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IN THE KWAZULU-NATAL HIGH COURT

DURBAN AND COAST LOCAL DIVISION

REPUBLIC OF SOUTH AFRICA

CASE NO: 6787/2007

In the matter between:

ABSA BANK LIMITED APPICANT

and

ADIELS CARRIERS CC RESPONDENT

JUDGMENT

HUGHES-MADONDO AJ

This is an application by the respondent to anticipate, discharge and reconsider the rule granted in favour of the applicant on the 21 June 2007.

The facts foreshadowing this application are set out herein after.

During or about 2004, the applicant and respondent entered into sixteen instalment sale agreements. In terms of the aforesaid agreements the applicant sold to the respondent certain motor vehicles. During October 2006, the respondent fell into arrears with its instalment payments. On 9 November 2006 the applicant launched an urgent ex parte application for the repossession of the vehicles. The order was granted and the vehicles were repossessed.

The parties engaged in settlement negotiations and about March 2007 a settlement was reached. In terms of the settlement, the respondent was to pay an amount of R1 million upfront in order to bring the arrears up to date. The accounts of the respondent would be restructured and from 10 May 2007 the respondent will pay monthly instalments on the restructured accounts. The applicant agreed to return the vehicles to the respondent after the amount of R1 million was paid.

The respondent duly paid the R1 million and the vehicles were returned to the respondent. On the 9 May 2007 the applicant undertook to provide the respondent with the restructured accounts requested by the respondent. In May 2007 the applicant proceeded to debit the bank account of the respondent with the instalments due. The debit orders went through however the respondent instructed its banker to return the aforesaid debits.

On 21 June 2007 the applicant proceeded to court and launched an ex parte application in seeking an interim order that a Rule Nisi be issued, calling upon the respondent to show cause on the 13 July 2007, why the Sheriff should not be authorised to attach, remove and take possession of the vehicles currently in the respondent’s possession. Thereafter these vehicles were to be handed to the applicant pending the final determination of an action to be instituted by the applicant. The respondent was also ordered to pay the costs. In light of the interim order which was granted, the respondent now seeks the said order to be reconsidered.

After the granting of the interim order, the applicant appeared in court on a number of occasions. It is relevant to set out the orders granted on each occasion since it is pertinent to the basis of the relief sought by the respondent.

On the return date, that being the 13 July 2007, the applicant adjourned the matter and the rule was extended to the 11 September 2007. On 11 September 2007, the matter was adjourned and the rule extended to 19 November 2007. On the latter date, the matter was adjourned and the rule extended to 21 January 2008.

When the matter came before this court on the 21 January 2008 a consent order was taken. The matter was adjourned to 20 March 2008 with the costs to be costs in the cause. On 20 March 2008 a similar consent order as that of the 21 January 2008 was taken. The return date though was the 7 May 2008.

On 7 May 2008 a representative of the respondent made an appearance at court. The respondent submits that on that day it was their first appearance in this matter. On the 7 May 2008 by consent the matter was adjourned sine die, the rule nisi was to remain operative until it was confirmed or discharged, the parties were given dates to file the necessary pleadings and the costs were reserved.

After the aforesaid appearance the respondent launched an urgent application on the 12 May 2008 to have the rule granted on the 21 June 2007 discharged. However, by consent, the respondent’s application was adjourned to the opposed roll and the rule was adjourned sine die with the costs reserved. The applicant also gave the respondent an undertaking that it would not execute the rule without giving them at least 7(seven) days notice. This is the background to this application.

Can the order granted on the 21 June 2007 be reconsidered? In terms of Rule 6(12) (c) if an order was granted by way of an urgent application in the absence of the affected party, that party, may give notice to set the matter down for reconsideration of the order so granted. See Lourenco and Others v Ferela (Pty) Ltd and Others (No 1) 1998 (3) SA 281 at 290C-D. The prerequisite for reconsideration is that the order must have been granted as a result of an urgent application in the absence of the party so affected. The order concerned could be interim or final in nature. The intention of Rule 6(12) (c) is to allow an aggrieved party, who was not present when the order was granted, with an opportunity to invoke the auidi alteram partem principle. This redresses the imbalance flowing from the order granted in the aggrieved party’s absence. The discretion conferred upon a judicial officer hearing these applications is a wide one and the reconsideration ‘may involve the deletion of the order, either in whole or in part, or the engulfment of additions thereto.’ See ISDN Solutions (Pty) Ltd v CSDN Solutions CC and Others 1996 (4) SA 484 (W) at 486H- 487B.

From the facts as set out above it is common cause that the order granted on 21 June 2007 was granted on an urgent basis and in the absence of the respondent. The case made out by the respondent is that the applicant was mala fides in that it had not disclosed all the material facts to the court when the order was granted. In my view the respondent’s case hinges on the fact that subsequent to the settlement negotiations the applicant undertook to restructure the respondent’s accounts. As a result of the aforesaid, the respondent alleges that a new agreement had been concluded between the parties. In terms of this new agreement the respondent alleges that the applicant would provide it with new instalment agreements in respect of the vehicles. The respondent alleges that after it had fulfilled its obligation by bringing the arrears up to date the applicant had failed to fulfil its obligation by proving the restructured accounts. Consequently, this is what sparked the respondent’s action to call back the debit orders, as it did.

