Merceds-Benz Financial Services South Africa (Pty) Ltd v RMM Investments (Pty) Ltd (2345/2023) [2025] ZAMPMHC 10; [2025] 2 All SA 559 (MM) (24 February 2025)

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

(MPUMALANGA DIVISION, MIDDELBURG)

CASE NUMBER: 2345/2023

(1) REPORTABLE:NO

(2) OF INTEREST TO OTHER JUDGES:

(3) REVISED:

DATE 24/02/2025

SIGNATURE

IN THE MATTER BEWTEEN:

MERCEDS-BENZ FINANCIAL SERVICES PLAINTIFF/APPLICANT

SOUTH AFRICA (PTY) LTD

AND

RMM INVESTMENTS (PTY) LTD

DEFENDANT/RESPONDENT

This judgement was handed down electronically by circulation to the parties and/or parties’ representatives by email. The date and time for hand down is deemed to be 24 February 2025 at 12H00

JUDGEMENT

MALANGENI AJ

Introduction

[1] This is an application for summary judgment by the applicant/plaintiff seeking the following relief against the respondent/defendant:

a. An order directing that the instalment sale agreement is cancelled.

b. Return of a Mercedes-Benzes V300d exclusive motor vehicle with engine number 6[...] and chassis number W[...] to the Plaintiff forthwith.

c. An order authorising the plaintiff to apply to the Court on the same papers, supplemented in so far as may be necessary, for Judgement in respect of any damages and future expenses incurred by the Plaintiff in repossession of any damages and future expenses incurred by the plaintiff repossession of the said vehicle, which amount can only be determined once the vehicle has been repossessed by the plaintiff and has been sold.

d. Costs of suit on the scale of Attorney and client.

e. Further or alternative relief or both.

Background

[2] On the 30th of September 2020, the plaintiff and defendant entered into a written instalment sale agreement. The terms of the agreement were as follows:

a. The plaintiff sold to the defendant a motor vehicle to wit Mercedes-Benz V300d exclusive with engine number 6[...] and chassis number W[...].

b. The purchase price was R1 923 027.46.

c. The plaintiff performed its obligations by delivering the vehicle in question to defendant on the 30th of September 2020.

d. The agreement goes on to say that should the defendant fail to pay the instalments on the due date or fail to satisfy any of its other obligations in terms of agreement, the plaintiff shall without prejudicing any of its rights in law be entitled to:

i. Cancel the agreement,

ii. Claim return and possession of the vehicle,

iii. Retain all payments already made in terms of the agreement,

iv. Claim payment of such damages as if will be entitled to in the circumstances,

v. Claim interest at variable rate linked to prime, commencing at 7.00 % plus 3.50 % per annum as from the 30th of September 2020 to date of payments,

vi. Claim costs on an Attorney and client scale.

[3] The defendant failed to pay monthly instalments thereby committing the breach of contract. As of the 3 April 2023, the plaintiff was in arrears to the value of R57 785.33. As a result of the breach of the contract by the defendant, the plaintiff claims relief mentioned in sub-paragraph d above.

[4] In these proceedings, the plaintiff once obtained a default judgement against the defendant as the latter failed to enter an appearance to defend. However, the defendant was granted an order rescinding such a default judgment on an unopposed basis.[1]

[5] Thereafter, the defendant filed the plea. In brief the plea is as follows:

a. At Paragraphs 1.2: “It is however pleaded that Annexure “NI” to the particulars of claims has expired.”

b. At paragraph 10.1: “Whilst the Defendant admits that it temporarily fell into arears with the amount of R57 758.33, it confirms that it has not missed an instalment payment since and further has tendered and still does tender payment in the amount of R57 758.33, which tender Plaintiff refuses to accept.”

c. At paragraph 10.2 “The balance of the content hereof is denied, and Plaintiff is put to the proof thereto.”

d. At paragraph 10.3: “Defendant specifically pleads that Plaintiff’s cancellation of the agreement constitutes a repudiation of the agreement that Defendant elected not to accept.”

e. At paragraph 11.3: “The Plaintiff still on a monthly continues to deduct the instalment in the amount of R23 408.97 from the Defendant’s chosen bank account and therefore the agreement is still in effect.”

f. At paragraph 11.4: “Defendant again tenders to pay the amount of R57 758.33 to the Plaintiff”.[2]

