Westbank v Coetzer (37175/2011) [2013] ZAGPPHC 468 (20 December 2013)

IN THE HIGH COURT OF SOUTH AFRICA

(NORTH GAUTENG HIGH COURTS

Case No: 37175/2011

Date: 20 December 2013

Not reportable

Not of interest to other judges

In the matter between:

WESTBANK………………………………………………………………….…….Applicant

and

J P COETZER………………………………………………………………….Respondent

JUDGEMENT

SWARTZ AJ

Respondent obtained judgment by default against the Applicant on 12 April 2011 for arrear payments upon the Applicant’s vehicle instalment sale agreement. This is an application for the rescission of that judgment in terms of the provisions of Rule 31 (2) (b). The application is opposed. Furthermore, the application for

rescission was made after the expiry of 20 days from which the judgment came to Applicants notice and application for condonation is not made.

Rule 31(2) (b) reads:

A defendant may within 20 days after he has knowledge of such judgment apply to court upon notice to the plaintiff to set aside such judgment and the court may, upon good cause shown, set aside the default judgment on such terms as to it seems meet.

The applicant must give a reasonable explanation for his default; the application must be made bona fide and not with the intention of merely delaying the Respondent’s claim and, he must show a bona fide defence to the respondent’s claim.

No condonation is prayed for in the Notice of Motion. The summons was served on 14 July 2011. Default judgment was granted on 12 April 2011. On 23 October 2012 the Applicant became aware of the judgment when representatives of the Respondent and the Sheriffs offices visited him at his place of employment to repossess the vehicle. Only then were steps taken by his debt counselor and his new attorney of record to establish the circumstances relating to his previous attorney’s alleged failure to file a notice of intention to defend and a plea. Since handing the summons over to his Debt Counsellor, the Applicant did nothing more not establish whether defence had indeed been entered on his instructions. At his peril he ignored court processes until the arrival of the sheriff to act in terms of the warrant for delivery of goods. This is not a proper explanation for the delay. The Applicant is not entitled to the relief claimed.

Over and above this, the Applicant raised three possible defences namely: Respondent was not entitled to terminate the debt review process in terms of Section 86 (10); the action was premature and the notice of termination was sent to the wrong address.

Section 86(10) of the National Credit Act, 34 of 2005 (“the Act”) reads:

(10) If a consumer is in default under a credit agreement that is being reviewed in terms of this section, the credit provider in respect of that credit agreement may give notice to terminate the review in the prescribed manner to-

(a) the consumer;

(b) the debt counsellor; and

(c) the National Credit Regulator,

at any time at least 60 business days after the date on which the consumer applied for the debt review.

According to the Applicant he never received any notice from the Respondent in terms of Section 86 (10) of the National Credit Act, Act 34 of 2005. He was never made aware of his default or the Respondent’s cancellation of the debt review process. He had been placed under debt review during August 2008 and had since then made monthly payments to his debt counsellors, NPDA. These payments included installments in favour of the Respondent. He had no control over installment payments to the Respondent. He never defaulted in his monthly payments to the debt counsellors.

The Respondent was only entitled to issue summons against him in the event of the debt review process having been terminated; that the debt review process could only be terminated in the event of him failing to comply with his payment obligations in terms of the debt review order; before the order could be terminated, prior notification thereof were to be sent to him in terms of the

provisions of Section 86 (10) of the National Credit Act; that only 10 days after receipt of this notice may summons be issued against him.

Furthermore, that he had elected his postal address as the address to which all post and other communication were to be sent. The respondent had sent the Section 86 (10) notice to his residential address and he had not received any mail at that address. The Respondent had not provided any proof of the fact that Applicant had received such notice, not even the track and trace report. Without such proof, the Respondent failed to discharge the onus upon it to show that there was proper compliance with the National Credit Act.

The credit provider's summons or particulars of claim should allege that the notice was delivered to the relevant post office and that the post office would, in the normal course, have secured delivery of a registered item notification slip, informing the consumer that a registered article was available for collection. Coupled with proof that the notice was delivered to the correct post office, it may reasonably be assumed in the absence of contrary indication, and the credit provider may credibly aver, that notification of its arrival reached the consumer and that a reasonable consumer would have ensured retrieval of the item from the post office.

In this matter, summons was issued on 30 June 2011 and served on 14 July 2011. The Sebola-judgment was only delivered on 7 June 2012. The Sebola- judgment has no retrospective effect.