The applicant denies that a new agreement was reached after the settlement negotiations. It further, denies that it undertook to provide the respondent with new instalment agreements. The applicant submitted that the restructuring of the respondent’s accounts was merely an indulgence granted to the respondent because it had fallen into arrears with its payments. The applicant added that this was not the first time that it had to restructure the respondent’s accounts due to its failure to pay. The applicant admitted that it did not provide the respondent with the restructured accounts however it avers that it was not required to do so for the debit order to be honoured by the respondent’s bank.

The respondent contended that the applicant could not rely on the initial credit agreement in order to obtain the relief it had obtained on the 21 June 2007 because this credit agreement had been cancelled when the parties entered into the alleged new agreement in about March 2007. Further, in terms of this new agreement the applicant failed to perform its obligations. The applicant failed to provide the respondent with the restructured accounts and the new instalment accounts. The respondent avers that due to the applicant’s failure, it was also under no obligation to perform by honouring the debit order payments.

On the other hand the applicant contends that the credit agreement was never cancelled, no new agreement were entered into as alleged by the respondent. Finally the failure of the applicant to provide the respondent with the restructured accounts did not have any bearing on the respondent’s performance in terms of the credit agreement. Even though it had granted the respondent with an indulgence by restructuring its accounts.

In reconsidering the order I have examined the pleadings that were before the presiding officer who granted the order of the 21 June 2007, to establish if indeed, the presiding officer was not presented with all the facts, as alleged by the respondent. In my view the allegations made by the respondent are not correct and I deal with them herein after.

From the outset the presiding officer was informed about the settlement negotiations, the restructuring of the respondent’s accounts, the respondent’s payment of the R1 million to bring the arrears up to date and the cancellation by the respondent of the debit orders that had already gone through. The credit agreement that the applicant relied on was also before the court when the previous order was granted on the 21 June2007. The argument advanced by the respondent that the credit agreement was cancelled when the new agreement for the restructure of the accounts, came into effect, cannot hold, in light of Clause 13 of the credit agreement. Clause 13 of the credit agreement reads as follow:

“13. CONCESSION

Any extension of time, relaxation, indulgence or condonation extended by the Seller to the Purchaser will not be regarded as a waiver of any of the Seller’s rights in terms of this agreement. Acceptance by the Seller of any payment made by the Purchaser after termination of this agreement will not be a waiver of the Seller’s rights in terms of this agreement nor regarded as a novation thereof, and the Seller’s prior termination of this agreement will remain in full force notwithstanding such acceptance.”

In terms of Clause 13 of the credit agreement, the restructure of the respondent’s accounts and or the acceptance of the payment of R1 million to settle the arrears did not constitute a waiver of the applicant’s right. The applicant could still exercise their rights in terms of the credit agreement. This is in essence what they did and in my view, correctly so. The respondent makes much of the fact that the restructure of its accounts constituted a cancellation of the credit agreement and the creation of a new agreement. According to the applicant when it sought the first order granted on the 9 November 2006, it did not seek to cancel the credit agreement. In the current application the applicant now seeks to cancel the credit agreement. The cancellation that the respondent refers to is of no force and effect, in view of Clause 14 of the aforesaid credit agreement. According to Clause 14, any amendment or cancellation of the agreement had to be reduced to writing and signed by both the parties. The applicant sent correspondence to the respondent dated the 6 March 2007. This letter dealt with the term under which the restructuring of the respondent’s accounts would take place. This letter was signed by both the parties. Nowhere in the aforesaid correspondence do the parties agree to cancel the credit agreement. In fact the details in this document deal with the applicant having ‘approved a moratorium on the instalment, release of the vehicles…and restructure of existing accounts.’ In my view from the, parties had no intention what so ever to cancel the credit agreement, but rather to restructure the payment to be made by the respondent. No evidence has been advanced by the respondent to substantiate its allegation about the cancellation of the credit agreement. In the result I find that the credit agreement was not cancelled and the rights which follow there from were still available to the applicant when it sought the interim order granted on the 21^st June 2007. In no way did the applicant mislead the court or act mala fides when it made the representations it did to the presiding officer on the 21 June 2007.

For these reasons, the application for reconsideration of the rule must fail. No injustice against the respondent arose as a result of the interim order granted on the 21 June 2007 in the absence of the respondent. The costs are awarded as set out in Clause 9.2 of the credit agreement on an attorney and own client scale in favour of the applicant.

In the result the following order is made:

The respondent’s application for reconsideration of the order granted on the 21 June 2007 is dismissed.

1. The respondent’s application to anticipate and discharge the rule is also dismissed and the rule is confirmed.

2. The respondent is liable to pay the costs on an attorney and own client scale.

HUGHES-MADONDO AJ

1. osts of such procee

APPEARANCES:

Counsel for the applicant: Adv. Andre Knoetze

Attorneys for applicant: Uys Matyeka Schwartz Inc.

Counsel for the respondent: Adv. Y. N. Moodley SC.

Attorney for respondent: Ravindra Maniklall & Company c/o Farhad Lockhat

Heard on: 17 March 2010

Delivered on: June 2010

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