REPUBLIC OF SOUTH AFRICA

HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NO: 34239/2015X

1.	REPORTABLE: 	NO	
2.	OF INTEREST TO OTHER JUDGES:	NO	
3.	REVISED:	YES	

DATE: 20 February 2017	

In the matter between:

SHONGWE, BAMBO SINGABENKOSI 						  Applicant

and

FIRSTRAND BANK LIMITED t/a LAND ROVER
FINANCIAL SERVICES, A DIVISION OF WESBANK 			          Respondent

_________________________________________________________________________

JUDGMENT
_________________________________________________________________________

Barrie AJ:
1.	The applicant, Mr Bambo Singabenkosi Shongwe (“Mr Shongwe”) applies for rescission of a judgment against him (“the judgment”) that this court granted on 3 December 2015 at the suit of the respondent, FirstRand Bank Limited (“the bank”).  The court granted the judgment by default arising from Mr Shongwe’s failure to deliver a notice of his intention to defend the matter.
2.	The judgment arose from an “instalment agreement” (“the instalment agreement”) .  Mr Shongwe had in terms of the instalment agreement purchased a motor vehicle on terms that encompassed that he had to liquidate a sum of R1,689,238.08 in 72 monthly instalments of R23,461.64, commencing from 1 September 2014.
3.	The judgment was for:
“1.	Cancellation of the agreement as at date of judgment.
2.	An order directing the Defendant to forthwith return to the Plaintiff a 2014 LAND ROVER RANGE ROVER SPORT 5.0 V8 S/C with chassis number SALWA2EE1EA375378 and engine number 13091340135508PS and failing compliance therewith, authorising and directing the Sheriff of this Honourable Court to take the said vehicle into his possess(ion) wherever he may find same, and to deliver same to the Plaintiff.
3.	Costs of suit.”
4.	The deputy sheriff served the bank’s summons on Mr Shongwe on 6 October 2015 at 29 Grosvenor Avenue, Craighall Park, Johannesburg “by affixing a copy of the original, to the main door, at the given address, being the Defendant’s chosen domicilium citandi et executandi, in terms of Rule 4(1)(a)(iv), as the Premises were found locked”.  The address at which the Deputy Sheriff effected service had been specified as Mr Shongwe’s “Domicilium address” in terms of the instalment agreement.  It included a clause providing that:
“18.	Addresses
	18.1	You agree that the postal/email address that you have provided on the Quotation/Cost of credit is the address where we must send all post and other communication to you and that such communications will be binding on you.
18.2	You agree that the physical address that you have provided on the Quotation/Cost of credit is the address that you have selected as the address where we must send all legal notices to you.
18.3	You must let us know, in writing, by hand or registered mail, of any changed or other of your addresses or your email address, telephone or cellular phone numbers.  If you fail to give notice of a change of address, we may use the last address we have for you.
18.4	You accept that you will be deemed to have received a notice or letter five (5) business days after we have posted it to either of the addresses you have given to us.”
5.	Mr Shongwe states in his rescission application papers that he did receive the summons after it had been served.
6.	Mr Shongwe does not provide a particularly helpful account of the reasons why he failed to cause a notice of intention to defend the bank’s action to be delivered.  His explanation is, essentially, that he contacted the bank immediately after receiving the summons and then wanted to make arrangements to pay.  He was, however, sent from pillar to post between the bank and the bank’s attorneys (of record) and then, only on 19 May 2016, when he attended at a Land Rover service centre in Centurion where the vehicle was being repaired, became aware that the vehicle had been attached at the instance of the bank, relying on the judgment.  It was only then that he decided to consult an attorney (who then became his attorneys of record).  
7.	A poor explanation for a party’s default of appearance can for purposes of establishing good cause for rescission of a judgment be cured by averments that, if proved at an eventual trial, will provide an unassailable defence.  I, accordingly, need to address the defences that Mr Shongwe proffers on their merits, as put forward in Mr Shongwe’s application papers.
8.	Mr Shongwe does not deny that he had fallen in arrear with the instalments that were payable in terms of the instalment agreement.  The defences that he relies on are that:
8.1	he did not receive the required notice in terms of section 129(1) of the National Credit Act, 2005 (“the NCA”);
8.2	it is very unfair towards him that in terms of the bank’s summons and the judgment given against him the bank was allowed to rely on a certificate of balance confirming an outstanding amount that he had not had any chance to debate with the bank, including to address the possibility that the bank had, without a court order, included legal costs in the balance;
8.3	the vehicle at issue has since his acquiring it in July 2014 been in a defective state, requiring, among other things, more than one engine replacement.
9.	The defences relating to the sum certified in the bank’s certificate of balance and the defective vehicle are not available to Mr Shongwe.  What the exact sum is that he owes is not relevant to the court order granted on 3 December 2015.  Nor is the fact that the vehicle, apparently, suffers of serious defects – in terms of the instalment agreement all risk in and to the vehicle passed to Mr Shongwe when he took delivery thereof.
10.	I quote the provisions of the NCA potentially relevant to Mr Shongwe’s first defence, as they read at the time when the bank instituted its action.
	“129
		(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 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 section 130(2), may not commence any legal proceedings to enforce the agreement before- 
			(i) 	first providing notice to the consumer, as contemplated in paragraph (a), or in section 86 (10), as the case may be; and 
			(ii) 	meeting any further requirements set out in section 130. 

