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[2021] ZAGPJHC 869
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Mofokeng v GMG Trust Company (SA) (Pty) Ltd and Others (25121/2018; 25124/2018) [2021] ZAGPJHC 869 (6 July 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 25121/2018
25124/2018
REPORTABLE:
NO
OF
INTEREST TO OTHER JUDGES: NO
REVISED:
NO
[6
JULY 2021]
In
the matter between:
LERATO
INNOCENTIA MOFOKENG
Applicant
and
GMG
TRUST COMPANY (SA) (PTY) LTD
First
Respondent
WILLEM
SWANEPOEL
N.O.
Second Respondent
BRENDAN
HARMSE
N.O.
Third Respondent
WESSEL
STADLANDER
N.O.
Fourth Respondent
This
Judgment was delivered electronically to the parties’ legal
representatives on 8 July 2021, and the deemed date of handing
down
the Judgment is accordingly 8 July 2021. The Judgment will also be
uploaded to Caselines.
J
U D G M E N T:
NEL
AJ
[1]
The Applicant, Ms Lerato Innocentia
Mofokeng (“the Applicant”) seeks the rescission and
setting aside of two default
judgments granted against her under case
numbers 25121/2018 and 25124/2018 respectively, on 14 October 2019 by
His Lordship Mr
Justice Mudau (“Mudau J”).
[2]
Although two separate Default Judgments
were granted (under the aforesaid two case numbers), the Applicant
seeks the rescission
of both judgments in one application.
[3]
The application for rescission of both
Default Judgments was launched on 26 October 2019. The Respondents
set the Rescission Application
down for hearing (almost a year after
the Rescission Application was launched), and served a Notice of Set
Down on 4 September
2020, for the hearing to be held on 16 November
2020.
[4]
Neither the Founding Affidavit nor the
Answering Affidavit can be described as models of clarity, but I
ascertained that the rescission
of both judgments can be heard in one
application, as all of the issues and documentation in the two
actions that resulted in the
actions and the Default Judgments being
granted are identical, save for the fact that the Default Judgments
relate to the purchase
of two different motor vehicles, with one
motor vehicle being an Audi A5 TFSI Cabriolet and the other motor
vehicle being a Volkswagen
Golf VII GTI.
[5]
Similarly, the factual and legal aspects
relating to the rescission of the two Default Judgments and the
grounds for rescission
of the two Default Judgments, are identical,
and can be determined in one application. The motor vehicles play no
part in the determination
of the Rescission Application.
[6]
The relevant terms of the two Default
Judgments granted which are identical, save for the description of
the two motor vehicles,
were the following:
[6.1] The credit
agreements concluded between the Applicant and Volkswagen Financial
Services South Africa (Pty) Ltd (“Volkswagen
Financial
Services”) were cancelled;
[6.2] The Applicant
was obliged to return the two motor vehicles to the Respondents;
[6.3] Judgment in
respect of the quantum of damages that the Respondents may have
suffered was postponed, pending the return
of the motor vehicles, the
valuation of the motor vehicles and the sale of the motor vehicles.
RELEVANT
BACKGROUND FACTS
[7]
The Applicant stated that she concluded
credit agreements with Volkswagen Financial Services in respect of
both motor vehicles in
2016. The Respondents deny this. The Applicant
did not attach any documents in support of her contention. It appears
from the Particulars
of Claim (and the subsequent affidavits that I
considered) that the dispute relates purely to the dates of
conclusion of the credit
agreements.
[8]
There is no dispute that the Applicant
received possession of both motor vehicles in terms of an agreement,
regardless of whether
it be classified as a credit agreement or an
instalment sale agreement, and that she has paid certain instalments
in respect of
the purchase price of the motor vehicles.
[9]
On 31 March 2017 Volkswagen Financial
Services instituted two separate legal actions against the Applicant
(under case numbers 11485/2017
and 11486/2017 respectively) founded
on two instalment sale agreements and obtained Default Judgment as
against the Applicant.
The terms of the Default Judgments were not
referred to, but are irrelevant, having regard to the subsequent
events. It appears
that the Applicant ceased making any payments in
respect of the two motor vehicles in 2017, which prompted the
institution of the
actions by Volkswagen Financial Services.
[10]
The Judgments granted in favour of
Volkswagen Financial Services under case numbers 11458/2017 and
11486/2017 were rescinded on
application, during May and June 2017,
respectively. The grounds of rescission were not disclosed.
[11]
During August 2018 Volkswagen Financial
Services withdrew the two actions referred to in the previous two
paragraphs. The reason
for such withdrawal is not explained, and is
in any event not relevant. I can only assume that Volkswagen
Financial Services had
no
locus standi
,
having regard to the subsequent allegations made.
[12]
The Applicant alleged that she understood
that the right, title and interest in the indebtedness of the
Applicant to Volkswagen
Financial Services, under the instalment
sales agreements concluded with Volkswagen Financial Services, were
ceded to Velocity
Finance Insurer Trust (“Velocity”) in
May 2015 (Agreement number 87001652167) and January 2016 (Agreement
number 87003328201),
based on information she had received in
correspondence addressed to her by Smit Jones Pratt Attorneys dated
29 May 2018. The Applicant
did not attach the relevant correspondence
to her Affidavits, but the Respondents attached the letter to their
Answering Affidavit.
[13]
In the Particulars of Claim of the Actions
referred to below, the Respondents allege that the Respondents are
the trustees of Velocity,
and have launched the Actions in such
capacity.
[14]
It is also alleged in the Particulars of
Claim that both credit agreements concluded between the Applicant and
Volkswagen Financial
Services were ceded to Velocity.
[15]
The agreements conferring the legal rights
on the Respondents to have launched the Actions are titled “
SALE
AGREEMENT
”. In terms of clause 4
of the Sale Agreements, Volkswagen Financial Services sold its right,
title and interest in the credit
agreements concluded with the
Applicant, to Velocity, by way of an out-and-out cession. In the
circumstances it is alleged in the
Particulars of Claim that
Volkswagen Financial Services ceded all of its rights, title and
interest in the credit agreements concluded
with the Applicant to
Velocity.
[16]
The Respondents thereafter instituted two
separate legal actions against the Applicant in this Division, under
case numbers 25121/2018
and 25124/2018 respectively (“the
Actions”).
[17]
The dates utilised in the Founding
Affidavit are confusing and appear to be chronologically incorrect.
As an example, it is alleged
that the Respondents launched the
Actions on 6 July 2019, yet the case numbers of the Actions indicate
that the Actions were issued
in 2018. The Chronology prepared by the
Parties does not assist, as it commences on 6 June 2019, when leave
to defend was granted
in respect of Summary Judgment Applications.
[18]
The Chronology does not comply with the
Practice Directives of this Division, as a Chronology is required to
inter alia
include all factual dates relevant to the merits of the application,
and not just the procedural dates. The Chronology should accordingly
have commenced with the date when the first agreement (presumably an
instalment sales agreement) was concluded as between the Applicant
and Volkswagen Financial Services.
[19]
On 10 July 2019 the Respondents served
Notices of Bar after the Applicant had failed to file her Plea
timeously. During the five-day
period provided in the Notices of Bar
for the filing of a Plea, the Applicant filed Notices in terms of
Rule 30A(1). (I mention
as an aside, that the Chronology refers to
this as having taken place on 19 June 2019 further illustrating the
lack of care taken
in ensuring that the Chronology is accurate and
serves the purpose for which it was intended).
[20]
The Respondents set the applications for
Default Judgment down for hearing on 14 October 2019. On such date
Mudau J granted Default
Judgment against the Applicant in respect of
both of the Actions.
