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[2010] ZAWCHC 167
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E R Perrins Building Contractors CC v Druk-my-niet Wine Estate (Pty) Ltd (13954/2009) [2010] ZAWCHC 167 (23 August 2010)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE HIGH COURT, CAPE TOWN)
Reportable
Judgment
Case
No: 13954/2009
In
the matter between:
E
R PERRINS BUILDING CONTRACTORS CC Plaintiff/ Respondent (Registration
No. 1995/008056/23)
And
DRUK-
MY- NIET WINE ESTATE (PTY) LTD Defendant/ Applicant
CORAM:
Meer,
J
JUDGMENT:
Meer,
J
DATE
OF HEARING:
19
August 2010
DATE
OF JUDGMENT:
23
August 2010
ADV.
FOR APPLICANTS:
Adv.
G Elliot
INSTRUCTED
BY:
Mcloughlin
Inc.
REF:
Smcl/rjs/22004
ADV.
FOR RESPONDENT:
Adv. B Fourie
INSTRUCTED
BY:
Van
Der Spuy & Vennote
REF:
JLU
van Der Hoven
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE HIGH COURT, CAPE TOWN)
Case
Number: 13954/2009
In
the matter between:
E
R PERRINS BUILDING CONTRACTORS CC Plaintiff/ Respondent (Registration
No. 1995/008056/23)
And
DRUK-
MY- NIET WINE ESTATE (PTY) LTD Defendant/ Applicant
JUDGMENT:
23 AUGUST 2010
MEER,
J
1. Applicant seeks
an order rescinding and setting aside a final judgment in provisional
sentence proceedings which became effective
on 9 November 2009 in
terms of Rule 8 (11) and directing Respondent to reinstate the
security furnished by it to Applicant. In
the alternative Applicant
seeks an order condoning its non compliance with the provisions of
Rule 8 (11) and declaring the results
of such non compliance to be
cancelled.
2. The final
judgment was granted as a result of Applicant's failure to deliver
its plea and counterclaim timeously in terms of
Rule 8(11).
Respondent as Plaintiff issued a provisional sentence summons against
Applicant as Defendant during July 2009 claiming
the sum of R270
467,45 from Applicant on the strength of an interim payment
certificate dated 17 December 2008, for building work
to Applicant's
wine cellar undertaken in terms of a JBCC Series 2000 Principal
Building Agreement. The contract in respect of the
wine cellar was
one of four contracts entered into between the parties in respect of
building projects to be undertaken by Respondent
on Applicant's wine
estate.
3. On 22 July 2009
Applicant entered an appearance to defend the provisional sentence
summons. There followed settlement negotiations
as a result of which
the provisional sentence proceedings were postponed to 14 September
2009 to enable Applicant's architect and
the principal agent in terms
of the building contracts, a Mr Malherbe, to assess the building
projects undertaken by Respondent.
4. Pursuant thereto
Applicant's architect prepared a report which was sent under cover of
a letter to Respondent's attorney on 11
September 2009. The report,
based on findings on a site inspection held on 10 September 2009,
lists work which Applicants alleged
to be incomplete or defective and
the repair costs thereof. The letter stated on the basis of the
report, that Applicant had a
bona fide and legitimate counterclaim
against Plaintiff in the amount of approximately R520 000,00.
Respondent was invited to withdraw
the provisional sentence summons
against Applicant and it was suggested that the entire dispute, being
a building matter requiring
expert evidence, be referred to
arbitration for determination. Respondent did not
agree. Applicant
then elected to enter into the principal case after paying the amount
in the provisional sentence summons to Respondent.
5. On 23 October
2009 Applicant delivered its notice to enter into the principal case.
On 27 October 2009 Respondent gave notice
that it had put up security
de
restituendo
to
the satisfaction of the Registrar in terms of Rule 8 (9). Applicant
however failed thereafter to deliver its plea by 6 November
2009,
within 10 ten days of its notice to enter into the principal case, as
envisaged in rule 8 (11). As a consequence the provisional
sentence
ipso facto became a final judgment and the security that had been
given, lapsed. This application flows from these events.
