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2020
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[2020] ZAGPJHC 219
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SA Taxi Impact Fund (RF) (Pty) Limited v Maluleka; SA Taxi Development Finance (Pty) Limited v Ndaba; SA Taxi Finance Solutions (Pty) Limited v Ngqukumba; Potpale Investments (Proprietary) Limited v Ntong (41614/2019; 19411/2019; 19546/2019; 40717/2019) [2020] ZAGPJHC 219 (11 September 2020)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 41614/2019
In
the matter between:
SA
TAXI IMPACT FUND (RF) (PTY)
LIMITED
Plaintiff
(Registration
Number:
2012/093936/07)
and
MALULEKA,
SEPODISANA
PIET
Defendant
(Identity
Number: […]
AND
CASE
NO: 19411/2019
In
the matter between:
SA
TAXI DEVELOPMENT FINANCE (PTY)
LIMITED
Plaintiff
(Registration
Number:
2008/012599/07)
and
NDABA,
MELIKHAYA
CLAREMAN
Defendant
(Identity
Number: […])
AND
CASE
NO: 19546/2019
In
the matter between:
SA
TAXI FINANCE SOLUTIONS (PTY)
LIMITED
Plaintiff
(Registration
Number:
2003/029687/07)
and
NGQUKUMBA,
MICHAEL
SOYISO
Defendant
(Identity
Number: […])
AND
CASE
NO: 40717/2019
In
the matter between:
POTPALE
INVESTMENTS (PROPRIETARY)
LIMITED
Plaintiff
(Registration
Number:
2011/118165/07)
and
NTONG,
VINCENT
THAPELO
Defendant
(Identity
Number: […])
REASONS
FOR ORDERS
(
Heard
remotely over Zoom platform 9 September 2020)
SNYCKERS
AJ:
INTRODUCTION
1.
These are reasons for orders granted in
four similar applications for default judgment heard over the Zoom
platform in unopposed
motion court on 9 September 2020.
2.
In all four applications, default judgment
was sought by vehicle financiers in the form of the repossession of
vehicles the subject
of credit agreements regulated by the National
Credit Act 34 of 2005 (“NCA”).
3.
In each case, the default judgment in
question was sought on the basis of default in entering an appearance
to defend.
4.
Each application came before me as a
“reconsideration” of a refusal on the part of the
registrar to grant default judgment.
Each reconsideration application
was brought under Rule 31(5)(d) of the Uniform Rules of Court.
5.
In two of the matters (
Ngqukumba
and
Ndaba
)
the reason supplied by the registrar for refusing to grant default
judgment was “
inconveniency (sic)
caused to Defendant”
. In the
other two matters (
Maluleka
and
Potpale
),
the reason furnished was “
cause of
action was completed outside the area of jurisdiction of this
Division
”.
6.
In each case, notice under s129(1) of the
NCA was served on the defendant outside the area of the jurisdiction
of this court. In
each case the defendant appeared to be neither
resident nor domiciled nor present in the area of jurisdiction of
this court when
summons was served. In each case, the relevant credit
agreement was concluded within the court’s jurisdiction.
7.
Counsel for the applicant submitted that
the registrar’s reason in each case appeared to be based on the
judgment of the Supreme
Court of Appeal in
Blue
Chip 2 (Pty) Limited tla Blue Chip 49 v Ryneveldt and Others
2016 (6) SA 102
(SCA). That decision concerned section 28(1)(d) of
the Magistrates’ Court Act 32 of 1944. It was submitted that
the
ratio
of that decision, which concerned itself with the jurisdiction of the
Magistrates’ Courts, was not applicable to actions
instituted
in the High Court and to the principles upon which jurisdiction was
assumed in the High Court. I deal with this below.
RECONSIDERATION
UNDER RULE 31(5)(d)
8.
Rule 31(5) provides as follows:
(
5)
(a)
Whenever
a defendant is in default of delivery of notice of intention to
defend or of a plea, the plaintiff, who wishes to obtain
judgment by
default, shall where each of the claims is for a debt or liquidated
demand, file with the registrar a written application
for judgment
against such defendant: Provided that when a defendant is in default
of delivery of a plea, the plaintiff shall give
such defendant not
less than five days' notice of the intention to apply for default
judgment.