[21]
It is set out in the Answering Affidavit
(and was raised during argument) that at the hearing of the Default
Judgments the Applicant’s
counsel raised the arguments now set
out in the Rescission Application, including the effect of the
service of the Rule 30A(1)
Notice. It is also set out in the
Answering Affidavit that Mudau J provided Applicant’s counsel
with two opportunities to
seek the upliftment of the Notices of Bar
and to seek extensions for the filing of a Plea, which invitation was
declined. These
allegations are not disputed by the Applicant.
[22]
The Applicant has now sought the rescission
of both Default Judgments granted by Mudau J under case numbers
25121/2018 and 25124/2018
respectively.
[23]
As referred to above, the relevant facts in
respect of the Actions (and the Rescission Application) are
identical, save for the
fact that each Action relates to a different
motor vehicle. The Rescission Application relates to both Default
Judgments granted,
and the Applicant has “consolidated”
the seeking of rescission in respect of both Default Judgments. In
the circumstances
this Judgment will relate to, and apply to, both
Actions and the Rescission of both Default Judgments.
IN
LIMINE
POINT: LACK OF
JURISDICTION
[24]
In the Answering Affidavit and in the
Respondents’ Heads of Argument, the Respondents submitted that
the launching of the
Rescission Application is “
procedurally
incompetent
” on the basis that
the Applicant has incorrectly utilised Rule 42 of the Uniform Rules
of Court, and as the Judgments granted
by Mudau J are not Default
Judgments granted in the absence of the Applicant. The aspect of
“
absence
”
is crucial to the
in limine
point.
[25]
The Respondents accordingly contended that
I have no jurisdiction to hear the Rescission Application, and that
the Applicant ought
properly to have launched an application for
leave to appeal the Judgments of Mudau J.
[26]
It is trite that the rescission of a
Default Judgment can be sought in three distinct manners, being in
terms of the common law,
in terms of Rule 31 and in terms of Rule
42(1).
[27]
Whilst there is no specific reference in
the Applicant’s Notice of Motion or Founding Affidavit to Rule
42, the Applicant
does state in paragraph 47 of the Founding
Affidavit that “…
the order
or judgment was erroneously sought and/or erroneously granted…
”.
[28]
It is presumably based on such allegation
that the Respondents have (reasonably) assumed that the Applicant’s
Application
for Rescission is based on Rule 42(1).
[29]
Rule 42(1)(a) of the Uniform Rules of Court
utilises the phrase “
erroneously
sought or erroneously granted
”,
and entitles a Court, either
mere motu
or on application, to rescind an order or judgment erroneously sought
or erroneously granted in the absence of any party affected
thereby.
[30]
In the Answering Affidavit the Respondents
carefully analysed Rule 42(1) and concluded (and submitted) that
reliance on Rule 42(1)
is not available to the Applicant.
[31]
Rules 42(1)(b) and (c) are clearly not
applicable to this Rescission Application as the Respondents
correctly set out in their Answering
Affidavit. It is clear from the
affidavits filed on behalf of the Applicant that no reliance is
placed on Rules 42(1)(b) and (c).
[32]
The Respondents however concluded that Rule
42(1)(a) is also not applicable, and is in fact incompetent, on the
basis that the Judgments
were not granted in “
the
absence of any party affected thereby
”
as referred to in Rule 42(1)(a).
[33]
The Respondents pointed out that the common
law and Rule 31(2)(b) would also not find application in this
Rescission Application,
as both Rule 31(2)(b) and the common law
relate only to the rescission of default judgments that were granted
in the absence of
the person seeking rescission of the default
judgments.
[34]
The thrust of the Respondents’
in
limine
point (regardless of which rule
or common law is relied upon) is that the Application for the
Rescission of the Default Judgments
is defective, in that the
Applicant should have launched an application for leave to appeal, on
the basis that the Default Judgments
granted by Mudau J were not
granted in the absence of the Applicant.
[35]
This contention is confirmed in the Heads
of Argument filed on behalf of the Respondents, where it is submitted
that the Application
for Rescission of Judgment is procedurally
incompetent and should be dismissed on the basis that the Default
Judgments were not
granted in the absence of the Applicant.
[36]
It is clear from the affidavits filed that
the Applicant was legally represented at the hearing of the Default
Judgment applications
and that argument was raised on behalf of the
Applicant against the granting of default judgment.
[37]
There is no suggestion in any of the
affidavits that the legal representative representing the Applicant
at the hearing of the Default
Judgment before Mudau J placed the
Applicant’s version in respect of the merits of the Actions
fully before the Judge, or
made any representations or submissions in
respect of her version of the merits of the Actions.
[38]
The arguments and submissions made on
behalf of the Applicant at the hearing of the Default Judgments
related primarily to reasons
as to why the Default Judgment
Applications were premature and defective and should not be heard.
[39]
Whilst I accept that there must have been
some overlap of arguments that related to the merits of the Actions
with the arguments
raised on behalf of the Applicant, the submissions
made on behalf of the Applicant related primarily to the effect of
the service
of the Rule 30(A)(1) Notice on the Notices of Bar, and
whether the Default Judgment Applications were properly before, and
could
be heard by, Mudau J.
[40]
The full version and defence of the
Applicant in respect of the allegations made in the Particulars of
Claim were not placed before
Mudau J at the time of the hearing of
the Default Judgments, either by way of evidence, pleadings or
affidavit, and certainly could
not have been, as the Applicant had
not yet filed a Plea.
[41]
In the circumstances, it must be accepted
that the Applicant’s version in respect of the allegations made
in the Actions and
the merits of the Actions were not heard or
considered by the Court hearing the Application for Default Judgment.
[42]
In
the matter of
Ferreiras
(Pty) Ltd v Naidoo and Another
[1]
De Villiers AJ was faced with a similar argument as raised in the
in
limine
point
in this Application.
[43]
Briefly summarised, it was submitted in the
Ferreiras
matter that a rescission application of a default judgment had been
the inappropriate procedure to follow, as the judgment sought
to be
rescinded in the
Ferreiras
matter was not a default judgment, as the counsel for the party
against whom default judgment had been granted was present in Court
when the default judgment was granted. It was submitted in that
matter that a judgment is only a default judgment if it is granted
in
the physical absence of the party and the party’s legal
representatives against whom the judgment is sought.
[44]
De
Villiers AJ considered the matters of
Katritsis
v De Macedo
[2]
,
Pitelli
v Everton Gardens Projects CC
[3]
and
Rainbow
Farms (Pty) Ltd v Crockery Gladstone Farm
[4]
in determining when a judgment is regarded as being a default
judgment.
[45]
In explaining when a judgment is regarded
to be a default judgment, De Villiers AJ stated,
inter
alia
, that a judgment granted against a
party in circumstances where that party has not placed its version
before the Court, even if
the party is at Court or is legally
represented, is still classified as a default judgment. I am in
respectful agreement with De
Villiers AJ in respect of such
conclusion.
[46]
I am of the view that any judgment granted
against a litigant in a default judgment application, in
circumstances where such litigant
has not placed its version on the
merits before the Court, even if the litigant is present and/or
legally represented, must still
be regarded as a default judgment.
[47]
In
the matter of
Britz
and Others v Modloga and Others
[5]
three applicants sought the rescission of an order made by consent
during a trial. The Court held that the jurisdictional fact
required,
as set out in Rule 42(1)(a), that an order was erroneously sought or
granted in the absence of the three applicants,
were not met, as the
applicants’ legal representatives, who were concluding the
trial when the order sought to be rescinded
was made, were present at
Court. The Court held that in the circumstances the requirements of
“
absence
”
of the applicants was not met.
[48]
The
Britz
matter is clearly distinguishable, as
it related to a consent order rather than a default judgment, and
there were disputes as to
the mandate of the applicants’ legal
representatives.
[49]
Respondents’
counsel relied on the matter of
De
Allende v Baraldi
[6]
for the submission that the Default Judgments were not granted in the
absence of the Applicant, and she could accordingly not rely
on Rule
42(1).
