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[2020] ZAGPJHC 133
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Basithandile Trading (Pty) Limited t/a BTRM Civils and Mining v Khum MK Investments CC (35226/2018) [2020] ZAGPJHC 133 (28 April 2020)
IN THE HIGH COURT
OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO
:
35226/2018
DATE
:
28
th
April 2020
In
the matter between:
BASITHANDILE
TRADING (PTY) LIMITED t/a
BTRM
CIVILS AND
MINING
Plaintiff
and
KHUM
MK INVESTMENTS
CC
Defendant
Coram:
Adams J
Heard
:
22 April 2020
Delivered:
28 April 2020 – This judgment was handed down
electronically by circulation to the parties' representatives by
email, being
uploaded to the CaseLines system of the GLD and by
release to SAFLII. The date and time for hand-down is deemed to be
11h00 on
28 April 2020.
Summary:
Practice and Procedure – application for
rescission of default judgment – whether defence
prima
facie
established – application
for rescission granted
ORDER
(1)
The defendant is granted condonation of its
late filing of its application for rescission.
(2)
The defendant’s application for
rescission succeeds.
(3)
The summary judgment granted by default by
this court on 14 January 2019 is rescinded and set aside.
(4)
The defendant shall deliver its plea and
counterclaim (if any) within twenty days from date of this order.
(5)
The costs of the application for rescission
shall be in the course of the main action.
JUDGMENT
Adams
J:
[1].
I shall refer to the parties as referred to
in the main action. The defendant is the applicant in this
application for rescission
and the plaintiff is the respondent.
[2].
The defendant applies
for the setting aside of a summary judgment granted against it by
this court (Wepener J) by default in favour
of the plaintiff on the
14
th
of January 2019. In terms of the summary judgment the defendant was
ordered to pay to the plaintiff the sum of R678 264.16,
together
with interest thereon and costs.
[3].
Default judgment was
obtained by the plaintiff on the basis of a blasting agreement (‘the
agreement’) concluded between
the plaintiff and the defendant
on the 28
th
of January 2016. In terms of the agreement the plaintiff was to
provide ‘blasting and rock drill’ services to the
defendant at an agreed contract price. These services were to be
rendered at the Ezithobeni Heights Housing Development Project,
a
mixed-type housing development project of the City of Tshwane. The
plaintiff’s claim was in essence for services rendered
and
material supplied at the special instance and request of the
defendant.
[4].
It is the case of the
plaintiff that by the 15
th
of July 2017, pursuant to the agreement, and after certain of the
blasting and rock drilling services had already been rendered,
the
defendant had been invoiced by then for a total amount of
R1 033 264.16, which amount was not paid in full by the
defendant. The plaintiff in fact rendered an invoice number 007 on
the 28th of November 2016 for an amount of R574 503.31
and on
the 28th of June 2017 invoice number 008 for an amount of
R458 760.85. The total of these two invoices amount to the
aforesaid sum total of R1 033 264.16. Of this amount,
according to the plaintiff, the defendant had only paid the sum
of
R355 000, leaving a balance of R678 264.16.
[5].
What subsequently
happened was that on the 20
th
of July 2017, following further services rendered by the plaintiff,
so it (the plaintiff) pleaded and alleged in its answering
affidavit,
the defendant acknowledged that it would be indebted to the plaintiff
in the balance outstanding, being R678 264.16,
on completion of
the remaining blasting of 638 cubic meters. This agreement was
reduced to writing in a document styled ‘Agreement
with
mandatory – Acknowledgment’, signed on the 20
th
of July 2017 on behalf of the defendant by its Project Manager, Mr
Themba Tibane, after it had been signed on behalf of the plaintiff
on
the 14
th
of July 2017.
[6].
I read and interpret
this document, which clearly contains a patent typographical error in
that it records that invoice number 007
was issued on the 28
th
of November 2017 when in fact and in truth it was issued on the 28
th
of November 2016, to indicate that the agreed total amount due by the
defendant to the plaintiff in terms of the agreement would
be the
R1 033 264.16 referred to above after the works had been
completed. Moreover, this agreement records on the 20
th
of July 2017 that the defendant had paid to the plaintiff an amount
of R355 000 on account of its indebtedness to the plaintiff,
leaving a balance due to the plaintiff of an amount of R678 264.16,
which would have been payable within thirty one days of
completion of
the blasting of 638 cubic meters, representing the remainder of the
works in terms of the agreement. In my judgment,
the aforegoing is
common cause especially if regard is had to the fact that under the
heading ‘Acceptance’ at the bottom
of this acknowledgment
Mr Tibane confirms that he understood and accepted the declaration in
and the contents of the acknowledgment.
