- February 1, 2023
- |Concise Law Reports (CLR), Contracts
On 6 November 2012 the parties entered into a written instalment sale agreement in terms whereof the first defendant purchased a motor vehicle from the plaintiff for the sum of N$309 822,84. This amount included a single insurance premium of N$11 067 and finance charges at 9.5% p.a. in the amount of N$48 270,01. It was agreed that the first defendant would pay 54 equal monthly instalments of N$5 737,46 commencing on 25 November 2012 and each subsequent instalment was payable on the 25th day of each successive month until 25 March 2017. The vehicle was delivered to first defendant.
On 12 November 2018. i.e., more than a year after 25 March 2017, the plaintiff’s legal practitioner addressed a letter to the first defendant giving notice of repossession in terms of section 11 of the Credit agreements Act, 1980 (Act 75 of 1980). The address is P.O. Box 86891, Eros. This was not the address which was provided in terms of the agreement as the dommicilum citandi et executandi.
On 3 December 2018 the plaintiff instituted action for cancelation, the immediate restoration of the motor vehicle; forfeiture of the amounts paid by the first defendant in terms of the agreement to the plaintiff; and costs on an attorney and client scale. The first defendant denied that the principal debt was correct as the plaintiff was not entitled or permitted to add the amount of N$11 067 in respect of insurance. He pleaded that he obtained insurance cover for the motor vehicle separately and provided plaintiff with a cover letter. The plaintiff adduced evidence of the defendant’s application for credit life insurance which the first defendant signed on 26 September 2012. This document reflected that the single premium was N$11 067.
The plaintiff pleaded that it was a material term of the agreement that it would remain the owner of the vehicle until all the payments have been made. The first defendant disputed that and pleaded that he paid all the amounts due during the currency of the agreement and that the ownership therefore vested in him as at the date of final payment i.e., 25 March 2017. He pleaded that the plaintiff’s claim prescribed on 25 March 2017.
The plaintiff avered that the first defendant breached the agreement by failing to pay the instalments for the months of April and December 2015 and February, October and December 2016 totaling N$39 665,16 on the due date. The plaintiff handed into evidence a Loan Statement dated 5 November 2018.
The certificate of balance handed into evidence reflected that the full outstanding balance at 3 November 2018 was N$47 413,11 and that debit interest of 16.8% pa was charged being the maximum rate in terms of the Usury Act, calculated daily, charged monthly in arrears and compounded from 3 November 2018 until date of payment is added to the outstanding balance from 3 November 2018 to date of payment. The certificate also indicated that the prime interest rate at the time was 10.50% per annum. The plaintiff pleaded that the agreement further stipulated that a certificate by any manager whose authority need not be proved, shall be prima facie evidence of the amount of first defendant’s indebtedness.
The defendant denied that he was in arrears and disputed the outstanding balance as per the certificate of balance. He pleaded that the court in any event did not have jurisdiction to hear the matter in light of the amount outstanding.
The plaintiff averred that, in terms of the agreement, the first defendant would be liable for costs and disbursements including legal costs on an attorney and client scale and costs incurred in recovering possession and thereafter in disposing the vehicle such as cost incurred in tracing the first defendant or the vehicle in the event of first defendant’s breach of the agreement.
The plaintiff pleaded that it is entitled to repossess the vehicle, obtain an order for forfeiture of the payments made by the defendant and deduct from the total purchase price the deposit and instalments paid, such value as the vehicle may have upon its return to the plaintiff and such reduction of finance charges to which the First defendant may be entitled. The plaintiff pleaded that it would be unable to determine the amount due until such time as the value of the vehicle has been determined and this can only be done at the time the vehicle is returned to the plaintiff.
TOMMASI J had to determine the following preliminary issues: (a) the alleged bias of the presiding judge and the failure of the managing judge to also sit as the presiding judge; (b) Non-compliance with the rules for service of the order dated 20 June 2022; (c) The jurisdiction of the court; (d) Plaintiff’s authority to institute action authorization; and (e) prescription.
The points of alleged bias of the presiding judge and failure of the managing judge to also sit as the presiding judge were considered to be unmeritorious and without substance. The clear meaning of Rule 22 (1) is that a matter is allocated to a Managing judge up to trial or hearing stage. Rule 21 specifically mentions that the managing judge must manage it “as provided in this Part”. Part 3 i.e. Rules 17 to Rule 39 of the Rules deal with Case Management. Part 10 of the rules deals with the trial and where it refers to the proceedings during a trail, eg Rule 93; it makes reference to “the presiding judge” as opposed to the “managing judge”. The managing judge, in terms of the Practice Directive 56(6) may enroll up to seven matters on the floating roll. It would not be possible for the managing judge to preside over seven matters in the three to five days allocated for matters on the floating roll. The first defendant’s interpretation of Rule 21 and 22 was clearly not correct. In light of the fact that no formal application to this effect was brought, the court declined to express itself in respect of the first respondent’s remarks made in argument. Judicial officers have a duty to sit in any case in which they are not obliged to recuse themselves.
With regard to the point of non-compliance with the rules of service, the court found that the first respondent was called by the judge’s clerk and the contents of the order was communicated to him, he appeared at court which is an indication that he was aware court order and evidently no prejudice was suffered.
With regard to the jurisdiction challenge, it was submitted that the High Court did not have jurisdiction because the first defendant consented to the jurisdiction of the magistrates court and the parties were bound by this clause. It was further submitted that the amount presented in the loan statement fell within the jurisdiction of the magistrates court and, therefore, section 29(1)(e) found application. The court held that it has has inherent jurisdiction to hear all matters, including matters falling within the jurisdiction of the Magistrate’s court, unless its jurisdiction is specifically excluded by statute. There was therefore no merit in this submission.
The court declined to deal with the issue of authority to institute action because it was not raised in the defendant’s plea. The court opined that in any event, the plaintiff was not required to file a power of attorney in terms of the Rules.
With regards to prescription, the court referred to Empire Fishing Company (Pty) Ltd vs Dumeni (HC-MD-CIV-ACT-CON-2021/00191) [2022] NAHCMD 76 (24 February 2022), an unreported matter, where the court held that a vindicatory claim does not constitute a ‘debt’ as envisaged by section 11 of the Prescription Act and differed from Ongopolo Mining Ltd v Uris Safari Lodge (Pty) Ltd and Others 2014 (1) NR 290 (HC). In differing from the Ongopolo decision Judge Sibeya pointed out that that the Supreme Court in Council of The Itireleng Village Community and Another v Madi And Others 2017 (4) NR 1127 (SC) applied the decision of Makate v Vodacom Ltd 2016 (4) SA 121 (CC) (2016 (6). He also made reference of the matter of Absa Bank Ltd v Keet 2015 (4) SA 474 (SCA) which is on point. In the Keet matter the appellant’s bank brought an action in the High Court seeking confirmation of its cancellation of an instalment sale agreement and recovery of the vehicle when the respondent defaulted on payments. The Supreme Court of Appeal held that a claim for rei vindicatio does not constitute a ‘debt’. TOMMASI J agreed with the approach adopted in the Empire Fishing matter and concluded that the plaintiff’s vindicatory claim did not constitute a debt as envisaged by s 11 of the Prescription Act. The first defendant’s plea that the plaintiff’s claim for restoration of possession prescribed was accordingly dismissed.
Having considered the evidence and the legal principles in toto the court found that the plaintiff proved the breach and was entitled to cancelation of the agreement and for possession to be restored to the plaintiff, forfeiture of the amounts paid and cost on an attorney and client scale as agreed. No finding was made in respect of the damages as no claim for damages was included in the relief which the plaintiff sought herein.