Kaknis v Absa Bank Ltd and Another

• Jurisdiction: South Africa
• Citation: 2017 (4) SA 17 (SCA)

Kaknis v Absa Bank Ltd and Another
2017 (4) SA 17 (SCA)

2017 (4) SA p17

Citation	2017 (4) SA 17 (SCA)
Case No	08/16
Court	Supreme Court of Appeal
Judge	Shongwe JA, Willis JA, Mathopo JA, Van der Merwe JA and Nicholls AJA
Heard	November 11, 2016
Judgment	December 15, 2016
Counsel	PWA Scott SC (with KD Williams) for the appellant.; JG Richards for the respondents.

Flynote : Sleutelwoorde

Credit agreement — Consumer credit agreement — Section 126B(1)(b) of B National Credit Act 34 of 2005, inserted by National Credit Amendment Act 19 of 2014 — Retrospectivity — Section having no retrospective application.

Headnote : Kopnota

The question addressed in this matter was whether s 126B(1)(b) of the National Credit Act 34 of 2005 (the NCA) applied retrospectively. The provision was C inserted into the NCA by the National Credit Amendment Act 19 of 2014 and came into operation with effect from 13 March 2015. It provided in relevant part as follows:

'126B Application of prescription on debt

(1)(a) . . . D

(b) No person may continue the collection of, or re-activate a debt under a credit agreement to which this Act applies —

(i)

which debt has been extinguished by prescription under the Prescription Act, 1969 (Act 68 of 1969); and

(ii)

where the consumer raises the defence of prescription, or E would reasonably have raised the defence of prescription had the consumer been aware of such a defence, in response to a demand, whether as part of legal proceedings or otherwise.'

The appellant sought to rely on this provision in opposing summary judgment proceedings instituted by the respondents against him, summons having been issued on 30 April 2015. He argued that the acknowledgment of debt he signed in October 2014, and upon which the respondents relied, F operated to reactivate prior debts under the NCA which had been extinguished by prescription. Had he been aware of the defence of prescription, he would have raised it at the time of entering into the agreement. He argued that s 126B(1)(b) operated retrospectively to invalidate it. The court a quo disagreed, finding that the respondents were therefore entitled to rely on the acknowledgment of debt. This was an appeal to the G Supreme Court of Appeal against that finding.

Held, agreeing with the High Court, that s 126B(1)(b) had no retrospective operation and provided no defence to the appellant. The presumption against retrospectivity could not be rebutted in the circumstances. The retrospective application of the provision would have the effect of nullifying agreements that had been validly entered into and taking away existing H rights, a fact of which the legislature had no doubt to be taken to have been aware. However, there was no indication in the provision, or elsewhere, of any intention of such effect. Furthermore, the fact that the provision was intended to benefit consumers in itself said nothing about retrospectivity. Although the main objective of the NCA was to protect consumers, such protection had to be balanced against the rights of credit providers. I (Paragraphs [37] – [40] at 30C – 32A.)

Shongwe JA and Willis JA each delivered dissenting judgments. Shongwe JA found that, while there was no express indication thereto, the provision provided for retrospective application by necessary implication. Such a reading was called for in the light of the clear intention of the legislature in introducing s 126B, ie to protect naïve and vulnerable consumers by J

2017 (4) SA p18

eradicating A the injustice inherent in credit providers being able to benefit from transactions which had become prescribed. Furthermore, such an interpretation was in line with the trend set by the Constitutional Court emphasising the protection of the consumer. Similarly, Judge Willis found that a comprehensive reading of the NCA supported a finding of retrospectivity of the provision in question. (Paragraphs [16], [18], [23], [27], [30] B and [31] at 24E – F, 24H – 25D, 26G – 27A, 28H – J and 28J – 29C.)

Cases cited

Southern Africa

Bartman v Dempers 1952 (2) SA 577 (A): referred to

Boost C Sports Africa (Pty) Ltd v South African Breweries (Pty) Ltd 2015 (5) SA 38 (SCA) ([2015] ZASCA 93): referred to

City Deep Ltd v Silicosis Board 1950 (1) SA 696 (A): referred to

Curtis v Johannesburg Municipality 1906 TS 308: referred to

De Jager en Andere v Absa Bank Bpk 2001 (3) SA 537 (SCA) ([2000] 4 All SA 481): referred to

Euromarine D International of Mauren v The Ship Berg and Others 1986 (2) SA 700 (A): referred to

Ferris and Another v FirstRand Bank Ltd 2014 (3) SA 39 (CC) (2014 (3) BCLR 321; [2013] ZACC 46): referred to

Kruger v President Insurance Co Ltd 1994 (2) SA 495 (D): referred to

Kubyana v Standard Bank of South Africa Ltd E 2014 (3) SA 56 (CC) (2014 (4) BCLR 400; [2014] ZACC 1): referred to

Lek v Estate Agents Board 1978 (3) SA 160 (C): referred to

Manyeka v Marine & Trade Insurance Co Ltd 1979 (1) SA 844 (SE): referred to

Minister of Public Works v Haffejee NO 1996 (3) SA 745 (A) ([1996] 4 All SA 355; [1996] ZASCA 17): referred to