Application for summary judgment

[6] This application is being opposed by the defendant/respondent. The deponent to the founding affidavit of the application for summary judgement is Ferosa Gani. In her affidavit, she is explaining in depth the reasons for the Plaintiff to launch this application. This is evidenced from the following paragraphs of her affidavit:

“the Defendant breached the agreement by failing to pay the monthly instalments and was in arrears in the amount of R57 785.33 as at date of summons. At date hereof, the arrears are now R91 051.87. A copy of the statement is attached hereto marked as “Annexure SJ1.”[3]

“The agreement does not fall under the provisions of the National Credit Act 34 of 2005. The act is not applicable to the agreement as provided for in Section 4(1)(a)(i) alternatively Section 4(1)(b) alternatively of the Act.”[4]

[7] In her affidavit, she attacked the defendant’s plea as follows:

“There are several frivolous and baseless denials in the plea that can be rejected out of hand without any excitement.”[5]

“The first being a plea that the NCR certificate attached to the particulars of claim having expired. In response I attach hereto the NCR certificate for 2020-2024 marked Annexure “SJ2”.[6]

“The second being the denial that the agreement is excluded from the Act. In this respect the agreement is a large agreement with a juristic entity and therefore excluded by the Act. Secondly the vehicle being an asset, has a value which was more than R1 million and is a further objective indicator that the Defendant’s asset value exceeded R1 million at the time of entering into the agreement. There is simply no merit in the denial of the agreement being exempt from the act.”[7]

“despite the admission of being in arrears when the summons was issued and served, thereby admitting the lawful cancellation of the agreement the following so-called defence is yet still raised in the plea”.[8]

“The Defendant was in areas and tenders payment thereof and further pronounces that the Defendant has “not missed any instalments since” thereby the agreement was unlawfully cancelled. As alleged proof thereof the Plaintiff continues to deduct the monthly instalments.”[9]

“The defence on the mere reading of it is without merit, by admitting that the Defendant was and is in arrears the claim of the Plaintiff is admitted. Further, the reconciled statement shows further missed monthly statements. The arrears as at 01st of September 2024 increased to R91 051.87.”[10]

“Clause 4.12 of the agreement expressly state that: “ 4.12 If either party cancels this agreement and either of us disputes the other party’s right to do so you must, subject to applicable Law, continue to pay all amounts due in terms of this agreement, without prejudice to our aim or other rights.”[11]

[8] In resisting the application for summary judgement, Mr Ronald Makako Mnisi in his answering affidavit raised the following point in limine:[12]

“On or about 04th of July 2024 Defendant successfully applied for the rescission of a default judgement obtained against it by the Plaintiff, a copy that order was Annexed.”[13]

“It is trite that to obtain the rescission of a judgement, the above Defendant would have had to satisfy the above Honourable court that it had a bona fide defence or triable issue. This is akin to a bona fide defence in summary judgement proceedings.”[14]

“The above Honourable court in granting the application for rescission of judgement has therefore already determined that the defence pleaded by the Defendant in its plea is in law a bona fide defence.”[15]

“The court cannot now at summary judgement stage find that the defence put forward by the Defendant is not a bona fide defence under circumstances where this court has already found that the defence is bona fide. This would be contradictory. The court is, insofar as this aspect is concerned, functus officio.”[16]

“The application for summary judgement is therefore vexatious and an abuse of process and accordingly stands to be dismissed with costs on a scale as between Attorney and client.”[17]

[9] The respondent raised a defence that it would have paid the arrear amount due, whatever that amount was, had it been aware that there was an arrears and tenders such payment herein. The respondent attached, as annexure, a letter for such a tender and refusal to accept such a tender. Defendant further stated that it confirms that the amount of the arrears, as of April 2023, has been paid into its Attorneys of record Trust Account awaiting to be paid to the plaintiff. In this regard, the respondent attached a copy of a statement evidencing same.[18]

Issues

[10] This court is called upon firstly to decide whether the defence raised during rescission application, has got the same weight against the application for summary judgement, and secondly whether or not the tender to pay by the Defendant revives the lapsed or cancelled contract.

