Iemas Financial Services (Co-op) Ltd v Ntsedwana (79599/2015) [2017] ZAGPPHC 335 (31 May 2017)

IN THE HIGH COURT OF SOUTH AFRICA

(GAUTENG DIVISION, PRETORIA)

CASE NO: 79599/2015

DATE:31/5/2017

In the matter between:

IEMAS FINANCIAL SERVICES (CO-OP) LTD

PLAINTIFF

and

NTSEDWANA: MZUKISI WELLINGTON

DEFENDANT

JUDGMENT

YACOOB AJ:

1. This is an application for default judgment, for the amount outstanding from an instalment sale agreement to purchase a motor

vehicle, after the repossessed vehicle was sold.

2. The applicant is a registered credit provider with its principal place of business in Pretoria. However, it appears to do business

throughout the Republic, specifically in the Eastern Cape.

3. The applicant entered into the instalment sale agreement with the respondent in East London. The respondent resides in Alice, in the Eastern Cape, and the motor vehicle was delivered in East London. Payment of instalments, according to the agreement, were deducted from the respondent's salary by the respondent's employer.

4. The matter had initially come before the Registrar for default judgment, but the Registrar declined the application, annotating the file as follows:

"Referred to East London High Court if no property is not owned (sic) under this Division, nor the Defendant is ordinarily resident hereunder."

5. Mr Steyn, who appeared for the applicant, contended that, because payment was made by electronic funds transfer, and the applicant's

principal place of business is within this Division, this meant that the cause of action arose in this Division and there is sufficient

nexus for this

Court to assume jurisdiction.

6. In support of this contention he referred me to a judgment of the South Gauteng High Court (as it then was), Bush and Others v B Kruger Inc and Others.[1] In that judgment Wepener J found that, where there is a duty to pay into a bank account, payment by electronic transfer only occurs when the party entitled to receive it into his, her or its bank account. Performance of the obligation was therefore required in the jurisdiction where that person accesses these funds.

7. I am not convinced, in this day of electronic banking and facile mobility, of this reasoning. Bank accounts no longer

have more than a notional presence in a particular jurisdiction. Companies do business nationally without having a physical presence

or a bank account in that place. An ordinary consumer cannot be expected to make enquiries about where that company's principal place of business is, or where that company is likely to sue them in the event of default, before entering into an agreement.

8. In any event, the circumstances of this case are vastly different from those in the Bush judgment referred to. There are two particular differences which are relevent.

9.

First, that case dealt with individuals who invested in a

purported scheme, on the invitation of other individuals. There were identified persons involved, who made specific choices.

10.In this case, however, a man bought a car in East London. It so happened that the credit provider whose services he was offered and accepted in East London had a place of business elsewhere. That credit provider had chosen to do business in the place where the purchser was domiciled, rather than the other way round. The credit provider, which drafted the agreement that governed the relationship between the parties, made no mention of the jurisdiction in which the purchaser may be sued.

11.Mr Steyn for the applicant contended that it was not possible for a party to consent to the jurisdiction of a particular Division. This is not true. The doctrine of prorogation is well established in our law.

12. The second point of distinction is that, in this case, there no obligation for the respondent to take active steps to pay into any bank account. In fact the only bank account mentioned in the contract is that of the respondent. The money was to be deducted from the respondent's account by his employer, and if he changed employment or the salary could not be deducted, then his bank account was provided for the applicant to debit payments from it.

13.The breach in this case, therefore, would have occurred when the nominated bank account did not cover the attempted debit. To the extent to which it is necessary to determine where this notionally occurred it would have been , in my view, in East London.

14. Even if that were not the case, it is my view that there was insufficient nexus, in the circumstances of this case, for this Court to assume jurisdiction. There are a plethora of authorities which suggest that the breach of the agreement is only one of the factors to be taken into account in this enquiry.

15. For these reasons, I make the following order:

The application is dismissed for want of jurisdiction.

____________________

S. YACOOB

ACTING JUDGE OF THE HIGH COURT

[1] [2013] 2 All SA 148 (GSJ)