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[2021] ZAGPPHC 349
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Traditional Council of the Bapo Ba Mogale Traditional Community v Connect Com Project Management CC (44188/2020) [2021] ZAGPPHC 349 (28 May 2021)
IN THE HIGH COURT OF
SOUTH AFRICA
(GAUTENG DIVISION,
PRETORIA)
REPUBLIC
OF SOUTH AFRICA
Case
Number: 57757/2016
In the matter between:
THE TRADITIONAL
COUNCIL OF THE
BAPO
BA MOGALE TRADITIONAL COMMUNITY
Applicant
And
CONNECT
COM PROJECT MANAGEMENT CC
Respondent
JUDGMENT
JANSE
VAN NIEUWENHUIZEN J
[1]
The applicant launched this application to,
in essence, rescind a judgment granted by default on 26 July 2018.
BACKGROUND
[2]
The application is a traditional council
constituted in accordance with the laws and customs of a traditional
community which is
recognised in terms of section 3 of the North
West Traditional Leadership and Governance Act, 2 of 2005 read with
the Traditional
Leadership and Framework Act, 41 of 2003.
[3]
The respondent is a close corporation that
specialises in Information Technology.
[4]
In May 2012 the parties entered into two
Service Level Agreements, to wit:
4.1
a Network Support and Maintenance Contract;
and
4.2
a Network Infrastructure Implementation
Contract.
[5]
According to the respondent, it rendered
the services in terms of the contract until the contract was
repudiated by the applicant.
In consequence of the repudiation, the
respondent issued summons against the applicant during July 2016 for
payment of an amount
of R 10 478 403, 68 with interest
and costs.
[6]
The applicant defended the claim and duly
filed a plea on 13 September 2016.
[7]
In preparation for the trial, the
respondent caused a notice calling for the discovery of documents to
be served on Motalane Kgatiya
Attorneys (“MKA”), the
applicant’s then attorneys of record. The notice went
unanswered and the respondent brought
an application in terms of
rule 35(7) to compel the applicant to deliver its discovery
affidavit. The application was served
on MKA on 1 February 2018.
[8]
MKA did not oppose the application and an
order compelling the applicant to discover was granted on 8 February
2016. Notwithstanding
the order, MKA did not take any steps to comply
with the court order. In the result, the respondent served an
application to strike
the applicant’s defence on MKA on 6 July
2018.
[9]
MKA still did nothing and an order striking
the applicant’s defence together with judgment by default was
granted on 26 July
2018.
CONDONATION
Facts
[10]
Once the applicant’s defence was
struck, default judgment was obtained by the respondent in terms of
the provisions of rule 31(2)(a).
This entailed that the
applicant had to launch the present application within 20 days from
the date on which it acquired notice
of the judgment.
[11]
Mr Petrus Uka Mogale, the council
chairperson of the applicant, stated in the answering affidavit, that
the judgment first came
to the knowledge of the applicant when the
applicant’s movable goods were attached. Mr Mogale does not
state the exact date
on which the movables were attached, but the
respondent referred to three instances when writs were served on
persons ostensibly
representing the applicant, to wit:
11.1 on
21 September 2018 on a Mr Madumo, who is a member of the applicant
and the head of its legal department;
11.2 on
16 October 2018 on a certain Mr Botes, who informed the Sheriff that
the vehicles and equipment that were
attached belonged to a company,
Bapo Freight and Logistics (Pty) Ltd and not to the applicant; and
11.3
on 24 October 2018 on Ms Thato Booysen, an employee of the applicant
at the Royal Palace.
[12]
Mr Mogale stated that the council consisted
of laypersons and when the summons was served a certain Dimakatso was
appointed to liaise
with the attorneys who would represent the
applicant. The council was under the firm impression that the matter
was attended to
properly and professionally.
[13]
When the attachment came to the notice of
the applicant, the applicant contacted Dimakatso who gave the
applicant the assurance
that MKA is dealing with the matter and that
there is no cause for concern.
[14]
The applicant realised that the matter was
not properly dealt with and approached Manamela Attorneys for
assistance. Manamela Attorneys
requested a deposit of R 350 000,
00 in order to draft the rescission application, an amount the
applicant could simply
not afford.
[15]
The applicant then decided to approach the
attorneys acting on behalf of the respondent directly and a meeting
was arranged for
the middle of 2019. The matter could not be resolved
at the meeting and the applicant was informed that, unless, a payment
was
made, the applicant’s assets will be sold.
[16]
The applicant made a payment of R 1
million during the end of August 2019 in order to stay the sale of
its movable property.
The applicant had at that stage paid a total
amount of R 2, 8 million to the respondent, which in the applicant’s
view was
an exorbitant amount for the services that were rendered by
the respondent. According to the applicant the respondent had only
provided three computers, software and an undertaking to provide
services for five years.
