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[2010] ZAGPPHC 59
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Hashatsi Electrical CC and Another v Jamanzi Electrical CC and Others (15285/2008) [2010] ZAGPPHC 59 (9 July 2010)
IN
THE HIGH COURT OF SOUTH AFRICA
(
HIGH
COURT,
PRETORIA)
CASE
No. 15285/2008
DATE:
9/07/2010
In the matter betweem:
HASHATSI
ELECTRICAL CC
First
Applicant
PITJO
JOSEPH HASHATSI
Second
Applicant
and
JAMANZI
ELECTRICAL CC
First
Respondent
SHERIFF,
JOHANNESBURG CENTRAL
Second
Respondent
ESKOM
HOLDING LTD
Third
Respondent
In
re:
JAMANZI
ELECTRICAL CC
Plaintiff
and
HASHATSI
ELECTRICAL CC
First
Defendant
PITJO
JOSEPH HASHATSI
Second
Defendant
JUDGMENT
Van
der Byl, AJ
Introduction
[1]
In this matter the First Respondent was granted default judgment
against the Applicants on 14 January 2009 for payment of a
sum of R1
078 721,31, together with interest thereon at 15,5 per cent per year
a
tempore morae
until
date of payment and costs in the sum of R650 plus Sheriffs fees, and
pursuant thereto obtained a warrant of execution on 24
July 2009.
(I
will for the sake of convenience refer to the parties as they were
cited in the default judgment proceedings, namely, to the
Applicants
as the First Defendant and the Second Defendant, respectively, or, as
the circumstances may require, collectively as
the Defendants and to
the First Respondent as the Plaintiff)
[2]
As is apparent from the summons issued on or about 25 March 2008, the
Plaintiff claimed payment of a sum of R1 078 721,31, together
with
interest and costs, for services rendered and goods supplied in the
performance of such services by the Plaintiff to the Second
Defendant
in his capacity as
"owner"
of
the First Defendant at the First Defendant's special instance and
request.
[3]
According to the returns of service, the summons was served -
(a)
on 19 June 2008, by affixing acopyto the principal door of the
residence of the Second Defendant at 907 King Bruce, corner of
Claim
and Bruce Streets, Hillbrow, Johannesburg;
(b)
on 10 November 2008, by affixing it to principal the door of
First Defendant's
''place
of business"
at
the same address.
[4]
The Defendants now seek an order rescinding the aforesaid judgment
granted against them on 14 January 2009 and setting aside
the warrant
of execution obtained pursuant to that judgment.
Grounds
on which recission of the judgment in question is sought
[5]
In terms of a long standing practice followed in our courts a party
seeking recission of a judgment or order obtained on default
of
appearance in terms of either Ruie 31 (2)(b) or the common law is
required to establish on a balance of probabilities two essential
elements, namely -
(a)
a
reasonable and acceptable explanation for his or her default of
appearance; and
(b)
a
bona
fide
defence
on the merits which carries some prospect of success.
(See:
Herbstein
& Van Winsen, The Civi! Practice of the High Courts of South
Africa, fifth edition, Volume 1, p. 938)
[6]
In relation to the Defendants' default of appearance the Second
Defendant contends -
(a)
that
the First Defendant stopped conducting business at the address where
the summons was served sometime in March 2008 and that
it now
conducts business at Office B6, Third Road, Linrow Park, Sandton
(which, incidentally, is, as is apparent from
Annexure
JE 12, record p. 271,
the
First Defendant's registered address);
(b)
that
similarly he no longer resides at the address where the summons was
served as he had moved to his current residential address
specified
in the founding affidavit; and
(c)
that
he only became aware of the summons on 30 July 2009 when the Third
Respondent, Eskom Holding Ltd
{"Eskom"),
"was about to stop effecting payment of monies due to the First
(Defendant) pursuant to a court order"
and
was given a copy of the warrant of execution issued pursuant to the
default judgment granted in this matter, requiring Eskom
to stop
payments due to the Plaintiff.
