FFS Finance South Africa (RF) (Pty) t/a Ford Credit v Van Rensburg (4835/2020) [2021] ZAFSHC 330 (20 December 2021)

IN THE HIGH COURT OF SOUTH AFRICA,

FREE STATE DIVISION, BLOEMFONTEIN

Case number: 4835/2020

In the matter between:

FFS FINANCE SOUTH AFRICA (RF) (PTY) LTD

t/a FORD CREDIT

Applicant

and

DESIDERIUS JANSE VAN RENSBURG

Respondent

HEARD ON: 14 OCTOBER 2021

JUDGMENT BY: MATHEBULA, J

DELIVERED ON: The judgment was handed down electronically by circulation to the parties’ legal representatives by email and release to SAFLII on 20 December 2021. The date and time for hand-down is deemed to be 20 December 2021 at 10H30.

[1] This is an application for summary judgment. The relief sought in the notice of motion is for an order in the following terms: -

1. Confirmation of termination of the agreement attached thereto as annexure “B1”;

2. Return of the asset as referred to therein, a 2018 Ford Ranger 2.2 TDCI XLT A/T P/U D/C with engine number QJ2LPJB29561 and chassis/vin number AFAPXXMJ2PJB29561;

3. An order authorizing the plaintiff to apply to the court on the same papers, supplemented insofar as may be necessary, for judgment in respect of any damages and further expenses incurred by the plaintiff in the repossession of the said asset, which amount can only be determined once the asset has been repossessed by the plaintiff and has been sold;

4. Interest on the amount referred to in prayer 3 (being the total recalculated balance) calculated at the agreed interest rate, calculated from date of termination of the agreement, to the date of current prime lending rate being 7.00%, both dates inclusive;

5. Costs of suit.

[2] On 30 November 2018 the parties entered into a written instalment agreement. In terms of the agreement the applicant sold a 2018 Ford Ranger 2.2 TDCI XLT A/T P/U D/C with engine number QJ2LPJB29561 and chassis/vin number AFAPXXMJ2PJB29561 (‘the asset”) to the respondent. The total amount was the sum of R558,751.24 payable in monthly instalments. The respondent has breached the agreement by failing to pay regular instalments of R10,162.96 per month. As at November 2020, he was in arrears in the sum of R56,155.02.[1] This application emanates from the action instituted by the applicant as a result of the breach.

[3] The respondent is resisting the application on two (2) grounds. The first ground is that it was impossible to perform (ie make regular payments) in terms of the agreement and that such impossibility of performance was due to no fault of the respondent. In essence the respondent relies on force majeure to suspend his contractual obligations. I hasten to add that the written agreement does not provide for force majeure clause. The second ground is that the applicant has failed to deliver a default notice in terms of paragraphs 17 and 18 of the written agreement. The main contention is that the applicant has failed to comply with the provisions of section 129(5) of the National Credit Act 34 of 2005.[2]

[4] There is no dispute that the respondent is in arrears of the amount stated. All he does is to give an explanation of what is the root cause of his failure which is eventually the basis of his defence. The only point in issue pertaining to the merits is whether the respondent does have a bona fide defence to the claim against him.

[5] Despite amendment to Uniform Rule 32 dealing with summary judgment, the current legal position was eloquently stated by Binns-Ward J in Tumileng Trading CC v National Security and Fire (Pty) Ltd as follows: -

“That means that the test remains what it always was: has the defendant disclosed a bona fide (i.e. an apparently genuinely advanced, as distinct from sham) defence? There is no indication in the amended rule that the method of determining that has changed. The classical formulations in Maharaj and Breitenbach v Fiat SA as to what is expected of a defendant seeking to successfully oppose an application for summary judgment therefore remain of application. A defendant is not required to show that its defence is likely to prevail. If a defendant can show that it has a legally cognisable defence on the face of it, and that the defence is genuine or bona fide, summary judgment must be refused. The defendant’s prospects of success are irrelevant.”[3]

[6] This brings me to the consideration of the defences raised by the respondent. As stated earlier, force majeure clause was not included in the written agreement. Therefore, the respondent can only rely on the stringent provisions of the common law doctrine of supervening impossibility of performance. The requirement is objective not subjective impossibility. Scott JA articulated the position as follows: -

“This brings me to the appellant’s defence of supervening impossibility of performance. As a general rule impossibility of performance brought about by vis major or casus fortuitus will excuse performance of a contract. But it will not always do so. In each case it is necessary to ‘look to the nature of the contract, the relation of the parties, the circumstances of the case, and the nature of the impossibility invoked by the defendant, to see whether the general rule ought, in the particular circumstances of the case, to be applied’. 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]

[7] In Unibank Savings and Loans Ltd (formerly Community Bank) v ABSA Bank Ltd the court held that impossibility is not implicit in a change of financial strength or in commercial circumstances which impact negatively on the compliance with contractual obligations.[5] It is settled in our law that such impossibility must be objective as opposed to subjective given the facts of each case.

