mr.
Mokwena as a witness. He is a business consultant for FDC, a
parastatal development corporation which helps
people who want to
start small businesses by financing and advising them. Mr. Mokwena
assisted appellant with his business plan
to start his own business.
Appellant took the business plan to Absa. It was submitted to Louisa
Venter. When the loan was turned
down, Louisa Venter called Mr.
Mokwena to her office because it was not clear to her why the loan
was turned down. Mr. Mokwena said
the problem was that the official
at Absa did not understand the cash flow. The answer was negative.
They now cited appellant’s
credit record as reason for turning the
loan application down.
[22] Mr.
Mokwena testified that paragraph 6.1 of the business plan he had
completed with the appellant stated that appellant should
keep his
employment with Sanlam until the business got viable. Mokwena
testified that he spoke to a number of officials from Absa,
who told
him that in order for applicant to get a loan, he had to resign from
his employment. The impression they created was that
the loan was
granted, but for appellant to get the money he had to resign. When
appellant resigned, Absa came up with excuses not
to grant the loan.
This shocked Mr. Mokwena and Ms. Venter.
[23] In cross-examination
Mr. Mokwena said that appellant did complete an application form for
the loan.
[24] The appellant’s
case was closed by Mr. Siyo after the evidence of Mr. Mokwena. The
respondent (plaintiff) closed its case
without leading any evidence.
[25] In her judgment the
magistrate found that there was no concrete evidence that Ms. Venter
& Mr. Oelofse were employees of
Absa. She found that the
evidence that they were employees of Absa, was contested by
respondent.
[26] On the issue of
vicarious liability, the magistrate found that the appellant had
failed to present proof that Oelofse and Venter
were employees of the
respondent. On the second issue, the impossibility of performance,
the magistrate found:
“
Daar
is geen
nexus
tussen die Eiser se eis en die Verweerder se verweer nie. Die een
kan nie teenoor die ander afgespeel word nie. Daar bestaan nie
eers
sekerheid of die Verweerder sal slaag met so ‘n eis nie. Daar is
nie so beding in die ooreenkoms opgeneem dat indien Absa
nie ‘n
lening sou toestaan aan die Verweerder, die Verweerder betalings
ingevolge die kontrak mag staak nie, …….”
[27] As to vicarious
liability appellant’s witness, Mr. Mokwena, testified:
“
According to the best of your
knowledge for whom was Louisa Venter working? -- Absa.
According
to the best of your knowledge and belief for whom was Mr Willie
Oelofse or Oelofse working? -- Absa.”
[28] This established
prima
facie
proof and no contrary evidence was produced and cross-examination
left this evidence intact:
“
Mr.
Mokwena, why did you say that Ms Louisa Venter was an official of
Absa? -- Because I know she was employed by Absa or working
at
Absa.
What is the source of your knowledge?
-- I was able to get that knowledge while I was dealing with Absa.
It was not the first time
that I was dealing with Absa.”
and:
“
MR MOSTERT:
My instructions are that Ms Louisa Venter was at the time when the
defendant applied for a loan in the employ of New Business
Enterprises
Bank. -- The statement is not correct because at that
time she was wearing the badge which has her name on and it was also
from
Absa, Absa logo on.”
In respect of Mr.
Oelofse, Mokwena testified:
“
You also made reference to a
certain Mr Oelofse. Where was he employed at the time? -- Regional
office Bloemfontein, Absa’s regional
office in Bloemfontein.”
[29] The appellant’s
allegation that respondent made performance impossible for him, flows
from the refusal of an application for
a loan to commence a business
which the appellant made to the respondent. This meant that
appellant had no income to continue payments
on the instalment sale
agreement.
[30] According to the
summons, the instalment sale agreement was entered into on 22
December 2000 at Klerksdorp. The instalment sale
agreement was made
with Agenbach Motors and ceded to the respondent. These allegations
are admitted in the plea. Respondent thus
acts herein as a
cessionary.
[31] Mr. Mokwena
testified that Absa created the impression that appellant must resign
from his current employment before the loan
could be paid out.
[32] From the evidence
the inference can probably be drawn that the respondent had brought
appellant under the impression that he
had to resign and that his
loan had in fact been approved and that the loan would be paid out as
soon as he had resigned. However,
after he resigned the loan was
turned down. The question is whether this situation created an
impossibility of performance as alleged
by the appellant for him to
comply with his obligations under the instalment sale agreement.
[33] The magistrate found
that the defence raised by the defendant was not of any legal force
because it fell outside of the contract.
She found that a possible
claim of appellant which might flow from the loan application was
unrelated to the present action. She
also said there was not even
any certainty that appellant would succeed in such claim.
[34] The magistrate
granted judgment in favour of plaintiff (respondent).
[35] The appellant’s
Notice of Appeal signed by his attorney, who represented him at the
trial, reads as follows:
“
1. The
Honourable Magistrate erred both in law and on the facts when she
found that no concrete evidence was adduced to show that
Mrs. Venter
and Mr. Oelofse were employed by the respondent.
2. The Honourable Magistrate erred in
law when she found that it was necessary for the appellant to call
the said Venter and Oelofse
as witnesses.
3. The Honourable Magistrate
misdirected herself when she found that the appellant was of the view
that it was not his obligation
to prove vicarious liability on the
part of the respondent.
4. The Honourable Magistrate erred in
law when she accepted the
ipse
dixit
of the respondent’s
legal representative as sufficient to refute the evidence tendered by
and on behalf of the appellant with regard
to the relationship
between the respondent on the one hand and Venter and Oelofse on the
other hand.