[50]
In the
De
Allende
matter the Court considered an
appeal from the Magistrate’s court, and the proper
interpretation of Section 36(a) of the
Magistrate’s Court Act.
Section 36 of the Magistrate’s Court Act sets out the types of
judgments that can be rescinded
in the Magistrate’s Court, and
is not limited to default judgments.
[51]
In the
De
Allende
matter judgment was granted
after the filing of pleadings and pursuant to an application in terms
of Rule 60(3) for the striking
out of the defendant’s plea and
the granting of judgment.
[52]
The judgment considered in the
De
Allende
matter was accordingly not
strictly a default judgment in the sense of the judgment that is
being considered in this Application
.
[53]
The relevant portion of Section 36(a) reads
as follows:
“
The
Court may …
(a)
Rescind or vary any judgment granted by it
in the absence of the person against whom that judgment was granted.”
[54]
In the
De
Allende
matter the Court held that the
defendant in the Magistrate’s Court who was granted rescission
could not rely on Section 36(a),
as the defendant had been
represented at Court, and accordingly the judgment was not granted in
the absence of the party.
[55]
Whilst
the judgments relating to the meaning of “
absence
”
in considering rescission applications are not all harmonious,
subject to what I set out below, I am satisfied that despite
the
presence and the submissions made by Applicant’s counsel at the
hearing of the Default Judgments before Mudau J, the
judgments
granted were indeed Default Judgments and are susceptible to
rescission.
[7]
[56]
When it was Respondents’ turn to
address me at the hearing of the Application, Respondents’
counsel referred to the
Ferreiras
matter
(cited in the Heads of Argument of Applicant’s counsel)
informed me that the Respondents have elected to abandon the
in
limine
point, and no longer place
reliance on such
in limine
point.
[57]
I am accordingly not required to provide a
finding as to whether the Applicant was absent at the hearing of the
Default Judgments
and am also not required to determine the meaning
of “
absence
”
as referred to in rule 42(1)(a).
THE
“GROUNDS” OF RESCISSION
[58]
Under the heading of “
GROUNDS
FOR RESCISSION
” the Applicant has
set out a number of allegations in support of her application for
rescission. I have summarised the allegations
below.
[59]
The Applicant states that she concluded
credit agreements with Volkswagen Financial Services in respect of
the two motor vehicles
on 4 January 2016 and 8 March 2016,
respectively.
[60]
The Applicant states that she did not
conclude any credit agreements with the Respondents.
[61]
The Applicant contends that she was not
aware of the cession of any right, title and interest in the
agreements concluded between
the Applicant and Volkswagen Financial
Services to Velocity. The Applicant implied that she did not consent
to the cession.
[62]
The Applicant implies that the Respondents
have breached the provisions and regulations of the National Credit
Act, Number 34 of
2005, as amended (“the NCA”).
[63]
The Applicant alleges that the Respondents
have no
locus standi
to have instituted the Actions as against her.
[64]
The Applicant states that no further legal
proceedings could have been instituted against her in respect of the
two motor vehicles
after the withdrawal of the actions instituted
against the Applicant by Volkswagen Financial Services.
[65]
The Applicant contends that the
applications for Default Judgment filed by the Respondents were
premature, as the Applicant had
filed Rule 30A(1) Notices during the
five-day period stipulated in the Notices of Bar, on the basis that
the Respondents had not
attached “
true
copies
” of the Cessions relied on
in the Respondents’ Particulars of Claim.
[66]
The Applicant stated that the Default
Judgments were erroneously sought and granted.
[67]
The Applicant contends that the Rule 30A(1)
Notices constitute pleadings as contemplated by Uniform Rule of Court
26 and that she
was accordingly not in default.
[68]
The Applicant alleges that the hearing of
the Default Judgment Applications by Mudau J was “
irregular
”
and “
incompetent
”.
[69]
The Applicant states that she did not
abandon her right to file a Plea, and intended to do so after the
Rule 30A(1) Application
had been determined.
[70]
The Applicant alleges that the copies of
the credit agreement concluded between herself and Volkswagen
Financial Services, and the
cession concluded between Volkswagen
Financial Services and Velocity should have been attached to the
Particulars of Claim.
[71]
The Applicant alleges that she has a
bona
fide
defence against the Respondents’
claims in the Actions.
[72]
The Applicant alleges that the Plaintiff’s
Particulars of Claim do not substantiate a valid cause of action.
[73]
In paragraph 55.1 of the Founding
Affidavit, the Applicant alleges that “
in
support of this
” she refers the
Court to the “
grounds of defence
”
as set out in the Affidavit Resisting Summary Judgment which “
should
be incorporated herein by reference
”.
[74]
The contents of paragraph 55.1 of the
Founding Affidavit are not only inappropriate and improper, but also
most unhelpful. It is
not clear whether the reference to the phrase
“
in support of this
”
refers only to the preceding paragraph wherein it is alleged that the
Respondents’ Particulars of Claim do not substantiate
a valid
cause of action, or all of the preceding paragraphs of the Founding
Affidavit. Similarly, the statement that “
my
grounds of defence contained in my previous affidavit…should
be incorporated herein by reference
”
is vague, unhelpful, inappropriate and improper.
[75]
In
the matter of
Swissborough
Diamond Mines (Pty) Ltd & Others v Government of the Republic of
South Africa
[8]
the Court stated as follows:
“
Regard
being had to the function of affidavits, it is not open to an
applicant or a respondent to merely annex to its affidavit
documentation and to request the Court to have regard to it. What is
required is the identification of the portions thereof on
which
reliance is placed and an indication of the case which is sought to
be made out on the strength thereof. If this were not
so the essence
of our established practice would be destroyed. A party would not
know what case must be met.”
[76]
The bald allegation by the Applicant that
the contents of the Affidavit Resisting Summary Judgment, insofar as
it may relate to
any other grounds or defences should simply be
incorporated in her Founding Affidavit is entirely unhelpful, and
does not enable
the Respondents to know what case to meet. Crucially,
it also does not set out before the Court determining the Rescission
Application
what other grounds or defences should be considered.
[77]
In
the matter of
Engen
Petroleum Limited v Webrref Trading 31 CC
[9]
the Court, in referring to the incorporation of affidavits and
documentation solely by reference stated as follows:
“
One
would think that the proposition only has to be stated for it to be
rejected. A formulation as broad as this in an affidavit
fails to
define the issues between the parties and does not place the
essential evidence before the Court seized with the matter.
Neither
the Court nor the other party will know prior to the hearing what is
in issue.”
[10]
[78]
It is therefore no surprise that in
answering to paragraph 55 of the Founding Affidavit the Respondents
simply denied that the Respondents
Particulars of claim do not
substantiate a valid cause of action.
[79]
In addition, the Affidavit Resisting
Summary Judgment was not even attached to the Applicant’s
Founding Affidavit in the Rescission
Application.
[80]
Despite the improper conduct of the
Applicant, and my entitlement to ignore the contents of the
Affidavits Resisting Summary Judgment,
I called for copies of the
Affidavits Resisting Summary Judgment, and considered the contents
thereof. Two additional allegations
were contained in the Affidavit
Resisting Summary Judgments which may impact on the Rescission
Application, and I have accordingly
set them out below, and have
considered them.
[81]
The Applicant alleges that she “
denies
the contents of being in arrears with VFSSA and/or the
[Respondents]
…
without proof
(of)
the agreement which the
[Applicant]
is said to have defaulted
”.
[82]
The Sale Agreement raises “
serious
legal non-compliance issues
” with
provisions of the Companies Act and the NCA.
THE
REPLYING AFFIDAVIT
[83]
In the Replying Affidavit the Applicant
elected not to respond to the contents of the Answering Affidavit on
an
ad seriatim
basis. No proper reasoning is set out for such election.