(2)	……….

(3) 	Subject to subsection (4), a consumer may at any time before the credit provider has cancelled the agreement, remedy a default in such credit agreement by paying to the credit provider all amounts that are overdue, together with the credit provider's prescribed default administration charges and reasonable costs of enforcing the agreement up to the time the default was remedied.
	(4) 	A credit provider may not reinstate or revive a credit agreement after 
				(a) 	the sale of any property pursuant to- 
					(i) 	an attachment order; or 
					(ii) 	surrender of property in terms of section 127; 
				(b) 	the execution of any other court order enforcing that agreement; or 
				(c) 	the termination thereof in accordance with section 123.
		(5) 		The notice contemplated in subsection (1)(a) must be delivered to the consumer - 
				(a) 	by registered mail; or 
				(b) 	to an adult person at the location designated by the consumer.
		(6) 		The consumer must in writing indicate the preferred manner of delivery contemplated in subsection (5). 
		(7) 		Proof of delivery contemplated in subsection (5) is satisfied by- 
				(a) 	written confirmation by the postal service or its authorised agent, of delivery to the relevant post office or postal agency; or 
				(b) 	the signature or identifying mark of the recipient contemplated in subsection (5)(b).
	130
	(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 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 section 86 (10), or section 129 (1), as the case may be; 
			(b) 	in the case of a notice contemplated in section 129 (1), the consumer has- 
				(i) 	not responded to that notice; or 
			(ii) 	responded to the notice by rejecting the credit provider's proposals; and 
			(c) 	in the case of an instalment agreement, secured loan, or lease, the consumer has not surrendered the relevant property to the credit provider as contemplated in section 127. 
	(2) 		In addition to the circumstances contemplated in subsection (1), in the case of an instalment agreement, secured loan, or lease, a credit provider may approach the court for an order enforcing the remaining obligations of a consumer under a credit agreement at any time if
			(a) 	all relevant property has been sold pursuant to- 
				(i) 	an attachment order; or 
				(ii) 	surrender of property in terms of section 127; and 
			(b) 	the net proceeds of sale were insufficient to discharge all the consumer's financial obligations under the agreement. 
	(3) 		Despite any provision of law or contract to the contrary, in any proceedings commenced in a court in respect of a credit agreement to which this Act applies, the court may determine the matter only if the court is satisfied that- 
			(a) 	in the case of proceedings to which sections 127, 129 or 131 apply, the procedures required by those sections have been complied with; 
			(b) 	………. 
			(c) 	that the credit provider has not approached the court- 
			(i) 	during the time that the matter was before a debt counsellor, alternative dispute resolution agent, consumer court or the ombud with jurisdiction; or 
			(ii) 	despite the consumer having- 
(aa)	surrendered property to the credit provider, and before that property has been sold; 
(bb)	agreed to a proposal made in terms of section 129(1)(a) and acted in good faith in fulfilment of that agreement; 
(cc)	complied with an agreed plan as contemplated in section 129(1)(a); or 
(dd)	brought the payments under the credit agreement up to date, as contemplated in section 129(1)(a). 
	(4) 	In any proceedings contemplated in this section, if the court determines that- 
		(a) 	………. 
		(b) 	the credit provider has not complied with the relevant provisions of this Act, as contemplated in subsection (3) (a), or has approached the court in circumstances contemplated in subsection (3) (c) the court must- 
			(i) 	adjourn the matter before it; and 
			(ii) 	make an appropriate order setting out the steps the credit provider must complete before the matter may be resumed; 
		(c) 	……….” 
11.	Section 32(a) of the National Credit Amendment Act, 19 of 2014, amended subsection 129(4) of the NCA to its present wording.  Subsection 32(c) of the same amending act added subsections (5), (6) and (7) to section 129.  Section 33 of the amending act substituted the previous wording of section 130(1)(a) with the wording as quoted above.  The amending act came into effect on 13 March 2015.  
12.	It is relevant that the bank in its summons averred that it had “… cancelled the agreement, alternatively, cancels it hereby”.  Mr Shongwe does not dispute the cancellation.  Accordingly, section 129(3) does not come into the picture.
13.	The parties counsel addressed argument to me regarding what would constitute “delivery” of a section 129(1)(a) notice for purposes of section 130(1)(a) of the NCA.  They did so with reference to the judgments of the Constitutional Court in Sebola and another v Standard Bank of South Africa Ltd and another (“Sebola”) and Kubyana v Standard Bank of South Africa Ltd (“Kubyana”).  
