REPORTABLE

THE REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA
(CAPE OF GOOD HOPE PROVINCIAL DIVISION)

CASE NO: A283/2005

In the matter between:

WAYNE MARVIN WOLMARANS                                         Appellant

and

ABSA BANK LIMITED                                              First Respondent
TRANSUNION ITC (PTY) LTD                             Second Respondent

JUDGMENT  :  09 SEPTEMBER 2005

BOZALEK, J:

[1]	This appeal concerns the question of whether a customer involved in litigation with his bank in respect of his alleged default in payments due under an instalment sale agreement, can, pendente lite, interdict the bank from listing his name as a credit risk with a credit bureau. 

[2]	The respondents in this appeal were also respondents in the original proceedings where the appellant was the applicant. For the sake of convenience I shall refer to the parties as they were in the court below. The applicant launched motion proceedings against the first respondent, a large commercial bank, trading inter alia as Bankfin Finansierings Bank (“Bankfin”) and the second respondent, a credit bureau, for interdictory relief relating to his listing as a credit risk by second respondent pursuant to his alleged defaulting upon the terms of an instalment sale agreement with first respondent in respect of a motor vehicle he purchased. Second respondent did not oppose the relief sought against it, namely, that, pendente lite, it remove from its records the reference to applicant as a person in default of his payments in respect of the relevant Bankfin account number. First respondent, however, successfully opposed the relief sought against it which was that, pending the outcome of the underlying civil litigation in the magistrate’s court, it be barred from listing applicant as a person in default of his payments in respect of the account in question. 

[3]	The matter was heard by Allie J who delivered two judgments, the first of which struck out certain portions of the applicant’s founding and replying affidavits as constituting either hearsay evidence or new material. 

[4]	In her main judgment the learned judge found that the applicant had not established a prima facie right and nor had he made out a case that his apprehension of irreparable harm was reasonable. 

[5]	The following undisputed background facts emerged from the papers. The applicant, a building contractor, appears to have been an established client of first respondent which, over time, had financed his purchase of seven other vehicles. In April 2002 the applicant concluded an instalment sale agreement with first respondent for the purchase of a pick-up truck in terms whereof he was required to pay instalments on a monthly basis for five years. In May 2003 the applicant purported sell the vehicle to one, Maseko, on the basis that the latter would pay off the outstanding balance owing to first respondent. The applicant furnished the particulars of the account to the purchaser who subsequently informed him, on a Saturday in May 2003, that he had paid the outstanding balance to first respondent and wished to take delivery of the motor vehicle. 

[6]	The applicant then telephoned a representative of first respondent to inquire whether this payment had in fact been made and, upon  being told that the account reflected a nil balance, delivered the vehicle to Maseko. Needless to say the applicant never saw Maseko nor the vehicle again and learnt, a few days later, that the payment purporting to have been made by Maseko to first respondent had been reversed following the dishonouring of the cheque by which such “payment” was effected. 

[7]	The applicant discontinued his monthly payments in terms of the instalment sale agreement and in due course was sued by first respondent for the balance of the purchase price owing on the vehicle. He defended the action denying any further liability under the instalment sale agreement on the basis that he had relied upon first respondent’s representative’s advices in handing over the vehicle to Maseko. The litigation in question is still pending.

[8]	Approximately a year after the dispute arose the applicant concluded an agreement to purchase a residential property. His application to another financial institution for bond finance was rejected. Upon investigation he learned that he had been listed with second respondent as a “defaulter” to the extent of the outstanding balance on his account with Bankfin which, according to the listing, had “handed over” the matter. Prior to this listing neither first nor second respondent had informed applicant that his name was to be placed on the list. Correspondence followed between the applicant’s and first respondent’s legal representatives as a result of which first respondent prevailed upon second respondent to change the code attached to the applicant’s listing from 22 to 21. According to first respondent a code 22 listing is normally interpreted as a “bad debt” but in fact signifies a debt due and payable which has not been settled. A code 21 listing, however, refers to a claim which is still the subject of a legal process. Notwithstanding this amendment to the terms of the listing, the applicant remained dissatisfied and launched these proceedings. 

