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[2022] ZAECMKHC 77
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South African Social Security Agency v Grow With Me Projects Primary Co-operative Limited (CA 184/2021) [2022] ZAECMKHC 77 (18 October 2022)
IN
THE HIGH COURT OF SOUTH AFRICA
[EASTERN
CAPE DIVISION, MAKHANDA]
CASE
NO: CA 184/2021
Heard:
07 October 2022
Delivered:
18 October 2022
In
the matter between:-
SOUTH
AFRICAN SOCIAL SECURITY
AGENCY
Appellant
and
GROW
WITH ME PROJECTS PRIMARY
CO-OPERATIVE
LIMITED
First Respondent
JUDGMENT
Matebese
AJ:
[1]
On 8 July 2021 the Regional Magistrates Court, East London (the court
a
quo
) in an application for rescission brought by the
appellant delivered judgement and granted an order dismissing the
application
for rescission and directing the appellant to pay the
costs of the application on a party and party scale. The appellant
appeals
the judgement and order of the court
a quo
.
[2]
The court
a quo
in arriving at the above order reasoned as
follows:
“
[29]
Considering the facts, submissions of the parties and the law I am of
the view that there is no bona fide defence established
by the
applicant. This court is inclined to exercise its discretion in
favour of the respondent.”
[1]
[3]
From a reading of the judgement it appears that the court
a
quo
never considered whether the appellant had furnished a reasonable and
acceptable explanation for its default. This is despite the
court
a
quo
havig identified this as one of the requirements or elements of
sufficient cause for the rescission of default judement.
[2]
Nothing is said by the court
a
quo
in this regard.
[4]
Before dealing with the issues that arise in this appeal I deem it
appropriate that
I deal with the following background facs which I
consider relevant to the order granted herein below.
Factual
background
[5]
On or about 2 December 2019 the appellant issued the respondent with
Purchase Order
Number A1-11885 for the supply and delivery of school
uniform in Mdantsane and/or Idutywa.
[6]
The respondent contends, in its answering affidavit in the court
a
quo
, that it delivered in terms of the Purchase Order and issued
the appellant with an invoice for the payment of the sum of
R86 450.00
in respect of the goods so delivered.
[7]
The appellant on the other hand contends, in its founding affidavit
in the court
a quo
, that the respondent failed to deliver as
per the agreement and that the appellant, as a result of such
failure, cancelled the
agreement.
[8]
For the reasons that appear later in this judgement it is not my
intention to deal
with the issue whether there was delivery by the
respondent or whether the agreement was cancelled by the appellant.
Suffice only
to mention that the dispute about the appellants refusal
and/or failure to pay the amount allegedly due to the respondent, led
the respondent to institute action proceedings in the court
a quo
.
[9]
On 16 November 2020 the respondent issued summons against the
appellant claiming the
total amount of R78 500.00 (Seventy Eight
Thousand Five Hundred Rand Only) plus costs and interest on both the
capital amount
and costs.
[10]
The summons were served upon the appellant on 10 December 2020. This
appears from the Sheriff’s
Return of Service dated 14
December 2020.
[11]
In the summons the appellant was given ten (10) days to file a notice
of intention to defend
the action and a further twenty (20) days
thereafter to deliver its plea.
[12]
The appellant, therefore, had until 26 January 2021 to file a notice
of intention to defend the
proceedings. This is so because the period
between the 16 December and 15 January is a
dies
non
for
purposes of filing a notice of intention to defend.
[3]
[13]
On 11 January 2021 the respondent sought and obtained default
judgement against the appellant
in the sum of R 78500.00 (Seventy
Eight Thousand Five Hundred Rand Only) plus interest in the at the
rate of 10.5 % per annum from
10 December 2020 and costs. The default
judgement was granted on 21 January 2021 by the court.
[14]
On 22 January 2021 the appellant delivered its notice of intention to
defend the proceedings.
The notice of intention to defend was served
upon he respondent’s attorneys on 21 January 2021 at 11H49.
[4]
[15]
It is therefore clear from the above that the default judgement was
sought and granted before
the period for the filing of the notice of
intention to defend expired. However, this was not raised in the
appellant’s rescission
application in the court
a quo
and the court
a quo
was apparently unaware or failed to take
notice of this irregularity or error.
[16]
The appellant, in its heads of argument in this court took this
point. Even though this point
was not raised in the court
a
quo
, it
is in my view a legal point that is apparent from the record,
it does not raise new factual issues and its consideration
does not
cause any unfairness and prejudice to the respondent. This court can
therefore entertain it and decide the matter on the
basis thereof.
[5]
Above all, it is in the interests of justice that it be considered by
this court.
Legal principles
[17]
Section 36 or the Magistrates Court Act 32 of 1944 (“the Act”)
grants the Magistrates
Court the power to rescind certain judgements.