[84]
It
is trite that an applicant must make out his or her case in the
founding affidavit, and should not attempt to make out his or
her
case in a replying affidavit. The phrase “
An
applicant must stand or fall by his/her founding affidavit
”
is often referred to in judgments of the various Courts.
[11]
[85]
Whilst there are exceptions to such general
rule, it was not suggested that any exception should apply in this
Application, and
I am satisfied that there are no exceptions
applicable.
[86]
Despite my view in such regard, I still had
regard to the additional ground raised in the Replying Affidavit,
being that the Applicant
alleges that the cessions of the credit
agreements are not lawful and may be in contravention of the
Companies Act, the Income
Tax Act, and the Tax Administration Act,
without setting out the manner of contravention, and the allegation
is simply meaningless.
[87]
The Applicant accuses the deponent to the
Answering Affidavit of perjury, without setting out in what manner
she allegedly perjured
herself. There is clearly no basis for such
allegation.
[88]
However, relying on such unsubstantiated
accusation the Applicant then attempts to discredit the allegations
made by Ms Stewart.
[89]
The Applicant however avoided dealing with
certain of the crucial allegations and invitations as set out in the
Answering Affidavit.
THE
RELEVANT LEGAL PRINCIPLES
[90]
It is not possible to determine from the
contents of the Applicant’s Heads of Argument whether the
Applicant is relying on
Rule 32, Section 42(1) or the common law as
the legal basis for the rescission of the two Default Judgments.
[91]
It appears from the phrase “
erroneously
sought
” as used in paragraph 45,
and the phrase “
erroneously sought
and/or erroneously granted
” in
paragraph 47 of the Founding Affidavit that the Applicant seeks to
rely on Rule 42(1).
[92]
In the Applicants’ Heads of Argument,
submissions are set out relating to an explanation for default, good
cause and a
bona fide
defence,
which are requirements of rescission in terms of Rule 31 and of the
common law.
[93]
I will accordingly briefly set out the
relevant legal principles applicable to all three methods of seeking
rescission, and consider
whether the Applicant is entitled to
rescission on any of the three legal bases in terms of which
rescission can be sought.
[94]
In
the High Court an application for the rescission of a judgment can be
based on Rule 31, Rule 42(1) or the common law.
[12]
[95]
In
terms of Rule 31(2)(b) (and any default judgment granted by a Court
under Rule 31(5)(d)), a defendant may apply to Court to set
aside the
judgment of a Court and the Court may, upon good cause shown, set
aside the default judgment. The Courts have stated
the following
principles in relation to “good cause”
[13]
:
[95.1]
The applicant must give a reasonable explanation of his
or her
default. If it appears that his or her default was wilful or due to
gross negligence, the Court should not come to his or
her assistance;
[95. 2]
The application must be
bona fide
and not made with the
intention of merely delaying the plaintiff’s claim; and
[95.3]
The applicant must show that he or she has a
bona fide
defence
to the plaintiff’s claim. It is sufficient if he or she makes
out a
prima facie
defence in the sense of setting out
averments which, if established at the trial, would entitle him or
her to the relief asked
for. He or she need not deal fully with the
merits of the case and produce evidence that the probabilities are in
his or her favour.
[96]
In relation to wilful default or gross
negligence, the Courts have held:
[96.1]
While a Court will decline to grant relief where the default
has been
wilful or due to gross negligence, the absence of wilfulness or gross
negligence is not a prerequisite to the granting
of relief;
[14]
[96.2]
For a person to be said to be in wilful default, the test
is whether
the default is deliberate, ie when a defendant with full knowledge of
the circumstances and the risks attendant on his
or her default
freely takes a decision to refrain from taking action.
[15]
[97]
Although
an applicant does not need to deal fully with the merits of the case,
the grounds of defence must be set forth with sufficient
detail to
enable the Court to conclude that he or she has a
bona
fide
defence.
[16]
[98]
A Court may rescind a judgment under Rule
42(1) where the order or judgment was erroneously sought or granted
in the absence of
any party affected thereby. The relevant principles
applicable to Rule 42(1)(a) are the following:
[98.1]
Once the Court holds that an order or judgment was erroneously
sought
or granted, it should without further enquiry rescind or vary the
order and it is not necessary for a party to show good
cause for the
subrule to apply;
[17]
[98.2]
Generally, a judgment is erroneously granted if there existed
at the
time of its issue a fact of which the judge was unaware, which would
have precluded the granting of the judgment and which
would have
induced the judge, if aware of it, not to grant the judgment;
[18]
[98.3]
An order is also erroneously granted if there was an irregularity
in
the proceedings, or it was not legally competent for the Court to
have made the order.
[19]
[99]
In
order to succeed in terms of the common law, an applicant for
rescission of a judgment taken against him or her by default must
show good or sufficient cause. The test of good or sufficient cause
is similar to that for Rule 31(2)(b) given above. This generally
entails three elements; The applicant must (i) give a reasonable and
acceptable explanation for the default; (ii) show that the
application is made
bona
fide
;
and (iii) show that on the merits he or she has a
bona
fide
defence which
prima
facie
carries some prospect of success.
[20]
ISSUES
TO BE DETERMINED
[100]
The Joint Practice Note which was uploaded
to Caselines by the Respondents on 4 November 2020, which ought to
have defined the issues
to be determined in the application, as
agreed between the parties, appears to have been purely filed in
order to comply with the
Practice Directives, and has simply paid
mere lip service to the requirements of the Practice Directives. As
an example, the common
cause facts set out in the “Joint
Practice Note” specifically record that it is common cause that
the application should
be dismissed. It could never have been common
cause that the application should be dismissed with costs, as in such
instance the
application would not have been proceeded with. It
appears that no attempt was made to prepare a proper Joint Practice
Note.
[101]
In the section of the ”Joint Practice
Note” where the issues for determination should have been set
out, it is recorded
that the Applicant failed to satisfy the
requirements of any of the recognised grounds upon which her Judgment
is to be rescinded
and set aside. The statements made under the
heading of Issues to be Determined simply comprise the submissions of
the Respondent,
and do not set out the issues to be determined.
[102]
The same “Joint Practice Note”
was e-mailed to me on 13 November 2020 by the Respondents’
attorneys. The Applicant’s
legal representatives did not even
bother to file a Practice Note.
[103]
It is clear that neither of the parties
applied their minds to the requirements of a Joint Practice Note, the
purpose of such Practice
Note, and the assistance it should provide
to the presiding Judge.
[104]
I was accordingly required to identify the
issues to be considered and determined without any guidance, which I
did by carefully
considering the affidavits filed in the application
and the Heads of Argument filed on behalf of both parties.
[105]
The issues to be considered in determining
whether the relief sought in the Rescission Application should be
granted or refused,
are the following:
[105.1]
The lack of
locus standi
of the Respondents;
[105.2]
Non-compliance with the provisions and regulations of the NCA by the
Respondents;
[105.3]
The effect of the actions instituted (and later withdrawn) by
Volkswagen
Financial Services against the Applicant;
[105.4]
The prematurity of the Applications for Default Judgment;
[105.5]
The excipiability of the Respondents’ Particulars of claim;
[105.6]
The Applicant’s entitlement to file a Plea;
[105.7]
The omission of annexures from the Particulars of Claim;
[105.8]
The denial of indebtedness;
[105.9]
Non-compliance with the Companies Act and the NCA; and
[105.10]
The contraventions of Statutes;
[106]
The issues will be considered separately
below, under separate headings.
First
Issue: Lack of
Locus Standi
of the Respondents
[107]
In support of the submission that the
Respondents do not have the necessary
locus
standi
to have instituted action
against the Applicant, the Applicant stated in the Founding Affidavit
that she concluded credit agreements
with Volkswagen Financial
Services in respect of the two motor vehicles forming the subject
matter of the Actions, that she did
not conclude any credit
agreements with the Respondents, and that she was not aware of the
cession of any right, title and interest
in the agreements concluded
between Volkswagen Financial Services and herself to Velocity.
