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[2013] ZAWCHC 52
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Investec Bank Ltd t/a Investec Private Bank v Ramurunzi (12554/08) [2013] ZAWCHC 52 (22 March 2013)
REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE HIGH COURT, CAPE TOWN)
REPORTABLE
case no: 12554/08
In
the matter between:
INVESTEC BANK LIMITED t/a INVESTEC PRIVATE BANK
.......................
Plaintiff
and
MAVHUNGU DAVID RAMURUNZI
...........................................................
Defendant
Heard: 5
March 2013
JUDGMENT DELIVERED: 22MARCH 2013
Savage AJ:
On 1 August 2008 the plaintiff, Investec Bank Limited trading as
Investec Private Bank, issued summons against the defendant,
Mr
Mavhungu Ramurunzi in terms of which judgment was sought against the
defendant for payment of the amount of R120 558.59, together
with
the return of the cards issued to the defendant by the plaintiff,
interest and costs.
The defendant raised a special plea of prescription in respect of
the claim, which was argued on 5 March 2013. The basis for
the plea
is that in spite of summons having been served on the defendant in
August 2008, notice in terms of s129(1)(a) of the
National Credit
Act 34 of 2005 (“NCA”) was only provided to the
defendant in April 2012, more than three years after
the summons was
served, as a consequence of which the claim has prescribed.
A factual dispute exists between the parties as to whether an
earlier notice in terms of section 129(1)(a)was provided to the
defendant before summons was served in August 2008. The parties seek
this Court to determine only the effect of the notice provided
to
the defendant in April 2012 on the basis that the plaintiff reserves
the right to lead oral evidence at a later stage regarding
any such
earlier notice that may or may not have been provided to the
defendant, should this be required.
The plaintiff opposed the special plea on the basis that on 19 April
2012 an order,taken by agreement between the parties, was
granted by
this Court in terms of which the matter was adjourned as envisaged
by s 130(4)(1)(b) of the NCA and the plaintiff
was required to
deliver a notice in terms of s 129(1) by way of email to the
defendant before the matter was resumed. This order
recorded that it
was taken ‘
with reservation of each of the parties rights
’.
The notice in terms of s129(1) was thereafter delivered to the
plaintiff as a consequence of which the plaintiff argued
that it is
entitled to proceed with its claim on the basis of the 2008 summons
served.
National Credit Act
S129(1)of
the NCA provides that:
(1)
If
the consumer is in default under a creditagreement, the
creditprovider—
(a)
may draw the default to the notice of the
consumer in writing and propose that the consumer refer the
creditagreement to a debt
counsellor, alternative dispute resolution
agent, consumer court or ombud with jurisdiction, with the intent
that the parties resolve
any dispute under the agreement or develop
and agree on a plan to bring the payments under the agreement up to
date; and
(b) subject to
section
130
(2), may not commence any legal proceedings to enforce
the agreement before—
(i) first providing notice to the consumer, as
contemplated in
paragraph
(a)
, or in
section
86
(10), as the case may be; and
(ii) meeting any further requirements set out
in
section
130.
The relevant provisions of
s 130(1)
are as follows:
(1) … a credit provider may approach the court for an
order to enforce a credit agreement only if, at that time, the
consumer is in default and has been in default under that credit
agreement for at least 20 business days and –
(a) at least 10 business days have elapsed
since the credit provider delivered a notice to the consumer as
contemplated in
section
86
(9), or
section
129
(1), as the case may be;
(b) in the case of a notice contemplated in
section
129
(1), the consumer has—
(i) not responded to that notice; or
responded to the notice by rejecting the credit provider’s
proposals; and
(c) in the case of an instalment agreement,
secured loan, or lease, the consumer has not surrendered the relevant
property to the
credit provider as contemplated in
section
127.
In terms of
s130(3)
the court may only determine the matter if it
satisfied that the provisions of
s129
(or
129
or
131
as the case may
be) have been complied with, the matter is not pending before the
Tribunal and the credit provider has not approached
the Court under
the circumstances specified.
S130(4)
continues:
(4) In any proceedings contemplated in this section, if the court
determines that—
(a) the credit agreement was reckless as
described in
section
80
, the court must make an order contemplated in
section
83
;
the credit provider has not complied with the relevant provisions
of this Act, as contemplated in subsection (3) (a), or has
approached the court in circumstances contemplated in subsection
(3) (c) the court must—
adjourn the matter before it; and
(ii) make an appropriate order setting out the steps the credit
provider must complete before the matter may be resumed…
Discussion
A credit provider may not commence with legal proceedings against
a debtor in terms of s129(1)(b) before notice in terms of s129(1)(a)
has been provided to the debtorandany further requirements have been
met in terms s130.