[7]
As far as the Second Defendant is concerned, it is contended, and
conceded by the Plaintiff, that the summons, in so far as
the claim
is based on the contention that the Second Defendant is liable as
"owner"
of
the First Defendant, a close corporation, does not disclose a lawful
cause of action against the Second Defendant.
[8]
As far as the First Defendant is concerned, it is, in essence, its
defence that the Plaintiff did not render any services to
it.
[9]
In this regard there are, as I will be pointed out below, numerous
factual disputes between the parties on the papers.
[10]
On the one hand, it is the First Defendant's case -
(a)
that
the First Defendant at some stage rendered electrical works for Eskom
in an area classified by Eskom at its
"northern
region"
and
that it engaged the services of the Plaintiff in the performance of
those works as a sub-contractor;
(b)
that
in terms of an agreement concluded between them in this regard the
Plaintiff would, after having rendered the services as such,
invoiced
the First Defendant who would then pay the Plaintiff the agreed
amount;
(c)
that
it, however, moved from the northern region to the area classified by
Eskom as its
"central
region"
sometime
in 2006 where it continued rendering services to Eskom, particularly,
in the Lichtenburg and surrounding areas;
(d)
that
since it moved to the central region it had no dealings with the
Plaintiff and has never sub-contracted any work to the Plaintiff;
(e)
that
the Plaintiff decided to seek business opportunities in the central
region as well and then commenced forwarding fraudulent
invoices,
allegedly on the basis of information obtained through
"some
person at Eskom's offices"
on
invoices submitted by the First Defendant to Eskom, to the Fist
Defendant for payment as if the services were rendered by the
Plaintiff to the First Defendant as its sub-contractor;
(f)
that
it, thereupon, caused a letter dated 20 August 2007 by its attorneys
to be addressed to Eskom and a meeting between itself
and Eskom to be
convened;
(g)
that
at that meeting, attended by the Plaintiff, the Plaintiff failed to
prove that it had done electrical work in the central region
or that
a sub-contract or understanding existed between it and the First
Defendant;
(h)
that
the Plaintiff nevertheless caused a letter dated 20 February 2008 to
be addressed by its attorneys to the First Defendant in
which payment
of an amount of R1 078 721, 31, together with interest, is claimed
from the First Defendant for goods sold and services
rendered, in
response to which the First Defendant in a letter dated 17 April 2008
through its attorneys denied any liability to
the Plaintiff.
Plaintiff's
opposition of the application for rescission
[11]
In its opposing affidavit the Plaintiff contends that it indeed
rendered electrical services for Eskom in the areas of Verdwaal
1 and
2, Blauwbank and Lichtenburg situate in the so-called central region
during 2006 and 2007 at the special instance and request
of the First
Defendant, as, according to the Plaintiff, is evident from -
(a)
four
itemized tax invoices annexed to the papers as
Annexures
JE3.1 to JE 3.4, record pp. 79 to 87,
submitted
to the First Defendant during the period 15 June 2007 to 25 June
2007;
(b)
e-mails
exchanged between the Plaintiff and the First Defendant during the
period 16 April 2007 to 31 May 2007 annexed to the papers
as
Annexures
JE 5.1 to JE 5.4, record pp. 92 to 93;
(c)
the
fact that it employed 27 employees referred to in paragraph 13.4.1 of
Plaintiff's opposing affidavit,
record
pp. 54 to 55,
some
of whom filed confirmatory affidavits annexed as
Annexure
JE 7, record pp. 122 to 162,
confirming
that they were so employed in the areas concerned;
(d)
the
fact that, as is evident from Plaintiff's bank statement for the
period 16 March 2007 to 29 March 2007,
Annexure
JE 4, record p. 88,
the
First Defendant made partial payments in respect of those services;
(e)
the
fact that, as is evident from documentary proof,
Annexures
JE 7.1 to JE 7.7, record pp. 163 to 265,
it
incurred expenses whilst performing those services in the central
region;
(f)
the
fact that, as far as the meeting referred to by the First Defendant
is concerned, the meeting which was chaired by the deponent
to the
opposing affidavit was convened to discuss the First Defendant's
indebtedness to the Plaintiff, but that the Second Defendant
left the
meeting immediately after he noticed that the deponent was present at
the meeting;
(g)
the fact that the deponent of the Plaintiffs opposing affidavit
personally and telephonically demanded payment from the Second
Defendant who on every occasion promised that the First Respondent
would pay its indebtedness
"within
the near future".
