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[2021] ZAGPJHC 366
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PM Africa Project Management (Pty) Ltd and Another v Trencon Construction (Pty) Ltd (2019/36963) [2021] ZAGPJHC 366 (3 June 2021)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, JOHANNESBURG
Reportable:
No
Of
interest to other judges: No
3
June 2021
Case
number: 2019/36963
In
the application of:
PM
Africa Project Management (Pty)
Ltd
First Applicant
Padayachee,
Nalentheren Moonsamy
Second Applicant
and
Trencon
Construction (Pty) Ltd
Respondent
JUDGMENT
Vally
J
Introduction
[1]
The first applicant applies for the
rescission of a default judgment (judgment) obtained from the
Registrar of this court. The respondent
opposes the application and
counter applies for an order against the second applicant. Should it
be found that the default judgment
is to be rescinded, the counter
application of the respondent requires no further consideration.
Facts
[2]
On 20 February 2019 the respondent issued
summons against the first and second applicants claiming therein that
the first applicant
was bound by an acknowledgement of debt (AOD)
concluded between itself and the first applicant. The AOD records
that the first
applicant is indebted to the respondent in the sum of
R2 187 977.99. It claimed further that the second applicant
found
himself as surety and co-principal debtor of the debt recorded
in the AOD. The AOD was concluded on 20 January 2011.
[3]
The summons was not served on the second
applicant. It was served on the first applicant per Sheriff on 20
February 2019 at its
chosen
domicilium
citandi et executandi
(
domicilium
).
The return of service (return) records that the summons was served
‘by delivering it at the main door’. After
recording this the Sheriff remarked:
‘
Kindly
note that the undersigned was informed by Mrs Portia, Cleaner that
the Defendant left the given address 2013’
[4]
The return was served on the
domicilium
five years after the first applicant had vacated it.
[5]
No notice of opposition was received from
the first applicant. Application for default judgment was made to the
Registrar. It succeeded.
The default judgment was granted against the
first applicant on 29 June 2019. Noting from the return that the
first applicant did
not operate from the
domicilium
the respondent employed a tracing agent on 4 July 2019 to locate the
business address of the first applicant. The tracing agent
advised
that it operates from [....] T[....] Close, S[....] Gardens,
Broadacres (T[....] Close). The second applicant resides
at
T[....] Close. The respondent instructed the Sheriff on four
separate occasions to serve a warrant of execution at T[....]
Close
on the first applicant, and on each occasion he was unable to do so
as the premises were closed.
[6]
On 21 August 2019 the judgment came to the
attention of the second applicant. On behalf of the first applicant
he instructed attorneys
to apply to have the judgment rescinded. The
attorneys attempted to locate the court file, but were unsuccessful.
Forty-six court
days later the first applicant’s application
for rescission was served on the respondent. The reason given for
taking this
long for preparing and serving the application was that
the attorneys were battling to locate the court file. Only on 20
September
2019 – one month after receipt of the judgment –
did they deem it appropriate to call on the respondent’s
attorneys
to forward a copy of the file to them. The first
applicant’s attorneys only briefed counsel to consider the
matter on 3 October
2019, and a consultation with counsel was only
arranged for 7 October 2019. Counsel took until 18 October 2019 to
settle the application
for rescission. The application was eventually
filed on 22 October 2019, i.e. two months after the judgment came to
the attention
of the second applicant. Its contention is that the
judgment was erroneously granted in the absence of the first
applicant. Realising
that it took longer than it ought to bring the
application – the application should have been brought within
20 days of the
judgment - the first applicant seeks condonation for
its delay in bringing the application. This paragraph provides the
factual
basis for the condonation.
[7]
The main ground for seeking rescission of
the judgment is that the summons was not received by, nor did it come
to the attention
of, both applicants. Had they received it, both of
them would have filed the necessary papers in opposition. Their
opposition,
as set out in the founding papers, would have been based
on an allegation that there existed an oral contract between the
first
applicant and the respondent which absolved the first applicant
from liability for the debt. In answer to this contention the
respondent
denied that any such oral contract was concluded. In
replying to the denial of the respondent the first applicant attached
certain
correspondence between the second applicant, acting on behalf
of the first applicant, and a Mr Dino Singh (Mr Singh). The
correspondence
consists of two key emails. The first one was sent by
the second applicant to Mr Singh, and the second one is a response
thereto
from Mr Singh. The first one reads:
‘
Thank
you for meeting with me on Thursday, much appreciated. Attached find
the Agency agreement for the different opportunities
we discussed.
Please note the following
is my thinking;
1.
Lakeview Hospital; if we look at 1.5% of
est. value at about R 28m, that equates to about R420k. This
obviously is inclusive of
any future work that we are working on
together to get from the same client.
2.
Gauteng Schools; if we look at 1,5% of est.
