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[2016] ZAGPJHC 90
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Municipal Employees Pension Fund v Pro-Care Contracting (Pty) Ltd t/a Pro-Care Civils (A3080/2015) [2016] ZAGPJHC 90 (29 April 2016)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION
CASE
NO:
A3080/2015
DATE:
29 APRIL 2016
In
the matter between
MUNICIPAL
EMPLOYEES PENSION
FUND
..............................................................
APPELLANT
And
PRO-CARE
CONTRACTING (PTY) LTD t/a PRO-CARE
CIVILS
.......................
RESPONDENT
JUDGMENT
MAYET AJ:
[1]
This is an appeal against the refusal of the magistrate to grant
rescission of a default judgment granted against the appellant
in
favour of the respondent in the Kempton Park Magistrates’
Court.
[2]
The relevant factual circumstances that led to the appeal can be
summarized as follows:
[2.1]
The parties concluded a contact in terms of which the respondent
carried out certain building work, in particular, the upgrading
and
renovation of the paved areas and entrance to the Panorama Plaza in
Kroonstad.
[2.2]
LMV (Pty) Ltd, a consulting firm of engineers was appointed by the
appellant to manage the project and to sign off on all
work done by
the respondent and to issue a payment certificate for settlement by
the appellant when satisfied with the standard
of workmanship.
[2.3]
Furthermore the contract made provision for a 10% retention of the
total value of the contract which would be held for a period
of
twelve months after the contract had been completed and after the
consulting engineers had signed off on the project so as to
protect
the appellant against any latent defects in the workmanship.
[2.4]
In June 2011 the consulting engineers, LMV (Pty) Ltd confirmed that
the project had been completed professionally to its satisfaction
and
signed off on the contract in June 2011.
[2.5]
On 8 August2012, after one year had elapsed, LMV (Pty) Ltd issued the
final certificate of payment and confirmed that it was
satisfied with
work done by the respondent which meant that the retention money
became due and payable.
[2.6]
As a result of non-payment of the retention money despite demand, the
respondent sued the appellant in the Kempton Magistrate’s
Court
and was granted default judgment in the sum of R67, 679.64 plus
interest and costs.
[3]
The requirements for a successful application for rescission are set
out in Grant v Plumbers (Pty) Ltd 1949(2) SA 470 (O) at
470-477:
“
(a)
He must give a reasonable explanation of the default. If it appears
that his default was wilful or that it was due to gross
negligence
the court should not come to his assistance.
(b)
His application must be bona fide and not made with the intention of
merely delaying the Plaintiff’s claim.
(c)
He must show that he has a bona fide defence to the plaintiff’s
claim. It is sufficient if one makes out a prima facie
defence in the
sense of setting out averments, which if established at the trial
would entitle him to the relief asked for. He
need not deal fully
with the merits of the case and provide evidence that the
probabilities are actually in his favour.”
Wilful
default
[4]
I deal firstly with the explanation provided by the appellant for the
default. The absence or default must be set out fully
because it is
relevant to the question whether or not the default was wilful. In
Silber v Ozen Wholesalers (Pty) Ltd 1954(2) SA
345(A) at 353, the
court held that the applicant should at least furnish an explanation
for his default sufficiently to allow the
court to understand how it
really came about and to assess his conduct and motive. The appellant
contends that it only became aware
of the default judgment granted
against it when the sheriff called on its premises on 3 December 2013
to attach the appellant’s
movable assets. In his founding
affidavit the CEO, Mr Letjane states that he immediately investigated
the matter and on 3 December
2013 he established that the respondent
addressed a letter dated 7 November 2013 to notify the appellant of
the default judgment.
However that letter was also not brought to his
attention and he was of the view that a member of his administrative
staff simply
filed the document. This explanation is not plausible
because the letter was addressed to and received by a senior member
of his
staff, one Anna Capelhina who is the property manager of the
appellant.
[5]
Mr Letjane also denies ever having received the summons despite the
return of service showing that it was served on the appellant’s
premises on 28 June 2013 and that it was received by Mrs Visagie who
is a manager. Mr Letjane’s averment that Mrs Visagie
has no
recollection of receiving the summons cannot be true because there is
prima facie
evidence that it was served on her as reflected on
the return of service. The further averment that if it had been
served on her
she would have given it to an unnamed responsible
person borders on the absurd. There is no reasonable explanation
offered by Mrs
Visagie to explain her selective amnesia in regard to
the summons.