[12]
In its replying affidavit the First Defendant disputes all these
factual averments.
Evaluation
of evidence
[13]
The First Defendant concedes in its replying affidavit that its
application should fail if the Court accepts, as established
facts,
the version of the Plaintiff.
[14]
This calls for a consideration of the First Defendant's challenge of
the Plaintiff's contentions that it indeed rendered services
to the
First Defendant in the Verdwaal 1 and 2, Blauwbank and Lichtenburg
areas.
[15]
As already indicated, the Plaintiff relies on seven factual averments
in support of its allegation that it indeed rendered
services to the
First Defendant in the areas concerned.
[16]
I deal
seriatim
with
the First Defendant's challenges on these factual averments.
Firstly
,
the four invoices, Annexures JE 3.1 tot 3
.4
[17]
These four invoices issued during the period 15 June 2007 to 25 June
2007 reflect detailed lists of services rendered in the
areas
concerned in which the First Defendant is invoiced in amounts of R317
164,86, R37 736,26, R875 647,71 and R150 828,04.
[18]
The First Defendant denies that any work detailed in these invoices
was performed at all or, if such work was performed, that
such
performance was performed at the instance of the First Defendant.
[19]
In this regard the First Defendant refers to statement,
Annexure
PJH 1, record p. 322,
which
seems to be a statement submitted to it by the Plaintiff on 30 July
2007 setting out invoices submitted to it and payments
made by it
during the period 30 November 2006 to 17 August 2007.
[20]
It shows a balance of R1 078 721,31 (which, incidentally, is the
amount claimed by the Plaintiff in its summons) and reflects,
inter
alia,
the
invoices, namely, invoice numbers 2204, 2205, 2208 and 2225, which
are the invoices annexed to the papers as
Annexures
JE 3.1 to 3
.4
and
two payments totalling R315 000 effected on 28 May 2007.
[21]
As far as the payments reflected in this statement, the First
Defendant denies any of those payments were made in respect of
any of
the invoices on which the Plaintiff relies and contends that the
payments
"pertain
to dealings"
between
them in Mpumalanga.
[22]
As far as the invoices reflected therein are concerned, the First
Defendant refers to a payment of R77 161 which is also reflected
in
that statement which has obviously been made on an invoice numbered
2221 annexed to the replying affidavit as
Annexure
PJH 2.2, record p. 323.
which,
according to the First Defendant, deals with work done for
''earthing"
at
Kwaggafontein, Mpumalanga.
[23]
The First Defendant, furthermore, refers to two invoices annexed to
the papers as
Annexes
PJH 3.1 and 3.2, record pp. 325 and 326
which
were submitted by it to Eskom on 9 February 2008 in respect of work
done in the Verdwaal and Blauwbank areas and which was,
according to
an endorsement thereon, paid been directly to the First Defendant on
21 February 2007.
[24]
A scrutiny of these allegations and the documentation referred to
does not in my view detract in anyway from the Plaintiff's
reliance
on the invoices annexed to its papers as
Annexures
JE 3.1 to 3.4
[25]
In this regard I can refer to the following:-
[26]
The statement,
Annexure
PJH 1,
purports
to be a full record of the Plaintiff's dealings with the First
Defendant for the period 30 November 2006 to 17 Augustus
2007, hence
the fact that the outstanding balance is the exact amount claimed by
the Plaintiff in respect of its services rendered
in the Verdwaal 1
and 2, Blauwbank and Lichtenburg areas.
