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[2024] ZAGPPHC 621
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Nedbank Limited v Mathebula (337/22; 384/22) [2024] ZAGPPHC 621 (12 June 2024)
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IN THE HIGH COURT
OF SOUTH AFRICA
(GAUTENG DIVISION,
PRETORIA
Case No.: 337/22
(1) REPORTABLE:
YES
/NO
(2) OF INTEREST TO
OTHER JUDGES:
YES
/NO
(3) REVISED
DATE:
In
the matter between:
NEDBANK
LIMITED
Plaintiff
and
THOMAS
JOHANNES MATHEBULA
Defendant
Case
No.: 384/22
In
the matter between:
NEDBANK
LIMITED
Plaintiff
and
THOMAS
JOHANNES MATHEBULA
Defendant
"
This
judgment was prepared and authored by the Judge whose name is
reflected herein, duly signed, and is submitted electronically
to the
Parties/their legal representatives by email. This judgment is
further uploaded to the electronic file of this matter on
Case Lines
by the Judge or his Secretary. The date of this judgment is deemed to
be 12 June 2024."
JUDGMENT
MTEMBU
AJ
Introduction
“
Regardless
of the view that this Court may take of the defence raised by the
respondent, the catastrophic effect of the Covid-19
pandemic on lives
and livelihoods worldwide is indisputable.”
[1]
The above remark was enunciated by
Molemela
JA
in
Slabbert N O & 3 Others v Ma-Afrika Hotels t/a Rivierbos Guest
House (772/2021)
[2022] ZASCA 152
(4 November 2022), at para 21. I am
starting with this remark precisely because the defendant’s
defence raised in this matter
is primarily based on lockdown
restrictions, as he says, it prevented him from performing his
contractual obligations for the period
of the ‘hard lockdown’
26 March - 30 April 2020
and
beyond.
[2]
The plaintiff, in two actions instituted against the defendant
on what appears to be the same causes of action, has applied for
summary judgments. The parties agreed that these applications be
heard simultaneously. The claim in case number 337/22 is almost
identical to the claim in case number 384/22. The affidavit in
support of the application for summary judgment is substantially
identical in its wording to the one in case number 384/22. It is not
surprising, given the similarity of the respective causes
of action
and the fact that the parties in both actions are represented by the
same attorneys. It was, therefore, prudent that
these matters be
consolidated in order to reduce the burden of determining two
applications which are identical in terms of the
cause of action and
the defence thereto.
[3]
The plaintiff is a registered credit provider and duly registered as
such in terms of the National
Credit Act 34 of 2005 (“the NCA
or the Act”). The plaintiff and the defendant, in
separate transactions, entered
into Instalment Sale Agreements
(“Agreement”) on 19 September 2018.
Summary
of the facts
[4]
Briefly, the facts underscoring the present application are that the
plaintiff has instituted
an action against the defendant wherein the
plaintiff relies on a breach by the defendant of the aforesaid
Agreement and claims,
inter alia,
the relief, namely:
confirmation of termination of the agreement entered into between the
parties; return of the motor vehicle
to the plaintiff forthwith;
forfeiture of all amounts already paid by the defendant in terms of
the Agreement; the plaintiff be
authorised to sell the vehicle in
execution; the plaintiff be given leave to approach the court for an
order enforcing the remaining
obligations of the defendant, if the
vehicle has been attached and sold, and the net proceeds of the sale
are insufficient to discharge
all of the defendant’s financial
obligations under the Agreement; payment of attorney and client
costs; and further and or
alternative relief.
[5]
In each case, the plaintiff, Nedbank Limited,
entered into a written Agreement with the defendant. In terms of each
Agreement, the
plaintiff would supply and deliver the motor vehicle.
The defendant, in return, would pay a monthly instalment for each
motor vehicle.
[6]
The defendant, in each transaction, allegedly defaulted on his
obligation to pay the monthly instalment.