(b)
The
registrar may-
(i)
grant
judgment as requested;
(ii)
grant
judgment for part of the claim only or on amended terms;
(iii)
refuse
judgment wholly or in part;
(iv)
postpone
the application for judgment on such terms as may be considered just;
(v)
request
or receive oral or written submissions;
(vi)
require
that the matter be set down for hearing in open court:
Provided that if the
application is for an order declaring residential property specially
executable, the registrar must refer such
application to the court.
(c)
The
registrar shall record any judgment granted or direction given.
(d)
Any
party dissatisfied with a judgment granted or direction given by the
registrar may, within 20 days after such party has acquired
knowledge
of such judgment or direction, set the matter down for
reconsideration by the court.
9.
The first question that arises is whether
“
a judgment granted or direction
given”
in Rule 31(5)(d) includes
a decision to refuse to grant default judgment.
10.
The
term “
grant
judgment”
in
the context of the registrar’s functions in respect of default
judgments certainly appears to be used in this Rule to envisage
the
granting of default judgment – see Rule 31(b)(i) and (ii) and
also Rule 31(6)(a) and (b). On the face of it, it is an
odd term in
the context to use to refer also to the refusal to grant default
judgment. The registrar is fulfilling a very restricted
quasi-judicial function when empowered to grant default judgment –
he or she is not sitting as a court whose pronouncements,
other than
the granting of default judgment under the Rule, can accurately be
described as “granting a judgment”.
[1]
Even if the refusal of a default judgment can be termed a “judgment”
by the registrar, as counsel submitted, it is
difficult to see how
this can be the “granting” of judgment, as nobody asked
for such refusal. It is also somewhat
strained to regard the refusal
to grant default judgment as the “giving” of a
“direction”.
11.
It is clear, however, that the entitlement
to seek reconsideration is not restricted to defendants against whom
default judgment
has been granted – the Rule specifically
refers to any party dissatisfied – and a plaintiff could well
be dissatisfied
with any of the more positive mandatory “directions”
contemplated in Rule 31(5)(b).
12.
The authors of
Erasmus:
Superior Court Practice
(RS11 2019
D1-376) invoke the definition of “party” in Rule 1 to say
of any dissatisfied party under Rule 31(5)(d):
“
This
includes the plaintiff and the defendant but not a non-litigant
having an interest in the action.”
13.
It remains strange that, if the Rule were
intended to cover the spectrum of decisions in Rule 31(5)(b), it did
not simply refer
to any decision of the registrar under Rule
31(5)(b), and instead confines itself to “judgments granted”
and “directions
given”. Perhaps it was thought
inappropriate to refer to “orders” and the term
“direction given”
was intended to cover all the possible
decisions contemplated in Rule 31(5)(b).
Prima
facie
this makes sense.
14.
Nevertheless,
in
Pansolutions,
[2]
the rationale for the existence of this Rule was based on the analogy
of the similar “reconsideration” opportunity
afforded by
Rule 6(12)(c) – to afford a party against whom a judgment was
granted in his or her absence the opportunity to
have it
“reconsidered” once presented with (at least part of) the
other side of the story. This rationale would be
wholly inapplicable
to a plaintiff who unsuccessfully sought default judgment.
15.
Pansolutions
is
cited in the
Erasmus
commentary
for being in conflict with
Bloemfontein
Board Nominees Ltd v Benbrook
[3]
on the nature of the power exercised by the court under Rule
31(5)(d). In
Benbrook
Hancke
J held that the court did not “
substitute
its own discretion for that of the Registrar”
but
should interfere only where the Registrar “
erred”
(“
fouteer”
).
[4]
In
Pansolutions
,
Swain J declined to follow
Benbrook
and held that the court did indeed “
substitute
its own discretion”
for that of the Registrar. Very different kinds of “
discretion”
were
at issue – in
Benbrook
,
a cost award by the registrar was at issue, something usually
regarded as a decision in the nature of a “strong” or
“true” discretion.
