Iemas Financial Services (Co-operative) Ltd v Ntokane (48941/15) [2018] ZAGPPHC 622 (10 August 2018)

SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

CASE NO: 48941/15

10/8/2018

In the matter between:

IEMAS FINANCIAL SERVICES (CO-OPERATIVE) LTD

PLAINTIFF

and

NTOKANE, TOLO GODFREY

DEFENDANT

Heard: 30 July 2018Delivered: 10 August 2018

JUDGMENT

VAN DER SCHYFF, AJ

[1] This matter came before me as an unopposed application for default judgment. After reading the documents filed of record I was concerned whether this court has the necessary jurisdiction to adjudicate the matter.

[2] Since it has been held that a court has the power to dismiss a claim mero motu if it is clear ex facie the pleadings that it has no jurisdiction to entertain such a claim (Viljoen v Federated Trust Ltd 1971 (1) SA 750 (0) at 760F), I conveyed my concern to counsel appearing on behalf of the plaintiff. I requested her to draft written heads of argument pertaining to the court's jurisdiction to adjudicate the matter and reserved my judgment. I am indebted to her for the

comprehensive heads of argument filed by her.

[3] The relevant facts of this matter as they emanate from the particulars of claim and the credit agreement attached thereto, are as follows:

[3.1] The plaintiff is lemas Financial Services (Co-Operative) Limited [hereafter referred to as lemas ], a duly registered credit provider, with its registered address situated as lemas Park, Corner of Embankment Road and Kwikkie Street, Centurion, Gauteng. It appears however from the case law referred to below, that the plaintiff conducts business throughout the Republic. In this particular matter, the physical address of the plaintiff is stated in the credit agreement as Two-on-Whyte, Whyte Street, Newcastle, 2940 and the postal address as PO Box 7335, Newcastle, 2940. No reference is made in the credit agreement to the plaintiffs registered address or its principal place of business.

[3.2] The defendant is Tole Godfrey Ntokane, a major adult male, 'residing at [….], Eastern Cape.'

[3.3] On 2 June 2014, and at or near Pietermaritzburg the plaintiff, duly represented by an authorised representative. and the defendant entered into a written loan agreement.

[3.4] In terms of this agreement the plaintiff advanced credit in the amount of R15 750.52 to the defendant. Interest for the period of the agreement is calculated at a variable interest rate of 29.50%per annum and amounts to RB 725.63. Monthly service charges amounted to R 51.30 per month and the credit life insurance premiums amounted to R151.20 per month.

[3.5] The defendant breached the agreement in that he failed to pay the instalments in terms of the agreement, and the plaintiff terminated the agreement.

[3.6] The plaintiff complied with the pre-enforcement procedures prescribed in section 129 and 130 of the National Credit Act, No 34 of 2005.

[3.7] It is stated in clause 3.3 that 'lemas has concluded an agreement with [the] consumer's employer' in terms whereof lemas is irrevocably entitled to deduct the money due by the consumer directly from the consumer's salary. Clause 3.4.1 then stipulates, 'should the consumers' employment terminate , or the salary deduction facility be unavailable for any reason, the consumer authorises lemas to satisfy any payment obligation from the consumer under this agreement by means of charges made against the consumer's bank account.' A debit order authorisation is then incorporated in the contract.

[3.8] No account details are provided in the credit agreement pertaining to the bank account where the plaintiff would receive payment.

[3.9] The credit agreement as it is before the court does not enable the defendant to take positive steps to pay money into any bank account but obliges him to ensure that there are funds available from which the plaintiff could make the necessary withdrawals.

[4] Plaintiff contends in its particulars of claim in paragraph [13] 'The Honourable Court is vested with jurisdiction to entertain this action by virtue of the fact that performance by the Defendant had to take place at the address of the Plaintiff which is situated within the Honourable Court's area of jurisdiction'.

[5] The only address relating to the plaintiff that is identified in the credit agreement is the plaintiffs business address in Newcastle referred to in paragraph 3.1 above. Since there is no doubt that Newcastle is not situated within this court's area of jurisdiction, the only inference that can be drawn from paragraph [13] of the particulars of claim is that the phrase 'the address of the Plaintiff refers to the plaintiffs registered address in Centurion, Pretoria, as identified in paragraph 1 of the particulars of claim.

[6] It is indeed evident from the written heads of argument filed on behalf of the plaintiff that it is the plaintiffs case that this court has jurisdiction 'by virtue of the fact that performance by the defendant

had to take place at the address of the plaintiff which is situated at Centurion and within the Honourable Court's area of jurisdiction'.