The plaintiff alleges that
it has validly cancelled each of these agreements, and the plaintiff
seeks to repossess each motor vehicle.
[7]
T
he conclusion of the Agreement in its terms, delivery of the
vehicles to the defendant and the defendant’s breach of the
said
agreement by its failure to make regular monthly payments are
not disputed. It was further not disputed that the plaintiff reserved
ownership of the two motor vehicles until the defendant discharged
his indebtedness to the plaintiff.
[8]
The defendant did not dispute that he was in arrears at the time nor
did he contend that the plaintiff
was not entitled to cancel the
Agreement in his affidavit.
[9]
The only defence raised by the defendant was that as a result of the
national lockdown in terms
of the Disaster Management Act 57 of 2002,
he was unable to trade and there was
vis major
or a
supervening impossibility of performance and as such, performance
under the contract was excused.
[10]
Apparently, the defendant used the motor vehicles for business
purposes. In support of his defence, the defendant
contended that
when the country was on hard lockdown, the taxi industry was not
allowed to work for a specific period, and even
after the easing of
some restrictions, the taxis were allowed to carry only 70% of the
normal load capacity.
Legal
principles
[11]
There is a plethora of authorities regarding summary judgments, and
they require no exclusive exposition.
The issue to be decided is
whether the respondent has a
bona fide
defence.
[12]
Uniform Rule 32 (3) requires that the court be satisfied that the
defendant’s defence, as stated
in his affidavit, constitutes a
bona fide defence to the plaintiff's claim. In deciding whether the
defendant has set out a bona
fide defence, all the court enquires is
whether, on the facts so disclosed, the defendant has disclosed the
nature and grounds
of her/his defence; and whether, on the facts so
disclosed, the defendant appears to have, as to either the whole or
part of the
claim, a defence which is bona fide and good in law. See
Maharaj
v Barclays National Bank Ltd
[1]
.
[13]
Rule 32(3)(b) expects defendants to satisfy the court by disclosing
their
bona fide
defence to the action. The
defendant has to disclose fully the nature and grounds of
the defence and the material
facts relied upon therefor.
[14]
Uniform Rule 32 was amended with effect from 1 July 2019. Under the
amended Rule, a plaintiff must wait for
the defendant to deliver a
plea before a plaintiff may institute summary judgment proceedings.
Therefore, a Judge cannot entertain
a summary judgment application in
terms of the said rule without a plea having been filed. There have
been no material changes.
The requirements for how a defendant may
successfully oppose summary judgment remain the same.
[15]
The issue to be determined is whether the defendant, indeed, has
disclosed a
bona fide
defence.
During
the hearing, the preliminary points raised by the defendant were
abandoned.
Analysis
of the defendant’s defence
[16]
As
already stated above,
to
avoid summary judgment a defendant wishing to satisfy the court by
affidavit that he has a
bona
fide
defence
to the action, shall “disclose” fully the nature and
grounds of the defence and the material facts relied
upon therefor.
(Rule 32(3)(b)). The test of
bona
fide
means
that the defendant’s allegations ought not to be inherently and
seriously unconvincing. See Breitenbach v Fiat
SA (Edms) Bpk
[2]
[17]
The defendant’s defence is that lockdown restriction
constitutes a vis major or supervening impossibility,
and thus, he is
excused from his obligations. As a general rule, the impossibility of
performance brought about by vis major or
casus fortuitus will excuse
the performance of a contract.
[3]
The rule will not avail a defendant if the impossibility is
self-created; nor will it avail the defendant if the impossibility
is
due to his or her fault. Save possibly in circumstances where a
plaintiff seeks specific performance, the onus of proving the
impossibility will lie upon the defendant.
[4]
The impossibility must be absolute or objective as opposed to
relative or subjective. Subjective impossibility to receive or to
make performance does not terminate the contract or extinguish the
obligation.
[5]
[18]
The instalment sale agreement does not make provision for
force
majeure
.