THE STRIKING OUT APPLICATION
[9]	It needs be said that first respondent contended at some length that the applicant had sought to make out a different case to that initially set out in his founding papers. There, first respondent argued, the applicant had focused simply upon his failure to obtain bond finance as the prejudice which he had suffered. In his reply, however, the applicant raised other instances where he was financially prejudiced as a result of his listing. 

[10]	These passages in the applicant’s replying affidavit and certain hearsay evidence in both affidavits were the subject of a successful striking out application by first respondent, against which ruling the applicant also appeals. First respondent argued that the striking out rulings were not appealable inasmuch as they were not a “judgment or order” as envisaged in Section 20 of the Supreme Court Act, 59 of 1959 and lacked the attributes of being final in effect, definitive of the rights of the parties and disposing of at least a substantial proportion of the relief claimed in the main proceedings. See Zweni v Minister of Law and Order 1993 (1) SA 523 (A) at 531I to 533E. 

[11]	This argument misconceives both the position regarding the appealability of rulings pertaining to the admissibility of evidence and the Zweni judgment. In the present matter applicant did not seek to appeal against these rulings alone but as part of an appeal against the whole of the judgment of the court in the application. To hold that the rulings on the admissibility of evidence could not be challenged in the broader appeal would be to hold that a court a quo’s rulings on the admissibility of evidence are inviolate, even in a later appeal dealing with the merits of the matter as a whole. This of course is not the position. See Zweni v Minister of Law and Order 1993 (1) SA 523 (A) at 533 par 9 and Dickinson and Another v Fischer’s Executors 1914 AD 424 where Innes ACJ stated as follows: “The trial court having no jurisdiction to grant leave to appeal against the decision upon the admissibility of evidence, would proceed to dispose of the action or application before it. And if the ultimate decision proved to be adverse to the party dissatisfied with the ruling upon a point of evidence, he could, in support of his appeal against such decision, rely upon the erroneous nature of the ruling if it was erroneous. The ruling would be part of the trial and could be criticized and attacked in connection with the appeal on the merits.” 

[12]	Be that as it may, there is no need to deal with the court a quo’s rulings on the admissibility of evidence since, in my view, there is sufficient unchallenged material on record to determine the matter without recourse to the struck portions. I say this because it was implicit in the case made out by the applicant in his founding papers that his prejudice was not limited to the refusal of the bond finance but encompassed the normal consequences of a loss of creditworthiness. Thus he stated: 
“Dit is verder my submissie dat die plasing van my naam op die swart lys in hierdie omstandighede my reg om aan die handelsverkeer deel te neem onregmatiglik aan bande lê en in die omstandighede ook onkonstitusioneel is.” 
When, therefore, the applicant stated in his replying papers that “(e)k is ‘n besigheidsman wat slegs doeltreffend kan funksioneer indien ek kredietwaardig is aangesien ek gereeld finansiering benodig”, it does not in my view behove first respondent to claim that the applicant was making out a new case, one unrelated to his original complaint that he could not obtain bond finance. This, in my view, would be too narrow a reading of the applicant’s founding affidavit. 

FIRST RESPONDENT’S CONTRACTUAL DEFENCE
[13]	The court below assumed, correctly, that the unlawful impugning of someone’s creditworthiness could be interdicted. The basis therefor is that doing so unjustly tarnishes such person’s reputation or infringes some other personal or constitutional right of that person such as the right to pursue one’s occupation. See in this latter regard Section 22 of the Constitution, Act 108 of 1996 which provides that every citizen has the right to choose their trade, occupation or profession freely and Hawker  v Life Offices Association of South African and Another 1987 (3) SA 777 (C). Creditworthiness has been recognised as an aspect or component of the fama or reputation of a person, or, arguably, as part of a new category of rights, personal immaterial property rights. 

[14]	The applicant’s case was that he was not in default of his obligations to first respondent and that he was a creditworthy person who should therefore not have been listed. First respondent adopted the opposing point of view on both of these questions and relied in the first instance on clause 17.1.2 of the instalment sale agreement as sanctioning its listing of the applicant. Under the heading “Disclosure of information”, that sub-clause provides as follows:  “The seller may – 
17.1.2 	disclose information about the Purchaser’s accounts and the conduct by the Purchaser of its accounts to other banks and credit bureaus when asked for such information. “
The applicant contended that first respondent could not rely on the sub-clause because it had not been asked by second respondent for such information and, secondly, because the sub-clause did not envisage the applicant’s name appearing on a list of debt defaulters circulated by a credit bureau or accessible to third parties. I do not regard it as necessary to deal with this latter argument but the question of whether first respondent was asked for information by second respondent is material since, clearly, without any such request first respondent cannot utilize the provisions of the sub-clause in defence of its actions.