[7].
The point is simply
this: as and at the 20
th
of July 2017 the defendant acknowledged that the total amount due in
terms of the blasting contract is the sum of R1 033 264.16
and that the balance due and payable on completion of the works would
be the amount of R678 264.16. It needs to be born in
mind that
by then the agreement had been extant for a period of approximately
eighteen months. At that point no mention had been
made by the
defendant or its project manager of any supposed defective or
unsatisfactory performance on the part of the plaintiff
in terms of
the agreement, which would have entitled the defendant to cancel the
agreement and / or to claim damages from the plaintiff
for breach of
contract. However, on the same day, being the 20
th
of July 2017, Mr Tibane had addressed an email to the plaintiff at
11:36 AM, in which he expressed the defendant’s dissatisfaction
with the fact that, notwithstanding its undertaking to do so, the
plaintiff had not by then – Thursday, the 20
th
July 2017 – completed the blasting. The plaintiff was therefore
requested to ‘hand over the site to a new blaster’.
[8].
How does one
reconcile the email from Mr Tibane on the 20
th
of July 2017 and the acknowledgment by him on the same day on behalf
of the defendant? The answer to this question is to be found
in the
plaintiff’s answering affidavit in which it is explained that
the acknowledgment agreement was in response to the
ultimatum
contained in the email and the plaintiff’s complaint in
response thereto that their invoices were not being paid.
[9].
All the same, on the
basis that the remaining job had been completed, the plaintiff sued
the defendant for the said amount and subsequently
obtained the
judgment for the said sum.
[10].
The central issue in
this application for rescission is whether the defendant disclosed a
bona fide
defence to the plaintiff’s claim in the sense of setting out
averments, which, if established at trial, would entitle it
(the
defendant) to a dismissal of the plaintiff’s claim. The
question is this: has the defendant established such a defence.
If
so, then the application should succeed and conversely, if not, then
the application stands to be dismissed.
[11].
In the founding
affidavit the defendant contends that the plaintiff ‘failed to
render the blasting services to the [defendant]
and caused [it]
substantial damages which the [defendant] will claim against the
[plaintiff] by way of a counterclaim’. The
defendant
furthermore alleges that the plaintiff was required to blast deep
enough so that the sewer line could be laid, which
meant that the
blasting should also be level. In breach of these provisions of the
agreement, so the defendant alleged in its founding
affidavit, the
plaintiff failed to complete the blasting in accordance with the
agreement. This, as well as certain delays in the
completion of the
contract which the defendant laid at the door of the plaintiff, in
turn caused the defendant damages, estimated
at R950 000, which
it (the defendant) intends properly quantifying and counterclaiming
in the main action.
[12].
In its founding
affidavit the defendant furthermore avers that from time to time it
paid to the plaintiff certain amounts of money
– some of it for
actual blasting which had by then been done and some payments in
advance for blasting to be done. This resulted,
so the defendant
alleged, in the plaintiff being ‘overpaid in the amount of
R1 189 549.63’. How this amount
is arrived at is
however somewhat of a mystery as the defendant simply states that:
‘Proof of this amount will be provided’.
I find this
rather peculiar in view of the fact that the founding affidavit was
deposed to on the 2
nd
of May 2019, which is some twenty months after the defendant had
requested the plaintiff to stop working on the project. It is
difficult to understand why details of this amount could not be
provided as and at the time when the application was launched.
The
defendant does however provide a schedule of payments to the
plaintiff from April 2016 to August 2017, which is described by
the
defendant as a ‘schedule of some of the payments made to the
[defendant]’. The sum total of the payments to the
plaintiff,
according to this list, is the amount of R745 000. Even this
schedule of payments is not supported or corroborated
in any way by
documentary evidence such as bank account statements or some other
forms of electronic proofs of payment.
[13].
The overall tendency
of the founding affidavit is to make of averments of a general
nature, with very little, if any details relating
to the particulars
of such averments. So, for example, the defendant alleges that,
following the cancelation of the agreement,
a new contractor was
appointed at a cost of R200 000 to ‘remedy the
[plaintiff’s] defective blasting and to continue
with the
completion of the blasting’. No details of the new contractor
are furnished and no documentary proof of the alleged
payment of the
amount to this new contractor is furnished.