Arguments

[11] The plaintiff submitted that the point in limine is with respect incorrect in law. further, if the court grants the application for rescission, the original judgement will be set aside or reconsidered. This means that the case will be re-opened, and the parties will have an opportunity to present their case again.[19] Meaning that the defendant is then required to plead and then the normal procedures as per the Uniform Rules follow. [20]

[12] The plaintiff argued that this much has also been held by the High Court f Petersen N.N.O and Others v CPLM Exports CC t/a Roots and Another [21] where the following was stated:

“I take the view that an order rescinding a default judgement cannot be used as an automatic “defence” against a summary judgement application. Should a Defendant oppose a summary judgement application, it would merely to say that previously a rescission

order had been granted in their favour, even if the court had specifically granted leave to defend. The mere fact that a default

judgement was rescinded, and that the court granted leave to defend, does not immunize a Defendant against a subsequent summary judgement application. If this were the case, it would amount to a circumvention of Rule 32 and essentially bar a Plaintiff from seeking summary judgement against a Defendant who was successful in having a default judgement rescinded and who was granted leave to defend by the court”.

[13] The plaintiff further submitted as follows against the defendant’s defence:

a. The effect thereof is that the agreement is cancelled, and the Respondent has no right to keep possession of the vehicle. Even if some payments are made towards the account and accepted by the Applicant, it does not revive the agreement.[22]

b. Clause 4.12 of the agreement expressly state that if either party cancels the agreement and either of us disputes the other party’s right to do, you must, subject to the applicable law, continue to pay all amounts due in terms of this agreement, without prejudice to our claims or other rights. [23]

c. The fact of the matter is that the agreement was cancelled upon service of summons. Once the agreement is cancelled, it cannot be revived. There is simply no substantive law or case for authority that an agreement can simply revive after it came to an end through breach or otherwise. Wherefore there is no merit in the so-called defence. The act of cancellation may be performed by innocent party without the assistance of the Court, in which case, technically, a subsequent court order would simply confirm the cancellation that he already had carried out.[24]

[14] The defendant submitted that since this court made a finding that the respondent raised a bona fide defence which raise a triable issue, therefore this court is funtus officio in the application for summary judgement.[25]

[15] In terms of Rule 32 of the Uniform Rules of Court, the respondent must disclose a bona fide defence which raises a triable issue. The respondent submits that it has done so.[26]

The applicable law

[16] An application for summary judgement is found within Rule 32 of the Uniform Rules of Court. This section states that:

“(1) The Plaintiff may, after the Defendant has delivered a plea, apply to court for summary judgement on each of such claims in the summons as is only-

(a) On a liquid document;

(b) For a liquidate amount in money;

(c) For delivery of specified movable property, or

(d) For ejectment, together with any claim for interest and costs.

“(2)(a) Within fifteen (15) days after the date of delivery of the plea, the Plaintiff shall deliver a notice of application for summary judgement, together with an affidavit made by the Plaintiff or by any other person who can swear positively to the facts.

(b) The Plaintiff shall in the affidavit referred to in sub-rule (2) (2), verify the cause if action and the amount, if any claimed, and identify any point of law relied upon and the facts upon which the Plaintiff’s claim is based, and explain briefly why the defence as pleaded does not raise any issue for trial………..

(3) The Defendant may

(a)………….

(b) Satisfy the court by affidavit (which shall be delivered five (5) days before the day on which the application is to be heard), or with the leave of the court by oral evidence of such Defendant or of any other person who can swear positively to the fact that the Defendant has a bona fide defence to the action, such affidavit or evidence shall disclose fully the nature and grounds of the defence and the material facts

relied upon therefore.”

[17] The decision to grant or refuse summary judgement is discretionary. In exercising its discretion, the court has to apply the following guideline: First, the summary judgement does not shut the doors of the defendant from defending its case. This view gains support from the decision of the Supreme Court of Appeal in Joob Joob Investments (Pty) Ltd v Stocks Mavundla Zek Joint Venture[27] where it was observed that:

“so too in South Africa, the summary judgement was not intended to shut (a defendant) out form defending, unless it was very clear indeed that he had no case in the action. It was intended to prevent sham defences from defeating the rights of parties by delay, and at the same time causing great loss to plaintiffs who were endeavouring to enforce their rights”.