Under these circumstances, the defendant is thus constrained to
illustrate compliance with the common law doctrine of supervening
impossibility of performance
[6]
.
[19]
Dippenaar J in Wesbank,a Division of Firstrand Bank Limited v PSG
Haulers CC (38511/2020) [2022] ZAGPJHC
603 (25 August 2022) an
unreported case, stated that:
“
[14] As held in
Glencore Grain Africa (Pty) Ltd v Du Plessis NO and Others, if
provision is not made contractually by way of a force
majeure clause,
a party will only be able to rely on the very stringent provisions of
the common law doctrine of supervening impossibility
of performance,
for which objective impossibility is a requirement. Performance is
not excused in all cases of force majeure”.
[20]
Dippenaar J further stated that:
“
the change in
the defendant’s financial position is not, as required by law,
absolute. The obligation to render performance
even during lockdown
can, in general, be performed by parties in the position of the
defendant. The defendant’s personal
incapability does not
render the instalment sale agreement void”
[7]
.
[21]
In Freestone Property Investment (Pty) Ltd vs Remake Consultants CC
and Another
[8]
, it was held
that:
“
Even when
approached from this nuanced perspective, the first defendant cannot
legally justify its failure to make payment of rentals
and other
charges for the protracted period of March to October 2020.
Whatever
restrictions there may have been that prevented the plaintiff and the
first defendant from performing their respective
obligations for the
period of the ‘hard lockdown’ until 30 April 2020, those
restrictions did not persist until October
2020. From 1 May 2020, the
lockdown regulations were progressively eased. Any supervening
impossibility of performance did not
endure for the entire period
corresponding to the first defendant’s non-payment of rentals
.
[My Emphasis]
[22]
The declaration of the state of disaster and the continued effect of
the Covid 19 pandemic may have
resulted in a dramatic decline in
custom but does not afford a defence.
[9]
[23]
The
court in
Johannesburg
Consolidated Investment Co v Mendelsohn & Bruce Limited
1903
TH 286
also
rejected a claim for remission of rental because of a decline in
custom arising from the outbreak of war, which rendered it
no longer
profitable to operate a stationer’s shop. The court conjectured
the following particularly relevant analogy at
295, 296:
“
The
consequence of holding that the defendants in this case are entitled
to a remission of rent appears to me to be far-reaching.
It would
involve this, that on the happening of any event amounting to vis
major, which caused a temporary diminution of the
population of a
town, every tradesman who could show that he had sustained a
temporary loss or a considerable diminution of profit
might be
entitled to a remission of rent.
Suppose, for instance,
that in consequence of the outbreak of an epidemic disease a large
proportion of the inhabitants fled, with
the result that owing to the
absence of their usual customers the tradesmen temporarily were
carrying on business at a loss, and
closed their shops, it would come
as an unpleasant surprise to the lessors to find that the whole of
the loss is to fall upon them,
and that they occupy in effect the
position of insurers of their lessees' custom.”
[My
Emphasis]
[24]
The Supreme Court of Appeal in
Slabbert
N O & 3 Others v Ma-Afrika Hotels
t/a
Rivierbos Guest House
(772/2021)
[2022]
ZASCA 152
(04 November
2022)
left the issue open
whether
the restrictive regulations applicable during the period 26 March
2020 to 20 September 2020 constituted a supervening impossibility
of
performance.
[10]
However, it
held that the period after 20 September 2020 cannot be considered for
purposes of supervening impossibility since there
was no
government-imposed trade ban at that time. Even if it is accepted
that the Covid-19 regulations that prevented or restricted
trade were
the cause of the default in rental payment, there is no justification
for such default beyond 20 September 2020, regardless
of the
diminished commercial ability that may have resulted from the
Covid-19 pandemic. Thus, the doctrine of impossibility of
performance
could not be triggered beyond 20 September 2020.
