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[2014] ZAGPJHC 408
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Van Niekerk and Others v Absa Bank Limited (8763/2013) [2014] ZAGPJHC 408 (15 December 2014)
REPUBLIC
OF SOUTH AFRICA
IN
THE GAUTENG HIGH COURT
(LOCAL DIVISION
JOHANNESBURG)
CASE
NO: 8763/2013
DATE:
15 DECEMBER 2015
In
the matter between
HENDRIK
JOHANNES VAN
NIEKERK
...........................................................
FIRST
APPLICANT
JAQUES
JANSE VAN
RENSBURG
...............................................................
SECOND
APPLICANT
SHERENE
JANSE VAN
RENSBURG
...............................................................
THIRD
APPLICANT
JOHANN
NICO
JUNIUS
.................................................................................
FOURTH
APPLICANT
And
ABSA
BANK
LIMITED
.................................................................................................
RESPONDENT
J
U D G M E N T
MOSIKATSANA
AJ:
Introduction
[1]
This is an appl
ication for an order in the following terms:
[1.1]
Rescinding and setting aside of the default judgment granted against
the applicants under the above case number on 10 April,
2013;
[1.2]
Granting the applicants leave to oppose the respondent’s
application for judgment, the applicants having to file a notice
of
intention to oppose the application within five (5) days from date of
the setting aside of the judgment and thereafter to file
their
answering affidavits within fifteen (15) days after they have given
notice of their intention to oppose the respondent’s
application;
[1.3]
Costs of the application to be costs in the cause, unless the
respondent unsuccessfully opposes the application, in which
event,
the respondent is to be ordered to pay the applicants’ costs as
a result of the opposition to this application, and
further or
alternative relief.
[2]
The respondent first sought condonation, for the late filing of its
answering affidavit, which was duly granted. The respondent
notes, in
its answering affidavit, that the applicants have not shown whether
they are relying upon the uniform rules of court,
or the common law,
in support of their application for rescission. While acknowledging
that the applicants’ failure to plead,
with such particularity,
is not fatal to their cause, the respondent, nevertheless, emphasises
that the applicants have failed,
to make out a proper case for
rescission, on any of the recognised grounds, and that the
application for rescission, falls to be
dismissed with costs.
Factual
background
Common
cause facts
[3]
It is common cause that during 2010 the respondent brought an
application against the applicants in the above honourable court,
under case number 46514/2010, for payment of the sum of R981, 170.44
together with interest and costs, and for an order declaring
ERF 143
Norton Park Extension 7 Township, Registration Division IR, Province
of Gauteng (situated at 143 villa Elefante, 14 Auret
Road, Nortons
Home Estate Benoni, Norton Park Extension 7 (the property)
executable. Default Judgment was granted by the Honourable
Victor J,
in favour of the respondents on 29 March 2011.
[4]
The applicants sought rescission of the default judgment granted
against them, and in favour of the respondent, on 29 March,
2011 on
the basis that there was irregular service on the applicants.
[5]
On 25 October, 2011 the above honourable court, per Meyer J, granted
an order, rescinding the default judgment, granted against
the
applicants, and in favour of the respondent, by Victor J on 29 March
2011. The respondent was ordered to pay the costs of the
application.
The applicants were ordered to file answering affidavits in that
application, but the respondent elected to withdraw
the application
and tendered to pay costs.
[6]
On 19 February, 2013 the respondents brought a new application under
the above case number, for judgment in the amount of R
1,176,352.48
plus interest at the rate of 6.95% per annum calculated and
capitalised monthly in advance in terms of the mortgage
bond, from 30
January, 2013 and for an order declaring the property specially
executable for the said sum plus costs.
[7]
On 10 April, 2013 the honourable Mabesele J, granted default judgment
against the applicants under the above case number. It
is the default
judgment granted by the Honourable Mabesele J, on 10 April, 2013
which is sought to be rescinded in the present
application.
