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[2024] ZAFSHC 90
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Global Group Demolition Contractors (Pty) Ltd v Buka Hattingh Katlego Security Services (Pty) Ltd (3868/2022) [2024] ZAFSHC 90 (26 March 2024)
IN THE HIGH COURT
OF SOUTH AFRICA,
FREE STATE
DIVISION, BLOEMFONTEIN
Reportable:
Of Interest to
other Judges:
Circulate to
Magistrates:
Case
number:
3868/2022
In
the matter between:
GLOBAL
GROUP DEMOLITION
CONTRACTORS(PTY)LTD
APPLICANT
And
BUKA
HATTINGH KATLEGO SECURITY
RESPONDENT
SERVICES
(PTY) LTD
CORAM:
BOONZAAIER AJ
HEARD
ON:
29 FEBRUARY 2024
DRAFT
JUDGMENT BY:
BOONZAAIER
AJ
DELIVERED
ON:
26 MARCH 2024
INTRODUCTION:
1.1
This is an application for rescission of a
default judgment which was granted against the Defendant, Global
Group Demolition Contractors
(Pty) Ltd (Applicant
in
casu
) by this court on
20
April 2023
, in the main action.
2.
The cause of action
in the main action was damages suffered due to the non-compliance of
an agreement to render security services
and payment to be made
accordingly.
FACTUAL
BACKGROUND:
3.
On
15
April 2012
at
Welkom the parties entered into a partially written and partially
oral agreement for security services to be rendered by Respondent
to
the Applicant.
4.
The written part of
the agreement consists of a quotation from the Respondent to the
Applicant reflecting the costs of services
to be rendered which was
accepted by the Applicant.
5.
The oral terms of the
agreement consist of the following:
i)
The Respondent would
continue to render security services and place guards at the premises
chosen by the Applicant on a monthly
basis until the agreement is
terminated by either of the parties
ii)
The Respondent would
invoice the Applicant on a monthly basis, which amount would vary
from month to month as the need for services
and guards to be placed
at the behest of the Applicant, varied.
a.
The Applicant would
pay the Respondent`s invoices during the month in which the invoices
were rendered
.
6.
The Respondent
allegedly complied with its obligations in terms of the agreement
between the parties to the satisfaction of the
Applicant until
02
August 2022,
when
the Applicant fell into arrears.
7.
The Respondent
demanded payment from the Applicant, the latter allegedly promised to
make payments but failed to keep its commitment.
The Respondent also
caused a notice of termination of the agreement which was sent to the
Applicant.
8.
Summons was issued
16
August 2022
and
the Applicant filed a Notice of Intention to Defend on the
19
th
January 2023,
however it
failed to plead to the Respondent`s particulars in the main action.
9.
The Respondent was
entitled to apply for default judgment on these premises and there
was nothing that would have precluded the
court from granting the
default judgment only on that basis.
APPLICANT:
10.
I
t is
the Applicants case that it is evident, that the default judgment
which was granted by this Court on
20 April 2023
arises as a
result that the order was granted in the absence of the Applicant and
it was erroneously sought.
11.
The
Applicant argued that in terms of rule R 42(1)(a) the court in
Zuma
v Secretary of Judicial of Inquiry into Allegations of State Capture,
Corruption and Fraud in the Public Sector Including Organs
of State
and Others
,
[1]
held that the word
“absence” exists to protect litigants whose presence was
precluded, not those whose absence was elected.
[2]
12.
The Applicant further
submitted that in the Zuma case supra, the court emphasized the
requirements which Applicant is required to
prove under to succeed
with rescission under the common law. The Court held:
“
The
requirements for rescission of a default judgement are twofold.
First, the applicant must furnish a reasonable and satisfactory
explanation for his default. Second, it must show that on the merits
it has a
bona
fide
defence
which
prima
facie
carries
some prospect of success. Proof of these requirements is taken as
showing that there is sufficient cause for an order to
be rescinded.
A failure to meet one of them may result in a refusal of the request
to rescind.”
[3]
13.