[17]
During September 2019 the applicant
instructed its current attorneys Langenhoven Pistorius. Due to
limited funding, the applicant
was advised to try and negotiate an
amicable solution. To this end, Mr Pistorius undertook to set up a
meeting with the respondent,
during which meeting he will confront
the respondent with the exorbitant amount for the services rendered
in the hope that protracted
litigation could be avoided.
[18]
On 17 September 2017 Mr Pistorius addressed
a letter to the respondent’s attorneys indicating that the
applicant is desirous
of resolving the matter amicably.
[19]
Shortly after the letter of 17 September
2019 and on 30 September 2019 the respondent attached the bank
account of the applicant
which account had a balance of approximately
R 450 000, 00.
[20]
It became clear to the applicant that the
matter could not be resolved amicably and a consultation was arranged
with counsel and
the application for rescission was prepared and
signed. Mr Mogale stated that Mr Pistorius and counsel were prepared
to assist
the applicant at reduced fees, which enabled the applicant
to launch the present application.
Legal principles
[21]
An applicant that requests condonation for
the late filing of a pleading, must:
[21.1] provide an
explanation of the default sufficiently full to enable the court to
understand how it really came about,
and to access the applicant’s
conduct and motives [See:
Silber v Ozen Wholesalers (Pty) Ltd
1954
(2) SA 345
A at 353A]. This requirement entails that the enquiry into
the applicant’s conduct and motives, must establish that the
application
is
bona fide
;
and
[21.2]
set out a
bona fide
defence.
[22]
Mr Khoza, counsel for the respondent,
submitted that the applicant’s explanation for the delay lacks
both candour and particularity.
The applicant does not state the
specific date on which the judgment came to its attention and does
not in sufficient detail explain
all the steps it took since the
judgment had come to its knowledge.
[23]
Although the applicant did not state the
exact date on which the judgment came to its knowledge, it did
explain the steps it took
after the judgment came to its knowledge.
I, however, agree with Mr Khoza that the detail contained in the
explanation in respect
of exact dates is open for criticism.
[24]
This is, however, not the end of the
matter. The court must also have regard to the merits of the
applicant’s defence in order
to establish whether the applicant
has shown good cause for the condonation to be granted. [See:
Gumede
v Road Accident Fund
2007 (6) SA 304
C
at 307C – 308A].
[25]
Insofar as the merits of the applicant’s
defence are concerned, the applicant states that it did not have the
necessary financial
means to enter into a contract for R 10 million.
The applicant contends that the person entering into the contract was
not duly authorised to do so.
[26]
The applicant is further of the view that
the three computers, software and an undertaking to provide services
for five years could
at most cost R 3 million of which it has
already paid R 2. 8 million.
[27]
The applicant, furthermore, raised the
non-compliance with the statutory prescripts in respect of the
procurement of services as
a defence. In this regard, the applicant
relied on the following legal instruments:
[27.1] section
30(5) and (7) of the North West Traditional Leadership and Governance
Act, 2 of 2005, which provides that expenditure
of the applicant must
be submitted to the Premier for approval that payment is necessary
and that funds are available;
[27.2] the National
Treasury Instruction Note on Enhancing Compliance Monitoring and
Improving Transparency and Accountability
in Supply Chain Management,
dated 31 May 2011, aimed to improve accountability, to provide supply
chain management directives to
accounting officers and to ensure
value for money in the procurement of goods, works and/or services in
terms of the
Public Finance Management Act, 1 of 1999
, which provides
that:
[27.2.1]
procurement plans in the procurement of goods, works and/or
services
which exceed R 500 000, 00 must be submitted;
[27.2.2]
the procurement plan must be approved by the Accounting Officer
prior
to submission; and
[27.2.3]
the names of the bidders in respect of the advertised competitive
bids must be published on the website;
and
[27.3]
section 11
of the
Preferential Procurement Policy Framework Act, 5 of
2000
, which requires a tender to be advertised.
[28]
Mr Khoza submitted that compliance with the
aforesaid legal instruments is the responsibility of the relevant
officials of the applicant
who entered into the agreement with the
respondent and does not affect the validity of the agreement. Mr
Khoza, further, submitted
with reference to
Oudekraal
Estates (Pty) Ltd v City of Cape Town and Others
[2204]
3 All SA 1
SCA, that the decision to enter into the contract is an
administrative decision and remains valid until set aside on review
in
terms of the Promotion of Administrative Justice Act, 3 of 2000
(PAJA).
[29]
The aforesaid contention was considered by
the Supreme Court of Appeal in
Municipal
Manager: Quakeni Local Municipality and Another v FV General Trading
[2009] 4 All SA 231
SCA and at
paragraph [26] the Court held as follows:
“
While
I accept that the award of a municipal service amounts to
administrative action that may be reviewed by an interested party
under PAJA, it may not be necessary to proceed by review when a
municipality seeks to avoid a contract it had concluded in respect
of
which no other party has an interest. But it is unnecessary to reach
any final conclusion in that regard. If the second respondent’s
procurement of municipal services through its contract with the
respondent was unlawful, it is invalid and this is a case in which
the appellants were duty bound not to submit to an unlawful conduct
but to oppose the respondent’s attempt to enforce it.
