Standard Bank of South Africa Ltd v Oosthuizen (1897/2010, 2617/2010) [2011] ZANWHC 90 (9 June 2011)

NORTH WEST HIGH COURT, MAFIKENG

CASE NO. 1897/2010

&

CASE NO. 2617/2010

In the matter between:

THE STANDARD BANK OF SOUTH AFRICA LIMITED ...................................PLAINTIFF

and

HENDRIK LODEWYK OOSTHUIZEN .........................................................DEFENDANT

____________________________________________________________________________

JUDGMENT

GUTTA J.

[1] In both case numbers 1897/2010 and 2617/2010, the plaintiff applied for summary judgment against the defendant for the confirmation of the cancellation of an instalment sale agreement concluded between the plaintiff and the defendant, the return of a motor vehicle and costs on an attorney and client scale. The arguments by both counsel under the two case numbers were the same, except where specified infra.

KNOWLEDGE OF THE DEPONENT

[2] The first defence raised by the defendant is that the deponent to the affidavit in support of the summary judgment, namely, Lynn Liesel Lawrence-Hall, does not have personal knowledge of the facts relevant to the matter and cannot confirm that the facts in the particulars of claim are true and correct as the instalment sale agreement was concluded in Zeerust and the deponent, who is based in Pretoria, was at no stage involved in the instalment sale agreement and the management thereof.

[3] The deponent to the affidavit in support of the summary judgment is the legal manager of the plaintiff. She states that she has “through my position, access to all records and information in the possession of the applicant pertaining to this matter before this Honourable Court and am as such competent to depose of this affidavit”.

[4] Rule 32(2) provides that the affidavit be deposed to by any other person who can swear positively to the facts verifying the cause of action and the amount.

[5] The Court must be satisfied prima facie that the deponent is a person who can swear positively to the facts.

[6] An affidavit by a legal advisor of a bank who swears that the facts are within her personal knowledge and swears positively to the facts is sufficient. See Nedcor Bank Ltd v Behardien 2000 (1) SA 307 (C) at 310F–311C.

[7] In casu the deponent, who is a legal manager of the plaintiff, in my view, provides a reasonable explanation of how the facts came to be within her knowledge and I am satisfied prima facie that the deponent has access to the documents and records and that she is a person who can swear positively to the facts. See BOE (NBS) Bank Ltd v Baccarella Investments (Pty) Ltd (unreported) CPD case number 6348/2001.

[8] Accordingly, the point in limine is dismissed.

THE SECTION 129 NOTICE

[9] The second point raised by the defendant is that the plaintiff attempted to deliver the Section 129 notice to the defendant’s

physical address, at which address delivery was not possible and should have been sent to the defendant’s postal address.

Furthermore, the defendant did not receive the notice and the action is premature.

[10] The defendant relies on clause 16.6 of the instalment sale agreement which reads that “where the post office does not effect street deliveries at your address, we may send any notices in terms of this agreement per post office box number” and the defendant avers that for the duration of the agreement, the plaintiff sent all notices, correspondence, documents to the defendant’s postal address and not to the defendant’s physical address.

[11] In the matter under case number 2617/2010, the defendant in the opposing affidavit stated that “my domicilium adres is gewysig na Posbus 471, Zeerust” and notwithstanding this the plaintiff sent the letter to his physical address and not the P O Box address. A similar allegation is absent in the matter under case number 1897/2010.

[12] Clause 16.3 of the instalment sale agreement provides that the defendant must inform the plaintiff in writing within ten (10)

business days after the change, to any change to the defendant’s residential or business address, notice address, postal address, telefax number and that the change will be effective on the tenth (10th) business day from receipt of the notice.

[13] The defendant makes a bald allegation that he amended his address without attaching any proof that he gave notification of the change of notice address as provided for in the lease agreement.

[14] The defendant in clause 16.1 chose the address, namely, Plaas Kalkdam, Zeerust as the address for serving legal notices in terms of the agreement.

[15] It is common cause that the plaintiff sent the notice in terms of Section 129 to the defendant’s physical address as provided by the defendant in the instalment sale agreement.

[16] Mr De Beer, counsel for the plaintiff, referred the Court to the case of Muien v BMW Financial Services (SA) (Pty) Ltd & Another 2010 (1) SA 549 (KZN) and submitted that the exact argument was raised before Wallis J.

[17] In the above case, the applicant contended that there was non-compliance with the provisions of Section 129(1)(a) as there was no street delivery of mail at all in the Richards Bay suburbs and that any notices sent by registered mail to the chosen domicilium would not have been delivered by the postal services.

[18] Wallis J held at paragraphs [14] and [18] at 556E–D and 557B–D that “the credit provider discharges its obligation of delivering notice by sending it to the postal address selected by the consumer”, and at paragraphs [20] and [22] at 557F–558B

and 558D–F, “although the onus of proving that notice was indeed given rests on the credit provider, the risk of non-receipt of the notice lies with the consumer: provided the credit provider delivered the notice in the manner chosen by the consumer, and such manner was one specified in Section 65(2)(a), it is irrelevant whether the notice in fact came to the attention of the consumer”.