Applicant sets out
the background to the judgment having been granted.
i)
On
16
August 2022
summons
was issued by the Respondent. After receipt of the summons Applicant
secured the services of an attorney and properly instructed
them to
defend the action. Notice of intention to defend was filed but the
attorney failed to execute the Applicant`s instructions
to deliver a
plea.
ii)
This failure came to
the knowledge of the Applicant on
11
May 2023
when
the Applicant’s representative attempted to make a telephonic
enquiry and ultimately attended the offices of the Attorneys
firm.
iii)
Applicant thereafter
took all the necessary steps to give instructions and to appoint a
new attorney to deal with the matter.
iv)
Applicant was not
present when the judgment was granted and only received notice of the
default judgment having been granted on
17
May 2023.
v)
The original attorney
that was appointed was struck from the role of attorneys by the LPC.
14.
The Applicant
submitted that it is evident that the Applicant meets both the
requirements of Rule 42(1)(a) namely that the judgment
was granted in
its absence and that the Applicant provided a reasonable and
satisfactory explanation for its failure to file its
plea.
15.
The Applicant is of
the contention that the Respondent did not place all the terms of the
oral agreement before the court. There
are specific terms in the oral
agreement which need to be ventilated. It is clear that the
Respondent has not placed all the relevant
terms to its claim. This
confirms the selective manner in which the Respondent had placed the
terms of the agreement before the
court.
16.
By
failing to disclose relevant terms of the agreement and by failing to
provide the court with insight into the fact, that the
Respondent
failed to perform in terms of the agreement, thereby misleading the
court. The Respondent caused the court to issue
judgment based on
incomplete facts and an incorrectly pleaded agreement.
17.
The Applicant, placed
all the relevant terms of the oral agreement before the court to
indicate that:
i)It
was agreed that the Respondent will be liable for any damages to the
Applicant`s assets.
ii)
It was agreed that
set off will be applied between the parties of any amounts indebted
to either party.
iii)
The
Applicant has a counterclaim against the Respondent which he did not
have the opportunity to institute.
iv)
Consequently,
the judgment was granted erroneously and ought to be set aside in
terms of Rule
31(2)(b) alternatively R42
of
the
Uniform
rules of Court or alternatively in terms of the Common Law.
APPLICANT`S
GOOD CAUSE (
AND
A TRIABLE CASE WITH
PRIMA
FACIE
PROSPECTS
OF SUCCESS IN THE MAIN ACTION):
18.
Applicant indicated that due to the following he has a good cause:
i)
it is important that he requires at
least the opportunity to defend the case, because there is
a triable
case.
ii)
He did not have the opportunity to institute a counterclaim, or to
plead to the accusations, which
was not due its own fault.
19.It
is further contended that the Applicant advanced a satisfactory
explanation why he needs to come onboard, notwithstanding
the
Respondent contention that good cause is absent to justify the
rescission.
RESPONDENT:
20.The
Respondent on the other hand is adamant that the rescission was
granted properly and correctly in terms of the Uniform Rules
of
Court.
21.
It is Respondent`s main issue that an order is erroneously granted if
it was legally incompetent for the court to have made
such an order,
if there was an irregularity in the proceedings or if the court was
unaware of a fact, if known to it would have
precluded it from a
procedural point of view from making the order or granting the
judgment.
[4]
Also if a party is
procedurally entitled to judgment, the fact the court was unaware of
a “defence” which the Defendant
could have raised
does not mean that the judgment is erroneously granted.
[5]
22.
The Respondent argues that the Applicant does not allege that the
court was not legally competent to grant the default judgment,
that
there was any irregularity in the proceedings, nor that the court was
unaware of a fact, that if known to it, would have precluded
it from
a procedural point of view from the granting of the judgment.
23.
Applicant alleges that it has a counterclaim for damages that can
stand as a valid defence against the claim of Respondent,
hence the
question in this regard is whether the existence of the said
counterclaim constitutes a fact which if known to the court
precluded
it from a procedural point of view from granting the Default
Judgment.
24.
It was submitted by Respondent that the existence of a counterclaim,
valid or not, does not imply, that there was any misdirection
as
regards to procedure.
25.
