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[2016] ZAGPJHC 9
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Firstrand Bank Limited t/a First National Bank v Shabalala (23762/2013) [2016] ZAGPJHC 9 (5 February 2016)
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REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA,
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 23762/2013
DATE:
05 FEBRUARY 2016
In the matter
between:
FIRSTRAND
BANK LIMITED t/a FIRST NATIONAL
BANK
.........................................
Applicant
And
SHABALALA
MBUSISENI THOLITHEMBA
BRIGHT
.................................................
Respondent
JUDGMENT
Delivered on: 05 February 2016
NORMAN
AJ
:
INTRODUCTION
[1]
This is a rescission application wherein the applicant seeks an
order rescinding an Order granted by this Court on 29 March
2014
which,
inter alia,
rescinded
a default judgment that had been granted against the respondent on 15
October 2013. Incidentally both the default judgment
and the Order
rescinding it were granted by the same Judge. The application is
opposed by the respondent.
[2]
The applicant is FirstRand Bank Limited, a company with limited
liability duly registered in terms of the Company Laws of the
Republic of South Africa.
[3]
The respondent is Tholithemba Mbusiseni Bright Shabalala, an adult
male who practises as an advocate within the jurisdiction
of this
Court.
[4] The cause of
action arose within the jurisdiction of this Court.
BACKGROUND
[5] The following facts
serve as a necessary background:
5.1 On 4 July
2013 the applicant herein who is also the plaintiff in the main
action instituted an action against the respondent.
It sought
judgment in its favour for payment of an amount of R3 180 513.58
being monies lent and advanced to the respondent
in terms of a
structured facility agreement. The agreement was entered into between
the parties on 18 July 2006. As security for
the debt a covering
bond was registered in favour of the applicant over a certain
property described as Erf [8……..]
[R…….]
Township, Registration Division IQ, measuring one thousand six
hundred and thirty six (1 636) square
metres(“
the
property
”). The property was held
under a deed of transfer number [T…………..].
5.2 In terms of
clause 20 of the structured facility agreement and as agreed between
the parties the respondent chose for the purpose
of legal proceedings
and for the purpose of giving any notices an address being
[
4…….]
[M……..] Road, [R……], [R……],
2146. He also chose the mortgaged property
as his
domicilium
citandi et executandi
in terms of
clause 12 of the bond agreement. The facility sum was R1,9 million.
It was payable over a period of 24 months. The
respondent’s
monthly instalment was R17 266.24. The bond registered over the
property was for R2 million. The respondent
also ceded or pledged a
cash investment of R700 000.00. In addition to the R2
million the applicant also held the respondent
liable for R400 000.00
being monies in respect of the costs of preserving and realising the
mortgaged property including, amongst
others, insurance premiums.
5.3 It is not in
dispute between the parties that the respondent fell into arrears
with his repayments. As a result thereof the
main action referred to,
above, was instituted against him. The summons was purportedly served
on the respondent at [8…….]
[K……..]
Street, [S…….]. When he failed to enter a notice of
intention to defend default judgment was
sought and obtained against
him on 15 October 2013.
5.4 It appears
from the founding affidavit in support of the rescission application
that the respondent became aware of the default
judgment when a
notice of attachment and execution was served on or about 14 February
2014 on him at [4……] [M…….]
Road.
5.5 On 04 March
2014 the respondent brought an application to rescind the default
judgment. He also sought leave therein to file
a notice of his
intention to defend the action and costs of the rescission
application. The grounds for the rescission application
were that
contrary to the agreement between the parties the applicant served
the summons on [8……] [K……]
Street and not
on [4……] [M……..] Road. The respondent
placed in full his defence that he had authorised
and the applicant
had agreed to utilise the investment funds held with the applicant
which he estimated to be approximately R1
million to set off the
arrears. He also contended that although there was agreement to pay
R22 000.00 per month he was paying R30
000.00 per month. He submitted
that there was no basis for the applicant to sue him and had the
summons been properly served on
him he would have defended the
action.
5.6 The
rescission application was duly served on the applicant’s
attorneys of record on 04 March 2014. In the notice of
motion the
applicant was required to notify the respondent’s attorneys in
writing by 12 March 2014 if it intended to oppose
the application.