14.	The National Credit Amendment Act, 2014, passed into law on 16 May 2014 after the Constitutional Court had handed down Kubyana on 20 February 2014.  The amending act came into operation, as referred to already, on 13 March 2015, i.e. before the litigation in this matter started.
15.	To my mind, and with the utmost of respect, the Constitutional Court in Sebola and Kubyana added glosses and complexities to the provisions of the NCA that were neither called for nor necessary.  
16.	To my mind, according largely, but not entirely, with the judgment of Maya JA in Rossouw and another v FirstRand Bank Ltd, as matters stood at the time that the two judgments were handed down:
16.1	Section 129(1) of the NCA required of a credit provider to “draw the default” of a consumer who was “in default under a credit agreement” to his/her notice “in writing”, and in such document to propose that the consumer refer the credit agreement to a debt counsellor, alternative dispute resolution agent, consumer court, or ombud with jurisdiction, to enable any dispute under the agreement to be resolved or a plan to bring the payments under the agreement up to date to be developed and agreed. 
16.2	In terms of sections 129(1)(b), 130(1)(a) and (b) and 130(3), read together, a court could only grant an order to enforce a credit agreement against a defaulting consumer if, among other things, it was satisfied that a notice (and proposal) in terms of section 129(1)(a) had been “delivered” to the consumer and that the consumer had either not responded to the notice, or had responded, but had rejected the proposals that the credit provider had made to him/her in terms thereof.
16.3	What the word “delivered” in section 130(1)(a) meant and required for purposes of sections 129(1)(b), 130(1)(a) and (b) and 130(3) of the CPA, read together, could, potentially, be ascertained from the contents of sections 65, 96 and 168.  
16.4	Section 96 of the NCA did not assist.  It specifies that a party to a credit agreement that is required or wishes to give “legal notice” to the other party for any purpose contemplated in the agreement, the CPA or any other law, must “deliver” that notice.  Section 96 serves only to specify where the notice has to be “delivered”, not how it should occur.
16.5	Section 168 deals with provisions of the CPA requiring that notices, orders or other documents be “served”.  It specifies what would suffice to achieve that such documents “will have been properly served”.  
16.6	Section 168 pertains to provisions of the CPA requiring that notices, orders or other documents be “served”.  It does not say anything about provisions of the CPA requiring that documents be “delivered”.  
16.7	It would be sophistry to have argued that section 168 would, for that reason, not apply to a requirement that a notice be “delivered”.  Albeit that section 130(1)(a) of the NCA uses the word “delivered” and not “served”, it is of no consequence.  If the section 129(1)(a) notice had been “served” in accordance with section 186, it would have been “delivered” in accordance with section 130(1)(a).
16.8	The one method, specified in section 168(a), that could be used to achieve that a document “will have been properly served”, is that it be “delivered”.  Section 168(a) takes interpretation of the same term in section 130(1)(a) no further.  
16.9	Section 168(b) specifies a further method that suffices for serving documents in terms of the NCA.  It provides that documents “will have been properly served” on somebody if “sent by registered mail to that person’s last known address”.  
16.10	If a document is served in accordance with section 168(b) by sending it by registered post the document would in terms of section 7 of the Interpretation Act, 33 of 1957, be deemed to have been served at the time at which the letter would have been delivered in the ordinary course of post.  
16.11	Section 130(1)(a), read with section 168(b) and section 7 of the Interpretation Act, and applied to section 129(1)(a) notices sent to defaulting consumers by registered post, allowed the deeming provision in section 7 of the Interpretation Act to be applied.
16.12	Section 65 also assisted.  It, in its terms, applied to “(e)very document that is required to be delivered to a consumer in terms of” the CPA.
16.13	Subsections (1) and (2) of section 65 provide that:
“(1) 	Every document that is required to be delivered to a consumer in terms of this Act must be delivered in the prescribed manner, if any.
(2) 	If no method has been prescribed for the delivery of a particular document to a consumer, the person required to deliver that document must- 
(a) 	make the document available to the consumer through one or more of the following mechanisms- 
	(i) 	in person at the business premises of the credit provider, or at any other location designated by the consumer but at the consumer's expense, or by ordinary mail; 
	(ii) 	by fax; 
	(iii)	by email; or 
	(iv) 	by printable web-page; and 