Respondent argued further that it is clear from the Applicant`s
Founding affidavit that although it applied for rescission in
terms
of Rule 42, the facts set out in the Founding Affidavit constitute an
attempt to satisfy the requirements for rescission
of judgment in
terms of Rule 31(2) (b) or in terms of the common law.
28.
Mr. Grundling counsel for Respondent submits that under this rule,
the Applicant must show good cause for the rescission of
judgment.
Good cause means that the Applicant:
i)
has a reasonable explanation for its default;
ii)
that the application is
bona fide
and not with the intention
to delay the Respondent`s claim.
iii)
can show that it has a
bona
fide, prima
facie
defence
to the Respondent’s claim and that it has a
bona fide
intention to raise the defence if the application is granted.
27.
In terms of the common law, a court is entitled to rescind a judgment
obtained in default of appearance if good cause can be
shown. What
constitutes good cause is that the Applicant can explain that it has
a reasonable and acceptable explanation for the
default and that on
the merits, it has a
bona fide
defence.
28.
The Applicant submits that it is not indebted to the Respondent in
the amount on which default judgment was obtained due to
its
entitlement to set off its damages claimed in terms of the
counterclaim against the said amount. Respondent argues that
Applicant
is mistaken as to operation of set off.
29.
Respondent argued that if Applicant is so resolute in pursuing its
counterclaim against the Respondent, it should institute
a separate
action to recover said damages from the Respondent.
30.
Respondent further conceded that in the case
of
Flacodor 109 CC t/a Bell Foods v Agri Poultry (Pty)Ltd t/a Day Break
Farms,
[6]
it
was held by Daniso J in this Division that that a counterclaim is a
valid ground for rescission of a judgment. Respondent however
is of
the view that the mentioned decision did not take other decisions
form other Divisions into account which clearly stated
that a
counterclaim does not justify the rescission of a default
judgment.
[7]
31.
Hence the
Respondent is still entitled to the default judgment.
THE LAW:
32.
Stare
decisis:
The
doctrine that courts will adhere to the precedent in making
decisions. The court can depart from a previous decision of their
own
only if satisfied that that decision was clearly wrong. This court is
bound by the doctrine of
stare
decisis
and
departure from the doctrine is not justified.
[8]
33.In
Ruta
v Minister of Home Affairs,
[9]
the
court held that:
“
[R]espect
for precedent, which require courts to follow the decisions of
coordinate and higher courts, lies at the heart of judicial
practice.
This is because it is intrinsically functional to the rule of law
which in turn is foundational to the Constitution.
Why intrinsic?
Because without precedent certainty, predictability and coherence
would dissipate. The courts would operate without
a map or
navigation, vulnerable to whim and fancy. Law would not rule.”
34.The
High Court has inherent powers to protect and regulate its own
process, taking into account the interest of Justice, as envisaged
in
Section 173 of the
Constitution of the Republic of South Africa
35.
It is trite that a court may set aside a judgment
by default in the event that just cause is shown. The court at the
same time retains
a discretion to do so.
LEGAL PRINCIPLES
GOVERNING RULE 42:
36.
Rule 42
states:
“
Variation
and Rescission of Orders
1. The
court may, in addition to any other powers it may have, mero
motu or
upon the application of any party affected, rescind or
vary:
a) An
order or judgement erroneously sought or erroneously granted in the
absence of any party
affected thereby.
b) An
order or judgment in which there is an ambiguity, or a patent error
or omission, but only
to the extent of such ambiguity, error or
omission.
c) An
order or judgment granted as the result of a mistake common to the
parties.
2. Any
party desiring any relief under this rule shall make application
therefore
upon notice to all parties whose interests may be affected
by any variation sought.
3. The
court shall not make any order rescinding or varying any order or
judgment unless
satisfied that all parties whose interests may be
affected have notice of the order proposed.”
37.
The legal principles governing the rescission of
judgment under rule 42 have long been settled by the courts. In terms
of rule 42(1)(a),
a judgment may be rescinded on the basis that the
it was erroneously sought or erroneously granted in the absence of
any party
thereby.”
The legal principles as
follows:
1. The
rule must be understood against its common law background.
