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[2021] ZAGPPHC 266
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CMTI Consulting Proprietary Limited v King Pie City Ltd (Nabuvax Pty Ltd) and Another (19176/2019) [2021] ZAGPPHC 266 (5 May 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
(1)
REPORTABLE:
YES
/ NO
(2)
OF INTEREST TO OTHER
JUDGES:
YES
/ NO
(3)
REVISED.
Case
No: 19176/2019
In
the matter between:
CMTI
CONSULTING PROPRIETARY LIMITED
Applicant
and
KING
PIE (PTY) LTD (Nabuvax Pty Ltd)
First Respondent
KING
PIE HOLDINGS Pty Ltd
Second
Respondent (Intervening Party/
Joinder)
JUDGMENT ON RESCISSION
FRANCIS-SUBBIAH,
AJ:
[1]
The Applicant, CMTI, seeks rescission of default judgment granted on
7 August 2019.
Default judgment was sought by the Respondent with a
combined summons
and
particulars of claim as King Pie Holdings (Pty) Ltd. However the
court order is made out incorrectly to King Pie (Pty) Ltd with
a
different company’s registration number, namely ‘Nabuvax
Pty Ltd.’
[2]
In seeking rescission the Applicant seeks an order that the court
order be corrected
to replace King Pie (Pty) Ltd with King Pie
Holdings (Pty) Ltd and therefore King Pie Holdings is joined as an
intervening Respondent.
The test for joinder is whether a party has a
direct and substantial interest in the subject matter of litigation
which may prejudice
the party that has not been joined.
In
Gordon
v Department of Health, Kwazulu-Natal
it
was held that “if an order or judgment cannot be sustained
without necessarily prejudicing the interests of third parties
that
had not been joined, then those parties have a legal interest in the
matter and must be joined.”
[1]
[3]
In the matter at hand the
error occurred not in determining the interested parties but at the
stage of submission of the draft order
when default judgment was
granted. The draft order incorrectly cited the plaintiff
(Respondent). No reasonable basis for the error
is given by the
Respondent,
save to say
that, it is a typographical / clerical error
.
The Respondent failed to take any steps within a period of seven to
eight months to correct the error and concedes that King Pie
Holdings
clearly has a direct
and substantial interest in the relief that is being sought.
Consequently, r
efusing
joinder will have the impact of prejudice on the parties and further
delay the proceedings. As a practical measure the joinder
is
confirmed and the order corrected. The Respondent will further be
referred to as King Pie Holdings.
[4]
It is trite that rescission of default judgment must establish in
terms of Uniform
Rule 31(2)(b) firstly, the reasons for absence or
default. And secondly, the Applicant must satisfy the court of his
grounds of
defence to the main action by showing good cause in terms
of the Uniform Rule or sufficient cause according to the common law
which
defence must have some prospect of success, establishing
triable issues. According to
Swart
v ABSA Bank Ltd
[2]
good cause must be proved.
[5]
The basis for rescission of judgment is the Applicant bears the onus
of proving:
5.1
that there was no
wilful default; and
5.2
that there is a
bona fide
defence to the Respondent’s claim.
[6]
The Applicant’s complaint is that the sheriff on 22 March 2019
served the summons
on CMTI by affixing the summons to the door of the
premises which was no longer occupied by the Applicants. As a result
the summons
did not come to their attention resulting in the default
judgment. Had they been aware of the summons they would have
certainly
defended the matter. The Respondent contends that the
summons was served on the registered business address of the
Applicant and
therefore it is deemed proper service.
[7]
The Applicant concedes that the company’s auditors had failed
to update their
new business address in the CIPC’s records.
However the Respondent was fully aware that the Applicant had moved
business
premises. The Respondent collected the pie vending
machine from the new business premises of the Applicant. As a result,
I find that Applicant has not been grossly negligent and there is no
willful default on the part of the Applicant for not defending
the
matter.
[8]
Turning to consider whether the Applicant has a
bona
fide
defence,
requires an understanding of the nature of the business between the
parties. King Pie Holdings concluded an agreement
with CMTI
to
design and develop a functioning pie vending machine to be
commercially utilised by King Pie Holdings.
The
uniqueness of this vending machine is to provide and dispense a
selection menu of pies. Once the customer selects a pie, pays
for it,
receives change in notes and or coins, the selected pie is removed
from cold storage, heated through by a microwave oven
and dispensed
to the customer.