[5]
In
Benbrook
,
it was indeed the plaintiff who had set the matter down for
“reconsideration” of a cost award granted by the
registrar.
In
Pansolutions
,
the defendant sought rescission of a default judgment, and so the
“discretion” at issue in
Pansolutions
related
to the traditional requirement of “
good
cause”
for rescission – something that would not be troubling the
registrar at first instance.
16.
The criticism of
Benbrook
in
Pansolutions
did not extend to any difficulty with
allowing a plaintiff, to whom the rationales canvassed by Swain J in
Pansolutions
did
not apply, to utilise the provisions of the Rule.
17.
I revert below to the matter of a
discretion when I address the reconsideration decision itself.
18.
It seems to me that the Rule was indeed
intended to allow reconsideration by a dissatisfied plaintiff of any
decision of the registrar
taken under Rule 31(5)(b), including the
refusal of default judgment, which, even if not the “grant”
of a judgment,
must be accommodated as one of the possible
“directions given” contemplated in the Rule. A defendant,
after all, has
available the ordinary rescission route under Rule
31(6) or Rule 42, and the ability to have the application
“reconsidered”
by the court is something the rulemaker
appeared to me to seek to bestow on the unsuccessful plaintiff too. I
therefore do not
believe the reasons canvassed in
Pansolutions
,
relating to an ability to have reconsidered something granted in
one’s absence, are exhaustive in determining the scope
of the
Rule, nor its confined language.
19.
I do, however, agree with
Pansolutions
that the “reconsideration”
must be a reconsideration
de novo
.
Of course, anything the registrar said or did could be an important
consideration for the court in exercising its own discretion,
but
that does not mean it is appropriate to regard Rule 31(5)(d) as
creating some species of review, entailing deference to the
registrar. I revert to the issue of discretion below.
JURISDICTION
AND
BLUE CHIP
20.
Section 28(1)(d)
of the
Magistrates’
Courts Act 32 of 1944
conflates personal and subject-matter
jurisdiction of the Magistrates’ Courts. It confers
jurisdiction over any person, as
long as the whole of the cause of
action arose within the jurisdiction of the relevant lower court. And
so, for such jurisdiction
to vest in relation to persons residing
outside the jurisdiction, it is important that “the whole”
of the “cause
of action” should arise within the relevant
court’s jurisdiction.
21.
In
Blue Chip
,
it was determined that, for purposes of claims in relation to which
delivery of notice under
s129(1)
of the NCA was essential in order to
sue, it could not be said that the “whole cause of action”
arose within the relevant
jurisdiction if the
s129(1)
notice was
delivered outside the jurisdiction.
22.
Counsel submitted that the statutory
jurisdiction of the High Court was worded decisively differently, in
referring to “causes
arising” in
section 21(1)
of the
Superior Courts Act 10 of 2013
, rather than “the whole cause of
action”.
23.
The relevant part of
section 21(1)
reads:
“
A
Division has jurisdiction over all persons residing or being in, and
in relation to all causes arising and all offences triable
within,
its area of jurisdiction and all other matters of which it may
according to law take cognizance…”
24.
It
has, however, been long established that identically worded
provisions in predecessor statutes were question-begging in the sense
of not referring to causes of action, but rather to cases over which
the court properly assumed jurisdiction on recognised grounds.
The
“causes arising” formulation was therefore not itself a
jurisdiction-conferring provision.
[6]
25.
At
common law, the presence of a recognized basis for subject-matter
jurisdiction was insufficient in the absence of personal jurisdiction
or attachment or arrest to confirm jurisdiction. Yet statutes in this
country from early on prohibited attachment or arrest to
confirm
jurisdiction in relation to persons who were
peregrini
of
the court in question, but
incolae
of
the Republic as a whole. The current
section 28
of the
Superior
Courts Act continues
that rule. It was authoritatively established in
Veneta
Mineraria Spa
[7]
that the prohibition had the effect also of rendering attachment
unnecessary for jurisdiction in such cases, thereby implicitly
conferring jurisdiction on the High Court if a recognised
ratio
jurisdictionis
was
present, even in the absence of personal jurisdiction, in the case of
a local
peregrinus
.