[19] The Supreme Court of Appeal in Rossouw & Another v First Rand Bank Ltd 2010 (6) SA 439 (SCA) at paragraph [32] at 450C–D, put this issue to rest when it pronounced that “the dispatch of Section 129(1)(a) notice by a credit provider in a manner chosen by a consumer from the six alternatives provided in Section 63(2)(a) of the Act, namely, in person, at the credit provider’s business premises or at any location chosen by the consumer at his expense, by ordinary mail, by fax, by e-mail or by printable web-page is sufficient to establish compliance with the submission, actual receipt of the notice being the consumer’s responsibility”.

[20] The Supreme Court of Appeal also held at paragraph [56]–[57] at 456A–I, that “Section 65(2)(b) obliges a credit provider to deliver the notice in a manner chosen in Section 65(2)(a). Credit providers therefore cannot reserve other options for delivery. In line with the stated purpose of consumer protection in Section 3(e) of the Act, credit agreements should provide for all the specified delivery alternatives, so that a consumer may make an informed choice of service address”.

[21] As the defendant chose his physical address as his domicilium citandi et executandi it does not assist the defendant to allege that at the physical address street delivery was not possible.

[22] Accordingly, the Section 129 was duly delivered to the defendant at his chosen domicilium citandi et executandi in the manner chosen by the defendant.

PAYMENT

[23] The defendant alleges that he is not behind on his payments and that he does not owe the plaintiff any monies for late payment. That throughout the contract period up until the middle of 2010, the instalments were paid by debit order and during the middle of 2010 the defendant changed his bank to Capitec Bank, but continued to pay his monthly instalments and is up to date with his payments. The defendant attached proof of his last three monthly instalments for September, October and November 2010.

[24] Mr Maree, on behalf of the defendant, submitted that the defendant’s defence is bona fide and good in law. See Standard Bank of South Africa Ltd v Panayiotts 2009 (3) SA 363 (W). He submitted that the Court has a discretion to refuse summary judgment and grant leave to defend, which discretion the Court should exercise in favour of the plaintiff in the light of:

24.1 the Section 129 notice did not come to the defendant’s attention;

24.2. the plaintiff was aware that the notice did not come to the defendant’s attention, alternatively ought to have reasonably

been aware;

24.3 the defendant is not behind on his payments;

24.4. the facts and grounds set out by the defendant are not seriously unconvincing.

[25] Mr De Beer submitted that the defendant at no stage properly dealt with the arrears. That as at the date of summons, namely, 17 August 2010, the defendant was in arrears under case number 1897/2010 in the amount of R30 987.83 and under case number 2617/2010 in the amount of R9 513.36. In both matters the defendant relies on normal instalments in respect of the agreement. Mr De Beer submitted that the allegations are bald, vague and sketchy. That there is no proof to suggest that the defendant was not in arrears or that the arrears were settled and that the defendant bore the burden to satisfy the Court that the arrears were settled, which they failed to do.

[26] Mr De Beer further submitted that the date on which the summons was issued is the effective date of its enforcement and once the plaintiff acquired the election to cancel and enforce the agreement by way of lex commissoria, any subsequent payment or tender of payment made by the defendant cannot influence such election and the plaintiff is accordingly

entitled to cancel the agreement. See Boland Bank Ltd v Pienaar & Another 1988 (3) SA 618 (A) at 623.

[27] To avoid summary judgment the defendant is required, in terms of Rule 32(3) (b) of the High Court Rules, to set out in an affidavit facts, which if proved at the trial, will constitute an answer to the plaintiff's claim. The rule also requires that the defendant satisfy the court that the defence is bona fide. This means that the defendant must swear to a defence, valid in law, in a manner which is not seriously unconvincing. Finally, it is required of the defendant that he discloses fully the nature and grounds of the defence and the material facts relied upon therefore. This means that the statement of material facts must be sufficiently full to persuade the court that what the defendant has alleged, if it is proved at the trial, will constitute a defence to the plaintiff's claim. If the defence is averred in a manner which appears in all the circumstances to be needlessly bald, vague or sketchy, that will constitute material for the court to consider in relation to the requirement of bona fides. See Breitenbach v Fiat SA (Edms) Bpk 1976 (2) SA 226 (T) at 227G–227F.

[28] Of crucial importance in summary judgment proceedings is the comprehensive disclosure of the material facts upon which the defence is based. This is particularly so as the evaluation of the defendants opposing affidavit frequently entails not a consideration of what the defendants have said, but of what they did not say. See Kassim Brothers (Pty) Ltd v Kassim 1964 (1) SA 651 (SR), 653B.