[27]
It would appear that the First Defendant does not deny that the
payments of, particularly, the amounts of R77 161 and R20 000,
and, I
add, various other payments reflected in the statement reflected
therein were duly effected on invoices of which the correctness
is
not disputed.
[28]
In so far as the amount claimed in the summons is determined with due
regard to all the invoices and payments specified in
the statement in
which the various, including the invoices which are not disputed by
the First Defendant, I fail to understand
the First Defendant's
contention that the whole amount claimed is based on fraudulent
invoices compiled on information relating
to invoices submitted by it
to Eskom irregularly obtained from some unidentified person in the
employ of Eskom.
[29]
The First Defendant could fairly easily have annexed the invoices
from which this information was obtained so as to show how
the
services claimed in the Plaintiff's invoices are duplicated.
[30]
It is, furthermore, significant to note that no allegations of fraud
were made in the letter addressed to the Plaintiff's attorneys
in
response to their letter of demand dated 17 April 2008.
[31]
The allegation based on
Annexure
PJH 2.1
is,
furthermore, not supported by the invoice which contains no
indication as to where the work has been done.
[32]
The fact that Eskom paid the First Defendant the amounts referred to
in
Annexures
PJH 3,1 to 3.4
does
likewise not detract from the Plaintiff's case as it appears to be
common cause between the parties, at least at the time the
Plaintiff
performed work at the First Defendant's instance and request in the
northern region, that the First Defendant would pay
the Plaintiff
directly the agreed amount as contained in an invoice submitted to
it.
[33]
In these circumstances the contention that he Plaintiff submitted
false invoices to the First Defendant seems to me to be so
farfetched
that the allegation can be rejected on the papers.
Secondly
,
the e-mails exchanged between the parties
[34]
In its replying affidavit the First Defendant merely denies that the
e-mails "are
in
respect of any agreement"
between
the parties in respect of the electrification works in the central
region which is a denial which is clearly contradicted
by the
contents of the e-mails themselves
Thirdly
,
the employees who have been employed by the Plaintiff in the central
region
[35]
In its response the First Defendant refers to members of the local
community it employed in the Verdwaal 1 and 2 and Blauwbank
areas and
a
"daily
risk assessment
form"
filled in on 31 January 2007 apparently in respect of electrification
work performed in the Blauwbank area.
[36]
I fail to see how this allegation detracts from the Plaintiff's
allegation that it also employed employees in those areas as
well as
in the Lichtenburg area.
Fourthly
,
the partial payments made to the Plaintiff
[37]
As already indicated, the Plaintiff's allegation relates to two
payments totalling R315 000 made to it in respect of Invoice
No. 2204
on 25 May 2007 which according to the First Defendant have been made
in respect of services rendered on its behalf by
the Plaintiff in
Mpumalanga.
[38]
I need to point out, as is also contended by the First Defendant,
that, bearing in mind that Invoice No. 2204 is dated 15 June
2007 and
the payment of R315 000 was made on 25 June 2007, it appears
prima
facie
unlikely
that that payment could have been made in respect of Invoice 2204.
[39]
It, however, does not detract from the fact that Invoice No. 2204
purports to relate to work done by the Plaintiff in the Verdwaal
1
and 2 area
Fifthly
,
the expenses incurred by the Plaintiff in the areas concerned
[40]
The First Defendant's response to this allegation by the Plaintiff is
a denial that those expenses could have been incurred
by the
Plaintiff in respect of services rendered at the instance of the
First Defendant and points out, particularly, that Eskom
provided all
material for the use of electrifications projects.
[41]
It is, however, apparent from the documentary proof rendered by the
Plaintiff that the expenses were incurred not in respect
of material,
but in respect of petrol expenses, toll gate fees, motor vehicle
maintenance expenses, expenses in respect of equipment,
lodging
expenses, food and beverage expenses and certain diverse expenses.