[108]
In the Founding Affidavit, the Applicant
states that the Respondents “
clearly
had no locus standi to institute the aforesaid legal actions against
me because, inter alia, they never concluded any agreement
with me”
.
[109]
The Respondents do not contend that
Velocity (or the Respondents) concluded any agreements with the
Applicant, and do not rely on
the conclusion of any agreement with
the Applicant for their cause of action.
[110]
Despite the cession of Volkswagen Financial
Services’ rights, title and interest in the credit agreements
concluded by the
Applicant to Velocity, being of crucial importance
in order to establish the Respondents’
locus
standi
which had been challenged, the
Respondents blandly stated in the Answering Affidavit that all credit
agreements concluded between
consumers and Volkswagen Financial
Services are ceded to Velocity, and that the Respondents are not
obliged to have notified the
Applicant of the cessions.
[111]
Despite clear challenges to the cessions in
the Founding Affidavit, the Respondents did not take the opportunity
in the Answering
Affidavit to clearly set out how the cessions came
about, when the cessions were effected, what the relevant clauses of
the cessions
stipulated, and the rights that the cessions confer on
the Respondents.
[112]
In the Respondents’ Heads of
Argument, Respondents’ counsel correctly states: “
The
primary defence which the Applicant seeks to advance at the hearing
relates to the denial that a valid and binding cession of
rights in
and to the underlying agreement took place between Volkswagen, the
initial contracting party and the Trust
”.
Having regard to such submission, I would have expected full details
of the cession to have been set out in the Answering
Affidavit, and
the supporting documentation to be attached.
[113]
Respondents’ counsel stated in the
Heads of Argument that the cession of rights from Volkswagen to the
Trust “
has been duly pleaded
”,
but what was pleaded was not set out in the Answering Affidavit or in
the Respondents’ Heads of Argument.
[114]
I called for copies of the Particulars of
Claim (which should have been uploaded to Caselines) in order to have
regard to what had
been pleaded.
[115]
It is clear from the Particulars of Claim
that Volkswagen Financial Services ceded its right, title and
interest in and to the credit
agreements concluded with the Applicant
to the Velocity Trust, and as set out in the Sale Agreement, the
transfer of right, title
and interest was by way of an out-and-out
cession.
[116]
I should also mention that in the Section
129 letters sent to the Applicant on 29 May 2018, the Applicant was
advised of the cession
of the credit agreement to Velocity.
[117]
The Respondents, in their capacities as
Trustees of the Velocity Trust accordingly launched the Actions on
behalf of the Velocity
Trust.
[118]
The claim as instituted by the Respondents
against the Applicant is clearly based on the cession of the right,
title and interest
in the agreement concluded between the Applicant
and Volkswagen Financial Services to Velocity.
[119]
I should mention that defining the Trustees
of the Velocity Trust in the Answering Affidavit as “the Trust”
is not only
inaccurate, but confusing, particularly as the first
Trustee is itself a Trust. The “Trust” is not even
defined in
the Answering Affidavit. Such description leads to the
absurdity contained in paragraph 2 of the Answering Affidavit which,
having
regard to the description of the Trustees as “the
Trust”, refers to a round-robin resolution of the trustees of
the
trustees, which is clearly nonsensical. In other instances
references are made to the “
Trust
”
which is intended to be a reference to the Velocity Trust and not the
trustees. Every reference to the “Trust”
had to be
carefully considered to determine what was intended.
[120]
Neither of the parties explained clearly in
any of the affidavits filed, what the legal nexus between the
Respondents and Velocity
was. Only upon receipt of copies of the
Particulars of Claim and a careful perusal of the correspondence did
I understand the precise
nature of the relationship.
[121]
The Applicant contends that she was not
aware of the cession and infers that her consent to the cession was
required, which consent
she did not grant.
[122]
The Respondents deny that there was any
obligation to notify the Applicant of the cession of rights.
[123]
In a letter attached to the Particulars of
Claim dated 19 June 2018, the Applicant was advised once again of the
cession to Velocity,
and it was pointed out that the Applicant had
consented to the cession.
[124]
Clause 16.2 of the credit agreements relied
on by the Respondents and attached to the Particulars of claim record
that Volkswagen
Financial Services are entitled to transfer any of
their rights.
[125]
In the circumstances, it is clear that the
Respondents, having regard to the allegations contained in the
Particulars of Claim,
and the annexures filed in support thereof, did
have the necessary
locus standi in
judicio
to have launched the Actions as
against the Applicant, and the first issue raised by the Respondent
is devoid of merit.
Second
Issue: Lack of Compliance with the Provisions and Regulations of the
NCA by the Respondents
[126]
The Applicant implied that the Respondents
breached the provisions and regulations of the NCA.
[127]
The Applicant has not set out precisely
what obligations the Respondents had in terms of the NCA, or in what
manner the Respondents
have breached their obligations or the
provisions and regulations or the NCA.
[128]
The Respondents stated that there had been
proper compliance by the Respondents with the provisions and
regulations of the NCA,
and invited the Applicant to set out in her
Replying Affidavit what the contraventions of the NCA by the
Respondents were. The
Applicant did not respond to such invitation.
[129]
In the circumstances, the vague suggestion
that the Respondents did not comply with the provisions and
regulations of the NCA is
entirely meaningless, and there is
accordingly no merit in the second issue raised by the Applicant.
Third
Issue: The Effect of the Actions instituted by Volkswagen Financial
Services against the Applicant
[130]
The Applicant alleged that on 31 March 2017
Volkswagen Financial Services instituted two legal actions against
the Applicant based
on instalment sale agreements which actions were
withdrawn during August 2018.
[131]
The Applicant alleges that as a result of
the withdrawal of the actions by Volkswagen Financial Services “
those
cases could (and can) never be brought back, as
[Volkswagen
Financial Services]
never specifically
said the matters were only provisionally withdrawn
”.
[132]
The contention that the Respondents are
prohibited from instituting action against the Applicant in respect
of the same instalment
sale agreements and/or credit agreements
simply on the basis that Volkswagen Financial Services had previously
instituted actions,
and had then withdrawn its actions instituted
against the Applicant is clearly without any merit.
[133]
Any party, or any other third party with
the necessary
locus standi
,
is entitled to institute fresh proceedings against a defendant, after
an action has been withdrawn, as the withdrawal of the action
does
not render any issues
res judicata
and
as the actions have certainly not been finally determined.
[134]
In the Applicant’s Heads of Argument,
it was submitted that there were issues of
res
judicata
and/or
lis
pendens
arising from the actions
instituted by Volkswagen Financial Services, but no facts were set
out in any of the affidavits to support
such submissions.
[135]
In the circumstances, the third issue
raised on behalf of the Applicant has no merit.
Fourth
Issue: Prematurity of the Applications for Default Judgment
[136]
The Applicant alleges that the Applications
for Default Judgment filed by the Respondents were premature, as the
Applicant had filed
Rule 30A(1) Notices during the five day period
stipulated in the Notices of Bar for compliance, and that in the
circumstances the
Applications for Default Judgment could not have
been filed or set down. The Applicant alleges, on the same basis,
that the hearing
of the Default Judgment Applications by Mudau J was
“
irregular
”
and “
incompetent
”.
[137]
The Applicant submitted that the delivery
of the Rule 30A(1) Notices, in response to the Respondents’
Notices of Bar constituted
a further procedural step in the Actions,
and therefore constituted compliance with the requirements of the
Notices of Bar.
[138]
Whilst a litigant is clearly entitled to
make use of Rule 30A(1) in circumstances where the other litigating
party fails to comply
with any of the Uniform Rules, or with a
request made, such step must be initiated prior to the expiry of the
time period available
to the party complaining of an irregularity,
before such party is required to take another step. The Applicant
should accordingly
have filed the Rule 30A(1) Notice prior to the
date by when she was required to file a Plea to the Particulars of
Claim.