[14].
The plaintiff
disputes the defendant’s defence. It denies that its
performance in terms of the agreement was defective or
delayed. The
plaintiff insists that it ‘rendered diligent and adequate
services to the [defendant]’ and that it had
completed the
blasting of the remaining 638 cubic square meters as per the
agreement of the 20
th
July 2017. This is confirmed, so the plaintiff contends, by the fact
that the defendant’s foreman and its project manager
had signed
off on the works up to the 28
th
of August 2017. The documents in support of the aforegoing claim are
however not explained by the plaintiff and my cursory perusal
of same
seems to afford corroboration for the version of the plaintiff. My
reading of the said documents suggests that from the
27
th
of July 2017 the volume blasted amounted in total to 610.2 cubic
meters, which would have been about five per centum less than
what
was envisaged in the acknowledgment agreement.
[15].
As regards payment by
the defendant on account of its indebtedness to the plaintiff, the
latter denies having received payment from
the defendant of the total
amount of R1 189 549.63 or, for that matter, payment of the
sum of R745 000. As indicated
above, it is the plaintiff’s
case that the total amount received from the defendant on account of
its indebtedness to plaintiff
was the sum of the R355 000. The
version of the plaintiff on this aspect of the matter appears to be
strongly supported by
the written acknowledgment agreement between
the parties dated the 20
th
July 2017. The defendant explains the incongruity in its case by
referring to the email communication from Mr Tibane to the plaintiff
on the morning of the 20
th
July 2017, in which the following is said:
‘
[The
defendant] will reconcile [the plaintiff’s] invoices and pay
what is due to [it] when the client pays.’
[16].
What the defendant
therefore says is that, notwithstanding the declaration in the
acknowledgment agreement that by the 20
th
July 2017 it had paid to the plaintiff amounts totalling R355 000,
that statement is not actually true because the defendant
still
intended reconciling the plaintiff’s accounts with a view to
calculating the balance to plaintiff by the defendant.
The
questionability of this statement is self-evident.
[17].
The plaintiff
therefore maintains that the defendant’s application for
rescission should be refused with costs.
The
Law and its application
in casu
[18].
The defendant’s
application for rescission and the setting aside of the summary
judgment granted against it is in terms of
Uniform Rule of Court
31 (2) (b) and the common law.
[19].
Rule 31 (2) provides
as follows:-
‘
(2)
(a) Whenever in an action the claim or, if there is more than one
claim, any of the claims is not for a debt or liquidated demand
and a
defendant is in default of delivery of notice of intention to defend
or of a plea, the plaintiff may set the action down
as provided in
subrule (4) for default judgment and the court may, after hearing
evidence, grant judgment against the defendant
or make such order as
it deems fit.
(b)
A defendant may within 20 days after acquiring knowledge of such
judgment apply to court upon notice to the plaintiff to set
aside
such judgment and the court may, upon good cause shown, set aside the
default judgment on such terms as it deems fit.’
[20].
In this matter the
summary judgment was granted against the defendant because there was
no appearance on its behalf on the day of
the hearing of the
application for summary judgment. The attorney for the defendant,
after he delivered notice of appearance to
defend, appears to have
seriously neglected his client’s matter in that he did not give
the necessary attention to the application
for summary judgment,
which had been served on their offices on the 5
th
of December 2018. In the notice of application for summary judgment
it was indicated that the application for summary judgment
would be
heard in this court on 14
th
of January 2019. The matter was neglected, as I said, in that the
notice of application for summary judgment was ignored completely.
Additionally, no affidavit resisting summary judgment by the
defendant was filed and importantly there was no appearance on behalf
of the defendant on the day of the hearing of the application for
summary judgment, hence summary judgment was granted by default
against the defendant.
[21].
Strictly speaking,
this application for rescission does not fall within the ambit of
rule 31(2). However, it was a ‘default
judgment’ as
envisaged by rule 31(2)(b) and I am of the opinion that the
circumstances in the matter are appropriate and,
provided the other
requirements are met, the summary judgment granted
in
casu
in
contradistinction to a default judgment may also be set aside in
terms of the said rule.
[22].
In terms of Rule
31(2)(b) and the common law, the court has a discretion, upon good
cause shown, to set aside a default judgment.
‘On good cause
shown’, and the requirements for an application for rescission
have been stated to be as follows:
(a).