It provides, in part, that the court may, upon application by any
person affected
thereby, or, in cases falling under paragraph (c),
suo
motu
-
rescind or vary any judgment granted by it in the absence of the
person against whom that judgment was granted.
[6]
[18]
Rule 49 of the Rules for the Conduct of Proceedings in the
Magistrates Courts (“the rules”)
provides for the
procedure for making applications for rescission and as well as the
grounds upon which a court may rescind a judgement.
It provides, in
the relevant part:
“
49
Rescission and variation of judgments
(1)
A party to proceedings in which a default judgment has been given, or
any person affected by such judgment,
may within 20 days after
obtaining knowledge of the judgment serve and file an application to
court, on notice to all parties to
the proceedings, for a rescission
or variation of the judgment and the court may, upon good cause
shown, or if it is satisfied
that there is good reason to do so,
rescind or vary the default judgment on such terms as it deems fit:
Provided that the 20 days'
period shall not be applicable to a
request for rescission or variation of judgment brought in terms of
subrule (5) or (5A).
(2)
It will be presumed that the applicant had knowledge of the default
judgment 10 days after the date on which
it was granted, unless the
applicant proves otherwise.
(3)
Where an application for rescission of a default judgment is made by
a defendant against whom the judgment
was granted, who wishes to
defend the proceedings, the application must be supported by an
affidavit setting out the reasons for
the defendant's absence or
default and the grounds of the defendant's defence to the claim….”
The
rescission.
[19]
The reasoning of the court a quo, quoted above, shows that the court
a quo only considered whether
the appellant had a bona fide defence.
This is only one element of the enquiry on good cause.
[20]
The court
a quo
also failed to consider whether there was good
reason to rescind the judgement as required by rule 49 of the rules.
The rule clearly
states that a default judgement may be rescinded
upon good cause shown or if the court is satisfied that there is a
good reason
to rescind the judgement.
[21]
The existence of a good reason to rescind the judgement is, in terms
of the rule, an independent
and separate ground for rescission of
default judgement from good cause. This is clear from the use of the
word “
or”
in the rule.
[22]
In this case there was clearly a good reason to rescind the default
judgement. The reason is
that the default judgement was prematurely
sought and granted by the court.
[23]
For this reason alone the appeal must succeed. Having said that I
consider it unnecessary to
deal with the other grounds of appeal
raised by the appellant
[24]
I am left to deal with the issue of costs, with which I deal
hereunder.
Costs
[25]
The respondent, once the above issue was raised by the appellant,
decided to file a notice to
abide in which it sought to avoid
liability for costs on the basis that if the point was raised earlier
the issue of costs would
have been mitigated. The notice to abide was
filed on 5 October 2022, two days before the hearing of the appeal.
[26]
In my view the respondent cannot avoid liability for costs in this
matter. First, it is the respondent
that prematurely approached the
court and applied for default judgement. Second, when the appellant
filed its notice of intention
to defend, the respondent had an option
to withdraw the application for default judgement, if the judgement
had not yet been granted
or, if already granted, to abandon same.
Third, the respondent could also have consented to the rescission of
the default judgement,
especially regard being had to the fact that a
notice of intention to defend was filed on the day the judgemet was
granted, clearly
signifying an intention by the appellant to defend
the matter. Instead, it opposed the rescission. Fourth, the
respondent only
waited until the 5
th
October 2022 to file
its Notice to abide, a mere two days before the hearing of the
appeal.
[27]
Accordingly, I do not believe that the respondent is genuine or bona
fide when saying the notice
to abide is filed in order to avoid
unnecessary legal expenses.
[28]
The respondent must therefore bear the costs of this appeal and the
costs of the rescission application
in the court
a quo
.
[29]
Accordingly, I make the following order:
1.
The appellant’s appeal is upheld with costs.
2.
The judgement and order of the court a quo is set aside and
replaced with the following order:
(a)
The default judgement granted against the applicant on 21
January 2021 is rescinded and set aside;
(b)
The applicant is granted leave to file its plea to the
respondent’s summons and particulars of claim within twenty
(20) days
from the date of this order
(c)
The respondent shall pay the costs of this application.
Z.Z
Matebese
Acting
Judge of the High Court
I
agree
M.
Lowe
Judge
of the High Court
Appearances:
For
the appellant
:
Adv X. Nyangiwe (with Adv M.
Sotenjwa)
Instructed
by State Attorney
East
London
For
the Respondent
:
No Appearance
[1]
Quoted
from the judgement of the court a quo.
[2]
See para.13 of the judgement of the court a quo.
[3]
See rule 13 of the Rules for the Conduct of Proceedings in the
Magistrates Court.
[4]
See record p.22 to 23
[5]
Nwafor v Minister of Home Affiars and Others
[2021] ZASCA 58
para.29
[6]
Section 36(1)(a)
of the
Magistrates Courts Act 32 of 1944
as
amended.