[15]	The applicant did not state in his founding affidavit that first respondent had disclosed information to second respondent without being specifically requested for such information but the thrust of his affidavit was that the listing had been initiated by first respondent. In its initial opposing affidavit first respondent stated, somewhat baldly, that the information in question was furnished to second respondent at the latter’s request and in accordance with an existing agreement with second respondent. Nothing further was said in this regard in first respondent’s supplementary opposing affidavit. The question then is whether the sub-clause was triggered by a request as envisaged by its terms. 

[16]	It is difficult to conceive of a system of credit bureau listing of debt defaulters other than on the basis of creditors proactively furnishing such information to bureaus. If this were not the case every credit bureau, when approached for a credit reference, would have to request each of its contracted clients for information regarding such person, a time-consuming and inefficient procedure. First respondent’s broad and vague handling of the subject of the “request” would seem to confirm that no specific, individualized request for information concerning the applicant’s accounts with first respondent was received from second respondent. If this were not the case one would have expected that first respondent would have given some detail if not furnished a copy of the specific request. Its reference to “die bestaande ooreenkoms met tweede respondent” suggests further that information regarding so-called bad debtors is supplied routinely and proactively by first respondent to second respondent. 

[17]	Given the adverse consequences for first respondent’s customers of a listing and the fact that sub-clause 17.1.2. was drafted by first respondent, I can see no reason to interpret it other than requiring a specific and individualized request from a credit bureau before it could be supplied with information regarding a client’s accounts or conduct thereof. To the extent that there is any doubt as to the proper construction of this clause I consider that a more restrictive rather that an expansive interpretation of the phrase “when asked for such information” should be employed in accordance with the contra proferentem rule. 

[18]	In the circumstances I am of the view that first respondent cannot rely on sub-clause 17.1.2 of the agreement as contractual license for impugning the applicant’s creditworthiness. Mr. Viviers, who appeared on behalf of first respondent, conceded that if it was found that first respondent acted outside the ambit of the sub-clause the question of whether it infringed the applicant’s rights must be determined according to the common law. 

THE POSITION AT COMMON LAW
[19]	In the context of the interdictory relief sought the first question is whether the applicant was able establish a clear right or a prima facie right although open to some doubt. First respondent contended that it was clear on the papers that the applicant was indeed in default of his debts, was therefore not creditworthy and that, in these circumstances, it was entitled to convey such information to second respondent. In adopting this stance first respondent relied on the case of Ebrahim t/a Broadway Fisheries v MER Products CC and Another 1994 (4) SA 121 (C). Mr. Viviers conceded, however, in accordance with the judgment in Hawker (supra), that first respondent’s conduct in conveying the information in question to second respondent had to be judged on the basis of reasonableness and in doing so the court is entitled to look at the consequences for the applicant of first respondent’s actions in so doing.

[20]	The starting point in this inquiry must be whether the applicant was in breach of its obligations to first respondent in terms of the instalment sale agreement. In his founding affidavit the case made out by the applicant was that first respondent’s representative had advised him that since the balance on the account had been reduced to nil he could release the vehicle to the purchaser and that without this representation he would never have done so. First respondent denied any such representation by its representatives to the applicant and annexed to its opposing affidavit a transcript of the telephone conversation in question. What emerges therefrom is that first respondent’s representative did indeed inform the applicant that the balance on the account was nil. As regards the release of the vehicle the relevant passage reads as follows: 
	“Client:	‘But it is definitely settled, so I can give him the car?’
	Consultant:	‘It is… it is settled, yes.’
	Client:		‘Is it, okay.’
	Consultant:	‘Alright?’
	Client:		‘Alright.’
	Consultant:	‘Okay.’”