5. The Honourable Magistrate, further,
misdirected herself both in law and on the facts when she found that
the respondent disputed
the existence of employment relationship
between itself and the said Venter and Oelofse when, at no stage in
its pleadings, did the
respondent place that issue in dispute.
6. The Honourable Magistrate erred in
law and on the facts when she found that there existed no
nexus
between the respondent’s claim and the appellant’s defence.
7. The Honourable Magistrate’s
judgment goes against the weight of the evidence properly before
her.”
[36] No Heads of Argument
were filed by appellant, who appeared in person at the hearing of the
appeal.
[37] In his argument
before the magistrate, Mr. Siyo, applicant’s attorney referred to
four cases. He said it is a fundamental
principle of our law that
where one of the parties to a contract is responsible for the
impossibility of performance it does not
give a right to the party
who creates the situation of impossibility to claim relief on the
basis of the contract, with reference
to
WIREOHMS
S.A. (PTY) LTD v GREENBLATT AND ANOTHER
1959 (3) SA 909
(C) at 912. He also referred to
S.A.
CRUSHERS (PTY)
LTD v
RAMDASS
1951 (2) SA 543
(N) where the court says that a party cannot rely on
impossibility of performance where such impossibility has been
created by an
act of his own (at 547 B-C). In
CAVE
t/a THE ENTERTAINERS AND
THE
RECORD BOX v SANTAM INSURANCE CO. LTD
1984 (3) SA 735
(W) the defendant prevented the fulfilment of the
procedural requirement by not complying with its duties. Therefore
the defendant
could not raise non-compliance by the plaintiff in
order to avoid defendant’s obligation to indemnify plaintiff (at
747 F – H.)
Lastly, Mr Siyo referred
to
NATIONAL
UNION OF
TEXTILE
WORKERS AND OTHERS v JAGUAR SHOES (PTY)
LTD
1987 (1) SA 39
(N) at 46 A where the court said that where
performance by the employee becomes impossible due to the fault of
the employer, the
latter would remain liable.
[38] In his heads of
argument, Mr. Human for respondent, submitted that at best for
appellant, he showed that it would be difficult
for him to perform,
which subjective impossibility does not release him from liability,
with reference to
UNIBANK
SAVINGS AND LOANS LTD (formerly COMMUNITY BANK) v ABSA BANK
LTD
2000
(4) SA 191
(W) par. [9.2] especially at 198 B - C where the court
says that a contract is only terminated by objective impossibility,
not subjective
impossibility. Mr. Human pointed out that the
appellant, correctly, never suggested that it would be impossible to
ever earn an
income again. (
WORLD
LEISURE
HOLIDAYS
(PTY) LTD v GEORGES
2002 (5) SA 531
(W) at 533 F – 534 G.)
[39] In considering
impossibility of performance, one looks at the obligation created by
the agreement, not the reasons for entering
into the agreement.
(
ROSEBANK
MALL (PTY) LTD AND ANOTHER v CRADOCK HEIGHTS (PTY) LTD
2004 (2) SA 353
(W) par. [64] at 383 F – G). In the present case
the appellant says that the reason why he resigned was to secure a
loan. That
decision of his, taken for whatever reason, is unrelated
to his obligations created under the instalment sale agreement.
There
is no issue of
vis
major
in this case – the appellant took the decision to resign (on
vis
major
and foreseeability of impossibility, see
NUCLEAR
FUELS CORPORATION OF SA (PTY) LTD v ORDA AG
1996 (4) SA 1190
(A) at 1205 I – 1207 I.) Appellant is seeking to
escape liability, and has to show that there was no fault on his
part
GROBBELAAR
N.O. v BOSCH
1964 (3) SA 687
(ECD) at 691 D – E. The appellant decided to
resign from Sanlam. No-one forced him to do so. He did so because
he believed that
such resignation would secure a loan for his
proposed business venture.
[40] The negotiations
relating to obtaining a loan for appellant’s proposed business
venture were unrelated to the instalment sale
agreement. Even if one
were to accept that Venter and Oelofse were employees of respondent,
acting in the course and scope their
employment with respondent,
appellant has failed to show objective impossibility to perform, and
the negotiations and the loan for
the business venture were unrelated
to the appellant’s obligations under the instalment sale
agreement, which is the subject of
the present litigation.
[41] The appellant’s
inability to pay the instalments is temporary – it cannot be said
that it is impossible for him to find employment
in future.
Temporary impossibility of performance does not of itself bring a
contract to an immediate end –
WORLD
LEISURE HOLIDAY (PTY) LTD v GEORGES
(supra)
paragraph
[8].
[42] The question whether
the appellant was mislead in respect of his application for a
business loan, is unrelated to his obligations
under the instalment
sale agreement, which he concluded with Agenbach Motors, which was
ceded to the respondent. There is no evidence
that in the
consideration of the business loan the instalment sale agreement
featured at all. As the magistrate says in her judgment,
there is no
nexus
between respondent’s claim and appellant’s defence. They are
unrelated. There is no merit in the appeal.
[43] The magistrate came
to the correct conclusion.
[44] The appeal is
dismissed with costs.
____________
A. KRUGER, J
I
concur.
_________________
J.P. MALHERBE, JP
On
behalf of appellant : In person
No
attorneys
On
behalf of respondent : Adv. C.A. Human
Instructed
by:
Neumann
Van Rooyen Inc
BLOEMFONTEIN
/ec
/sp