Starita v Absa Bank Ltd and Another

• Jurisdiction: South Africa

Starita v Absa Bank Ltd and Another
2010 (3) SA 443 (GSJ)

2010 (3) SA p443

Citation	2010 (3) SA 443 (GSJ)
Case No	302/08
Court	South Gauteng High Court, Johannesburg
Judge	André Gautschi AJ
Heard	August 21, 2009
Judgment	September 28, 2009
Counsel	C van der Merwe for the applicant.; JJ Durandt for the respondent.; No appearance for the second respondent.

Flynote : Sleutelwoorde B

Credit agreement — Consumer credit agreement — Debt enforcement — Procedures in anticipation of judicial proceedings — Notice of default — Delivery — Risk of non-receipt — Receipt not required for notice to be valid — Sufficient if notice sent by registered post to consumer's domicilium — National Credit Act 34 of 2005, ss 65(2), 129(1)(a) and 168. C

Headnote : Kopnota

Section 129(1)(a) of the National Credit Act 34 of 2005, which states that a credit provider must, in anticipation of judicial proceedings, in writing notify a consumer who is in default under a credit agreement of the fact of his or her default, does not require receipt of such a notice by the consumer. Judicial authority is divided on whether a s 129 notice must be received by D the consumer before it will constitute a valid notice that would entitle the credit provider to approach the court for an order enforcing the agreement. Section 168, which sets out the prescribed manner of delivery of documents to the consumer under the Act, is applicable to s 129 notices, and provides that it will be properly served (delivered) when it has been sent by registered mail to the person's last known address. (Paragraph [18.6] at 451C - D.) Accordingly the s 129 notice need not be actually received by the consumer: E it is sufficient that it was sent by registered post to the domicilium address. (Paragraph [19] at 453H.)

Cases Considered

Annotations:

Reported cases F

Absa Bank Ltd v Prochaska t/a Bianca Cara Interiors 2009 (2) SA 512 (D): not followed

BMW Financial Services (South Africa) (Pty) Ltd v Dr MB Mulaudzi Inc 2009 (3) SA 348 (B): referred to

Judson Timber Co (Pty) Ltd v Ronnie Bass & Co (Pty) Ltd and Another 1985 (4) SA 531 (W): dictum at 538A - B applied G

Kuhne & Nagel (Pty) Ltd v Elias and Another 1979 (1) SA 131 (T): referred to

Loader v Dursot Bros (Pty) Ltd 1948 (3) SA 136 (T): referred to

Loryan (Pty) Ltd v Solarsh Tea & Coffee (Pty) Ltd 1984 (3) SA 834 (W): dictum at 847D - I applied H

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

Unreported cases

First National Bank Ltd v Rossouw and Another (GNP case No 30624/2009, 6 August 2009): followed I

FirstRand Bank Ltd v Dhlamini (GNP case No 50146/2009, 17 March 2010): criticised and not followed

Standard Bank of South Africa Ltd v Mellet and Another [2009] ZAFSHC 110 (30 October 2009): followed

Standard Bank of South Africa Ltd v Rockhill and Another [2010] ZAGPJHC 10 (11 March 2010): followed. J

2010 (3) SA p444

Statutes Considered

Statutes A

The National Credit Act 34 of 2005, ss 65(2), 129(1)(a) and 168: see Juta's Statutes of South Africa 2008/9 vol 2 at 1-469, 1-487 and 1-494.

Case Information

Application for the rescission of a default judgment. The facts appear B from the reasons for judgment.

C van der Merwe for the applicant.

JJ Durandt for the first respondent.

No appearance for the second respondent.

Cur adv vult. C

Postea (September 28)..

Judgment

André Gautschi AJ:

[1] This is an application for rescission of a default judgment granted in D favour of the first respondent against the applicant in this court on 30 April 2009, which order included declaring a certain immovable property executable.

[2] The applicant had been granted a loan by the first respondent during E the middle of 2005 to enable her to purchase the aforesaid property. The loan was secured by a first mortgage bond registered over the property. The applicant thereafter experienced financial difficulties and was unable to meet her commitments to the first respondent and other creditors.