Thereafter and within 15 days of the filing of such notice to file
its affidavits. It was also indicated in the
notice of motion that
should no notice of intention to oppose be given, the application
would be made on 28 March 2014 at 10h00.
5.7
The applicant took no steps between 5 March 2014 and 17 March 2014.
5.8
On 17 March 2014, a notice of set down on the unopposed roll was
served on the applicant’s attorneys. On 18 March 2014
the
applicant’s attorneys served on the respondent’s
attorneys a notice to oppose which was later filed on 19 March
2014.
5.9 On 28 March
2014 the matter was before Court and there was no appearance for the
applicant. The respondent was represented
and the rescission of the
default judgment was sought and granted by the Court. This is the
Order that the applicant now seeks
to rescind.
[6] The only basis upon which the rescission application before me is
based is that the Order that rescinded the default judgment
was
erroneously sought and granted. The applicant contends that the
notice to oppose was placed in the court file but right at
the back.
It submits that the respondent’s representatives failed to
bring it to the attention of the Court. It further submitted
that “
It
would seem that the Honourable Justice Makume may not have noted our
opposition as it was amongst the papers in the back which
include the
default judgment application
”.
[7]
On this basis the applicant contends that had the Court been aware
of the notice to oppose it would not have rescinded the
default
judgment.
I
SSUES
[8] Mr Venter appeared for the applicant and Mr Kela appeared for
the respondent.
[9] The application is opposed by the respondent on the following
bases:
9.1
Mr Kela raised certain points
in
limine
,
first, that the applicant failed to apply for condonation for the
late filing of the rescission application. He submitted that
the
application was filed some two and a half months after the granting
of the Order sought to be rescinded. Second, that the deponent
to the
affidavit has no
locus standi
to bring the application as there is no resolution authorizing the
launching of the proceedings by the applicant. Third, that the
form
used by the applicant in bringing the application was not the correct
one and that it was contrary to the provisions of Rule
6(5) (b)of the
Uniform Rules of Court. Fourth, he submitted that this Court is
functus officio
because
the Court had considered the matter when it rescinded default
judgment and that it was incompetent for it to deal with the
matter
for the second time.
[10]
He submitted that the notice of intention to oppose was filed out of
time. He argued further that the applicant is silent
about what its
defence is going to be to the rescission application. He submitted
that the applicant has failed to make out a case
for rescission of
the order in that it is speculating in its submissions that the Court
may not have seen the notice to oppose
because it was placed at the
back in the court file. He submitted that the application should be
dismissed with costs.
[11]
On the first point
in limine
Mr Kela relied on the judgment of D Pillay J in
Terrance
Johan Rossitier and Others v Nedbank Limited
Case
No. 8244/10 delivered on 25 February 2013, KZN High Court,
Pietermaritzburg. He relied on this judgment for his argument that
an
application for rescission of a judgment or order, even one
erroneously sought or granted, must be brought within a reasonable
time of the applicant for rescission becoming aware of the judgment
and error. Mr Venter argued that there was no need to file
a
condonation application because there are authorities that have found
that a period of three months is a reasonable period.
[12]
It may very well be that a period of two and a half months does not
constitute an inordinate delay in certain cases, however,
that does
not exempt the applicant from applying for condonation.
[13]
In casu
,
the applicant’s attorneys of record became aware of the
rescission of the default judgment on 03 April 2014.The notice of
motion before me was signed on 23 May 2014. The founding affidavit
was deposed on 6 June 2014. The application was launched on
26 June
2014, some two and a half months later. The applicant’s
attorneys got to know about the rescission application having
been
granted on 3 April 2014. I agree with Mr Kela that there is no
explanation being given whatsoever for the delay between 4
April 2014
and 26 June 2014 when the application was launched.
[14]
On the second point
in limine
,
Mr Venter submitted that there was authority when summons was
instituted and that suffices. In the founding affidavit the
applicant’s
attorney of record stated “
I
am duly authorised to depose to this affidavit and to launch this
application and the facts contained herein fall within my own
person
knowledge and are both true and correct
”.