[8] Undoubtedly the exponential surge of Covid-19 cases throughout many jurisdictions has wreaked havoc to economies and landed many people in financial difficulties. This Republic was not spared and the response of the government was to impose the hard lockdown restrictions from midnight 26 March to 30 April 2020. The alert levels were adjusted over time which essentially determined the levels of the restrictions. The respondent squarely lays his inability to comply with his contractual obligations on the outbreak of the pandemic. I must add that the opposing affidavit is very thin on details as to how his situation was negatively affected by the prevailing circumstances.

[9] Quite plainly, the restrictions on conducting business were eased over a period of time. It is incorrect as the respondent seem to allege that he was unable to earn a living over the entire period. In this regard, there can be no talk of the impossibility being absolute. In fact, the respondent is relying on the change in his financial strength and commercial circumstances not to honour his contractual obligations. It may well be so that he experienced a financial strain but that did not prevent him from conducting his business at all. Economic hardship is not categorised as being a force majeure event because it does not render performance objectively and totally impossible.[6] My considered opinion is that the respondent has not shown that the impossibility was not caused by his fault. Counsel for the applicant correctly pointed out that the respondent at no stage made his changed circumstances known to the applicant. It can be accepted that he withheld payment for other reasons which cannot serve as the basis of his defence. The conclusion is that the argument of the respondent has no merit and ought to be dismissed.

[10] The other ground revolves around the notice in terms of section 129 of Act 34 of 2005 and whether it was sent to the respondent. The core of the argument is that the applicant at no stage delivered the default notice and was therefore not entitled to proceed to either cancel the agreement or to proceed with legal proceedings. This submission is based on the misreading of clause 17 of the written agreement. Annexure “C1” attached to the founding on page 19 is a default notice in accordance with the aforementioned clause. This is a notice of impending legal action which means that legal action will be triggered by non-compliance. The other contention is that the particulars of claim lack the averment that the respondent in writing preferred the manner of delivery or that the address on the section 129 notice was chosen by him as his domicilium citandi et executandi.

[11] Section 129(5) provides that the notice must be delivered to the consumer by registered mail or to an adult person at the location designated by the consumer. Subsection 6 states that the consumer must in writing indicate the preferred manner of delivery contemplated in subsection 5.

[12] The contention that compliance with section 129 has not been pleaded does not have any merit. It is pleaded which means that there has been compliance on that aspect. The notice which is mandatory pre-litigation was delivered to the respondent when a registered mail was sent to him. The proof of the delivery of the letter and issuing of the notification to him are attached to the particulars of claim. The address is the same one that appears on Annexure “B” on page 10 of the papers. This is the only address in the credit documentation between the parties and the respondent did not deny that it is his address. My conclusion is that it is his preferred address made available to the applicant. On this ground also, the respondent cannot succeed. I am of the view that there has been mandatory compliance with the provisions of section 129 of the National Credit Act 34 of 2005.

[13] In the result summary judgment is granted against the respondent and I make the following order: -

13.1. The termination of the agreement attached to the applicant’s particulars of claim marked “B1” is confirmed.

13.2. The respondent must return the asset to wit 2018 Ford Ranger 2.2 TDCI XLT A/T P/U D/C with engine number QJ2LPJB29561 and chassis/vin number AFAPXXMJ2PJB29561.

13.3. The applicant is authorised to apply to this Court on the same papers, supplemented insofar as may be necessary, for judgment in respect of any damages and further expenses incurred by the applicant in the repossession of the asset.

13.4. Interest on the total recalculated amount as per sub-paragraph 13.3 calculated from 20 December 2021 to the date of final payment at the agreed interest rate.

13.5. Costs of suit including the costs occasioned by the postponement on 2 September 2021.

M. A. MATHEBULA, J

On behalf of applicant: Adv. R Bester

Instructed by: Strauss Daly Incorporated

BLOEMFONTEIN

On behalf of respondents: Mr R Coetzee

Instructed by: Steenkamp & Jansen Incorporated

/tkwapa

[1] Page 19 of the Index Papers.

[2] Section 129(5) of the National Credit Act 34 of 2005 reads as follows: - “The notice contemplated in subsection (1) (a) must be delivered to the consumer (a) by registered mail; or (b) to an adult person at the location designated by the consumer.”

[2] Section 129(5) of the National Credit Act 34 of 2005 reads as follows: -

“The notice contemplated in subsection (1) (a) must be delivered to the consumer

(a) by registered mail; or

(b) to an adult person at the location designated by the consumer.”

[3] 2020 (6) SA 624 WCC at para 13.

[4] MV Snow Crystal Transnet Ltd t/a National Parts Authority v Owner of MV Snow Crystal [2008] ZASCA 27; 2008 (4) SA 111 SCA at para 28.

[5] 2000 (4) SA 191 (W) at 198D.

[6] 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 (2021) 42 ILJ 600 (GJ) (3 June 2020).