(b) 	deliver it to the consumer in the manner chosen by the consumer from the options made available in terms of paragraph (a).”
16.14	A section 129(1)(a) notice is a “legal notice” as referred to in section 96 of the CPA.
16.15	The address of the consumer “as set out in the agreement” or the address “most recently provided by the recipient in accordance with subsection (2)” of section 96 was, accordingly, the address at which the credit provider had to (“must”) deliver the section 129(1)(a) notice.
16.16	No manner or method for delivery of section 129(1)(a) notices were prescribed by regulation.  Section 65(2) of the NCA, accordingly, applied to the delivery of such notices as required by section 130(1)(a).
16.17	An address specified for a consumer in accordance with section 96 would be the address at which a section 129(1)(a) notice (that is  “required to be delivered” to the consumer in terms of section 130(1)(a)) had to be made available in accordance with section 65(2) (unless the in person delivery option in terms of section 65(2)(a)(i) applied).
16.18	Accordingly, a credit provider that (before the coming into operation of the National Credit Amendment Act, 2014) sought to obtain an order from a court for enforcement of a credit agreement could, in addition to relying on section 168(b) of the NCA, read with section 7 of the Interpretation Act, satisfy the court that it had “delivered” a section 129(1)(a) notice to the defaulting consumer by demonstrating that:
16.18.1	it had “made the document available to the consumer through one or more of the mechanisms specified in section 65(2)(a)”; 
	and
16.18.2	it had “delivered” the section 129(1)(a) to the consumer in the manner that the consumer had chosen from the options available in terms of section 65(2)(a), i.e. the option that the consumer had in terms of that subsection chosen as the method through which the document could be made available to him/her.
16.19	Accordingly, further: 
16.19.1	if a credit provider (prior to the coming into operation of the National Credit Amendment Act, 2014) satisfied the court that it had “made available” a section 129(1)(a) notice to the defaulting consumer through one or more of the mechanisms specified in section 65(1)(a), applied to the address of the consumer as referred to in section 95, the jurisdictional fact specified by section 130(3)(a) in respect of compliance with section 129 would have been established, provided, that the mechanism(s) that the credit provider employed included the one that the consumer had chosen in accordance with the provisions of section 65(2)(b).  
16.19.2	if the consumer’s choice of option in terms of section 65(2)(b) was to receive delivery of documents by ordinary mail, the credit provider did not have to employ registered mail.  
16.19.3	however, arising from the provisions of section 168, read with section 7 of the Interpretation Act, the credit provider would have been entitled to employ registered mail, even if the consumer had specified ordinary mail in the credit agreement, but it would then have had to establish when the relevant letter would have been “delivered in the ordinary course of post”.  
16.19.4	if the credit provider appropriately employed ordinary mail for making the section 129(1)(a) notice available, i.e. to “deliver” it, the consumer would not, factually, have received the document at the time of the relevant notice being posted.  However, arguably, because such “making available by ordinary mail” would have constituted “delivery”, the 10 “business days” referred to in section 130(1)(a) would have started running on the day after posting.  
16.19.5	a credit provider appropriately utilising ordinary mail to deliver a section 129(1)(a) notice, who produced evidence of the time that it would take the postal service, in the ordinary course, to deliver a letter by ordinary post to the defaulting consumer’s address at issue (or who produced evidence that it would not, in the usual course, take the postal service longer than a given time that the postal service my state it takes to deliver letters to addresses in South Africa), and who relied on the 10 business day period starting to run on the day after that period had elapsed, would have satisfied the requirement of section 130(1)(a).
17.	The Constitutional Court in terms of Sebola imposed a mechanism for credit providers’ delivering section 129(1)(a) notices to defaulting consumers that, in my respectful opinion, was not consonant with section 65 of the NCA.  It did so on the basis of the importance of a section 129(1)(a) notice within the legislative scheme of things provided by the NCA.
18.	Sebola, in effect, found that the mechanisms to “deliver” documents “required to be delivered to a consumer in terms of this Act”, as specified in section 65(2)(a), did not apply to the delivery of a section 129(1)(a) notice, as required by section 130(1)(a).  
19.	Sebola also found, in effect, that section 7 of the Interpretation Act does not apply in relation to registered post as provided for in section 168(b) of the NCA.  