In
Rossouw v Firstrand Bank
2010 (6) SA 439
(SCA) Maya JA
held at 451E-G that –
‘
In the circumstances, the bank did not prove that it
delivered the notice. As pointed out earlier, ss 129(1)(b)(i) and
130(1)(b)
make this a peremptory prerequisite for commencing legal
proceedings under a credit agreement, and a critical cog in a
plaintiff's
cause of action. Failure to comply must, of necessity,
preclude a plaintiff from enforcing its claim; this despite the fact
that
in this matter it was not disputed the appellants were in
arrears and thus breached their contractual obligations. The bank,
therefore,
failed to make out a case for summary judgment and it
ought to have been refused
…’
If a credit provider has not complied with the relevant
provisions of the NCA, s130(4) permits the court to adjournthe
proceedings
already instituted and ‘
make an appropriate
order setting out the steps the credit provider must complete before
the matter may be resumed’.
Where the court, in the
face of non-compliance by a credit provider with the provisions of
the NCA, does not adjourn the proceedings
and make an appropriate
order in terms of s130(4) the effect of such continued
non-compliance,given the peremptory nature of
ss 129(1)(b)(i) and
130(1)(b),is that a plaintiff is precluded from enforcing its claim.
S15(1)
of the
Prescription Act 68
of 1969
provides that ‘(t)
he running of
prescription shall, … ,
be
interrupted by the service on the debtor of any process whereby the
creditor claims payment of the debt.
’
In
terms of
s16(1)the
provisions of the
Prescription Act apply
unless
such provisions are inconsistent with the provisions of legislation
‘
which prescribes a
specified period within which a claim is to be made or an action is
to be instituted in respect of a debt or
imposes conditions on the
institution of an action for the recovery of a debt
’
.
The NCA constitutes legislation which ‘
imposes
conditions on the institution of an action for the recovery of a
debt
’
. As much is
evident from
ss 129(1)(b)(i)
and
130
(1)(b) which provides a
‘
peremptory prerequisite
for commencing legal proceedings under a credit agreement, and a
critical cog in a plaintiff's cause of
action’ (per Maya JA in
Rossouw supra).
Consequently,
the service of a summons by a credit provider on a debtor in
circumstances in which there has not been compliance
with such
peremptory provisions does not interrupt the running of
prescription. T
he running of
prescription in such circumstances is only interrupted where, as a
matter of fact, there has been compliance with
the NCA
after the court has adjourned proceedings
in terms of
s130(4)
and ordered such compliance
.
Compliance with the provisions of the NCA
subsequent to and in terms of an order of court made in terms of
s130(4)
is not a retrospective act, nor does it have retrospective
effect. This is because s
tatutes are
construed as operating prospectively only, unless the legislature
has clearly expressed a contrary intention (
S
v Acting Regional Magistrate, Boksburg
2012
1 BCLR 5
(CC)
).
In
Curtis v Johannesburg Municipality
1906
TS 308
at 311
and 312
Innes CJ put it this way:
‘
The general rule is that, in the absence of express
provision to the contrary, statutes should be considered as affecting
future
matters only
.’
In
National Iranian Tanker Co v MV Pericles GC
1995 1 SA 475
(A) at 483H–
484A Corbett CJ stat
ed:
‘
A statute is retrospective in its effect if it takes
away or impairs a vested right acquired under existing laws or
creates a new
obligation or imposes a new duty or attaches a new
disability in regard to events already past. (This definition appears
to merge
two canons of interpretation: the presumption against
retrospectivity and the presumption against interference with vested
rights.
This, however, is not of great moment, as both canons lead in
the same direction. See
Cape Town Municipality v F Robb &
Co
Ltd
1966 (4) SA 345 (C), at 350 F –
351 D.)
There is an exception to thisrule in the case of a statute
which is purely procedural and operates prospectively on all matters
coming before the Court after the passing of the statute, though even
here it is the intention of the Legislature which is paramount.
Moreover, a provision which is procedural in form may in essence
affect the substantive rights of persons.
Both retroactive and retrospective legislation will not be given
effect to if vested rights are taken away or impaired, or new
obligations are created, or a new duty is imposed, or a new
disability is attached in regard to events already past.
Shewan
Tomes & Co Ltd v Commmissioner of Customs & Excise
[1955]
4 All SA 272
(A)at 274-5;
Cape Town Municipality v F Robb &
Co Ltd
supra 350F–351D; De Ville 205.