[139]
The irregularity complained of by the
Applicant is that the Respondents failed to comply with Rule 18(6),
and failed to attach to
the Particulars of Claim “
a
true copy
” of the written
cessions relied on in the Particulars of Claim. The Applicant alleges
that as a result of such irregularity
she elected to invoke the
provisions of Rule 30A(1).
[140]
In terms of Rule 18(12) of the Uniform
Rules of Court, it is stipulated that if a party fails to comply with
any of the provisions
of Rule 18, the pleading will be deemed to be
an irregular step and the opposing party will be entitled to act in
accordance with
Rule 30 of the Uniform Rules of Court.
[141]
Rule 30 applies to irregularities of form
and not to matters of substance, and any non-compliance with the
provisions of Rule 18
would relate to an irregularity of form, rather
than an irregularity of substance.
[142]
Rule 30A (which replaced the previous Rule
30(5)) provides a general remedy for non-compliance with the Uniform
Rules of Court.
[143]
In circumstances where a specific Rule
provides its own remedy for non-compliance with that Rule, a party
should ordinarily invoke
the provisions of the Rule providing its own
specific remedy.
[144]
In the Founding Affidavit the Applicant
states that she was entitled to invoke the provisions of Rule 18(12)
of the Uniform Rules
of Court.
[145]
In the circumstances, and having regard to
the particular complaint raised by the Applicant, it would have been
more appropriate
to rely on the provisions of Rule 30 in order to
obtain compliance with Rule 18(6) of the Uniform Rules of Court,
rather than seeking
to rely on Rule 30A.
[146]
It is however not necessary to finally
determine whether the Applicant should have utilised Rule 30 or Rule
30A, as the Applicant
elected to rely on Rule 30A, and it is
irrelevant, for the purposes of this Application to determine which
Rule should have been
utilised, as the effect would have been the
same.
[147]
The Applicant alleges that the filing of
the Rule 30A Application in response to the Respondents’
Notices of Bar constituted
compliance with the demand as set out in
the Notices of Bar, and that accordingly she was not
ipso
facto
barred, and that the Respondents
were not entitled to rely on the Bar to apply for default judgment.
[148]
In terms of Rule 26, a party failing to
deliver a Plea within the stipulated time stated must be provided
with a Notice of Bar calling
upon such defaulting party to deliver
“
such pleading within five days
after the day upon which the notice is delivered
”.
[149]
It is also recorded in Rule 26 that “
any
party failing to deliver the pleading referred to in the notice
within the time therein required … shall be in default
of
filing such pleading and ipso facto barred …
”.
[150]
It is accordingly clear that Rule 26
requires the filing of a specific pleading, as referred to in the
Notice; in this instance
a Plea, which was not complied with by the
Applicant. The only recognised alternative to the filing of a Plea
within the time period
is an Exception or a Notice to Remove Cause of
Complaint, which are regarded as pleadings.
[151]
Whilst the Applicant contends that a Notice
in terms of Rule 30A(1) constitutes a pleading for the purposes of
Rule 26, such allegation
is without merit. I was not referred to any
authority in support of such contention. A Notice in terms of Rule
30A(1) is not a
pleading and does not meet any of the characteristics
of a pleading.
[152]
In the circumstances, the filing of a Rule
30A(1) Notice did not suspend or interrupt the five day period
provided to file a Plea,
does not qualify as a pleading, and resulted
in the Applicant being
ipso facto
barred.
[153]
The Applicant’s contentions that the
Default Judgments were erroneously sought and erroneously granted,
and that the hearing
of the Default Judgments was irregular and
incompetent are based on the allegations that the Default Judgment
Applications were
premature.
[154]
The Default Judgment Applications were not
premature, and there is accordingly no merit in the fourth issue
raised by the Applicant.
Fifth
Issue: The Excipiability of the Respondents’ Particulars of
Claim
[155]
The Applicant alleged in the Founding
Affidavit that the Respondents Particulars of Claim do not disclose a
valid cause of action,
but she has not set out in the Rescission
Application (or in the Affidavit Resisting Summary Judgment) in what
manner the Particulars
of Claim do not disclose a cause of action.
The allegation is accordingly meaningless and unhelpful. Although the
Applicant’s
counsel touched on the Particulars of Claim being
improperly pleaded, and referred to Non-Joinder and Misjoinder, no
proper basis
for alleging the lack of a cause of action was made out.
[156]
In the circumstances, there is no merit in
the fifth issue raised by the Applicant.
Sixth
Issue: Entitlement to file a Plea
[157]
The Applicant alleged that by filing a Rule
30A(1) Notice, she did not abandon her right to file a Plea and
intended to do so after
the Rule 30A(1) Application had been
determined.
[158]
By electing to file the Rule 30A(1) Notice,
rather than filing a Plea or an Exception, in the face of a Notice of
Bar, the Applicant
effectively did abandon her right to file a Plea.
[159]
As already set out above, at the hearing of
the Default Judgment Applications the Applicant was provided with an
opportunity by
the presiding Judge to seek the upliftment of the
Notice of Bar and apply for an extension of time within which to file
a Plea,
which opportunity the Applicant, through her legal
representatives, rejected.
[160]
In the circumstances, the sixth issue is
similarly without any merit.
Seventh
Issue: Copies of Agreements to be attached to the Particulars of
Claim
[161]
The Applicant alleged that the signed
original copies of the credit agreements concluded between herself
and Volkswagen Financial
Services, and the cessions concluded between
Volkswagen Financial Services and Velocity should have been attached
to the Particulars
of Claim.
[162]
The Particulars of Claim that I have had
sight of refer to the credit agreement concluded between the
Applicant and Volkswagen Financial
Services and the Deed of Cession
(described as a sale agreement), as relied on by the Respondents,
copies of which have been attached
to the Particulars of Claim.
[163]
In the circumstances, it appears, on a
prima facie
basis that the Respondents have complied with the issue raised by the
Applicant.
[164]
Insofar as the Applicant wishes to allege
that the credit agreement and cession relied upon by the Respondents
are not the correct
agreements, are not the agreements that relate to
her, are unsigned, are invalid, that different agreements ought to
have been
attached, or wishes to raise any other objection to such
attachments, such aspect should have been raised timeously in terms
of
Rule 30 or Rule 30A, or as a defence in the Applicant’s
Plea.
[165]
In the circumstances, the seventh issue
raised by the Applicant is without any merit.
Eighth
Issue: Denial of indebtedness
[166]
In the Affidavit Resisting Summary Judgment
the Applicant alleged that she “
denies
the contents of being in arrears with VFSSA and/or
[the
Respondents] …
without proof
[of]
the agreement which the
[Applicant]
is said to have defaulted.
”
[167]
The wording of the Applicant’s
allegation is very carefully framed, as it is clear that the
Applicant is not prepared to admit
that she is in arrears, unless
Volkswagen Financial Services and/or the Respondents provide her with
proof of the agreement in
terms of which she purchased the motor
vehicles.
[168]
It appears that the Applicant is of the
view that in the absence of being provided with a written credit
agreement she is not obliged
to make payment for the two motor
vehicles to Volkswagen Financial Services, despite being in
possession of, and utilising, the
motor vehicles at the time.
[169]
In the Answering Affidavit the Respondents
pointed out that the Applicant has not made any instalment payments
to Volkswagen Financial
Services since 2017, and as at the date of
preparation of the Answering Affidavit, the Applicant was in arrears
in respect of an
amount in excess of R1 million in respect of
both motor vehicles. The Applicant did not deny or dispute such
allegations in
her Replying Affidavit.