[11]
In a judgement of this division, decided before the SCA decision in
Slabbert,
Gilbert
AJ
in
Freestone
[12]
held that, “
whatever
the defence the first defendant may have that it was excused from
paying rentals for the period of the ‘hard lockdown’,
that impossibility of performance does not relate to the full period
for which it did not make payment”.
[25]
What can be gleaned from the authorities referred to above is that it
is generally accepted by our courts
that
even if the
defendant were to succeed in its defence of the supervening
impossibility of performance, it would still not be relieved
of its
contractual obligations during the remaining period of the Covid-19
restrictions after the hard lockdown.
That impossibility of performance does not relate to the full period
for which it did not make payment.
[26]
The defendant remained in possession of the motor vehicles throughout
the lockdown period up to this moment.
I
t
was not disputed that the plaintiff reserved ownership of the two
motor vehicles until the defendant discharged its indebtedness
to the
plaintiff. Neither did the defendant dispute that he was in arrears
at the time, nor did he contend that the plaintiff was
not entitled
to cancel the agreement in his affidavit. Even if I were to accept
that the defendant was indeed operating the motor
vehicles for
business purposes and thus Covid-19 caused an impossibility to honour
his contractual obligations due to a total shutdown
in the economy,
such impossibility of performance cannot extend beyond 31 April 2020
since the lockdown restrictions were progressively
eased. During this
period, public transport was permitted to operate, with limitations
on the number of passengers and stringent
hygiene requirements,
including that all passengers should wear face masks. I must also
highlight, though, that the impossibility
of performance is not
one-sided. It must not be possible for anyone to make that
performance. If the impossibility is peculiar
to a peculiar
contracting party, the contract is valid and the party who finds it
impossible to render performance will be held
liable for breach of
contract.
[13]
[27]
For the authorities referred to above, I see no reason why I should
not grant summary judgment.
[28]
At best, for the defendant, given the stringent and extraordinary
nature of summary judgment proceedings, the issue
of arrear payments
is the one in which I can refuse summary judgment. For purposes of
summary judgment,
an
arguable defence is in respect of at least a portion of the arrears
.
I decline to descend into the arena of prospects of success. This, in
my view, does not fall within the purview of the summary
judgment
court. It is trite that should there be, on the facts presented by
the defendant, an arguable defence, he has passed the
test on paper
and must be granted leave to defend. That defence will then be
properly adjudicated upon at a trial in due course.
In such an
instance, it cannot be contended that the defence is without merit.
The court is then required to refuse summary judgment
even though it
might consider that the defence will probably not succeed at
trial
[14]
.
Costs
[29]
What remains is the question of costs.
The
general rule is that the successful party should be given his costs,
and this rule should not be departed from, except where
there are
good grounds for doing so. In this matter, there is nothing that
warrants deviation from the general rule. Although the
defendant is
granted leave to defend at least a portion of arrear payments, in my
view, the plaintiff was a successful party.
Order
[30]
Consequently, Summary judgment is granted, and
an order is made as follows::
(a)
The credit agreements are cancelled;
(b)
The Defendant is ordered to return the 2018 TOYOTA QUANTUM 2.7
SESFIKILE 16s; with engine
number 2[...] and chassis number A[...]
vehicle to the Plaintiff;
(c)
The Defendant is ordered to return the 2018 TOYOTA QUANTUM 2.7
SESFIKILE 16s; with
engine number 2[...] and chassis number A[...]
vehicle to the Plaintiff;
(d)
The damages component of the Plaintiff’s claims are postponed
sine die,
and the Defendant is granted leave to defend a
portion of the Plaintiff’s claims, being the arrear payments
during the period
of the hard lockdown;
(e)
The Plaintiff is granted leave to return to the Court on the same
papers, duly supplemented, to
obtain judgment in respect of damages
suffered by the Plaintiff once the vehicles have been sold; and
(f)
The Defendant is ordered to pay the costs of suit.
