IN THE KWA-ZULU NATAL HIGH COURT, DURBAN 
REPUBLIC OF SOUTH AFRICA

Cases No. 2694/2009 
2695/2009

In the matter between:

BMW Financial Services (SA) (Pty) Ltd					Plaintiff

and

Surendera Singh								Defendant

Judgment

Delivered on the 19th of October, 2009

Lopes A.J.

[1] The plaintiff seeks summary judgment against the defendant in two cases, numbered 2694/2009 and 2695/2009.
[2] In each case the plaintiff, who is in the business of providing finance, inter alia for the purchase of motor vehicles, lent and advanced monies to the defendant to be used for the purchase of two BMW motor vehicles:
(a)     on the 14th of January, 2005 pursuant to a credit application completed on that date for a BMW 530D automatic; and
(b) on the 12m of December, 2006 pursuant to a credit application completed on the 1st of September, 2006 for a BMW 320D automatic.
[3] The loan in each case was by way of an instalment loan agreement providing for no deposit with instalments repayable over 60 months.

[4] The installment loan agreements provided that should the defendant default in making payments, the plaintiff would be entitled to:
(a) cancel the agreements; and
(b) obtain return of the motor vehicles;
(c) retain the payments made so far;
(d) recover such damages as the plaintiff may have suffered;
(e) retain ownership of the motor vehicles until full payment had been made.

[5] Delivery of the two motor vehicles was effected on the 14th of January, 2005 and during 2006 respectively.

[6] The plaintiff alleges that it has complied with the provisions of s 129 of the National Credit Act, 2005 ("the Act"). In this regard, Mr Boulle who appeared for the plaintiff and Mr Manikam who appeared for the defendant were agreed that if I found if that there had not been compliance with s 129 of the Act, the plaintiff was non-suited.

[7] The plaintiff claims compliance with s 129 of the Act by way of letters dated the 2nd of September, 2008 and the 9th of January, 2009 respectively posted by pre-paid registered post to the defendant's domicilium citandi et executandi in respect of each of the instalment sale agreements.

[8] Counsel were further in agreement that the prepaid registered post had been addressed to the correct address.
[9] The arrears at that stage were R17 624.71 in respect of the one instalment sale agreement and R50 430.91 in respect of the other.
[10] In neither case did the defendant proceed with any debt review proceedings envisaged in the Act.

[11] The plaintiff consequently cancelled both instalment sale agreements by way of cancellation letters also sent to the defendant's domicilium citandi et executandi by prepaid registered post.

[12]   As at the 16th of February, 2009 the amounts outstanding were:
(a) R300 688.16 in respect of the agreement under case number 2694/09; and
(b) R306 648.94 in respect of the agreement under case number 2695/09.

[13] The defendant has opposed the grant of summary judgment in both cases. He admits in both cases that he defaulted in making timeous payment and admits that his accounts were in arrears. This was ultimately because his business was in financial difficulties and in fact closed down in January of 2009.

[14] In order to resolve his financial difficulties he consulted with his attorneys early in January of 2009.

[15]   The defendant's defence may be summarised as follows:
(a) that at the stage he received advice from his attorneys, the agreements had already been cancelled;
(b) he did not receive any of the letters the plaintiff claimed to have sent him in terms of the Act;
(c) he had instructed his attorneys to pay the plaintiff the amounts outstanding and regularise matters as soon as possible.

[16]   In correspondence the defendant's attorneys adopted the stance that:
(a) the plaintiff had not properly complied with the provisions of the Act and the cancellations were invalid;
(b) alternatively that a new agreement could be completed if the plaintiff did not accept that the cancellations were invalid.

[17] The first point taken by Mr Manikam who appeared for the respondent is that there was no allegation in th© founding affidavits that the deponent thereto, Willem Coenraad Ackermann, was duly authorised to institute proceedings on behalf of the plaintiff. The authority cited for this proposition was Ganes & Another v Telecom Namibia Ltd 2004 (3) SA 615 (SCA). That case is authority for the proposition that it is the institution of proceedings and the prosecution thereof that must be authorised.
[18] There is no suggestion in the affidavits in support of summary judgment that Ackermann suggested he was authorised to bring the application on behalf of the plaintiff. He merely testified that he was duly authorised to depose to the affidavit.
[19] As is evident from the Ganes case (supra), that was not even necessary.
[20] The institution of the action was by attorneys acting on behalf of the plaintiff. Had the defendant wished to challenge that authority, it was bound to have done so in terms of Rule 7 of the Uniform Rules. To challenge that authority in the answering affidavit leaves the plaintiff in an invidious position, because it does not have any right of reply in summary judgment proceedings. (See Rule 32(4))

[21]   I am accordingly of the view that the defendant has followed the wrong procedure in attempting to challenge the authority to bring the action.
[22] The second point raised by Mr Manikam is that Practice Direction No. 28 of the Practice Directions of this Court oblige the plaintiff to allege that there has been compliance with s 129 of the Act and to attach a certificate to the summons in indicating compliance with such provisions. I drew the attention of Mr Manikam to the provisions of paragraph 5 of the particulars of claim which allege compliance with the requirements of s 129. I also drew to his attention the contents of annexures "D1-D2" to each application comprising the letter sent by the plaintiff in compliance with the Act together with the proof of posting by registered post.