[170]
In the circumstances, there is clearly no
merit in the vague suggestion that the Applicant is not in arrears
with her payments to
Volkswagen Financial Services and the eighth
issue has no merit.
Ninth
Issue: Non-Compliance with the Companies Act and the NCA
[171]
In the Affidavit Resisting Summary Judgment
the Applicant alleged that the sale agreement raises “
serious
legal non-compliance issues
” with
the provisions of the Companies Act and the NCA.
[172]
The Applicant, does not provide any details
as to the alleged non-compliance, and the bald allegation is simply
unhelpful and entirely
meaningless.
[173]
In the circumstances, the ninth issue is
similarly without any merit.
Tenth
Issue: Contraventions of Statute
[174]
Whilst I have set out above that an
Applicant must make out his or her case in the Founding Affidavit,
the Applicant raised one
further issue in the Replying Affidavit,
which I had regard to, being that the cessions of the credit
agreements by Volkswagen
Financial Services to Velocity are not
lawful, and “
may
”
be in contravention of the Companies Act, the Income Tax Act and the
Tax Administration Act.
[175]
As with the previous allegations of
contraventions and non-compliance, the Applicant has not set out in
what manner there has been
a contravention, or which provisions of
the various Acts have been contravened.
[176]
Once again, the bald allegations are simply
meaningless, and the tenth issue also has no merit.
RESCISSION
OF THE DEFAULT JUDGMENTS
[177]
Having considered the various complaints,
contentions and issues raised by the Applicant, it is necessary to
determine whether the
Applicant is entitled to rescission of the two
Default Judgments.
Rescission
in terms of Rule 42(1)
[178]
The Applicant submitted that the Default
Judgments heard by Mudau J were both erroneously sought and granted
on the basis that the
Default Judgment applications were premature,
and that the filing of a Rule 30A Notice by the Applicant interrupted
the effect
of the Notice of Bar and it was accordingly erroneous to
seek Default Judgment in circumstances where the Applicant had not
been
barred.
[179]
Similarly, it is contended that the Default
Judgments were erroneously granted by Mudau J, in circumstances where
the Applicant
had not been barred because of the interruption of the
Notice of Bar.
[180]
As set out above, in discussing the
relevant legal principles, a judgment is regarded as being
erroneously granted if there existed
at the time of the granting of
judgment a fact of which the Judge was unaware, which would have
precluded the granting of the judgment
and which would have induced
the Judge not to grant the judgment.
[181]
The Applicant has not alleged that there
was any fact of which the Judge was unaware at the time of granting
the Default Judgments.
[182]
I was advised by Respondents’
counsel, which was not disputed by Applicant’s counsel, that
all of the arguments raised
in the Rescission Application and in the
Heads of Argument filed in support of the Rescission Application were
raised before Mudau
J at the hearing of the Default Judgment.
[183]
Whether or not each and every possible fact
or argument was raised before Mudau J is not strictly relevant, as no
fact or aspect
is raised in the Rescission Application which the
Applicant contends is new, and that Mudau J was not aware of, and
which fact
or aspect would have induced Mudau J not to grant Default
Judgment.
[184]
As already set out above, the filing of a
Rule 30A(1) Notice did not interrupt the Notice of Bar, and upon the
expiry of the five
day period provided in the Notice of Bar the
Applicant was
ipso facto
barred. Even if Mudau J had been unaware of this fact at the time of
the granting of the Default Judgment, it is not a fact, if
raised for
the first time in the Rescission Application, which would have caused
him to refuse Default Judgment, if it was raised
at the hearing of
the Default Judgment.
[185]
As already stated, there is not any
allegation in any of the affidavits filed on behalf of the Applicant
contending that there were
any aspects that Mudau J was unaware of at
the time of hearing the Default Judgment Applications.
[186]
Whilst a default judgment will be regarded
as being erroneously granted if there was an irregularity in the
proceedings or if it
was not legally competent for the Court to have
made the Order, I am satisfied that there was no irregularity, and
that it was
indeed legally competent for Mudau J to have granted the
Default Judgment Orders.
[187]
The alleged irregularities raised and
relied on by the Applicant are simply spurious.
[188]
As an example, the Applicant complains of
the manner in which the Default Judgment Applications were heard,
being by Mudau J, rather
than a Registrar, but elsewhere in the
affidavit states that the Default Judgment Applications ought to have
been held before a
Judge in open Court. Another example is the
suggestion that Mudau J did not hear evidence as referred to in Rule
31(2)(b), but
evidence is not required in each and every application
for default judgment, and it will be entirely dependent on the relief
sought
as to whether evidence is required or requested.
[189]
Whilst I am certainly not sitting in appeal
of the Default Judgments granted by Mudau J, I am of the view, having
regard to the
allegations made in the Particulars of Claim and the
nature of the Default Judgments sought, that no evidence would have
been required
in the Default Judgment hearings.
[190]
As I have already found that the hearing of
the Default Judgments were not premature, the Applications were not
erroneously sought.
[191]
It is accordingly clear that the Default
Judgments were not erroneously granted, that there were no
irregularities, and that it
was legally competent for Mudau J to have
granted the Default Judgments.
[192]
In the circumstances, I am satisfied that
the Default Judgments were not erroneously sought or granted, and are
not susceptible
to rescission in terms of Rule 42(1).
Rescission
in terms of Rule 31(2)(b)
[193]
Insofar as the Applicant may be relying on
a rescission of the Default Judgments on the grounds set out in Rule
31(2)(b), the Applicant
is required to show good cause as to why the
Default Judgment should be rescinded.
[194]
The Applicant is firstly required to
provide a reasonable explanation of the event placing her in default,
which resulted in the
granting of the Default Judgment. The
Applicant’s explanation cannot be regarded as being wilful or
due to gross negligence,
as the Applicant’s conduct in filing a
Rule 30A(1) Notice rather than filing a Plea (or even an Exception,
having regard
to the allegation that the Particulars of Claim do not
disclose a cause of action) was presumably based on the legal advice
that
the Applicant received.
[195]
Whilst the basis of the default may be
wrong in law, it still suffices as a reasonable explanation for the
Applicant’s default.
[196]
The Applicant must then secondly show that
the Application for Rescission is
bona
fide
and has not been made with the
intention of merely delaying the Respondents’ claim.
[197]
The Applicant asserts that she wants to
defend the Actions instituted by the Respondents, and it cannot be
suggested that the Rescission
Application is not
bona
fide
, or was brought with the intention
of delaying the Respondents’ claim.
[198]
The Applicant is then thirdly required to
show that she has a
bona fide
defence to the Respondents’ claim. Such
bona
fide
defence need only be established
on a
prima facie
basis, in the sense that averments should be set out in the
Rescission Application which if established at the trial, would
entitle
the Applicant to the relief she seeks.
[199]
The
bona fide
defence must be set out with sufficient detail to enable a Court to
conclude whether or not an Applicant has a
bona
fide
defence to the Actions.
[200]
The Applicant’s defence appears to be
that the Applicant did not conclude any agreements with Velocity, and
that the Applicant
did not consent to the cession of the right, title
and interest of the agreements concluded between herself and
Volkswagen Financial
Services to Velocity.
[201]
As regards the “
defence
”
of not concluding a credit agreement (or any other agreement) with
Velocity, it is not the Respondents’ case that
such an
agreement was concluded, and that “
defence
”
is of no relevance.
[202]
As regards the second “
defence
”,
being that the Applicant did not consent to the cession of the right,
title and interest in the credit agreements concluded
between the
Applicant and Volkswagen Financial Services to Velocity, the
Applicant does not allege that it was a legal or contractual
requirement that her consent to the cession is required.
[203]
The statement that the Applicant did not
consent to the cession, without an allegation that her consent was
required does not constitute
a defence.
[204]
It
is most certainly not uncommon for cessions to be concluded between
two parties, which cessions do not require the consent or
input of
the third party debtor.