Sixthly
,
the meeting convened to discuss the First Defendant's indebtedness to
the Plaintiff
[42]
In this regard the deponent of the Plaintiffs answering affidavit is
accused by the First Respondent of lying under oath.
[43]
Although the meeting took, according to the First Defendant, place
under completely different circumstances as those alleged
by the
Plaintiff, the First Defendant concedes that the chairperson did
raise the issue of the invoices which were allegedly due
to the
Plaintiff and that the deponent of the Plaintiff's answering
affidavit was present at the meeting.
Seventhly
,
the Plaintiff's allegation that Second Defendant promised to pay the
First Defendant's indebtedness
[44]
In its replying affidavit the Second Defendant denies that he
"did
not dispute the claims advanced by the (Plaintiff)"
and,
furthermore, indicates that the First Defendant
"is
minded to place the invoices prepared by the deponent on behalf of
the (Plaintiff) before the commercial fraud unit of
the prosecution
authorities".
Conclusion
[45]
On the question whether the First Defendant has given a reasonable
and acceptable explanation for its default of appearance,
I am
satisfied that service had been duly effected on the First
Defendant's registered address, but I have no reason to reject
its
explanation that it did not receive the summons because it had at the
time of service no longer doing business at that address.
It is in
any event clear from correspondence exchanged between the parties
before summons was issued that the First Defendant was
opposed to the
Plaintiff's claim. It is accordingly in my view unlikely that, had it
received the summons, it would not have filed
a notice of intention
to defend the action.
[46]
On the question whether the First Defendant has shown that it has a
bona
fide
defence,
I am satisfied that the First Defendant did not show a
bona
fide
defence
which has some prospects of success.
[47]
In conclusion I need to point out that the Plaintiff filed an
application for the striking out of various paragraphs contained
in
the Defendants' founding and replying affidavits together with
certain Annexures to those affidavits on the grounds thereof,
inter alia,
that
those paragraphs and Annexures contain inadmissible evidence and, in
the case of the replying affidavits, that they also contain
new
evidence.
In
view of the conclusion I have reached I do not regard it necessary to
deal with the allegations raised in this regard.
Costs
[48]
This is clearly a matter where in the case of the First Defendant
costs should follow the result. In the case of the Second
Defendant
it does not appear, the two Defendants having been represented by the
same attorneys and the same counsel, to be a matter
where the costs
incurred by the two Defendants can be separated from each other. It,
furthermore, does not appear that the papers
would have been
different had default judgment been granted against the First
Defendant only.
[49]
For the reasons set out in this judgment the following order is
made:-
1
.
The application for rescission of the default judgment granted
kin this matter on 14 January 2009 is -
(a)
in
the case of the First Applicant, dismissed; and
(b)
in
the case of the Second Applicant, granted.
2.
The
First Applicant is ordered to pay the costs incurred by the First
Respondent in opposing this application.
3.
N
o
order as to| costs is made in respect of the Second Applicant.
P
C VAN DER BYL
ACTING
JUDGE OF THE HIGH COURT
ON
BEHALF OF THE APPLICANTS
ADV
O MOOKI
On
the instructions of:
MAJAVU
INCORPORATED
c/o
FRIEDLAND HART SOLOMON & NICOLSON
Suite
301, Block 4 Monument Office Park 79 Steenbok Ave Monument Park
PRETORIA Ref: T van Straaten/cb/M3652 Tel: (012)424 0200
ON
BEHALF OF FIRST THE RESPONDENT
ADV
J A DU PLESSIS
On
the instructions of:
VAN
GREUNEN AND ASSOCIATES - PRETORIA
608
Reitz Street Sunnyside PRETORIA Ref : I van Greunen/L0006 (012) 343
1194
DATE
OF HEARING
31
May 2010
JUDGMENT
DELIVERED ON
9
July 2010