[23] Mr Manikam submitted that what was required was a certificate by some person that the provisions of s 129 of the Act had been complied with by the plaintiff.

[24]   The Practice Directive in question provides that:

"With effect from 1 August 2007, any action brought in terms of the National Credit Act 34 of 2005, the summons must allege that there has been compliance with section 129 of the Act and a certificate must be attached to the summons indicating compliance therewith".

[25]   In my view what the plaintiff has put up as annexures to the particulars of claim constitutes more than substantial compliance with the Practice Directive, Indeed, the letters constitute the best evidence of the fulfilment of the requirements of s 129 of the Act. In any event, I condone any perceived non-compliance with the practice directive. In my view the second point taken by Mr Manikam has no merit.

[26] Mr Manikam thirdly pointed to what he referred to as the inadequate identification of the defendant in the s 129 notice, because that notice is addressed to "Mr Singh". Below that and in the body of the letter there is a reference which reads "Singh" followed in each case by the account number in respect of which the statutory notice applies.

[27]   The suggestion in the answering affidavits in each case is that:
(a) there are no less than seven Singhs residing at the domicilium address, each with different initials and different names;
(b) at least three of those (including the defendant) have the initial "S";
(c) the postal authorities send a white slip with the name of the addressee to the address in question and the addressee is required to collect the item at the designated post office. This procedure was also adopted in this case;
(d)	if such a slip addressed to "Mr Singh" had been left at the
premises, the receptionist or other person collecting the mail would have no idea as to which Singh reference was being made and the slip would have gone unanswered.
[28] In my view these allegations are typical of what was referred to in Plascon-Evans Paints Ltd v Van Riebeeck Paints (Ptv) Ltd 1984 (3) SA 623 (A) at 635B-C as:

"... where the allegations or denials of the respondent are so far-fetched or clearly untenable that the Court is justified in rejecting them merely on the papers..."

I say this because:
(a) the suggestion that any competent receptionist employed at the premises would not take any steps to ascertain the identity of the addressee by calling for the letter from the Post Office is made without any explanation whatsoever;
(b) following the logic employed in the answering affidavit, if the plaintiff had addressed the letter to "S Singh", because there were three of them, the receptionist's response would have been the same as it would have been if the letter was only addressed to "Singh", because similarly she could not have known who was being addressed;
(c) the fault for the failure of the defendant to receive the statutory letters lies entirely with the defendant himself and the blame cannot be laid at the door of the plaintiff.

[29] I was referred by Mr Boulle to the unreported judgment of Wallis J in this division in the matter of Marimuthu Munien v BMW Financiel Services (SA) (Ptv) Ltd & Another (case no. 16103/08) delivered on the 3rd of April, 2009.

[30] That matter concerned the service in terms of s 129 of a notice on the chosen domicilium citandi et executandi of the applicant who claimed that he no longer lived at the address and that the summons did not come to his notice. He sought rescission of the default judgment granted against him and sought an interdict restraining the first respondent from executing on the judgment by repossessing his motor vehicle.

[31] As in this case, it was not disputed that a notice complying with the requirements of sub-s 129(1)(a) of the Act was posted by registered post to the debtor's chosen domicilium and thereafter by the same means a notice of cancellation was addressed to him.
[32] Indeed, Wallis J proceeded with his judgment on the basis that, not only had the debtor moved from his domicilium address, but there was no street delivery of mail at the domicilium address.

[33] It was argued before Wallis J that the statutory notice must be received by the consumer or come to his attention. It was accepted that that had not happened. Wallis J drew attention to the provisions of s 65 of the Act which deals with the manner of delivery of documents and which provides that where no method has been prescribed for the delivery of a particular document to a consumer the person required to deliver that document must make it available to the consumer, inter alia, by ordinary mail.
[34] In addition the manner of delivering documents was prescribed in the National Credit Regulations published in GNR489 in the Government Gazette of the 31st of May, 2006 which provides the definition of "delivered" in s 1 as meaning:

"... unless otherwise provided for, means sending a document by hand, by fax, by e-mail or registered mail to an address chosen in the agreement by the proposed recipient,..."

[35] Having analysed s 1 of the Regulations and the introduction to the definition section, Wallis J concluded that the method of delivery of a sub-s 129(1) notice must be in accordance with the provisions of the definition of "delivered" in the regulations, rather than in terms of sub-s 65(2). However, for the reasons set forth in his judgment he found that the result is no different if the provisions of sub-s 65(2) of the Act were applied.