A.M. MTEMBU AJ
Acting Judge of the
High Court of South Africa
Gauteng Division,
Pretoria
Date
of hearing:
24
April 2024
Date
of judgment:
12
June 2024
Counsel
for the Plaintiff:
Adv J
Van der Merwe
Instructed
by:
Uys
Matyeka Schwartz Attorneys, Johannesburg
Counsel
for the Defendant:
Mr M
E Phaladi,
Instructed
by:
M E
Phaladi Attorneys, Pretoria
[1]
1976 (1) SA 418 (A) at 425G–426E.
[2]
1976(2) SA 226 (T) at 228B.
[3]
Transnet
Ltd v The MV Snow Crystal
(250/07)
[2008] ZASCA 27
(27 March
2008) ; 2008 (4) SA 111
at para 28
[4]
Ibid
at para 28
[5]
Matshazi
v Mezepoli Melrose Arch (Pty) Ltd and Another; Nyoni v Mezepoli
Nicolway (Pty) Ltd and Another; Moto v Plaka Eastgate
Restaurant and
Another; Mohsen and Another v Brand Kitchen Hospitality (Pty) Ltd
and Another (2020/10556; 2020/10555; 2020/10955;
2020/10956;) [2020]
ZAGPJHC 136; (2021) 42 ILJ 600 (GJ) (3 June 2020) at para 37
[6]
Wesbank,a
Division of Firstrand Bank Limited v PSG Haulers CC (38511/2020)
[2022] ZAGPJHC 603 (25 August 2022) an reported case,
at para 17
[7]
Para
21;
See
also
FirstRand
Auto Receivables (RF) limited v Andrew Zungunde
under
case no:
19875/2021,
delivered
on 27 January 2023, an unreported case which followed the salutary
approach as enunciated by Dippernaar in Wesbank,
where
Kilmartin
AJ stated that:
“
[25]
As it was not objectively impossible for all persons to pay their
vehicle instalments during Lockdown, I find that any impossibility
is relative to the Defendant because of his personal situation.
Therefore, the Defendant cannot rely on the common law doctrine
of
supervening impossibility of performance. I therefore find that
there is no merit in the second defence.”
[8]
2021 (6) SA 470
(GJ), at para 27
[9]
Ibid
at para 29
[10]
See para 25
[11]
Ibid at para 25; the issue in this case was in respect of the
operation of a guest lodge during lockdown restrictions. Guest
houses were only permitted to operate during alert level 2 which
came into effect from 18 August 2020 to 20 September 2020. It
was on
this basis that the court stated that impossibility could not be
triggered beyond 20 September 2020.
[12]
2021 (6) SA 470
(GJ), at para 32
[13]
Matshazi v Mezepoli Melrose Arch (Pty) Ltd and Another; Nyoni v
Mezepoli Nicolway (Pty) Ltd and Another; Moto v Plaka Eastgate
Restaurant and Another; Mohsen and Another v Brand Kitchen
Hospitality (Pty) Ltd and Another, supra, at para 37; See also
Freestone
Property Investment (Pty) Ltd vs Remake Consultants CC and
Another, supra, at para 12, where it was held that:
“
A
consideration of a defence of supervening impossibility of
performance in the context of the regulations passed pursuant to
the
state of disaster should be approached from the perspective of its
effect on the performance by the plaintiff of its obligations
as
lessor
and
on the performance by the first
defendant’s obligations as lessee, rather than approached
solely from the perspective
of whether the first defendant was able
to perform its side of the bargain, particularly to pay rentals.”
[14]
Eisenberg’s
v OFS Textile Distributors (Pty) Ltd
1949 (3) SA 1047 (O)
1055;
Arend
v Astra Furnishers (Pty) Ltd
1974 (1) SA 298 (C)
316C; see also Cohen N.O and Others v D (368/2022)
[2023] ZASCA 56
(20 April 2023) at para 29