[18] Secondly, the respondent has a legal obligation to disclose fully the nature and grounds of his defence. It is settled law that the answering affidavit must disclose fully the nature and ground of the defence fully and the facts relied upon. In Maharaj v Barclays National Bank Ltd[28] it was held that:

“[O]ne of the ways in which a defendant may successfully oppose a claim for summary judgement is by satisfying the court that he has a bona fide defence to the claim. Where the defence is based upon facts, in the sense that material facts alleged by the plaintiff in his summons, or combined summons, are disputed or new facts are alleged constituting a defence, the Court does not attempt to decide these issues or to determine whether there is a balance of probabilities in favour of the one party or the other. All that the court enquires into is: (a) whether the defendant has ‘fully’ disclosed the nature and grounds of his defence and the material facts upon which it is founded, and (b) whether on the facts so disclosed the defendant appears to have, as to either the whole or part of the claim, a defence which is bona fide and good in law. If satisfied on these matters the Court must refuse summary judgement, either wholly or in part, as the case may be”.

[19] Thirdly, the respondent’s defence must not be an ordinary one but a bona fide defence. As to what is meant by this, an answer is found from Nedbank v Maredi and Another,[29] where the following was stated:

“a bona fide defence, which means a defence set up bona fide or honestly, which if prove at the trial, would constitute a defence to the plaintiff’s claim”.

[20] For a comprehensive contract, parties to it must have a common mind. In the absence of this crucial factor, there would be no valid contract. In Jones and Another v Voster and System Incorporated and Others[30] it was held that “a contract only comes into being when there is consensus between the contracting parties and regards the subject matter, the terms and conditions thereof”.

[21] From the mere reading of the papers filed by the parties and further listening to their arguments, it is clear that the defendant is in breach of the contract. It is further evident from annexure B1 attached to the summons that the plaintiff issued notice to the defendant requesting it to remedy the breach as stipulated in paragraph 4.1 of the agreement. The contract was as a result of failure by the defendant to remedy the breach, terminated by the plaintiff. This then means that there is currently no agreement or contract between the parties. It has to be considered that the original contract has a suspensive condition found in clause 4.12 that reads thus: “4.12 if either party cancels this agreement and either of us disputes the other party’s right to do so, you must, subject to the applicable law, continue to pay all amounts due in terms of this agreement, without prejudice to our claims or other rights.”

[22] The crux of these proceeding is whether or not an instalment sale agreement of a movable property can be revived following the cancellation of a suspensive condition. There are different authorities in this regard but what is of utmost importance is that most of them follow one direction.

[23] These authorities were clearly defined by Supreme Court of Appeal in Vantage Gold Fields SA (Pty)Ltd v Siyakhula Sonke Employment Corporation (Pty) Ltd[31] as follows:

“In Abrinah 7804 (Pty) Ltd v Kapa Koni Investments CC (Abrinah), the Court relied on Cronje, Mcpherson and other decisions and stated that the legal position regarding the revival of lapsed contracts is useful summarised as follows:

‘In McPherson it was also held that the lapsed contract could not simply be revived. A new agreement would in effect have to be concluded. It was held that the parties could conclude such a new agreement on the same conditions as those contained in the lapsed agreement or by incorporating those terms, but then they would have to eliminate or amend the condition (especially the cutoff date, which would already have passed by then) that had had led to the lapsing of the initial contract; otherwise the new agreement would simply immediately self-destruct due to the non- fulfilment of the suspensive condition. It was also held that, where the contract is by law required to be in writing, an oral agreement to eliminate or to amend a material clause of the lapsed agreement would not be possible. It would have to be in writing and signed by both parties.

In Cronje it was also held that the revival of the whole of a lapsed agreement would necessarily include the revival of the suspensive condition in it that had caused the agreement to lapse and, because the period stipulated in that condition would already have expired, the revived contract would immediately terminate or self-destruct’”. [Footnotes omitted]

[24] From the instalment sale agreement, it is clear that the value of the property sold is more than R1 000 000.00 and as a result the sale agreement is excluded by the National Credit Act 34 of 2005 (The Act). Section 4(1) of the Act provides that, subject to section 5 and 6 of the Act, this Act applies to every credit agreement between the parties dealing at Arm’s length and made within or having an effect within the Republic except (a)(i) A credit agreement in terms of which the consumer is a juristic person whose assets value or annual turnover is, at the time the agreement made, below the threshold value determined by the minister from time to time in terms of section 7(1).