Value of about R400m(conservative figure), that equates to about R6m
3.
Take 6.42m less what PMA owes Trencon =
R1,8m plus another R2m for your very generous help and my thanks to
you for believing in
me.
I trust that the above is
acceptable to you and once again want to express my deepest gratitude
to you in the help rendered to me
when everything else seem to fail
around me.
I will send you the
Ethopia one shortly.’ (Quote is verbatim).
The
second one reads:
‘
No
my man the only I agreed was to think about was R500k Multiplied by 3
which I am still thinking about.’ (Quote is verbatim).
[8]
The first applicant also supplemented its
claim for the rescission by contending that the debt, which it says
was no longer in existence
because of the oral agreement,
nevertheless had prescribed by the time summons was served. It is
important to note that the replying
affidavit was filed seven months
after the answering affidavit was received. There is an application
for condonation for its late
filing. The explanation given is that
the second applicant, who is acting on behalf of the first applicant
as well as himself,
encountered financial difficulties in paying the
legal fees to prosecute the application. He claims that these have
now been overcome.
[9]
The respondent filed a further affidavit
dealing with this new matter in the replying affidavit. The root of
its case is that the
applicants have no
bona
fide
defence to the claim. It points
out that the correspondence attached to the first applicant’s
replying affidavit shows that
Mr Singh unequivocally stated that in
his view there is no oral contract between the first applicant and
the respondent. It also
took issue with the applicants raising the
defence of prescription for the first time in reply. It correctly
pointed out that a
party is not entitled to make out a new case in
reply. However, it has filed a further affidavit dealing with the
allegations,
including the defence of prescription, in the replying
affidavit. It says in this regard that prescription, particularly in
regard
to the second applicant, ‘was interrupted in August
and/or September 2014.’ This is its version on the issue of
prescription.
In the circumstance it cannot, and rightfully does not,
claim to suffer prejudice by the inclusion of the defence of
prescription.
Analysis
[10]
On the issue of whether there exists an
oral contract between the first applicant and the respondent, the
respondent is correct
in its contention that the correspondence
attached to the replying affidavit does not support the applicants’
claim that
such a contract came to be. The applicants accept that
this is so. However, it is important not to lose sight of the
fact
that the applicants’ contention is that there is an oral
contract. The documents attached to the replying affidavit merely
evidences the fact that the parties were engaged in discussions
regarding the liquidation of the debt. The documents do not in
themselves prove that such a contract had actually been concluded,
nor that it was not concluded. After all, the contract being
oral
would need to be proven by having recourse to oral evidence from both
parties. For purposes of this application the applicants
have put up
sufficient evidence to show that its defence is
bona
fide
and worthy of consideration. The
applicants have not merely put it up to escape the consequences of
the judgment. They have attached
evidence showing that the parties
were engaged in discussions regarding the payment of commission to
the first applicant for work
done by the second applicant, which
payment would be set-off against the debt of the first applicant. In
the result there is clearly
purpose in rescinding the judgment since
the outcome of the trial may well be different from the judgment
issued as a result of
the first applicant’s default.
[11]
Having found that there is a
bona
fide
defence in the form of the
existence of an oral contract raised by the applicants, there is no
need for me to pronounce on the
strength or validity of the defence.
What can be said though is that it is not a frivolous one. The
contention of the respondent
– see [9] above - relies on
factual matter that is best explored at trial.
Conclusion
[12]
For these reasons, I hold that the judgment
should be rescinded and set aside.
The
counter application
[13]
The counter application can only be
considered if the judgment survived this application. Since that has
not occurred the counter
application stands to be dismissed.
Costs
[14]
Both applicants should be liable for the
costs of the condonation applications. They also failed to file
their heads of argument
timeously. The respondent was forced to
threaten them with an application to compel them to file their heads
of argument. The applicants
did not set the matter down. The
respondent was forced to do so. In the light of the applicants’
conduct, I am of the view
that they should be denied their costs for
the rescission application. As for the costs of the counter
application, these should
be for the respondent.
Order
[15]
The following order is made:
1.
The application for condonation for the late launching of this
application is granted.
2.
The application for the condonation for the late filing of the
replying affidavit is condoned.
3.
The first and second applicant are to pay the costs of both
applications for condonation jointly and severally the one paying the
other to be absolved.
4.
The default judgment issued by the Registrar on 29 June 2019
is
hereby rescinded and set aside.
5.
Each party is to pay its own costs for the rescission application.
6.
The counter application is dismissed.
7.
The respondent is to pay the costs of the
counter application.
Vally
J
Gauteng
High Court (Johannesburg)
Date
of hearing:
24 May 2021
Date
of judgment:
3 June 2021
For
the applicant:
K Magan
Instructed
by:
Soonder Inc
For
the respondents:
K Lavine
Instructed
by:
Andrew Garrat Inc