2. The
basic principle of common law is that once a judgment has been
granted, the judge becomes
functus officio,
but
subject to certain exceptions of which rule 42(1)(a) is one.
3. The
rule caters for mistakes in the proceedings.
4. The
mistake may either be one which appears on the record of proceedings
or one which
subsequently becomes apparent from the information made
available in an application for rescission of judgement.
5. A
judgment cannot be said to have been granted erroneously in light of
a subsequently
disclosed defence which was not known or raised at the
time of default judgment.
6. The
error may arise in the process of seeking the judgment on the part of
the Applicant for
default judgment or in the process of granting
default judgment on the part of the court.
7. The
Applicant for rescission is not required to show, over and above the
error, that there
is good cause for the rescission, as it was held in
Kgomo
and Another v Standard Bank of South Africa and Others
[10]
It
has been stated that the purpose of the rule is to ‘correct
expeditiously and obviously wrong judgment or order. In
order to
succeed in an application to rescind the judgment, the applicant must
meet the jurisdictional requirements contained in
rule 42(1)(a)-(b).
Bakoven
Ltd v GJ Howes (Pty) Ltd.
[11]
38.
It
is trite that an Applicant who invokes this rule must show that the
order sought to be rescinded was granted in his or her absence
and it
was erroneously granted or sought. Both grounds must be shown to
exist.
See:
Zuma v Secretary of the Judicial Commission of Enquiry into
allegations of State Capture, Corruption and Fraud in the Public
Sector Including organs of State and Others.
[12]
39.
Once the Applicant meets these jurisdictional
requirements the court has a discretion whether or not to rescind its
own order.
Was the order
erroneously sought and erroneously granted?
40.
Generally, a judgment would have been erroneously
granted if there existed at the time of its issue a fact of which the
court was
not aware of which would
have
precluded the granting of the judgment and which would have induced
the court, if aware of it, not to grant the judgment.
41.In
Promedia
Drukkers & Uitgewers(Edms ) Bpk v Kaimowitz
[13]
it
was explained as follows:
“
F
irst
applicant contends that she is entitled to a rescission if it existed
at the time of the issue of a judgment a fact which the
judge was
unaware of, which would preclude the granting of a judgment…
…
.
She states that if her defenses
were disclosed, the judge who heard the matter would not have granted
the summary judgement.”
She further argued
that ‘
the judgments were granted erroneously because certain
facts of which the judge who granted the judgments were unaware would
have
precluded him from granting the judgments had he been aware of
such facts.’
42.
Lodhi
2 Properties Investment CC v Bondev Developments (Pty) Ltd 2
which
the Respondent referred the court to, supports the above view of the
court.
[14]
43.The Supreme Court of
Appeal held that rule 42(1)(
a
) was essentially a restatement
of the common law. The position of the courts in interpreting
the Rules had been to vary and
expand their application as little as
possible. Rule 42(1)(
a
) was intended to provide for rescission
of an order that had been erroneously sought or erroneously granted.
44.
On whether the judgment was erroneously sought or
granted, the Supreme Court Appeal held that the rule properly
applied, depended
on the
nature of
the error
and not whether the
error appeared from the record of the proceedings. The error had to
be one related to the proceedings themselves.
[own emphasis]
45.
An application for rescission on common law
grounds must be brought within a reasonable period. For the Applicant
to succeed with
the application for rescission on common law grounds,
the Applicant must show good cause or sufficient cause by giving a
reasonable
explanation for delay and showing that application for
rescission was
bona fide
and
showing a
bona fide
defence
to the claim with a
prima
facie
prospect of success.
46.
The Appeal court dealt with the concept of
“sufficient cause” or “good cause” stated
that, “these
concepts defy precise or comprehensive definition,
for many and various factors require to be considered.” The
learned Judge
stated that “it is clear that in principle the
two essential elements of “sufficient cause” for
rescission of
a judgment by default are:
(i)
that the party seeking relief must present a
reasonable and acceptable explanation for his default; and
(ii)
that on the merits such party has a bona fide defence which, prima
facie, carries some prospect of success.