[9]
The main issue between the parties is the terms of their oral
agreement and the incompletely
manufactured pie vending machine. The
vending machine did not function as originally planned. This resulted
in delays, unexpected
problems, various re-designing and re-working
that included a different fridge for cold storage, additional
microwaves for heating,
extended time periods for testing to enable
delivery of the end product - a warm pie from a vending machine.
[10]
The Respondent aggrieved by the non-performance of the Applicant
submits that
the matter
is a fairly straightforward contractual dispute in which the
technical details play an insignificant role in the adjudication
of
the dispute.
[11]
However it is common cause between the parties that there are at
least six disputes between them.
CMTI submits that there are three
separate phases to the oral agreements between the parties. They
submit that they have performed
on certain phases of the deliverables
and should therefore retain their monetary compensation for it.
[12]
According to the parties there w
as no time
frame agreed upon between them for the design and the development of
the pie vending machine. However by
November
2018 the Applicant had given another undertaking to deliver a fully
functional machine and yet again the Applicant failed
to deliver.
[13]
The Respondent concedes that
even
though no specific time period was agreed upon, it is trite that in
any commercial contract where no specific time period is
agreed upon,
the Court should consider a reasonable time period in the
circumstances. It is submitted that a period of more than
three
years, by no stretch of the imagination, could not be considered as a
reasonable time period. A reasonable time period can
only be deducted
by taking into account a variety of factors including a rational
connection between the measure and the plan to
achieve something. A
haphazard conclusion cannot be made without a consideration of the
relevant factors. These factors may well
be triable issues.
[14]
Additionally the Applicant did not provide the Respondent with a
“
performance guarantee.”
However, it is trite that throughout
the correspondence exchanged between the parties, the Applicant
repeatedly confirmed its commitment
to deliver a fully functional
machine thereby accepting such obligation.
[15]
The issue related to utilising the services of Delphius Technologies
(Pty) Ltd as a third party
was also a factor for consideration.
According to the Respondent the introducing of Delphius Technologies
to them was indicative
of the Applicant’s lack of necessary
expertise and skills and possible delays in the completion of the
machine. This is a
further issue that raises factual dispute where
evidence led will in fact clear up whether the Applicant lacked the
necessary expertise
and skills to perform as agreed.
[14]
The next issue raised is that the Applicant was prevented from
completing the machine because
the machine was collected by the
Respondent on 11 December 2018 after demanding collection o
n
10 December 2018. The Respondent threatened to lay criminal charges
against the Applicant if the machine was not released.
[15]
The Applicant contends that certain
programming
of the machine was outstanding and requested an opportunity to
complete the programming and perform in terms of the
agreement. The
Respondent’s view is that
King
Pie Holdings cannot be blamed for, after a period of three years,
demanding performance and in the absence of the Applicant
performing,
cancelling the agreement and collecting the non-functioning machine
as the Respondents had lost faith in the Applicant’s
abilities.
As there are two viewpoints on this issue the leading of evidence
relating to the technicalities and technology will
reveal to what
extend there was performance by the Applicant or not.
[16]
In the result the Applicant makes out a bona fide case for
rescission.
[17]
The following order is made:
17.1
The Intervening Party
is allowed to intervene as the Second Respondent.
17.2
The Court order granted
on the 7 August 2019 be corrected by replacing the name of the
Plaintiff, incorrectly cited as “King
Pie (Pty) Ltd
(Registration number: 2012/050518/07)” with the name of
the Second Respondent ‘King Pie Holdings
(Pty) Ltd
(Registration number: 1997/008676/07)” as Plaintiff.
17.3
T
he
order granted by the honourable court on 7 August 2019 be and is
hereby rescinded.
17.4
The Applicant is
granted leave to defend the main action and deliver a plea within the
prescribed days in accordance with the uniform
rules of court.
17.5
Costs of this
application are costs in the cause.
R.
FRANCIS-SUBBIAH
ACTING
JUDGE OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION
PRETORIA
APPEARANCES
Counsel
for the Applicant:
Adv C Gibson
Counsel
for the Respondents:
Adv J A Venter
Date
of Hearing:
20 April 2021
Date
of Judgment:
05 May 2021
[1]
2008
ZASCA 99
[2]
2009
(5) SA 219
(C)