The Respondent alleges in the opposing affidavit that it properly complied with the provisions of the National Credit Act and submits that the Applicant has failed to show good cause as to why he should be entitled to the relief claimed. In any event, the application should be dismissed because the respondent financed the vehicle on certain terms and condition which Applicant breached; after following due process judgment was validly sought and granted; the application is out of time and the Applicant does not have a bona fide defence. The defences raised by the Applicant are all without merit.

The Applicant, through the NPDA, in some months made such low payments to the Respondent that it bordered on being ridiculous. During the period January 2011 to November 2011 it received installment payments amounting to some R165. Applicant was in arrears with installment payments amounting to R79 731.37 when summons was issued. Respondent submits that all the payments were less than the Applicant was supposed to pay and as such the Respondent was entitled to terminate the Applicant’s debt review process. I agree with Respondent’s counsel that this ‘defence’ is without any merit.

The Applicant submits that the Respondent should not have instituted action prior to the lapse of 10 days after dispatch of the notice in terms of section 86(10).

The only requirements for a valid termination in terms of section 86(10) of the Act are:

(i) at least 60 business days had to have prescribed from the date when the Applicant applied for debt review; and

(ii) the Applicant had to be in default of the credit agreement in question at the time of termination. Both these requirements had been met and as such the Respondent was not premature in the action. In any event, the notice in terms of section 86(10) of the NCA is dated 10 June 2011 and was dispatched on 14 June 2011. Summons was only served on 14 July 2011. Therefore, at least 10 business days has lapsed and the summons was not issued or served prematurely.

In respect of the incorrect address to which the notice was dispatched, Applicant relies on the provisions of clause 20.1 of the agreement between the parties and states that he never received the termination notice as it was sent to the wrong address.

Respondent submits that in terms of clause 20.2 of the agreement entered into between the parties, the Applicant elected his physical address, 10 De Klerk Street, Nelspruit, as his chosen domicilium citandi et executandi for the delivery of all legal notices. The S 86 (10) notice is indeed a legal notice. The S 86 (10) notice was indeed dispatched to the correct chosen domicilium.

Munien v BMW Financial Services SA (Pty) Ltd and Another 2010 (1) SA 549 (KZD):

provided the credit provider delivered the notice in the manner chosen by the consumer in the agreement and such manner was one specified in s 65 (2) (a), it is irrelevant whether the notice in fact came to the attention of the consumer. As the consumer has the right to choose the manner in which notice is to be given, it is for the consumer to ensure that the method chosen will be one that is reasonably certain to bring any notice to his or her attention.

5.15 In Rossouw and Another v FirstRand Bank Ltd 2010 (6) SA 439 (SCA) at paragraph 8 it was held by the Appellate Division that:

It appears to me that the legislature's grant to the consumer of a right to choose the manner of delivery inexorably points to an intention to place the risk of non-receipt on the consumer's shoulders. With every choice lies a responsibility, and it is after all within a consumer's sole knowledge as to which means of communication will reasonably ensure delivery to him. It is entirely fair in the circumstances to conclude from the legislature's express language in s 65(2) that it considered dispatch of a notice in the manner chosen by the appellants in this matter sufficient for purposes of s 129(1) (a), and that actual receipt is the consumer's responsibility.

In ABSA Bank v Petersen 2013 (1) SA 481 (WCC) in paragraph 18 the Honourable Judge Binns-Ward summed the Binneman-matter as follows up:

... (i) that it may be presumed when a registered item arrives at the addressee's local post office that notification of its arrival will probably have been given by the post office to the consumer and that a reasonable consumer would ensure its retrieval; (ii) ergo that non-collection of the item in the circumstances is on the face of it an indication of unreasonable indifference by the addressee; (Hi) the risk of non-receipt in the circumstances of the credit provider having taken 'reasonable measures to bring the notice to the attention of the consumer' is on the consumer; and (iv) in any event, a presumption of receipt clause could not trump the requirements of s 129.

There was no formal application for condonation. In any event, there is no reasonable explanation advanced for the delay in bringing the application. Furthermore, the Applicant has no bona fide defence and with regards to the defences raised, I am satisfied that there is nothing irregular with regard to the termination of the Applicant’s debt review and that it was lawfully done; the action was not premature and the notice of termination was not sent to the wrong address.

The order I make is that the application for rescission of judgment is dismissed with costs on the attorney and client scale.

E SWARTZ

ACTING JUDGE OF THE HIGH COURT