It
is not sufficient if only one of these two requirements is met; for
obvious reasons a party showing no prospects of success on
the merits
will fail in an application for rescission of a default judgement
against him, no matter how reasonable and convincing
the explanation
of his default. An orderly 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 judgement against him rescinded
on the ground that he had
reasonable prospects of success on the merits.”
As
it was held in
Chetty
v Law Society, Transvaal
.
[15]
CONCLUSION:
47.
From both the parties’
arguments it is clear that there are numerous allegations, terms and
facts which the parties place
in dispute and needs to be ventilated
at a trail.
48.
The court is still required to determine whether the Applicant has a
raised a
bone fide
defence or not. I need to stress that
insofar as this is concerned that it is not for this Court to
determine whether or not a
trial court will make a finding in favour
of the defendant in respect of any of the defences it has raised.
49.
That is a determination to be made by the trial court. It is
sufficient at this stage that the defences set out averments which,
if they are established at a trial, could lead to a Court holding in
favour of the Applicant. In other words, it is sufficient
if the
Applicant makes out a
prima facie
defence, that is raises an
issue which is triable.
50.
It is obvious that whether such issue is triable or not will depend
on the nature of the defence that has been raised and each
situation
will have to be judged according to its own merits.
51.
It follows from what transpired that the Applicant has succeeded in
showing that the defences that it has raised may lead to
a different
result to the default judgment that has been granted.
52.
This leads me to the
bona fides
of the application. It should
be apparent from what has been submitted before that judging by what
has transpired and on the basis
that the Applicant has immediately
launched an Application for Rescission of judgment when it became
aware of the Default Judgment
that it cannot be said that the
Applicant was
mala fide.
53.
I am satisfied that the Applicant has shown good cause for the
rescission of the judgment.
54.
I am also satisfied that t
his
court is bound by the doctrine of
stare
decisis
and
departure from the doctrine is not justified.
COSTS:
55.
The general rule is that costs should follow the event and this rule
should be departed from only when there are good grounds
to do so.
ORDER:
56. The following order
is made:
i)
The
Default Judgment granted against Defendant (Applicant
in
casu
) on 20 April 2023 be rescinded and
set aside.
ii)
The Applicant be afforded 10 (ten) days from date of this order to
file its subsequent pleading.
iii)
The Respondent be ordered to pay the costs of the application on a
party and party scale.
A.S
BOONZAAIER, AJ
ON
BEHALF OF APPLICANT:
ADV
J FEREIRA
INSTRUCTED
BY:
NOORDMANS
ATTORNEYS
04
SEVENTH STREET, ARBORETUM
BLOEMFONTEIN
ON
BEHALF OF RESPONDENT:
ADV
JJ GRUNDLING
INSTRUCTED
BY
WEBBERS
ATORNEYS
96,
CHARLES STREET
BLOEMFONTEIN
[1]
[2021]
ZACC28; 2021(11) BCLR 1268(CC) at para47.
[2]
At
7 supra para 61
[3]
At 7 supra para
71
[4]
Harms, Civil
Procedure in the Superior Courts 42.4; Athmaram v Singh 1989(3) SA
953(D) 956D-E.
[5]
Lodhi 2
Properties Investments CC v Bondev Developments (Pty) Ltd 2007(6) SA
87(SCA).
[6]
[2018] JOL
40437(FB)
[7]
Standard Bank of
SA Ltd v SA Fire Equipment (Pty) Ltd and Another 1984(2) SA693(C);
Goodwin Stable Trust v
Duohex
(Pty)Ltd and another 1998(4) SA 606 (C); P & Sons Builders v
Amatole District Municipality [2006] JOL 18596(E).
[8]
Ayres
and Another v Minister of Justice and Correctional Services and
Another {2021] ZACC12.
[9]
[2018]
ZACC 52
;2019(3) BCLR383(CC) at para 21.
[10]
2016(2)]
SA184(GP)
9.1992(2) SA 466(ECD)at
471 G-H
[12]
[2021]
ZACC 28.
[13]
1996(4)
SA 411(C)
.
[14]
2007
(6) SA 87(SCA)
at 94E
.
[15]
1985(2)
SA 756(A) at 765 A-E
.