Disputed Facts
Applicants’
submissions
[8]
The applicants claim that the default judgment granted by the
Honourable Mabesele J, on 10 April, 2013 ought to be rescinded
due to
irregular service, in that the court documents in the main
application for judgment, were served on a security guard at
the main
entrance to the gated community, in which the applicants own a plot,
and not at the applicants’ plot, which is their
chosen
domicilium citandi et executandi.
[9]
It is submitted on behalf of the applicants that on or about 16 June,
2006 the applicants concluded a written agreement with
yellow flame
properties (yellow flame), for the purchase and sale of an Erf
referred to as Portion 12 in a property development
known as Vila
Elefante. The applicants also entered into a building contract with
yellow flame.
[10]
The salient terms of the contract concluded between the applicants
and yellow flame were as follows:
[10.1]
The vacant land on which a building was to be erected was described
as Portion 12, Villa Elefante, Auret Road, Benoni (the
immovable
property);
[10.2]
The purchase price for the immoveable property was R400, 000.00;
[10.3] yellow
flame was to build a dwelling of approximately 183 square metres on
the immovable property;
[10.4]
the building contract price was R766, 330.00 inclusive of interim
interest in the amount of R100, 000.00 which yellow
flame was not
entitled to draw. The actual building contract price was therefore
R666, 330.00
[10.5]
The building contract price was payable to yellow flame by way of
progress payments specified in Annexure “B”
to the
building contract in terms whereof:
[10.5.1]
Yellow flame would be entitled to a first progress payment equivalent
to 36% of the contract price upon completion of the
stone work;
[10.5.2]
a second progress payment equivalent to 34% of the contract building
price would be payable upon completion of the plumbing
and drainage;
[10.5.3]
a third progress payment equivalent to 20% of the contract price
would be payable upon completion of the painting and glasswork;
[10.5.4]
upon completion of the building and having cleaned up, yellow flame
would be entitled to draw the outstanding10% which
would be the final
draw of the contract price.
[11]
After conclusion of the building contract with yellow flame, the
applicants obtained a loan from the respondent against a mortgage
bond registered on the property, in the amount of R 1166, 330.00
plus an additional amount of R 233, 266.00. The mortgage
bond
was registered over the property on or about 9 June, 2007. The
principal amount recorded in the mortgage loan agreement represented
the purchase price in respect of the property and the building
contract price.
[12]
An amount of R766 330.00 was to be retained by the respondent
and only paid out to yellow flame if the work had been performed
to
the satisfaction of the applicants.
[13]
Upon transfer of the property to the applicants, the respondent paid
a purchase price of R400, 000.00 to yellow flame for the
property.
Applicants submit that respondent also paid in breach of its
obligation, an additional R 581, 000.00 to yellow flame
in
respect of the building contract. It is alleged that the respondent’s
breach consists in the fact that the amount it paid
for the building
work was in excess of the work that was actually performed. It is
alleged that the respondent was responsible
for monitoring progress
on the building work done before releasing funds to yellow flame. The
applicants dispute the fact that
the respondent exercised sufficient
oversight before making progress payments to yellow flame.
[14]
Applicants contend that the value of the building work performed,
amounts to R465, 498.00 and that the respondent paid an amount
of
R120, 000.00 in excess of the fair and reasonable value of the
building works performed. The applicants contend that the respondent
cannot claim performance from them under circumstances where the
respondent acted in breach of the loan agreement. Accordingly,
the
applicants deny that they are indebted to the respondent in the
amount of R 1 176, 352.48.
Respondent’s
submissions
[15]
In opposing the rescission application on the basis of the alleged
irregular service, the respondent argues that service of
process in
the main application complied with the rules in that the court
documents were served on a security guard at the applicants’
chosen
domicilium citandi et executandi
and that the court
process served did not come to the applicants’ attention
because none of the applicants reside at the
chosen
domicilium
.
Accordingly, the respondents contend that there was proper service.