[36] In reaching his conclusion Wallis J set out the considerable public policy reasons why the legislature intended that provided the credit provider delivered the notice in the manner chosen by the consumer in the agreement, and such manner was an authorised one, it is irrelevant whether the notice in fact comes to the attention of the consumer. This is inter alia because the consumer had the right to choose the manner in which notice was to be given to it. If the consumer chooses such a method, it is the consumer's responsibility to ensure that the method chosen will be one that is reasonably certain to bring the notice to their attention.
[37] I am in respectful agreement with the judgment of Wallis J, and in my view the facts of that case are indistinguishable from those in the present matter.

[38] At the domicilium address used by the plaintiff in this case was chosen by the defendant, the plaintiff was entitled to give notice in terms of sub-s 129(1)(a) of the Act by posting the notice by registered post, and such posting constituted delivery in terms of the requirements of the Act. The fact that the defendant may not have received the notices does not provide a defence to the defendant.

[39] I am accordingly of the view that the third point raised by Mr Manikam has no merit.

[40] After hearing the application I became aware of the judgment in the matter of ABSA Bank Ltd v De Vitliers & Another 2009 (5) SA 40 (CPD). In that matter the applicant had sought repossession of a motor vehicle which was the subject matter of an instalment sale agreement, without having cancelled the agreement or making a claim for cancellation thereof. The court held that cancellation of the agreement or a claim for cancellation was a necessary prerequisite to the grant of a final order for attachment of the vehicle.
[41] Given that the applicant in this matter seeks summary judgment for delivery of the two vehicles which form the subject matter of the instalment sale agreements, I invited counsel for both parties to make oral or written submissions to me regarding the possible effects of this judgment.
[42] Both counsel submitted written argument to me. Mr Boulle for the plaintiff submitted that the ABSA Bank case {supra) finds no application in the present matter because the plaintiff in this case had cancelled the agreement and has alleged such cancellation in his particulars of claim and sought, in the prayers to the action, an order confirming cancellation of the agreement.
[43] He submits further that the plaintiffs case is not one where there is a fusing together of the concepts of specific performance and cancellation as he submits was the case in the ABSA Bank matter (supra).

[44] Whilst it is correct that the plaintiff in this matter sought an order confirming the cancellation of each agreement in the respective particulars of claim, that is not what it sought in the summary judgment proceedings. The only orders sought in the summary judgment proceedings are for delivery of the motor vehicles and costs.
[45] Were I to grant summary judgment in the terms sought by the plaintiff those would be final orders. The remainder of the issues in the actions would then proceed to trial. Those issues include orders confirming the cancellation of the agreement together with the payment of the amounts due by the defendant in terms of the instalment sale agreements.
[46] A potentially anomalous situation could arise were I to grant final orders that the vehicles be delivered to the plaintiff, and in the further proceedings a court holds that the agreements were not validly cancelled.
[47] This problem, however, can only arise if the defendant has a valid defence to the cancellation of the agreements. As the cancellation of the agreements was a prerequisite to orders for the return of the motor vehicles I would have expected the defendant to have raised any such defence in his summary judgment opposing affidavit.
[48] I have dealt with the defences which were raised in the summary judgment opposing affidavit, and insofar as it is necessary to expressly find that the agreements have been validly cancelled in terms of s 129 of the Act, I do so.

[49] There is accordingly no danger of the further proceedings coming to a different conclusion.

[50] All that remains in the action then is for the plaintiff to prove the damages which it has suffered consequent upon the cancellation of the agreement.

[51] In his further supplementary heads, Mr Manikam submitted that the plaintiff was not entitled to cancel the agreements for the first time in the summonses which it issued. However, this is not what was done. Annexed to each summons was a letter of cancellation which followed upon the s 129 notice in each case. The defendant was afforded the debt resolution remedies to in the Act in the s 129 letters to which I have already referred.

[52] Insofar as Mr Manikam suggests it is necessary for a court to pronounce on the claim for cancellation, I refer to what is stated above.
[53] With regard to the question of costs sought in the summary judgment applications, each instalment sale agreements provided at clause 13.2 that the defendant agreed to pay any costs which may be awarded against it on an attorney and client scale.

[54] In this regard I point out that copies of the instalment sale agreements which were put up as annexures to the particulars of claim were such poor copies, and in such small print, that it was extremely difficult to ascertain the contents thereof. The plaintiff is cautioned that in so doing it runs the risk of being penalised for its failure to comply with the rules of court, or alternatively having the matter adjourned at its own cost.
[55] In the premises I grant summary judgment in terms of prayers 1 and 2 of the application for summary judgment in each of the applications.

LOPES AJ
Date of hearing: 	13th of October, 2009
Date of judgment: 	 19th of October, 2009

Plaintiffs Counsel: 	AJ Boulle

Plaintiffs Attorneys:	Bascerano Nel Attorneys c/o JH Nicolson, Stiller & Geshen

Defendant's Counsel: 		M Manikam

Defendant's Attorneys:	Saras Naidoo & Co.