The applicant
must give a reasonable explanation for his 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 plaintiff’s
claim.
(c).
He must show
that he has a
bona
fide
defence to plaintiff’s claim. It is sufficient if he 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
needs not
deal fully with the merits of the case, and produce evidence that the
probabilities are actually in his favour.
[23].
The authority for the
aforegoing trite legal principle is
Grant
v Plumbers (Pty) Ltd
1949 (2) SA 470
(0), which has been confirmed by numerous subsequent
cases.
[24].
Generally, an
applicant will establish good cause by giving a reasonable
explanation for his default and by showing that he has
a
bona
fide
defence to the claim of the respondent which
prima
facie
has
some prospect of success.
[25].
As regards the
defendant’s explanation for its default judgment, I am of the
view that in its founding affidavit the defendant
gave a satisfactory
explanation. As indicated above, the attorney designated at the
attorneys of record of the defendant to deal
with this instruction
neglected the matter. This was probably due to the fact that he was
in the process of emigrating at the relevant
the relevant time. He
did not give the matter the necessary attention and allowed the
application for summary judgment to be granted
by default and without
notifying the defendant of the said application. The said attorney
had in fact caused notice of appearance
to defend to be delivered on
behalf of the defendant, but failed to oppose the application for
summary judgment on the 14
th
of January 2019.
[26].
The simple fact of
the matter is that the defendant was blissfully unaware that the
application for summary judgment had been served
on its legal
representatives. Notice of the service of such application was not
brought to its attention, hence its default. It
only became aware of
the summary judgment
ex
post facto
on the 28
th
of January 2019.
[27].
I am satisfied that
the defendant has proffered an acceptable explanation for its
default. In any event and however one views this
matter, the
defendant has furnished an explanation for the default, an even is
such explanation was not reasonable, it would not
have made a
difference, in my judgment, to the final outcome of the application
for rescission. That is so because a ‘weak’
explanation
can and should be complemented by a ‘strong’
bona
fide
defence.
[28].
So for example Miller
J in
Chetty
v Law Society, Transvaal
1985 (2) SA 756
(A)
had the following to
say:
‘
It
is not sufficient if only one of these two requirements is met; for
obvious reasons a party showing no prospect of success on
the merits
will fail in an application for rescission of a default judgment
against him, no matter how reasonable and convincing
the explanation
of his default. Any ordered judicial process would be negated if, on
the other hand, a party who could offer no
explanation of his default
other than his disdain of the Rules was nevertheless permitted to
have a judgment against him rescinded
on the ground that he had
reasonable prospects of success on the merits’
[29].
The defendant also
applied for condonation for the late filing of the application for
rescission, which was lodged only on the 27
th
of May 2019, despite the fact that the notice of the judgment came to
its attention on the 28
th
of January 2019. Therefore, there appears to be an undue delay of
about four months in the filing of the application for rescission
–
the uniform rule requires that the application be delivered within
twenty days from the date on which the judgment debtor
received
knowledge of the judgment.
[30].
The defendant’s
explanation for the delay relates to the fact that, with its
attorney’s departure from South Africa
and from the firm of
attorneys representing it, the said firm was required to transfer the
matter to another attorney in the firm.
Once the new attorney had
been appointed, the defendant was required to gather the necessary
data and particulars so that it could
instruct its legal
representatives to formulate the defence, whereafter the papers were
drawn up.
[31].
There existed a
dispute between the defendant and the plaintiff, so the defendant’s
explanation continued, as to the amount
of blasting which was
undertaken by the respondent and whether the blasting conformed to
the requirements of the agreement. A reconciliation
of the amounts
paid to the plaintiff as compared to the blasting undertaken by it
was also required to be undertaken. It was therefore
necessary for
the purposes of launching the rescission application for the
defendant to undertake a search for the documentation
required for
the purposes of the rescission application. This, so the defendant
contends, is a reasonable explanation for the delay
and for its
non-compliance with the time period of twenty days prescribed by rule
31(2)(b) for the delivery of an application for
rescission.
[32].
The explanation for
the delay appears to be a
tad
light on the detail. However, in the bigger scheme of things, the
said explanation may very well be tenable. Moreover, in the context
of applications for condonation it is trite that an important
consideration in deciding whether or not to grant such condonation
is
the applicant’s prospects of success as regards the main
application, which, in this case, is the application for rescission.
[33].