In response to these allegations the respondent responded as follows:
“
Save to
deny that all the facts contained in the affidavit of Blom Andre Uys
are within his personal knowledge and are true and
correct, I do not
dispute the content hereof.
”
[15]
In the answering affidavit the respondent did not challenge the
authority of the deponent to the founding affidavit to do so
on
behalf of the applicant. In argument, Mr Kela argued that the
respondent is entitled to raise this issue at any time before
judgment. He persisted in his argument that there was no resolution
from the applicant authorizing the launch of the proceedings.
[16]
In response Mr Venter referred the Court to Erasmus Superior Court
Practice, Volume 2, original service 2015 page D1–54
where
reference is made therein to
Scott v
Hanekom
1980 (3) SA 1182
(C) at 1188H
where the Court held that it is trite law that appropriate
allegations to establish the
locus
standi
of an applicant should be made
in the launching affidavits and not in the replying affidavits. He
also relied on
Ganes v Telecom Namibia
Ltd
2004 (3) SA 615
(SCA) at 624 G–H
for his submission that the deponent to the affidavit need not be
authorised by the party concerned to depose
thereto. It is the
institution of the proceedings and prosecution thereof which must be
authorized. He submitted that when the
action was instituted by way
of summons there was authorisation of the action.
[17]
The rules of Court make provision for challenges such as those
relating to authority on how they should be raised. It is not
helpful
to the Court that authority is challenged at the hearing of the
matter. Rule 7 of the Uniform Rules outlines a procedure
to be
followed when authority of an attorney or a party is placed in
dispute. The respondent should have raised this issue at least
within
ten (10) days after it came to his notice that the attorneys or the
applicant were acting. When he failed to do so he could
only raise it
with the leave of court on good cause shown at any time before
judgment.
In casu
the
respondent did not dispute the allegations that the deponent had
authority to bring the application. In this regard the remarks
of the
Court in
Cekeshe and Others v Premier,
Eastern Cape, and Others
1998(4) SA 935
(TkD) at page 951H-I are apposite herein. There are no grounds which
have been advanced as constituting good cause
which would have made
the Court to grant leave for the issue of authority to be disputed.
This point must accordingly fail.
[18]
The respondent also raised
in
limine
the
point that the applicant failed to comply with the provisions of Rule
6(5)(b) in that it failed to notify the respondent of
the time within
which to file his notice to oppose and answering affidavit. I
indicated to Mr Kela that this point was moot because
both parties
had filed the necessary affidavits and there was no complaint
relating to non- compliance with time frames. In any
event
non-compliance with the provisions of Rule 6(5)(b) would not lead to
a dismissal of the application. This point in my view
lacks merit.
[19]
On the fourth point Mr Kela argued that Court is
functus
officio
because it has already made an
order and is barred in law from revisiting the order. Mr Venter
argued that the Court is at liberty
to revisit the decision if it was
erroneously sought or granted.
[20]
This is a common law proposition as it was found in
Firestone
South Africa (Pty) Ltd v Genticuro AG
1977
(4) SA 298
(A). The position now is that with the provisions of Rule
42 the applicant is able to bring the rescission application. On this
basis I find that this point too must fail.
[21]
I now proceed to deal with the ground relied upon by the applicant in
seeking rescission. The applicant has made it clear in
its heads of
argument that it was seeking rescission in terms of Rule 42(1) of the
Uniform Rules of Court.
[22]
Rule 42 (1) provides:
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;
(b)
…
..
(1)
…
..
(2)
…
..
(3)
The
court shall not make any order, rescinding or varying any order or
judgment unless satisfied that all parties whose interests
may be
affected have notice of order proposed.
”
[23]
In casu
,
there is no evidence at all that the Judge who presided on 28 March
2014 did not have sight of the notice to oppose. The
assumption
is made simply because the notice was at the back in the Court file.
This is not sufficient to make out a case for rescission.
[24]
The applicant also relies on a disputed conversation between the
applicant’s and respondent’s attorneys. The applicant’s
attorney of record alleges that when he telephoned the respondent’s
attorney about the order taken although the notice to
oppose was
filed his response was that he was not aware of it, he apologised for
having taken the order and confirmed that had
he been aware of it he
would have advised his Counsel to bring it to the Court’s
attention. These allegations are denied
by the respondent’s
attorneys.