20.	The Constitutional Court in Sebola then fashioned requirements that a credit provider wishing to enforce its rights in terms of a credit agreement had to comply with.  Sebola specified that such a credit provider needed to aver in its particulars of claim that it had employed registered post for delivery of the section 129(1)(a) notice, that the relevant post office had received the posted notice (providing proof of delivery of the posted notice to the post office) and that the post office would, in the ordinary course, have secured delivery of a notification slip informing the consumer that the registered letter was available for collection.  In so doing, choosing registered mail above ordinary mail, as well as above the other potential means that section 65(2)(a) provides for, the Constitutional Court in Sebola opted for the mechanism that is in this day and age probably the least likely actually to bring the contents of a section 129(1)(a) notice to the attention of a defaulting consumer.
21.	In Sebola, albeit that it was later somewhat attenuated in Kubyana, the Constitutional Court went on to suggest that even if a credit provider had shown that it had “delivered” a section 129(1)(a) notice by despatching it by registered post, and obtaining confirmation that the posted document had reached the correct post office and that the post office would, ordinarily, have sent notification of receipt of the registered letter to the consumer’s applicable address, it would still not necessarily suffice.  In given circumstances, the court called upon to determine the matter could still conclude that a notice “delivered” in this manner did not achieve compliance as required in terms of section 130(3)(a).
22.	The legislature then took a hand in terms of section 32(c) of the National Credit Amendment Act, 2014, that, as referred to already, added subsections (5), (6) and (7) to section 129.  In doing so, and no doubt following the Constitutional Court’s lead, the legislature also opted for registered post as the method that credit providers have peremptorily to use to convey the required section 129(1)(a) notice to consumers.
23.	It is evident from the documentation annexed to the particulars of claim forming part of the summons served on Mr Shongwe that the bank’s attorneys, on 9 September 2015, sent a letter that qualified as a notice in accordance with section 129(1)(a) of the NCA to Mr Shongwe by registered mail.  The documents annexed to the particulars of claim show that the attorneys sent the letter to the address that Mr Shongwe had chosen as his domicilium address at which legal notices had to be sent to him and that the postal service had confirmed in writing that the letter had been delivered to the relevant post office.
24.	Mr Shongwe raises no case that the letter of 9 September 2015 did not constitute an adequate notice in terms of section 129(1)(a) and that delivery as contemplated by sections 129(5) and (7) of the NCA had not taken place.
25.	In the light of the provisions of subsections (5) and (7) of section 129, the documents attached to the bank’s particulars of claim would adequately and conclusively have served to satisfy the court regarding compliance with section 129 of the NCA, as intended by section 130(3)(a) of the NCA, when the bank’s default judgment application served before court on 3 December 2015.  Mr Shongwe’s possibly not having received the section 129(1)(a) notice does not afford him a defence against the claims made in terms of the summons served on him.  It, accordingly, does not provide a basis for rescinding the judgment.
26.	In any event, Mr Shongwe did receive the section 129(1)(a) notice timeously before the bank applied for default judgment.  A copy of the section 129(1)(a) notice letter of 9 September 2015 was annexed to the bank’s particulars of claim forming part of the summons served on 6 October 2015, that Mr Shongwe did receive.  Van Eeden AJ, sitting in this court, in SA Taxi Development Finance (Pty) Limited v Phalafala, in an admirably lucidly expressed judgment, concluded that a section 129(1)(a) notice attached to a summons that the consumer actually received constitutes delivery of the notice and that the fact that such delivery did not take place prior to the credit provider commencing legal proceedings is not of sufficient moment to justify an adjournment in terms of section 130(4)(b).  I agree with the reasons for Van Eeden AJ’s judgment and on the basis of that authority as well, Mr Shongwe’s alleged defence regarding his not receiving the letter sent to him by registered post does not provide any basis for rescinding the judgment.
27.	In the premises, I order that: 
The applicant’s application that the judgment granted against him in this court on 3 December 2015 under case number 34239/2015X be rescinded, is dismissed with costs.

______________________________
F G BARRIE

Acting Judge
Gauteng Local Division of the High Court
Johannesburg

17 FEBRUARY 2017