I am of the view that
the applicant did not delay, more than was reasonable, the launching
of the application for rescission following
the granting of the
judgment. Furthermore, in view of my findings relating to the
prospects of success of the main application
for rescission, I am of
the view that the condonation should be granted.
[34].
That brings me to the
most important issue before me, that being whether or not a triable
issue has been raised by the defendant.
In sum, the defendant
disputes liability for the judgment debt on the following bases:
Firstly, it alleges that it had paid to
the plaintiff in total an
amount of R1 189 549.63 and to date of its founding
affidavit the defendant was able to identify
payments totalling
R745 000. In this application the evidence in support of this
averment by the defendant is wholly unsatisfactory
especially in the
face of the contents of the agreement of acknowledgment of the 20
th
of July 2017. The plaintiff, on the other hand contends that the
defendant had paid to it R355 000 for services rendered pursuant
to the agreement. This claim by the plaintiff appears to be supported
by the said agreement. On the other hand though the email
from the Mr
Tibane affords some corroboration for the defendant’s version
that the account would still have been reconciled.
All things
considered, I accept that on this issue the defendant has raised a
triable issue. I do not think that the defendant’s
version on
that aspect, even with its flaws, can and should be rejected out of
hand.
[35].
Secondly, the
defendant alleges that the plaintiff had breached the agreement by
its defective and late performance, which resulted
in the defendant
suffering damages, which it intends counterclaiming from the
plaintiff in the main action. The plaintiff disputes
this.
[36].
The question
therefore is whether the application for rescission of the judgment
should be granted on the basis that the defendant
established a
bona
fide
defence. In relation thereto, see
Grant
v Plumbers (Pty) Ltd
(supra) at 476 and
Chetty
v Law Society
(supra) at 764I-765H. In my judgment, that question should be
answered in the affirmative. As I have already indicated, the
defendant
has raised issues which are triable and that is so despite
the fact that its case in this application has a number of notable
defects,
not the least of which is the dearth of particulars and
details relating to those defences.
[37].
I am therefore of the
view that the defendant has complied with all of the requirements for
the granting of an order for the rescission
of the default judgment.
[38].
The application for
rescission should therefore succeed.
Costs
[39].
The general rule in matters of costs is
that the successful party should be given his costs, and this rule
should not be departed
from except where there are good grounds for
doing so, such as misconduct on the part of the successful party or
other exceptional
circumstances. See:
Myers
v Abramson
, 1951(3) SA 438 (C) at 455.
[40].
In this matter the defendant is the party
asking for an indulgence from the court and it should therefore bear
the cost of the application
for rescission, at the very least the
cost of the application on an unopposed basis. The defendant however
contends that the plaintiff
was unreasonable in opposing the
application and should therefore bear the costs of opposing the
application. I disagree. I have
alluded
supra
to the fact that the evidence in support of the defendant’s
application, whilst entitling the defendant to a rescission,
was
unsatisfactory in a number of respects.
[41].
The ruling on the viability of the
defendant’s defence on paper may very well have gone against
the defendant if more particulars
had been furnished to the court by
the defendant or, for that matter, by the plaintiff in its answering
affidavit. It would therefore
be innately unfair to grant a cost
order at this stage against any of the parties. Who is wrong and who
is right in this application
for rescission? This question cannot be
answered definitively at this stage. The answer to the question will
only accurately present
itself after all of the evidence have been
heard and a judgment given on the merits of plaintiff’s claim.
[42].
In the exercise of my discretion, I
therefore intend ordering the costs of this application for
rescission to be in the course of
the main action. Such an order, in
my view, is just, fair and in the interest of justice.
Order
In
the result, I make the following order:
(1)
The defendant is granted condonation for
the late filing of its application for rescission.
(2)
The defendant’s application for
rescission succeeds.
(3)
The summary judgment granted by default by
this court on 14 January 2019 is rescinded and set aside.
(4)
The defendant shall deliver its plea and
counterclaim (if any) within twenty days from date of this order.
(5)
The costs of the application for rescission
shall be in the course of the main action.
Judge of the High
Court
Gauteng Local
Division, Johannesburg
HEARD ON:
22 April 2020
JUDGMENT DATE:
28
th
April
2020
FOR THE PLAINTIFF:
Mr M W Sekgatja
INSTRUCTED BY:
Radasi Sekgatja &
Associates Incorporated, Johannesburg
FOR
THE DEFENDANT:
Adv
C Gibson
INSTRUCTED
BY:
Cuzen
Randeree, Johannesburg