National F Director of Public Prosecutions v Basson 2002 (1) SA 419 (SCA) (2001 (2) SACR 712; 2002 (1) BCLR 419; [2002] 2 All SA 255; [2001] ZASCA 111): referred to

National Director of Public Prosecutions v Carolus and Others 2000 (1) SA 1127 (SCA) (1999 (2) SACR 607; [2000] 1 All SA 302; [1999] ZASCA 101): referred to

Nkabinde G and Another v Judicial Service Commission and Others 2016 (4) SA 1 (SCA) ([2016] ZASCA 12): referred to

Nkata v FirstRand Bank Ltd 2016 (4) SA 257 (CC) ([2016] ZACC 12): referred to

R v Mazibuko 1958 (4) SA 353 (A): referred to

R H v Sillas 1959 (4) SA 305 (A): referred to

Road Accident Fund v Monjane 2010 (3) SA 641 (SCA) ([2007] ZASCA 57): referred to

Rossouw and Another v FirstRand Bank Ltd 2010 (6) SA 439 (SCA) ([2010] ZASCA 130): dictum in para [19] applied

S v Mhlungu and Others 1995 (3) SA 867 (CC) (1995 (2) SACR 277; I 1995 (7) BCLR 793; [1995] ZACC 4): dictum in para [65] applied

S v Mpetha 1985 (3) SA 702 (A): referred to

Sebola and Another v Standard Bank of South Africa Ltd and Another 2012 (5) SA 142 (CC) (2012 (8) BCLR 785; [2012] ZACC 11): referred to

Transnet Ltd v Ngcezula 1995 (3) SA 538 (A): referred to

Unitrans Passenger (Pty) Ltd t/a Greyhound Coach Lines v Chairman, National J Transport Commission, and Others; Transnet Ltd (Autonet Division) v Chairman, National Transport Commission, and Others 1999 (4) SA 1 (SCA) ([1999] 3 All SA 365; [1999] ZASCA 40): dictum in para [12] applied

2017 (4) SA p19

A Veldman v Director of Public Prosecutions, Witwatersrand Local Division 2007 (3) SA 210 (CC) (2006 (2) SACR 319; 2007 (9) BCLR 929; [2005] ZACC 22): dictum in para [26] applied. B

England

Hutchinson v Jauncel 1950 (1) KB 574: referred to

Yew Bon Tew v Kenderaan Bas Mara [1983] 1 AC 553 (PC) ([1982] 3 All ER 833): referred to.

United States C

Landgraf v USI Film Products et al 511 US 244 (1994): referred to.

Legislation cited

The National Credit Act 34 of 2005, s 126B(1)(b): see Juta's Statutes of South Africa 2015/16 vol 2 at 1-522.

Case Information

PWA Scott SC (with KD Williams) for the appellant. D

JG Richards for the respondents.

An appeal from the Eastern Cape Local Division of the High Court, Port Elizabeth (Msizi AJ sitting as court of first instance). The appeal is dismissed with costs. E

Judgment

Shongwe JA (Willis JA concurring) (dissenting judgment):

[1] This appeal is against the judgment and two orders of the Eastern Cape Local Division of the High Court (Msizi AJ) (the High Court) granting summary judgments against the appellant, Mr Pontelis Kaknis. F The respondents, Absa Bank Ltd (Absa) and MAN Financial Services SA (Pty) Ltd (MFS), are the two judgment creditors in whose favour these two orders were granted and are the respondents in this appeal. The High Court dismissed the appellant's defence that the respondents' claims against him had prescribed. For this assertion, the appellant had relied on s 126B(1)(b)(ii) of the National Credit Act 34 of 2005 (the G Act). The High Court held that s 126B(1)(b)(ii) did not apply retrospectively. The appeal against this narrow point of law is with leave of the High Court.

[2] The crisp question in this appeal accordingly is the interpretation and application of the provisions of s 126B of the Act which came into H operation with effect from 13 March 2015. Specifically, it is whether or not s 126B(1)(b) of the Act applies retrospectively.

Background

[3] I turn to deal briefly with the background before delving into I the relevant legal principles of interpretation. During the period March 2006 to March 2008 the appellant concluded ten instalment sale agreements with Absa, in terms of which Absa sold and delivered to the appellant various movable assets comprising inter alia motor vehicles and trailers. The appellant also concluded an instalment sale agreement with MFS, in terms of which it sold and delivered to the appellant a J

2017 (4) SA p20

Shongwe JA

2007 A MAN truck. The appellant honoured both transactions by paying regularly. However, after a few years of compliance the appellant got into financial difficulties, which resulted in his failure to pay.

[4] As a result of his financial woes, the appellant approached a debt counsellor to apply for a debt review as contemplated in s 86 of the Act. B On 12 June 2010 he obtained an order from the magistrates' court for the district of Port Elizabeth in terms of which his obligations to his various credit providers were rearranged in accordance with the provisions of s 86(7)(c)(ii)(aa) and (bb) of the Act. The appellant faithfully complied with the court order, until 8 July 2011 when the last payment C was made by the payment distribution agent. It is common...