[7] In support of this contention the court is referred to the decision of Kubushi J in IEMAS Financial Services (Co-operative) Limited v Finland; IEMAS Financial Services (Co-operative) Limited v Claasen; IEMAS Financial Services (Co­ operative) Limited v Kalanie; IEMAS Financial Services (Co-operative ) Limited v Sathu; IEMAS Financial Services (Co-operative) Limited v Mkhwanazi; IEMAS Financial Services (Co-operative) Limited v Makaton (18726-2016; 93244-15; 96970-15; 75686-15; 40873-16; 96640-15) [2017] ZAGPPHC 575 (8 September 2017). In this case, Kubushi J found that the court has the necessary jurisdiction to hear and determine the respective default judgment applications dealt with in the respective applications for default judgment before her.

[8] The matter before this court is distinguishable from the above in the sense that Kubushi J states in paragraph [9] of her judgment 'Payment was to be effected in Centurion which falls within the area of jurisdiction of this court'. It can only be deduced that the necessary evidence was placed before Kubushi J that proved that the respective debtors were obliged to pay the amounts they were obliged to pay, into a bank account held at the Centurion branch of a specific bank.

[9] In the current matter there are no such facts before the court. The credit agreement as attached to the summons does not support a finding that payment was to be effected in Centurion. No mention is made in the credit agreement of the plaintiff's bank account

[10] This is also the aspect on which the matter before the court can be distinguished from Bush and Others v BJ Kruger Incorporated and Another (2009/36699) [2013] ZAGPJHC 386 (8 February 2013), a case referred to in the plaintiffs written heads of argument. In this case, that was decided by Wepener J, there was evidence before that court that clearly indicated that payment had to occur in Johannesburg.

[11] The court cannot merely deduce that because· an institution's registered address is situated in a specific area, the bank account where the parties agree that payment must be made is necessarily in the same area, and therefore find that performance had to take place at the institution's registered address.

[12] A decision that also needs to be considered when deciding this case is lemas Financial Services (Co-op) Ltd v Ntsedwana (79599/2015) [2017] ZAGPPHC 335 (31 May 2017). In this case, the plaintiff also contended that 'because payment was made by an 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.'

[13] In this matter before, Yacoob AJ, there was also no obligation on the respondent to take active steps to make payments into any nominated bank Similar to the matter before this court, the only bank account details provided in the agreement was that of the applicant/plaintiff. '(In this regard see also Plasket J's judgment in Jan Hamer v Bruyns (2287/2015) [2015] ZAECGHC 97 (4 September 2015)) .

[14] Yacoob AJ found that '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.'

[15] On the facts before me, I cannot find that the plaintiff has made out a proper case that this court has the necessary jurisdiction to adjudicate the matter. The facts necessary to establish jurisdiction are absent.

[16] In the written heads of argument, counsel requests that in the event that the court is of the opinion that the necessary jurisdiction is not established, that the matter is removed from the roll and that the plaintiff is given leave to supplement its papers in relation to the aspect of jurisdiction.

[17] Although a creditor is always justified in pursuing the collection of debts owed, and although it is undoubtedly in the public interest that debtors timeously repay their debts, it is alarming that a plaintiff elects to issue summons for the meagre amount of R15 619.87 in the High Court of South Africa. From the judgments of Kubushi J and Yacoob AJ, referred to above, it is evident that the plaintiff advances credit to plaintiffs through its branch offices situated in other jurisdictions and then issue summons from the High Court of South Africa Gauteng Division. As Yacoob AJ stated, the 'credit provider had chosen to do business in the place where the purchaser was domiciled, rather than the other way around. 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.' He also stated that 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.'

[18] In the case before me, as in the cases before Kubushi J, the plaintiff entered into a small unsecured written credit agreement with the defendant. Of all the jurisdictional options that the plaintiff was convinced it had, it chose to issue summons from the court that would be the most difficult for the defendant to have access to. I, therefore, decline to allow the plaintiff to supplement.

ORDER

In light of the aforesaid, it is ordered that:

[1] The application for default judgment is dismissed.

E VAN DER SCHYFF

ACTING JUDGE OF THE GAUTENG DIVISION, PRETORIA

Heard on:

30 July 2018

For the Plaintiff/Applicant: Adv K Mitchell

Instructed by:

Hack, Stupel & Ross

For the Defendant/Respondent:

Instructed by:

Date of Judgment:

10 August 2018