Analysis

[25] The case of Peterson NNO and Others v CPLM[32] referenced to by the plaintiff’s defuses the special plea by the defendant. The Defense raised during the rescission application

should stand against summary judgment application as it is a triable issue. The clear message from this judgment is that the fact that the defendant managed to have a default judgment rescinded does not limit the plaintiff from applying for summary judgment and further that rescission of the default judgment cannot be used as defense against a summary judgment application. In simple terms, it means that the court that granted the rescission of default judgment is not barred from listening to the application for a summary judgment. The defense used in the rescission application will not automatically stand in the summary judgment. Each application is viewed on its own circumstances, therefore the special plea shall fail.

[26] The Question that must be considered by the Court is whether the tender to pay made by the defendant revive the contract and further whether the continued payment deducted from the defendant's account revive the contract. The tender does not introduce any new contract or is not a new contract between the parties. The parties are still bound by the terms of the contract they entered into. Considering clause 4.12 of the contract, the payments made by the defendant does not prejudice any rights and claims of the plaintiff against the defendant. It is the material fact of the contract that the defendant had to continue to pay all amounts due in terms of the contract. The above referred authorities promote adherence to the terms of the contract as such terms have a binding effect on the parties to the contract.

[27] The defence raised by the defendant does not negate the plaintiff’s claim as it does not amount to a triable issue. Therefore, such a defense must fail and the application for a summary judgment should succeed. I cannot find any reasons or grounds to deviate from the general rule that costs follow the successful party.

[28] I therefore issue the following orders:

1. The Defendant’s points in limine is dismissed,

2. That the instalment agreement entered into by the parties is cancelled,

3. The Return of a Mercedes-Benzes V300d exclusive motor vehicle with engine number 6[...] and chassis number W[...] to the Plaintiff forthwith,

4. That the Plaintiff to apply to the Court on the same papers, supplemented in so far as may be necessary, for Judgement in respect of any damages and future expenses incurred by the Plaintiff in repossession of any damages and future expenses incurred by the Plaintiff repossession of the said vehicle, which amount can only be determined once the vehicle has been repossessed by the Plaintiff and has been sold,

5. That the Defendant is ordered to pay the costs on an attorney and client scale inclusive of counsel’s fees

M MALANGENI AJ

ACTING JUDGE OF THE HIGH COURT

MPUMALANGA DIVISION, MIDDELBURG

APPEARANCE:

FOR PLAINTIFF: Adv Welgemoed Instructed by GFT Pistorius Inc FOR DEFENDANT: Ms. Nelson Instructed by De Jager Hattingh Attorneys Date of hearing: 10th January 2025 Date of Judgement: 24th February 2025

[1] Draft Order for rescission application Page 33

[2] Defendants Plea page 36 - 40

[3] Affidavit in support of the summary Judgement page 48 para 13

[4] Affidavit in support of the summary Judgement page 48 para 14

[5] Affidavit in support of the summary Judgement page 49 para 19

[6] Affidavit in support of the summary Judgement page 49 para 20

[7] Affidavit in support of the summary Judgement page 41 para 21

[8] Affidavit in support of the summary Judgement page 50 para 23

[9] Affidavit in support of the summary Judgement page 50 para 23.1

[10] Affidavit in support of the summary Judgement page 50 para 24

[11] Affidavit in support of the summary Judgement page 51 para 27

[12] Defendant’s answering affidavit Page 65 -72

[13] Defendant’s answering affidavit page 67 para 10

[14] Defendant’s answering affidavit page 67 para 11

[15] Defendant’s answering affidavit page 67 para 12

[16] Defendant’s answering affidavit page 68 para 13

[17] Defendant’s answering affidavit page 68 para 14

[18] Defendant’s answering affidavit page 70 para 22

[19] Applicant’s heads of Argument Page 8 para 18

[20] Applicant’s heads of Argument Page 8 para 19

[21] [2023] ZAGPJHC 767 at para 28

[22] Applicant’s heads of Argument Page 9 para 26

[23] Plaintiff’s heads of Argument Page 10 para 27

[24] Plaintiff’s heads of Argument Page 10 para 31

[25] Defendant’s heads of Arguments Page 3 para 2.5

[26] Defendant’s heads of Arguments Page 3 para 2.6

[27] 2009 (5) SA 1 (SCA) at para 31

[28] 1976 (1) SA 418 (A) at 426

[29] [2014] ZAGPPHC 58 at para 3.

[30] [2020] ZAWCHC 5 at para 24.

[31] [2025] ZASCA 01 (9 January 2025)

[32] 2023 (5) SA 555 (GJ) at para 28.