[25] In my view, the provisions of Rule 42(3) had been satisfied
because the applicant was given sufficient notice of the date
of the
hearing of the matter both in the notice of motion and in the notice
of set down.
[26]
Even if one were to assume that the notice escaped the eyes of the
Court ,a necessary enquiry would be whether that constitutes
an
“
error
”
as envisaged in Rule 42(1).
[27]
In
Nyingwa v Moolman N.O.
1993
(2) SA 508
(TKGD) at page 510G, the Court held that:
“
It
therefore seems that a judgment has been erroneously granted if there
existed at the time of its issue a fact of which the Judge
was
unaware, which would have precluded the granting of the judgment and
which would have induced the Judge if he had been aware
of it, not to
grant the judgment.
”
Mr
Venter submitted that the practise in this Division is that once a
notice to oppose is filed the matter must be adjourned.
[28]
In my view, this may be the practice but that practice does not usurp
the discretion that a Court has when dealing with a matter
before it.
There is no evidence that the notice to oppose was not considered by
the Court. In the exercise of its discretion
the Court decided
to rescind the default judgment.
[29]
The applicant and her attorneys were aware of the application for
rescission, they were even aware of the date of hearing.
The Judge
would have had regard to the notice of set down and would have
established therefrom that it had been served on the applicant’s
attorneys. There was no appearance by the applicant’s attorney
and no explanation is proffered for their absence at Court
on 28
March 2014.
[30]
When a Court is faced with a situation where the applicant had
sufficient notice of the hearing but elected to do nothing about
it,
it must come to the aid of the party before it. The applicant cannot
therefore seek to rely on the unfounded allegation that
the Court did
not take into account the existence of a notice to oppose which was
already filed by the 28
th
March 2014.
[31]
On the applicant’s version its attorneys got to know about the
rescission application brought by the respondent timeously,
it was
aware of the date of hearing but took no steps of ensuring that when
the matter was before Court on 28 March 2014, its interests
were
protected.
[32]
In
Mutebwa v Mutebwa and Another
2001
(2) SA 193
(Tk HC) at 199 para 15F–G, the Court dealt with the
prerequisite factors for granting rescission under this Rule as,
firstly,
the judgment must have been erroneously sought or
erroneously granted, secondly such judgment must have been granted in
the absence
of the applicant, and, lastly, the applicant’s
rights or interest must be affected by the judgment. Once those three
requirements
are established, the applicant would ordinarily be
entitled to succeed,
cadit quaestio
.
The applicant is not required to show good cause in addition thereto.
[33]
In
Bakoven Ltd v G J Howes (Pty) Ltd
1992 (2) SA 466
(E) Erasmus J interpreted the words “
erroneously
granted
” to mean “
the
error committed by the Court which granted the order must be in the
form of a mistake in law which appears on the record of
the
proceedings itself. It follows, so he continued, that a Court in
deciding whether a judgment was erroneously granted is, like
a Court
of appeal, confined to the record of proceedings
”.
[34]
The kind of error envisaged in the Rule cannot be equated to what is
contended for by the applicant. I fail in the circumstances
of this
case to find the error relied upon by the applicant.
CONCLUSION
[35]
In conclusion the applicant failed to prove that the Court when
rescinding default judgment it did not have regard to the notice
to
oppose. It also failed to prove that the order was erroneously sought
or granted as envisaged in Rule 42 (1) .
[36]
In the circumstances the application must fail and the applicant
should bear the costs thereof.
ORDER
[37]
The application is dismissed with costs.
T.V.
NORMAN
ACTING JUDGE
OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL
DIVISION, JOHANNESBURG
COUNSEL FOR
APPLICANT A K VENTER
INSTRUCTED BY
TIM DU TOIT & CO INC
COUNSEL FOR
RESPONDENT D G KELA
INSTRUCTED BY
MKATA ATTORNEYS
DATE OF
HEARING 01 FEBRUARY 2016
DATE OF JUDGMENT 5
FEBRUARY 2016