[16]
With respect to the allegations of contractual breach relating to the
alleged irregular payments for work done in terms of
the building
contract, the respondent argues that it is not a party to the
building contract between the applicant and yellow flame.
Respondent
contends that it is not liable for the assessments which may have
been conducted on the property with reference to the
construction of
a dwelling thereon. The respondent contends that progress payments,
were only made after requests for the release
of funds were made by
the applicants. Accordingly, the respondent contends that the defence
raised on behalf of the applicants
is unsustainable both in fact and
in law.
Issues
to be decided
[17]
The applicants in their founding affidavit and in their heads of
argument have failed to plead their case with sufficient
particularity. Sufficient particularity in pleadings is essential in
facilitating a lucid, legal characterisation of the facts.
However,
as the respondent has acknowledged, such laxity in this instance is
not fatal to the applicants’ cause.
[18]
In order to facilitate a disciplined legal analysis and judicial
determination of the facts with the objective of reaching
fair and
just practical outcomes, the facts may for convenience be
characterised as follows:
Irregular
service
[19]
The applicants’ claim that the default judgment obtained
against them on 10 April, 2013 ought to be rescinded due to
irregular
service falls, in my view, within the rubric of uniform rule
42(1)(a)
[1]
, in so far as it is
implicitly alleged that the default judgment was erroneously sought
or erroneously granted.
Common law
[20]
The applicants’ claim that the respondent has not complied with
all the terms of the contract relating to the release
of funds for
completion of the building phase of the project, can be
encompassed under the common law. In order to succeed
under the
common law, the applicants must demonstrate that:
[19.1]
They are not in wilful default;
[19.2]
the application is brought
bona fide
;
and
[19.3]
they have a
bona fide
defence which holds some prospect of success.
Legal
determination of the issues
Irregular service
[21]
As will appear below, there is a plethora of casuistic legal
authority, which points incontrovertibly, to the fact that the
giving
of notice to the affected party, is an essential first step in an
application on notice of motion. And, that an application
on notice
of motion, cannot be considered to have been made, if it had merely
been issued, but not served, or if service was irregular.
[2]
This is largely, due to the fact that irregular service or
non-service of court proceedings undermines due process.
[22]
Courts, have consistently emphasised, the importance of proper and
effective service of court proceedings, on affected parties.
For
instance, in
Republikeinste
Publikasies (Edms) Bpk v Afrikaanse Pers Publikasies (Edms) Bpk
[3]
Rumpff JA expressed approval of this principle in the following
terms:
'Hoewel
`n dagvaarding eers deur die griffier uitgereik word voordat dit
beteken word (Reël 17 (1) en (3)), word dit nie in
die Reëls
vereis dat `n kennisgewing van mosie deur die griffier uitgereik moet
word of by hom ingelewer moet word voordat
dit aan die respondent
beteken kan word nie… Die doel van `n dagvaarding en
kennisgewing van mosie is natuurlik om die verweerder
of respondent
by `n geding te betrek, en wat hom betref, word hy eers dan betrek
wanneer `n betekening van die dagvaarding of kennisgewing
van mosie
plaasgevind het.'
[23]
Similarly, in
First
National Bank of SA Ltd v Ganyesa Bottle Store (Pty) Ltd and Others
and First National Bank of SA Ltd v Schweizer Drankwinkel
(Pty) Ltd
and Another
[4]
the court per Horn AJ, reaffirmed the hallowed principle that it is
the cornerstone of our legal system, that an affected party
is
entitled to notice of legal proceedings against him or her, in the
following terms:
‘
The
issue of a summons is the initiation process of an action and has
certain specific consequences, one of which is that
it
must be served
.
The methods of service are prescribed in the Rules. Mere “knowledge”
of the issue of a summons is not service and
a plaintiff is not
relieved of his obligation to follow the prescribed Rules.’
[5]
[Emphasis mine].