[21]	This passage, read in isolation, falls short of an unequivocal statement by first respondent’s representative that applicant could release the vehicle without any financial repercussions vis á vis first respondent. The balance of the transcript does not reveal any warning from the consultant that the nil balance could be reversed or was a provisional balance, nor any reference to the fact that the nil balance was effected by a cheque payment which was subject to clearance. It is clearly undesirable for this court to express any clear view on the merits of the applicant’s defence to the respondent’s claim. Suffice it to say that, in all the circumstances, and in the light of the ambiguity of the exchange quoted above, there is, in my view, room for the argument that by reason of the exchanges between its representative and the applicant, first respondent could be estopped from relying on the instalment sale agreement in its claim against the applicant. In his amended plea in the magistrates’ court proceedings the applicant did in fact plead such an estoppel defence as releasing him from his obligations to first respondent in terms of the instalment sale agreement. 

 [22]	From the applicant’s side we were urged to find that he was creditworthy. Quite apart from the difficulties of defining ”creditworthiness“ with any precision and making such a finding on papers, where, as in this matter, the applicant’s creditworthiness turns solely on the question of whether he is in default of his obligations under the instalment sale agreement it is both unnecessary and undesirable for this court to prejudge the outcome of the pending litigation in the magistrates’ court. 

[23]	In contending that it was entitled to pass on the information relating to the applicant to second respondent, first respondent placed reliance on the ratio in Ebrahim’s case (supra) which appears from the following passage at 125J to 126D: 
“If first respondent tells others in the trade, who have a legitimate interest to know, about its bad experience with applicant then again, as I have said above, I see nothing wrongful in this. The creditworthiness of clients or potential clients is a matter of vital interest and any information honestly given to people who are legitimately interested in it does not, in my view, attract liability no matter the consequences to the client.”

[24]	In my view Ebrahim’s case is distinguishable from the present matter. In that case first respondent disclosed information to second respondent about the applicant’s alleged poor conduct of its account by reason of a legitimate interest which second respondent had in the matter since the latter guaranteed payment of the applicant’s indebtedness to first respondent. Thereafter, in turn, second respondent reduced its guarantee to another of its clients in respect of the applicant’s debts as a result of which that client cancelled its credit arrangements with the applicant. In the present matter first respondent’s furnishing of information to second respondent about the applicant’s conduct of his account served no useful purpose as far as the first respondent was concerned but merely broadened second respondent’s database of alleged debt defaulters. In my view, in the absence of contractual arrangements providing otherwise, the unsolicited disclosure by a creditor to a credit bureau of a debtor’s alleged default where that is the subject of contested litigation falls outside of the ambit of the bona fide and honest giving of information about the creditworthiness of clients or prospective clients in a trade to persons having a legitimate interest in such information.

[25]	Furthermore, the court in Ebrahim’s matter did not purport to deal with the situation of credit bureaus which distribute information about persons’ creditworthiness to a potentially unlimited audience without notice to the person involved. The facts in the present matter are more akin to those in Hawker’s case. There, a life insurance representative was, without prior notice, listed in a register maintained by the Life Offices Association as unfit to sell life insurance with the result that he was effectively banned from working for the vast majority of life insurers and a great number of brokers. The imposition of the S code reference followed upon alleged irregular conduct by the applicant in relation to a proposal form for certain insurance which the applicant procured from a client. The court found that the imposition of the S-code reference was preceded only by a cursory trial by correspondence. In considering whether the act of giving the applicant an S-code reference constituted a delict,  Howie J stated that: “(w)hether respondent’s action in the present matter was unreasonable and thus unlawful involves a weighing up of particular conflicting interests of the parties, their relationship to one another, the circumstances of the case and the considerations of social policy”. The respondent which imposed the S reference upon the applicant had been faced with a factual conflict regarding the alleged misconduct on the part of the applicant. In such a situation, the court held, the circumstances being governed not by contract but by the common law, the decision maker’s decision had to be both bona fide and reasonable. The learned judge stated:  “However, insofar as counsel sought to contend that unreasonableness did not result in unlawfulness, I disagree. If interference with another’s subjective right is unreasonable according to the standard of the boni mores of the community, then it is unjustifiable and thus unlawful...”. 