6. Applicant's
reason for the failure to deliver the plea timeously is that its
legal representatives overlooked the provisions
of Rule
8(11).
The founding affidavit of Applicant's attorney, Steven Mc Loughlin,
states that at all material times Applicant's legal representatives
were unaware that Rule
8(11)
required Defendant/ Applicant to delver its plea and counterclaim
within the ten day period of delivering its notice of intention
to
enter into the principal case. They operated under the mistaken
belief that Plaintiff/ Respondent would have to place
Defendant/Applicant
under bar to deliver its plea. They were unaware
of Defendant's / Applicant's obligation to have delivered its plea by
6 November
2009.
7. Mc Loughlin's
affidavit emphasizes that at all material times his instructions had
been to defend Plaintiffs /Respondent's claim
in the provisional
sentence summons and to prosecute the counterclaim, the amount of
which he alleges exceeds Plaintiffs / Respondent's
claim. To this
effect he had taken steps during November and December 2009 to
expedite the expert input of architect, Malherbe
which was required
to prepare the plea and counterclaim. During January and February
2010 other complex litigation had consumed
his practice and it was
only on receiving an enquiry from Applicant about the progress of its
claim, late in March 2010, that he
had requested counsel to prepare a
plea and counterclaim. Mc Louchlin goes on to state that on 15 April
2010 upon his return from
leave he was handed a telefax dated 23
March 2010 from Respondent's attorneys stating that as
Defendant/Applicant had failed to
file a plea as envisaged in rule
8(11),
provisional
sentence
ipso
facto
had
become a final judgment and the security given had lapsed. The
telefax, Mc Loughlin explained, had been misplaced and hence
did not
come to his attention on 23 March 2010 when it was faxed to his
office, but only on 15 April when it was discovered under
a pile of
documents, and handed to him. Applicant's legal team, he intimated,
sprang into action immediately, and delivered this
application two
days later, on 20 April 2010.
8. Mr Fourie
for Respondent took issue with Applicant's explanation for its
default, pointing out that no account was given
of action taken
between the period of delivery of the notice to enter into the
principal case and the granting of provisional sentence.
This
criticism would be relevant had the evidence indicated that
Applicant's legal team was aware that they were obliged to act
in
terms of rule 8(11) and deliver a plea within ten days of delivering
its notice.
9.
Disconcerting
though the reasons for default may be, it is clear that Applicant
intended at all times to enter into the principal
case. I am
satisfied from the reasons preferred by Applicant above, that a
reasonable and acceptable explanation has been presented
for
Applicant's default. Applicant is clearly not to blame for the error
of its legal representatives and should not be penalized
on that
account. See
Kolberg
(Pty) Ltd
v.
Atkinson's
Motors Ltd.
1970
1 SA 660at
663 G-H.
10.
The
basis for Applicant's defence in the main claim has been set out in
the plea and counterclaim, which rely on the contents of
the
architect's report of September 2009. The defective and/or incomplete
nature of the work undertaken by Respondent, as set out
in the
report, is confirmed in an affidavit by Malherbe Applicant has
alleged that it has cancelled the agreements and claimed
damages in
the amount of R561 550,00. Applicant alleges that Respondent is
indebted to it in the net sum of R229 873,70.
11.
Mr
Fourie's opposition on the merits was based principally on the
contention that Applicant had not shown sufficient prospects of
success regarding the defence and counterclaim sought to be raised by
it. In this
regard he raised the following:
11.1
He questioned whether this Court was the proper forum for the
dispute, given that Clause 40.3 of the JBCC contract applicable
to
the building works provided for all disputes to be referred to
arbitration. He was however mindful during argument that the
schedule
to the contract provided for dispute resolution by litigation.
11.2. He contended
that the grounds upon which Applicants based three of their four
counterclaims were incorrectly set out in the
founding affidavit.
Applicant had conceded, he indicated, on receipt of Respondent's
answering affidavit that all four contracts
were governed by the JBCC
agreement.