[29] What Rule 32 requires is that the defendant set out in his affidavit facts, which if proved at the trial, constitute an answer to the plaintiff’s claim. See Marsh v Standard Bank of SA Ltd 2000 (4) SA 947 (W) at 949.

[30] A denial must be amplified to constitute a bona fide defence. In order to give credibility to the defence raised by the defendants, the defendants must, at the very least, know and state when, where, how and the amount of the payment (and, it is suggested, attach proof of payment). There is an onus on him to do so. See Deary v Deary 1971 (1) SA 222 (C) 231A; also see Breitenbach v Fiat SA (Edms) Bpk supra 230D-231C; also see Gillinsky v Superb Launderers and Dry Cleaners (Pty) Ltd 1978 (3) SA 807 (C) 810; also see Nedperm Bank Ltd v Verbri Projects CC 1993 (3) SA 214 (W) 223I.

[31] The defendant’s defence is essentially that they have paid their instalments. I am of the view that the defendant’s

affidavit lacks particularity and is bald. The defendant failed to satisfy this Court that the arrears were paid and failed to amplify the denial in order to give credibility to his defence. He should have stated when, where and how the instalments and arrears were paid.

[32] Section 129(3) of the National Credit Act makes express provision for a consumer who falls into arrears to prevent the credit provider from exercising a right of cancellation, even one that has accrued, by paying the arrears together with default charges and the reasonable costs of enforcing the agreement up to that stage. However, in terms of Section 129(4)(c) that right falls away once the agreement has been lawfully cancelled. See BMW Financial Services (SA) (Pty) Ltd v Donker 2009 (6) SA 63 (KZD) at para 22 page 76.

[33] I have considered the lex commissoria principle and am of the view that the plaintiff cannot be deprived of his right to cancel the contract because of subsequent payment even if the payments were made before cancellation. As stated by Thirion J in Moodley v Reddy 1985 (1) SA 76D at 82F–G:

“(I)t would seem to me that the notion that a defaulting purchaser had a right to purge his default by tendering his performance late, and by such tender to deprive the seller of the benefit of a lex commissoria expressly stipulated for in his favour, militates against the whole concept of the lex commissoria. It would mean that, after fulfillment of the condition on which the lex commissoria was dependent, there would be two concurrent and competing rights; the right of the defaulting purchaser still to tender performance and the right of the seller at his option to cancel the contract and it would depend upon who was first in point of time to exercise his right. Such a situation would be contrary to the object with which a lex commissoria would be stipulated for (at 81D – F). . . . Whatever the position may be in case of a sale without a lex commissoria, once a lex commissoria is stipulated for in the seller’s favour the position becomes altered and on fulfillment of the condition which brings the lex commissoria into operation there accrues to the seller a right to cancel which cannot be defeated by an offer of performance by the purchaser and the offer of performance by the purchaser then becomes subordinated to the choice of the seller to cancel.”

[34] The payments made by the defendant, proof of which is attached, for the months of September, October and November 2010 were made after the election to cancel and enforce the agreement had taken place and does not assist the defendant in relation to the requirement of bona fides.

[35] Further under case number 2617/2010, Mr De Beer referred the Court to a deposit slip attached by the defendant and to payments highlighted on a bank statement that were for different accounts and submitted that this shows lack of bona fide on the part of the defendant.

[36] There is no explanation proffered for why this additional deposit slip in the amount R11 122.22, which is not completely legible, was attached or why payments for other accounts were highlighted in Annexure B. The above can be considered to be misleading in view of the fact that the plaintiff is not afforded an opportunity to file a replying affidavit.

[37] I am accordingly of the view that the defendant failed to disclose fully the nature and grounds of his defence and the material facts relied upon and failed to satisfy the Court that he has a bona fide defence.

THE ORDER

[38] Summary judgment is granted, under case number 1897/2010, as follows:

38.1. confirmation of the cancellation of the agreement;

38.2 return of the following goods:

2008 Refurbished Vibromax Padfoot Rol

Registration Number: 2069

Engine Number: Z520057

Chassis Number: N/A

38.3 costs of suit.

[39] Summary judgment is granted, under case number 2617/2010, as follows:

39.1 confirmation of the cancellation of the agreement;

39.2 return of the following goods:

2007 Aveling Barford VR3

Serial/Registration Number: VR511J

39.3 costs of suit.

_________________

N. GUTTA

JUDGE OF THE HIGH COURT

APPEARANCES

DATE OF HEARING : 26 MAY 2011

DATE OF JUDGMENT : 09 JUNE 2011

COUNSEL FOR PLAINTIFF : ADV L. DE BEER

COUNSEL FOR DEFENDANT : ADV G.V. MAREE

ATTORNEYS FOR PLAINTIFF : VAN ROOYEN TLHAPI WESSELS INC.

(Instructed by VEZI & DEBEER ATTORNEYS)

ATTORNEYS FOR DEFENDANT : SMIT STANTON INC.

(Instructed by BOSMAN & BOSMAN)