Damler Chrysler Financial Services South Africa (Pty) Ltd v Madikiza (EL 791/07, ECD 1590/07) [2008] ZAECHC 71 (4 June 2008)

Not Reportable

IN THE HIGH COURT OF SOUTH AFRICA

(EAST LONDON CIRCUIT LOCAL DIVISION)

Case No: EL 790/07

ECD 1590/07

Date Heard: 27/05/08

Date Delivered: 04/06/08

In the matter between

DAIMLER CHRYSLER FINANCIAL SERVICES

SOUTH AFRICA (PTY) LTD Plaintiff

and

MODADA PUMELELE MADIKIZA Defendant

JUDGMENT

REVELAS J

[1] This is an application for the recission of an order made on 11 December 2007, in terms whereof the “contract purchase agreement” concluded by the applicant and the respondent was cancelled and the applicant was ordered to return the Mercedes-Benz vehicle (“the vehicle”) purchased by the applicant in terms of that agreement, to the respondent. On 18 December 2007, the registrar issued a warrant of delivery authorizing the Sheriff to take possession or delivery of the vehicle.

[2] The applicant purchased the vehicle in February 2006 from Ronnie’s Motors. The respondent is a financier of vehicles, manufactured by inter alia Mercedes-Benz South Africa (Pty) Ltd and it financed the purchase of the vehicle in question. The total sum owed to the respondent by the applicant for the sale of the vehicle, in terms of the agreement, came to R762 433.47. The applicant took delivery of the vehicle on 22 February 2008 and used it.

[3] It is common cause that the applicant experienced difficulties in paying the instalments in the amount of R9 497.22, payable each month. In terms of the agreement, sixty such instalments were payable and ownership would only pass once all the amounts due under the agreement were paid. The agreement also, and more importantly, provided that should the applicant default in the punctual payment of any of the amounts payable in terms of the agreement, the respondent shall be entitled to cancel the agreement and obtain the return of the vehicle. It would also retain all payments already made, and recover the payment of damages.

[4] The domicilium et executandi chosen by the applicant in the agreement, was 12 Avalon Road East London, at which address he would receive all notices addressed to him in terms of the agreement. The applicant fell into arrears with the monthly payments. On 10 October 2007, when the applicant was in arrears with instalments in the amount of R21 231.50, the defendant forwarded a letter of demand or notice, by registered post to the applicant’s chosen domicilium. It is not in dispute that the aforesaid letter or notice met with the requirements of section 129 of the National Credit Act, 34 of 2005 (“The National Credit Act”).

[5] When the plaintiff failed to respond to this notice, the respondent issued a combined summons in November 2007 for the cancellation of the agreement and the return of the vehicle (or alternatively, payment of the outstanding amount), interest and costs on a punitive scale (also provided for in the agreement). The undefended summons resulted in the default judgment sought to be rescinded.

[6] Generally, once a court has made an order, it becomes functus officio and has no authority to alter or set aside its own judgment, (See: Firestone South Africa (Pty) Ltd v Gentiauro AG 1977 (4) SA 298 (A) at 306 H-308 A and Erasmus et al Superior Court Practice, Juta and Co, at B1-306 F), subject to the exceptions created in Rule 42 of the Rules of Court, Section 8 of the Divorce Act, 70 of 1979, Rule 31 (2) (b) of the Rules of Court, and the Common Law.

[7] In order to succeed in an application for recission of a judgment handed down by default, the applicant must show good cause. The words implies a discretion which must be exercised after due consideration of all the relevant circumstances. The absence of gross negligence is not an absolute requisite for good cause to be shown, (See: Saraiva Construction (Pty) Ltd v Zululand Electical and Engineering Wholesalers (Pty) Ltd 1975 (1) SA 612 (D) at 615).

[8] In Grant v Plumbers (Pty) Ltd, the following requirements had to be met to show good cause: A reasonable explanation for the default, contained in a bona fide application, in which a bona fide defence is set out.

[9] The judgments referred to above were discussed in the judgment of Jones J in De Witts Auto Body Repairs (Pty) Ltd v Fedgen Insurance Co Ltd 1994 (4) SA 705 to 709 B-E. In that judgment, the learned judge’s criticism of a magistrate’s refusal to rescind a judgment, with respect, gives useful guidance as to how an application for rescission should be approached:

“In my view, the magistrate misdirected himself on the facts by considering the question of the explanation for the defendants default in a vacuum, as it were, thereby failing to make an assessment of that explanation in the light of the nature of the defence on the merits and the defendant’s bona fides in its desire to raise that defence at the trial. Had the magistrate adopted the proper approach by looking at the total picture presented by all the facts, and had he not considered the explanation and the defence piecemeal, he would inevitably have come to the conclusion that the judgment should have been rescinded”.

[10] The applicant’s grounds for recission are firstly, that the notice required in terms of section 129 of The National Credit Act, was sent to the wrong address, because he was living in Mthatha at the time. For the same reason, he also did not receive the summons. Accordingly he argued, he has shown good cause insofar as a reasonable explanation for his default is concern. In support of this contention he alleged that the respondent knew of his different address in Mthatha and should not have chosen the East London address.

[11] Secondly, the applicant argued that he has a bona fide defence. He relied on a so-called pactum de non petendo. According to the applicant, in February 2008 he had phoned the credit section of the respondent to make arrangements to pay the outstanding instalment to bring his account up to date and an agreement was reached with one of the respondent’s employees (whose name he did not mention) that the applicant would be permitted to settle the account at the end of May 2008. He also averred that the unnamed employee was authorized to enter into the pactum de non petendo with him, which is his bona fide defence against the summons. This was disputes by the respondent.

[12] The applicant further set out, in somewhat detail, the financial difficulties he had experienced. A contract with a company from which he expected to be paid a substantial income was cancelled. That company owed him R120 000.00 he said. Furthermore, ABSA Bank had rejected his application for credit because he was already over-exposed, having mortgaged two of his houses on which the bond repayments came to R16 000.00 per month. According to him, the respondent recklessly entered into a credit agreement with him. I understood this to be part of his alleged bona fide defence.

[13] The applicant’s explanation for his default is not a reasonable one. It does not lie in his mouth to complain that he did not receive the notice, if he did not notify the respondent that there was a change in his domicilium. In terms of the agreement he was required to do so. Even though the applicant has a home in Mthatha, he still owns two homes in East London (where the vehicle was attached) and if the notices were served in Mthatha, the applicant would have had a valid legal argument that the notice was not sent to his chosen domicilium executandi.

[14] The respondent disputed the existence of the pactum de non petendo on oath. The probabilities also do not favour the applicant’s averment in this regard. Given the applicant’s other debts mentioned by him, it is highly unlikely that such an agreement would have been entered into. It is also strange that the agreement was not reduced to writing and that the applicant could not even provide the name of the person purporting to bind the respondent to such a new credit agreement. This is even more improbable where, on the applicant’s own version he had difficulties to pay instalments in the past. It is also not open to the applicant to contend that the respondent recklessly entered into the agreement with him, being apprised of his financial circumstances. In my view, the applicant was reckless in managing his own affairs. He should perhaps consider getting by with cheaper transport and perhaps sell one of his homes to settle his debts.

[15] There is no merit in this application and it is dismissed with costs.

_______________

E REVELAS

Judge of the High Court