[26]	Well before the right to choose and practice one’s trade occupation or profession freely was enshrined in our constitution, it was recognised in Hawker that, insofar as it is reasonable to allow, persons are at liberty to pursue their chosen calling. In my view a similar situation obtains in the present matter. The applicant is a building contractor whose creditworthiness is obviously crucial for him to pursue his occupation. This was borne out by second respondent’s records which reveal that over what appears to be a period of several years it had received twenty queries from various parties concerning applicant’s creditworthiness. 

[27]	Applying the test espoused in Hawker, there can, in my view, be little doubt that first respondent’s listing of the applicant was, in the circumstances, unreasonable and, therefore, unlawful. In this regard I view the difference between a code 21 and a code 22 listing as largely immaterial. The listings by second respondent, as reproduced in the papers, do not even provide a key to the codes and it seems to me likely that the ordinary supplier or retailer consulting second respondent for a credit rating in respect of a would-be customer would draw little distinction between these different listings. In that sense a listing as a credit risk with a credit bureau can be a blunt weapon since, notwithstanding the fact that the debt is disputed by the debtor, it either does not disclose or gives little weight to the fact that the listed person may have a sound defence to the claim. What a reader’s attention would be concentrated upon is the fact that, at least as far as the respondents are concerned, the applicant is a credit risk in that he has defaulted on a debt in an amount of R26 541,00. 

[28]	This court can take judicial notice of the fact that various aspects of the system of listings by credit bureau have become a matter of public concern and the entire subject is to be addressed in legislation pending before Parliament. Some of the difficulties which this matter has thrown up, such as the lack of notice to an alleged defaulter of his/her listing and the listing of someone in relation to a debt which is the subject of pending litigation, are questions which could usefully be considered by the lawmakers.

[29] 	In the circumstances I have come to the conclusion that the applicant has established a prima facie right albeit one open to some doubt, namely, his right not to be listed as a bad debtor or credit risk by the respondents arising out of his failure to make further payments in terms of the instalment sale agreement where his failure to do so is the subject of pending litigation and in which he has raised a credible defence. 

APPREHENSION OF IRREPARABLE HARM
[30]	There remain the questions of whether the applicant has shown a well grounded apprehension of irreparable harm if he is not granted the interim relief and ultimately succeeds in establishing his right and whether he has any other satisfactory remedy. Both of these requirements for an interdict pendente lite were disputed by first respondent. 

[31]	By virtue of the applicant’s occupation it is apparent that his creditworthiness is a vital asset in his day to day dealings and, furthermore, that his listing as a credit risk by second respondent will prejudicially affect him. Should the listing remain pending the outcome of the civil litigation in the magistrate’s court it is readily foreseeable that he may well be refused or denied credit facilities by various suppliers and institutions not only in respect of his business activities but also in respect of his personal affairs. In each such instance it will not always be apparent to the applicant that the reason for the denial of credit facilities is a result of his listing by first respondent with second respondent. Similarly, the applicant will be faced with a difficult, if not impossible, task in quantifying his damages arising out of those refusals which he can identify as arising out of his listing if he ultimately prevails in the civil proceedings and his listing as a credit risk proves to be unfounded and unlawful. 

[32]	In the circumstances, I am satisfied that the applicant has established he would suffer irreparable harm if the interim relief was not granted and he eventually prevailed in the litigation and, furthermore, that he had no other satisfactory remedy other than the interdict proceedings. 

[33]	For all these reasons I am of the respectful view that the court a quo erred in finding that the applicant had not established a prima facie right and in holding furthermore that he had failed to establish a reasonable apprehension of irreparable harm. 

[34]	I would therefore allow the appeal and make the following order: 

a:	The order made on 28 October 2004 dismissing the application with costs is set aside and is substituted by an order granting applicant the relief sought in prayers 1 to 5 of his notice of motion dated 29 July 2004.

b:	first respondent is ordered to pay the costs of this appeal including the costs arising from the application for leave to appeal and the petition to the Supreme Court of Appeal.

_________________
LJ BOZALEK, J

VELDHUIZEN J:  
I agree, and it is so ordered.

______________________
AH VELDHUIZEN, J

HJ ERASMUS J:  
I agree.
		
__________________
HJ ERASMUS, J