11.3. He questioned
whether in terms of the pool house contract Applicant could hold
Respondent responsible for patent defects.
11.4. He took issue
with Applicant's failure to deal with Respondent's counterclaim of
R519 064.90 other than by way of a bare denial.
He took issue further
with Applicant's reconciliation of the retention amount of R61 208,25
with his counterclaim, only in its
replying affidavit.
11.5. Applicant's
failure to annex to its founding papers an affidavit by architect
Malherbe confirming the contents of his report
on which the
counterclaims were based, and the belated handing in of such
affidavit only at the hearing of this application, was
a further
ground for exception.
12. Whilst the
above issues raise relevant questions, they however do not enable me
at this stage on the basis of the information
before me to rule out
the
prospects of success. Nor is it advisable
in
proceedings such as these to ventilate these issues in any detail,
issues about which a finding can be made on fuller information
than
is now before me. I am however able to find that Applicant's
counterclaim, supported as it is by a report and affidavit from
the
architect and principal agent in respect of the building projects,
meets the
threshold of a bona
fide defence , which, prima facie, carries some prospect of success.
13.
In
view of my finding that a reasonable explanation as well as a bona
fide defence are present, Applicant has demonstrated sufficient
cause
for the relief it seeks both by way of the order for rescission of
the judgment
1
of 9 November 2009 and the alternative order for condonation for non
compliance with Rule
8(11)
2
.
The latter order falls within the purview of Uniform Rule 27 which
permits a Court a discretion to extend the time for taking
any step
in connection with proceedings, including the delivery of a plea
within the period prescribed in rule 8 (11). See F. O.
Kollberg
(Pty) Ltd
v.
Atkinson's
Motors Ltd
1970
(1) SA 660
(C) at 662 H to 663 A. As the final judgment flowed from
non compliance I am inclined to grant relief in terms of the
alternative
order for condonation.
Costs
14.
It
is accepted that where an applicant seeks an indulgence from the
Court in circumstances such as the present, on account of its
non
compliance with the Rules, the applicant for the indulgence pays the
costs of opposition where such opposition is in the circumstances
reasonable. As is stated by Cilliers Law of Costs Second Edition
Butterworths 1984 paragraph 2.34 at 29:
" Where the
opposition is "fair and reasonable respondents ought not to be
put in a position where they oppose at their
peril, in the sense
that
....
they cannot recover their costs of opposition, or may even have to
pay such costs as are occasioned by their opposition"
See also Stocks
&Stocks Properties (Pty)Ltd v City of Cape Town
2003 (5) SA 140
(C) pararaph 27 at 147
15. This
application was precipitated by Applicant's non compliance with Rule
8(11).
In the setting out of its defence in the founding affidavit Applicant
raised issues which called for clarification and response
from
Respondent who was entitled to raise in opposition the aspects
referred to in paragraph 11 above, and place its contentions
before
Court regarding the prospects of success. Respondent's opposition
cannot be said in the circumstances to have been unreasonable
frivolous or vexatious and Respondent is accordingly in my view
entitled to its costs of opposition. In the result the following
order is made:
Applicant's/Defendant'
non- compliance with the provisions of Rule 8 (11) is condoned;
The results of such
failure to comply with the aforesaid Rule are cancelled;
Applicant/Defendant
is directed to file its plea and counterclaim within 5 days of the
date of this order;
Applicant/Defendant
is directed to pay Respondent's
costs
of opposition.
Meer,
J
1
See
Chetty v Law Society, Transvaal 1985 (2) SA756A at 765 where it is
stated two essential elements of sufficient cause for rescission
of
a judgment by default are, a reasonable and acceptable explanation
for default and a bona fide defence which prima facie carries
some
prospect of success
2
In
Kollberg
(Pty) Ltd
v.
Atkinson's
Motors Ltd
1970
(1) SA 660
(C)at 663 C-E the requirement of sufficient cause for
condonation for non compliance with rule 8 (11) is acknowledged.