[6]
It is abundantly clear that Mr Letjane used his authority to
undermine the professional standard of his managers by creating
the
impression that they were all incompetent and he was the only one
capable of dealing with the summons. This is quite disingenuous
and
does not in any way explain fully the reason for the default. The
court a quo was correct in rejecting the flimsy explanation
given by
Mr Letjane and for finding that the appellant was in willful default.
Bona
fide defence
[7]
The appellant contends that it has a bona fide defence to the
respondent’s claim, a counterclaim thereto and it has
reasonable
prospects of success. In support hereof the appellant
refers to an oral exchange between its Head of Procurement and Chief
Quantity
Surveyor, Mr Maluka and its consulting engineers that the
retention money would not be paid until the outstanding defects in
the
paving had been attended to and rectified.
[8]
The defects listed in appelant’s founding affidavit included
the following:
[8.1]
Incorrect pavement curbing;
[8.2]
Parking markings had been painted and not sandblasted as required and
had faded;
[8.3]
Designated and disabled parking was incorrectly sized and/or located.
The correctly sized bay was located too
far from the
entrance and the bays, correctly located, were of an insufficient
size to accommodate disabled persons. A grainy photograph
was
attached to show the defects referred to above.
[9]
However all of the above was refuted by its designated principal
agent LMV (Pty) Ltd who confirmed in writing that the minor
defects
in respect of broken paving had been carried out by the contractor.
[10]
On 4 October 2014 a meeting was held at the offices of the appellant
to discuss among others, the delay in payment of the retention
money.
The meeting was attended by Mr Maluka, Ms Ana Capelinha and other
staff from the appellant’s office as well as by
Mr Boshoff from
the consulting engineers. This meeting was fruitful in that all
outstanding issues were resolved to the satisfaction
of the relevant
parties and it was agreed that the retention money would be paid
immediately to the respondent. This was confirmed
in an email
addressed to Ms Capelinha who, in her reply on the very same day,
gave an undertaking to pay within a week.
[11]
However payment did not take place and on 7 November 2013 Ms
Capelinha apologized for the delay in payment in an email and
confirmed that her Managing Director had approved payment of the
invoice. Furthermore she asked if the respondent would accept
payment
with no interest charges as well as no legal fees.
[12]
In the circumstances it does not help the appellant to make the bald
statement that Ms Capelinha was not in a position to undertake
to
make payment on its behalf as she was not aware of the “extent
of issues” since she was present at the meeting in
October 2013
when the first undertaking was given to make immediate payment. She
gave the second undertaking to make payment after
her Managing
Director approved the invoice for payment. It cannot be said
therefore that she acted impulsively and outside her
mandate.
[13]
All of the above leaves no doubt that the appellant knew at all
material times that it was indebted to the respondent for payment
of
the retention money which became due and payable on 31July2012
[14]
In an attempt to avoid the consequences of its acknowledgement of the
debt and its undertaking to make immediate payment of
the retention
money to the respondent, the appellant tried to pass off the offer of
payment as a settlement offer. This conduct
of the appellant must be
condemned as a ploy to delay payment as there was never any mention
of settlement negotiations at the
meeting nor in any of the
correspondence between the parties when the undertaking was given to
make immediate payment.
[15]
Despite referring to a counterclaim as part of its bona fide defence,
the appellant has made no attempt whatsoever to obtain
quotations
presumably because the work was signed off by its consulting
engineers as having met its approval.
[16]
With due regard to the conduct of the appellant in delaying payment
of the retention money by firstly challenging the right
of its
authorized principal agent to sign off on the work and issue the
final certificate of payment; challenging the undertaking
given by
its Property Manager to make immediate payment and instituting a
supposed counterclaim without supporting quotations,
demonstrates
that the rescission application and this appeal has been brought to
merely delay payment and frustrate the respondent.
[17]
I am in agreement with the Magistrate’s finding that the
appellant has no bona fide defence. Consequently the appeal
must
fail.
In
the result I propose the following order:
The
appeal is dismissed with costs.
A
MAYET
ACTING
JUDGE OF THE HIGH COURT
GAUTENG
LOCAL DIVISION
I
agree, and it is so ordered.
WHG
VAN DER LINDE
JUDGE
OF THE HIGH COURT
GAUTENG
LOCAL DIVISION
APPEARANCES
FOR
THE APPELLANT: ADVOCATE ROBERT WILSON
INSTRUCTED
BY: DOCKRAT INCORPORATED
FOR
THE RESPONDENT: ADVOCATE H P VAN NIEUWENHUIZEN
INSTRUCTED
BY: E.P. DU PREEZ ATTORNEYS
Date
argued: 18 April, 2016
Date
judgment: 29 April, 2016