[3] On 23 November 2007 attorneys acting on behalf of the first F respondent sent a notice in terms of s 129 of the National Credit Act 34 of 2005 (the Act) to the applicant's chosen domicilium citandi et executandi by registered mail. It is common cause that the Act applies to the agreement in question. There is no dispute that the content of the notice complied with the provisions of s 129 of the Act. The applicant states that she did not receive this notice, and denies that it was delivered G at her domicilium address. The first respondent has attached proof of posting, and it is not disputed that the s 129 notice was duly posted by registered post.

[4] The first respondent thereafter issued a summons out of this court under case No 33019/2007, which was served on 8 January 2008. H Service took place at the applicant's domicilium address. The applicant does not dispute that the summons was served at that address, but alleges that she did not receive it. The applicant did not deliver a notice of intention to defend, and the first respondent accordingly applied to the registrar for default judgment in terms of rule 31(5). Many months I later the first respondent's attorneys of record, in querying why default judgment had not been granted, ascertained that the case number had been duplicated in another case, in which default judgment had been granted, which prohibited (apparently) default judgment from being granted in the plaintiff's matter. Accordingly, on 12 January 2009 the first respondent issued a second summons under case No 745/2009, J without withdrawing the first summons. The second summons was

2010 (3) SA p445

André Gautschi AJ

served on the applicant's domicilium on 14 January 2009, and it is upon A that summons that the default judgment was granted which is now sought to be rescinded. Again, the fact that the second summons was served is not disputed by the applicant, but the applicant contends that she did not receive it, this time because the property was then occupied by a tenant with whom the applicant was not on good terms and who therefore did not advise her of the service of the summons. B

[5] In the time between the two summonses being issued, and more particularly on 8 May 2008, the applicant applied for a debt review in terms of s 86(1) of the Act. She was at that time unaware of the issue and service of the first summons. The debt review thereafter proceeded C through its various stages, and was by the time this application was launched, pending in the Benoni Magistrates' Court.

[6] The applicant's defences to the action relate mainly to the existence of two summonses for the same debt and the effect which that has on the validity of the s 129 notice. D

[7] The applicant's first contention is that it is impermissible to have two extant summonses for the same debt, and that that position invalidates the default judgment granted on the second summons. It is true that such a position would afford a defendant the right to raise the defence of E lis alibi pendens, which is invariably done by way of a special plea. But the defence is merely a dilatory one, since if it is upheld the usual practice is to stay the proceedings in the one matter. [1] The court has a discretion whether to uphold the defence, and could refuse to do so in a proper case. [2] Ordinarily the plaintiff would simply withdraw one of the actions. F The mere fact that there is at any point in time two extant summonses does not render one or both of them invalid or inoperative. If it did, the special plea of lis pendens would not be merely dilatory and the court would not have a discretion in the matter; it would be dispositive of the case. If the special plea of lis pendens is never raised there would be no adverse consequences to the plaintiff other than the fact that it would not G be entitled to obtain judgment in both actions, but only in one. Accordingly, in my view, the fact that two summonses had been issued, and that both actions were pending at the time when default judgment was granted on the second, does not invalidate the default judgment granted.

[8] Then it is contended that the s 129 notice, having formed the H platform on which the first summons was based, could not be used again for the second summons, either per se, or because of the lapse of a period of time.

[9] It is necessary that ss 129 and 130 be examined. Their relevant parts I read as follows:

2010 (3) SA p446

André Gautschi AJ

A '129 Required procedures before debt enforcement

(1) If the consumer is in default under a credit agreement, the credit provider -

(a)

may draw the default to the notice of the consumer in writing and propose that the consumer refer the credit agreement to a debt counsellor, alternative dispute resolution agent, consumer court or B ombud with jurisdiction, with the intent that the parties resolve any dispute under the agreement or develop and agree on a plan to bring the payments under the agreement up to date; and

(b)

subject to s 130(2), may not commence any legal proceedings to enforce the agreement before -

(i)

first providing notice to the consumer, as contemplated in C paragraph (a), or in s 86(10), as the case may be; and

(ii)

meeting any further requirements set out in s 130.

'130 Debt procedures in a court

(1) Subject to subsection (2), a credit provider may approach the court for an order to enforce a credit agreement only if, at that time, the D consumer is in default and has been in default under that credit agreement for at least 20 business days and -

(a)

at least 10 business days have elapsed since the credit provider delivered a notice to the consumer as contemplated in s 86(9), or s 129(1), as the case may be;

(b)

E in the case of a notice...