In
Minister of Safety & Security v Molutsi
1996 4 SA 72
(A) at 88D–E it was stated that the approach to the
interpretation of statutes, within the context
of the
Constitution,is one –
‘
mindful of society’s distaste for retroactive
legislation characterised by a reluctance to accept that accrued and
vested
rights are intended to be retroactively set at naught unless
the legislation in question makes that plain
’.
The service of processupon the debtorfor purposes of
Prescription
Act must
be undertaken in a legally effective manner. Where service
of process is premature in terms of a statutory provision, legal
proceedings
are not effectively commenced and prescription is not
interrupted. (
Evins v Shield Insurance Co Ltd
1980 (2) SA 814
(A) at 842;
Santam Insurance Co Ltd v Vilakazi
1967 (1) SA 246
(A) at 253). This conclusion is supported by Laubscher in Extinctive
Prescription (1996) at 127 in which he concludes that a
‘
defective
provisional sentence summons will not interrupt prescription and
upon dismissal of such a summons the plaintiff will
not be entitled
to continue with the principle case’
.
The NCA does not state that compliance with the court’s order
in terms of
s130(4)
applies retrospectively to the date of service
of the summons.In
Mercedes Benz Financial Services South Africa
(Pty) Ltd v Dunga
2011 (1) SA 374
(WCC) at 385A-B, Blignault J
stated with reference to the Concise Oxford Dictionary that the
ordinary meaning of the word ‘resume’
in the context of
the NCA is ‘
to continue after an interruption
’.
It follows therefore that the court acting in terms of
s130(4)
therefore, following its order regarding compliance, will
resume
proceedings through continuing them after the interruption in which
compliance was effected. The NCA is silent on the effect
of such
procedure on prescription.
In the absence of clear language to this effect,it must be presumed
that the legislature did not intend such compliance to have
retrospective application.
Furthermore, the l
egislature must
be presumed not to have intended to take away vested rights or
produce prejudicial effects retrospectively in
the absence of
language clearly stating such intention.
(
Shewan
Tomes & Co Ltd v Commmissioner of Customs & Excise
supra
311G–312A;
National Iranian Tanker Co v MV Pericles GC
1995 1 SA 475 (A
) 483H–484A;
Cape
Town Municipality v F Robb & Co Ltd
supra 350F–351D;
De Ville 205).
The defendant held a vested right to raise a special plea of
prescription given the plaintiff’s non-compliance with
s129(1)(a)
prior to April 2012. If compliance with the court’s
order in April 2012 were to be found to retrospectively ‘validate’
the summons, this would have the effect of taking away the
defendant’s vested right to plead prescription. Such a finding
would not accord with the language of the statute which makes no
provision for such retrospectivity and I am persuaded that the
reference to the resumption of proceedings indicates that what is
intended is that the adjournment of proceedings pending compliance
and thereafter their continuation or resumption. Had the
retrospective validation of proceedings been intended, this would
been apparent from the language of the statute. Accordingly, with
the ‘
prerequisite for commencing legal proceedings
under a credit agreement, and a critical cog in a plaintiff's cause
of action’
being the provision of a notice in terms
of
s129(1)
, the running of prescription is interrupted,where summons
has already been served, only on provision of the notice to the
debtor,
whereafter the credit provider may enforce its claim.
The case of
Minister of Safety and Security v De Witt
[2008] ZASCA 103
;
2009 (1) SA 457
(SCA)turned on the interpretation of the notice
requirement contained in the
Institution of Legal Proceedings
Against Certain Organs of State Act 40 of 2002
. This Act permits
condonation to be granted by the court where notice of legal
proceedings has not been provided,if the organ
of state relies on a
creditor’s failure to serve notice and where the debt has not
been extinguished by prescription; good
cause exists for the failure
by the creditor; and the organ of state was not unreasonably
prejudiced by the failure. If condonation
is granted in terms of
s3(4)(c), the court may grant leave to institute the legal
proceedings on such conditions regarding notice
as the court deems
appropriate. The court concluded in
De Witt
that a
pplication for condonation may be made by the creditor
even after proceedings have been instituted if the debt has not
prescribed
and that to find differently loses sight of the purpose
of condonation (at para 10).
Given that the summons was issued and
served before the end of the prescriptive period, the court held
that it had a discretion
to condone the late service of the notice
after the proceedings were instituted.