26.
Counsel
was correct to submit that for High Court jurisdiction, jurisdiction
founded on the
locus
contractus
was
sufficient, even if performance, or some performance, were to take
place outside the jurisdiction of the court, or the cause
of action
needed completing in some or other way outside the jurisdiction of
the court.
[8]
Accordingly, it appears that invocation of
Blue
Chip
as
a basis for refusing default judgment would be wrong.
INCONVENIENCE,
JURISDICTION AND DISCRETION
27.
It may be noted, however, that the
registrar invoked jurisdiction twice and inconvenience twice.
28.
Should the existence of a sufficient basis
for jurisdiction be sufficient to grant default judgment?
29.
Ordinarily,
I would say yes. If a court is inclined to assume jurisdiction, and a
plaintiff entitled to institute action out of
it, it would seem
capricious to deny the plaintiff the ordinary remedy of default
judgment in all cases where, despite the existence
of jurisdiction,
the defendant is outside the area of jurisdiction of the court. After
all, as counsel submitted, a defendant may
seek a referral of the
matter from one jurisdiction to another.
[9]
Furthermore, a judgment obtained in this way may be more vulnerable
to rescission by a defendant who could more easily establish
good
cause, and that may be a risk the plaintiff takes in such cases.
30.
It was on this basis that I granted the
orders sought.
31.
In
preparing these reasons, however, I had occasion to consider the
judgment of the full court in
Thobejane
.
[10]
The full court was highly critical of the practice of finance houses
employing the convenience of High Court jurisdiction in cases
falling
within the jurisdiction of the lower courts (even if the Regional
Courts), as this amounted to a way of raising cost barriers
to poorer
litigants properly to defend the matters and could lead to, and in
fact mostly entailed, an abuse of the process of the
court. It
appears that several such matters are still being brought, and orders
routinely granted, in this court on the unopposed
roll, and some of
the orders granted by me in the week of 7 September would fall into
this category, as did all four the cases
at issue in the instant
matter (Regional Court jurisdiction, if not District Court).
32.
It appears to me in light of
Thobajane
to be important to discourage this practice in this court, and in
particular in cases where the defendant resides outside the area
of
jurisdiction of this court, despite the fact that this does not
deprive the court of jurisdiction as the
locus
contractus.
33.
In the instant cases, however, the
applications in question did raise serious questions of law that
required the attention of the
High Court, which tends to be a
sufficient basis for justifying the invocation of concurrent High
Court jurisdiction.
Frank
Snyckers
Acting
Judge
11
September 2020
For
applicants:
Rosalind Stevenson
Instructed
by
: Marie-Lou Bester Inc
Johannesburg
[1]
See
section 23
of the
Superior Courts Act 10 of 2013
in terms of
which the
grant
of default judgment by the registrar is deemed to be a High Court
judgment.
[2]
Pansolutions
Holdings Ltd v P&G General Dealers & Repairers CC
2011
(5) SA 608
(KZD), paras 9 to 11.
[3]
1996
(1) SA 631
(O).
[4]
At 634I.
[5]
See
Giddey
NO v JC Barnard & Partners
[2006] ZACC 13
;
2007
(5) SA 525
(CC)
footnote
17 and cases discussed there.
[6]
See
Bisonboard
Ltd v K Braun Woodworking Machinery (Pty) Ltd
[1990] ZASCA 86
;
1991
(1) SA 482
(A) at 486C.
[7]
Veneta
Mineraria Spa v Carolina Collieries (Pty) Ltd (in Liq)
1987
(4) SA 883
(A)
at
890. A digres
sion
on the fact that the wording of the statute, as was the case with
its predecessor, prohibits attachment only to “found”
jurisdiction, and not to “confirm” jurisdiction, is
unnecessary, given that it has always been interpreted to apply
to
both.
[8]
See for example
Roberts
Construction Co Ltd v Wilcox Bros (Pty) Ltd
1962
(4) SA 326 (A).
[9]
See
section 27(1)(b)(ii)
of the
Superior Courts Act.
[10
]
Nedbank
Ltd v Thobejane & Similar Matters
2019
(1) SA 594 (GP)