This it
did by way of its opposition to the main application and by seeking a
declaration of unlawfulness in the counter-application.
In doing so
it raised the question of the legality of the contract fairly and
squarely, just as it would have done in a formal
review. In these
circumstances, substance must be triumph over form. And while my
observations should not be construed as a finding
that a review of
the reward of the contract to the respondent could not have been
brought by an interested party, the appellant’s
failure to
bring formal review proceedings under PAJA is no reason to deny them
relief.”
[30]
The question of the legality of the
contract has been raised by the applicant in its plea and in this
application. The legality
defence constitutes a
bona
fide
defence for purposes of the
condonation application and I am satisfied that the applicant has
established sufficient facts for the
granting of condonation. Such an
order will follow.
RESCISSION
[31]
The requirements applicable to an
application for rescission are trite. An applicant must:
[31.1] provide a
reasonable explanation for the default. Should the default be wilful
or due to gross negligence, the application
would normally fail;
[31.2] satisfy the
court that the application is
bona fide
and not merely an
attempt to delay the plaintiff’s claim; and
[31.3] establish a
bona fide
defence.
[See:
Chetty v Law Society, Transvaal
1985
(2) SA 756
(A) at 765 B–D]
Default
[32]
The applicant consisting of laypeople,
placed all their trust in the hands of their first attorneys of
record, MKA. MKA dismally
failed in fulfilling their professional
duty towards the applicant.
[33]
Mr Khoza submitted that the applicant
cannot hide behind its attorney of record in circumstances where it
failed to inquire in respect
of the progress of its case. Although Mr
Khoza is correct in this regard, the principle must be applied to the
facts of each case.
[34]
In
casu
the applicant entrusted a certain
Dimakatso to liaise with its attorneys. It appears that everything
went well until the application
to compel was served on MKA. The
applicant is clearly not familiar with procedural steps taken in
preparation for a trial and there
would have been no urgency or
necessity for the applicant to contact MKA during the period the
applications were served and the
court orders were granted.
[35]
Its lack of understanding of the legal
process becomes more evident after the first writ of execution was
served. The applicant
still accepted Dimakatso’s assurance that
MKA is attending to the matter professionally and that the applicant
could rest
assured.
[36]
I was only after the applicant approached a
new set of attorneys that the extent of MKA’s neglect came to
light.
[37]
Should the applicant be penalised for
trusting Dimakatso and MKA? I do not believe so. The applicant’s
default was not wilful
or grossly negligent. The applicant’s
trust was at worst misplaced.
[38]
I trust the applicant has learned a
valuable lesson and that such trust will in future be better placed.
Application
bona
fide
[39]
Although the respondent was procedurally
entitled to have the applicant’s defence struck and to obtain
default judgment against
the applicant, the dispute between the
parties has not been adjudicated to date.
[40]
I am of the view that the applicant’s
application is
bona fide
and
that the facts evidences a wish to have the dispute resolved in due
course. The amount claimed and the issues raised in the
action is
significant and the applicant’s expressed intention to defend
the action does not, in my view, constitute conduct
aimed at merely
delaying the finalisation of the respondent’s claim.
Bona
fide
defence
[41]
I have dealt with this aspect
supra
and am of the view that the applicant
has established a
bona fide
defence.
CONCLUSION
[42]
In the result, the applicant is entitled to
an order rescinding the judgment granted by default on 26 July 2018.
The
causa
for the issuing of writs of execution and the attachment of the
applicant’s movables have fallen away and the applicant is
also
entitled to the remainder of the relief claimed herein.
ORDER
[43]
In the premises, I grant the following
order:
1.
The applicant’s non-compliance with
the time limit contained in rule 31(2)(b) is condoned.
2.
The judgment granted on 26 July 2018 is
rescinded.
3.
The writs of execution issued pursuant to
the judgment are set aside and all movable assets of the applicant
under attachment are
set free from attachment.
4.
Costs to be costs in the cause.
N. JANSE VAN
NIEUWENHUIZEN
JUDGE OF THE HIGH
COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
DATE
HEARD PER COVID19 DIRECTIVES:
19 April 2021
(Virtual hearing.)
DATE
DELIVERED PER COVID19 DIRECTIVES
:
28 May 2021
APPEARANCES
Counsel
for the Applicant
Advocate J. Brand SC
Instructed
by:
Langenhoven
Pistorius & Modihapula Attorneys
Counsel
for the Respondent:
Advocate X. Khoza
Instructed
by:
Adams and Adams