[24]
Where judgment has been obtained pursuant to irregular service or
non-service, the judgment is a nullity as it is erroneously
sought or
erroneously granted and it may be set aside pursuant to rule 42(1)(a)
notwithstanding the absence of good cause.
[6]
A more radical view was expressed in
Dada
v Dada
[7]
where it was stated that when proceedings have begun without due
notice to the defendant, the subsequent proceedings are null and
void, any judgment is of no force and effect and may be disregarded
without the necessity of a formal order setting it aside.
[8]
[25]
The higher courts have discretion in matters of service, to determine
on the facts, whether service was good. This discretion
has to be
exercised in a manner consistent with the Constitution. Acknowledging
the courts’ discretionary power in matters
of service, Shongwe
JA stated in
Arendsnes
Sweefspoor CC v Botha
[9]
at para 13:
‘
it
is trite that each case must be dealt with on its own particular
facts and merits. There is no differentiation or exception.
The
court, if service is contested, must determine whether service was
good and legally recognised or substantially compliant with
the rules
of service.’
The
high courts’ discretionary power to regulate its process
including service, was recently affirmed in
ABSA
Bank Limited v Lekuku
[10]
[26]
In the present matter, according to the sheriff’s return,
service was effected by giving the court process to a security
guard
in attendance at the gate. Evidently, the security guard is at
arm’s-length with the applicants, not being an employee
of the
applicants, or a member of their family. On the well-established
principle laid down in
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[11]
it
is highly probable that the applicants did not receive the court
process from the security guard. Accordingly, it is my finding
that
there was irregular service.
Common law
[27]
Having determined that there was irregular service and that the
applicants were not in wilful default, it is unnecessary to
make a
finding on whether the applicants would be entitled to claim
rescission under the common law on the basis that they have
a proper
a defence.
ORDER:
[28]
I Make the following order:
[28.1]
The default judgment granted against the applicants under the above
case number on 10 April, 2013 is hereby rescinded and
set aside;
[28.2]
The applicants are granted leave to oppose the respondent’s
application, the applicants to file notice of intention
to oppose the
application within five (5) days from the date of the setting aside
of the default judgment and thereafter to file
their answering
affidavits, if any, within fifteen (15) days after they have so given
notice of their intention to oppose the application;
[28.3]
Costs reserved.
T
L MOSIKATSANA
ACTING
JUDGE OF THE HIGH COURT
APPEARANCES:
COUNSEL
FOR APPLICANTS ADVOCATE: AP BRUWER
COUNSEL
FOR THE RESPONDENT ADVOCATE D VAN NIEKERK
DATE
OF HEARING 25 MARCH 2014
DATE
OF JUDGMENT 15 DECEMBER 2014
[1]
Uniform
rule 42(1)(a) states:
’
42
Variation and Rescission of Orders
(1)
The court may, in addition to any other
powers it may have,
mero motu
or upon the application of any party affected, rescind or vary:
(a)
An order or judgment erroneously sought or
erroneously granted in the absence of any party affected thereby ….’
[2]
Fishing
Touch 163 v BHP Billiton Energy Coal SA Ltd 2013 (2) SA 204 (SCA).
[3]
1972
(1) SA 773
(A) at 780 D-F.
[4]
1998
(4) SA 565 (NCD).
[5]
Id
at
589 B.
[6]
See
Fraind v Nothmann
1991 (3) SA 837
(W) at 839H; Topol And Others v LS
Group Management Services (Pty) Ltd
1988 (1) SA 639
(W) at
648D-649F.
[7]
Dada
v Dada
1977
(2) SA 287
(T) at 288C-E
[8]
See
Dada
supra
note 7 at 288 C-E and earlier authorities cited therein. See also
Todt
v Ipser
1993 (3) SA 577
(AD) at 588H-J;
[9]
2013
(5) SA 399 (SCA).
[10]
[2014]
ZAGPJHC 274 (14 October 2014) par 8.
[11]
[1984] ZASCA 51
;
1984
(3) SA 623
(A) at 634 H-I.