[21]
[205]
Applicant’s counsel submitted during
argument that the Applicant had set out a
bona
fide
defence in the Affidavits
Resisting Summary Judgment that she had filed, but despite a careful
perusal of such Affidavits, I could
not find any
bona
fide
defence.
[206]
The Applicant is effectively contending
that there was not a valid and binding cession but has not set out
any averments which if
established at the trial, would constitute a
defence. The Applicant is not entitled to simply make a bald
allegation of a defence
but must set out sufficient detail relating
to the defence for the Court to consider whether there is a
bona
fide
defence.
[207]
In the circumstances, I am satisfied that
the Applicant has not set out a
bona
fidei defence
, even on a
prima
facie
basis, and is accordingly not
entitled to rescission in terms of Rule 31.
Rescission
in terms of the Common Law
[208]
The requirements for rescission under the
common law are very similar to the requirements for rescission in
terms of Rule 31(2)(b),
and also requires the applicant to show that
on the merits of the action the applicant has a
bona
fide
defence which
prima
facie
carries some prospects of
success.
[209]
Having regard to what I have already set
out above in respect of the Applicant’s lack of establishment
of a
bona fide
defence,
I am satisfied that the Applicant has not met the requirement of
establishing a
bona fide
defence
which
prima facie
has some prospects of success at the trial.
[210]
In the circumstances, the Applicant is not
entitled to a rescission of the Default Judgments under the common
law.
COSTS
[211]
The Respondents submitted that the
Rescission Application should be dismissed, and that the Applicant
should be ordered to pay the
costs of the Application on the attorney
and client scale.
[212]
During the period of the COVID -19
pandemic, which shows no signs of abating, the Courts have sought,
and implemented adaptations
to ensure that Court proceedings are not
brought to a standstill.
[213]
In order to ensure that the audio-visual
hearings which have been implemented can be dealt with as smoothly as
possible, the Judge
President issued a Directive dated 18 September
2020, wherein the specific requirements to be adhered to during the
pandemic are
set out.
[214]
The requirements of the Practice Directive
were certainly not complied with by the parties in this Application.
In particular, I
refer to the contents of paragraph 104 of the
Directive, which stipulates that the counsel for the opposing parties
must
hold
a pre-hearing conference and prepare a Joint Practice Note setting
out,
inter alia
:
[214.1]
The relevant factual chronology;
[214.2]
Common cause facts;
[214.3]
Issues requiring determination; and
[214.4]
Other matters relevant for the efficient conduct of the hearing, to
present to the Judge seized with the matter.
[215]
The Joint Practice Note is to be uploaded
to the case file on Caselines and also transmitted by e-mail to the
Judge no later than
five court days prior to the hearing date.
[216]
In this Application the Respondents
(understandably) elected to set the Application down for hearing and
in so doing, to some extent,
accepted the responsibilities of
dominus
litis
.
[217]
As already set out in the Judgment, no
Joint Practice Note was prepared, with the result that none of the
issues to be set out in
the Joint Practice Note, aimed at assisting
the Court to hear and facilitate the matter was available, the
contents of the Affidavits
were not clearly set out and were
disjointed, correspondence referred to in the affidavits were either
not attached or their relevance
was not explained, and I was required
to understand the sequence of events by perusing ancillary documents,
and the contents of
correspondence.
[218]
The pleadings and all relevant affidavits
and supporting documents were not uploaded onto Caselines, requiring
me to call for copies
of the Particulars of Claim and the Affidavits
Resisting Summary Judgment.
[219]
As appears from the Judgment, there were
many different aspects to be considered and numerous issues to be
determined. None of the
issues were properly identified, as they
ought to have been, in a Joint Practice Note.
[220]
Had the parties held a joint pre-trial
conference as was required, it may very well have been agreed at such
conference that the
in limine
aspect raised by the Respondents was no longer being pursued. I would
then presumably have been advised that the
in
limine
point was no longer being
persisted with, and that there was accordingly no need to read and
deal with substantial portions of the
papers and read all of the
judgments referred to in respect of the
in
limine
point.
[221]
I accept that both the Applicant and the
Respondents were responsible for the failures and omissions set out
above.
[222]
In the circumstances, and having regard to
that I have set out above under the heading of “COSTS”, I
deem it appropriate
that each party should bear its own costs.
THE
ORDER
[223]
I accordingly make the following order:
[223.1]
The Application for Rescission of the Default Judgments granted on
14
October 2019 under case numbers 25121/2018 and 25124/2018
respectively, is dismissed;
[223.2]
Each party is to pay its own costs incurred in the Rescission
Application.
_______________________________
G
NEL
[Acting
Judge of the High Court,
Gauteng
Local Division,
Johannesburg]
Date
of Judgment:
6 July 2021
APPEARANCES
For
the Applicant:
Adv M S Sebola
Instructed
by:
Sebola Nchupetsand
Sebola Inc
For
the Respondents: Adv S Aucamp
Instructed
by
Smit Jones Pratt
Attorneys
[1]
(69094/2014)
[2017] ZAGP JHC 392 (11 December 2017).
[2]
1966
(1) SA 613 (A).
[3]
2010
(5) SA 171 (SCA).
[4]
(HCA15/2017)
[2017] ZALMPPHC 35 (7 November 2017).
[5]
(21653/2011)
[2015] ZAGPPHC 171 (25 March 2015).
[6]
t/a
Embassi Drive Medical Centre
2000 (1) SA 390
(T).
[7]
See
also:
Morris
v Autoquip (Pty) Ltd
1985
(4) SA 398
(W); and
FNB
v Myburgh and Another
2002 (4) SA 176 (CPD).
[8]
1999
(2) SA 279
(T) at 324F-G. See also
Lipschitz
and Schwarz N.N.O. v Markowitz
1976 (3) SA 722
(W) at 775H and
Port
Nolloth Municipality v Xahalisa & Others; Luwalala & Others
v Port Nolloth Municipality
1991 (3) SA 98
(C) at 111B-C.
[9]
trading
as Elm Street Service Station and Another
(32424/13)
[2017] ZAGPJHC 192 (3 July 2017).
[10]
At
paragraph 38.
[11]
Director
of Hospital Services v Ministry
1979
(1) SA 626
(A) at 635H-636C. See also
Ramosebudi
v Mercedes Benz Financial Services South Africa (Pty) Ltd
(51196/2017)
[2019] ZAGPPHC (20 March 2019) at paragraph [11].
[12]
De
Wet and Others v Western Bank Ltd
1979 (2) SA 1031
(A) at 1038A.
[13]
Grant
v Plumbers (Pty) Ltd
1949 (2) SA 470
(O) at 476-477.
[14]
Harris
v ABSA Bank Ltd t/a Volkskas
2006
(4) SA 527
(T) para 6
[15]
Kouligas
& Spanoudis Properties (Pty) Ltd v Boland Bank Bpk
1987 (2) SA 414
(O) at 417E-H
[16]
Standard
Bank of SA Ltd v El-Naddaf and Another
1999 (4) SA 779
(W) at 785G-786D
[17]
Naidoo
v Somai
2011
(1) SA 219
(KZP) paras 4 & 5. See also
Bakoven
(Pty) Ltd v G J Homes
1990 (2) SA 446 (E).
[18]
Naidoo
and Another v Matlala NO and Others
2012 (1) SA 143
(GNP) para 9.
[19]
Promedia
Drukkers & Uitgewers (Edms) Bpk v Kaimowitz and Others
1996 (4) SA 411
(C) at 417G.
[20]
Colyn
v Tiger Food Industries Ltd t/a Meadow Feed Mills (Cape)
2003
(6) SA 1
(SCA) para 11.
[21]
Hillock
& Another v Hillsage Investments (Pty) Ltd
1975
(1) SA 508
(A) at p 515.