Lewis JA at para 12 stated that –
‘
The very purpose of the provision allowing condonation is
to give a court a discretion to determine whether the organ of state
can
rely on non-compliance, whatever form that may take. If this were
not so, as was pointed out by Somyalo AJ in Moise the requirement
of
written notice as a precondition to the institution of legal
proceedings would be in itself an absolute bar to such proceedings
and would constitute a real impediment to the claimant’s access
to court. Indeed, a blanket bar to the amelioration by a
court of the
hardship worked by an inflexible precondition to the institution of
proceedings could hardly survive constitutional
scrutiny.’
The learned judge in
De Witt
approached the matter on the
basis that what stood to be determined was whether the claim had
prescribed as at the time that summons
was served. This was on the
basis of s3(4)(b)(i) of Act 40 of 2002 which permits a court to
grant condonation if it is satisfied
that the debt has not been
extinguished by prescription.
De Witt
is distinguishable from the current matter in my
mind in that the NCA makes no such reference to prescription within
the context
of s130(4). There is no requirement in the NCA that the
court may proceed in terms of s130(4) only if it is satisfied that
the
debt has not been extinguished by prescription. If such a
reference existed, the decision in
De Witt
would find
application. However, in the absence of such a reference and on the
basis of the ratio in
Rossouw (supra)
I am persuaded that the
court, upon there having been compliance with the NCA following the
procedure provided in s130(4), must
consider whether, at the date of
such proper compliance with the NCA as opposed to the date of
service of the summons, the debt
has been extinguished by
prescription or not.
There is a further distinction between the provisions of Act 40
of 2002 and the NCA in that the former requires an application for
condonation to be made only if the organ of state relies on a
creditor’s failure to serve notice. The statute accordingly
intended that in spite of no notice having been provided, no
condonation would be necessary if the organ of state did not rely
on
the failure to provide notice. This suggests that notice is not an
essential prerequisite for the validity of the summons
in all
circumstances. The contrary is apparent from the provisions of the
NCA which make it clear that the requirement of notice
is a
peremptory one. There are no circumstances provided in which the
requirement of notice may be waived, which read together
with
ss129(1)(b)(i) and 130(1)(b)clearly indicates the existence of a
legislative intention to require notice of legal proceedings
upon a
debtor in terms of the NCA in all circumstances.
This is also so given that the notice provided to debtor must in
terms of s129(1)(a) ‘
draw the default to the notice of
the consumer in writing and propose that the consumer refer the
credit agreement to a debt counsellor,
alternative dispute
resolution agent, consumer court or ombud with jurisdiction, with
the intent that the parties resolve any
dispute under the agreement
or develop and agree on a plan to bring the payments under the
agreement up to date’.
As a result, the purpose of the
notice required by Act 40 of 2002 and that required by the NCA are
distinct in that in the one,
an organ of state is informed of legal
proceedings to be instituted against it, which failure may be
waived, whilst in the other,the
debtor is informed of his or her
default and steps which he or she may take as a result to resolve
the matter are proposed, which
notice may not be waived.
In
Dauth v
Minister of Safety and Security
2009
(1) 189 (NC) Lacock J held that for purposes of s 4 of the Act 40 of
2002, a ‘premature’ summons is to be regarded
as valid
and effective and that consequently the dicta in
Vilakazi
(supra)
and
Evins
(supra)
do not apply. For the
reasons set out above, I am not persuaded that the conclusion of the
learned judge in that matter finds
application in the current
circumstances.
Consequently, I find that the service of summons in proceedings
instituted in terms of the NCA only interrupts the running of
prescriptionupon the provisions of the NCA having been complied
with. The date on which the court must determine whether the debt
has prescribed is therefore the date on which there has been proper
compliance with the NCA.
In the circumstances, I find that the notice
provided by the plaintiff to the defendant in April 2012 in terms of
s129(1)(a) was
only provided to the defendant more than three years
after the service of summons and more than three years after the
period
of prescription of the claim
.
In the circumstances, the plaintiff may only enforce its claim
against the defendant if it is able to prove that a notice was
provided to the defendant in accordance with the provisions of s129
of the NCA prior to the prescription of its claim.
With regards to the issue of costs, I am satisfied that costs should
stand over for later determination.
Order
In the result, I make the following order:
I declare that the defendant’s special plea of prescription is
upheld.
Costs stand over for later determination.
KM SAVAGE
ACTING JUDGE OF THE HIGH COURT
Appearances
:
Plaintiff: W Jonker instructed by De Klerk &Van Gend
Defendant: M D Ramurunzi (in person)