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[2021] ZAGPJHC 453
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Moraka and Another v Industrial Development Corporation of South Africa and Others (2019/12579) [2021] ZAGPJHC 453 (22 September 2021)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG LOCAL
DIVISION, JOHANNESBURG
CASE NUMBER:
2019/12579
REPORTABLE: NO
OF INTEREST TO OTHER
JUDGES: NO
REVISED.
22 SEPTEMBER 2021
In the matter between:-
TSHOSA
JOPA
MORAKA
First Applicant
ISF
STRATEGIC INVESTMENT (PTY) LTD
Second Applicant
and
INDUSTRIAL DEVELOPMENT
CORPORATION OF
SOUTH
AFRICA
First Respondent
SHERIFF
HALFWAY
HOUSE
Second Respondent
NAME
PLATE CENTER SIGNS (PTY) LTD
Third Respondent
HANS
CHRISTIAN
TILEMAN
Fourth Respondent
GERHARDUS
ALBERTUS GEEL
Fifth Respondent
JUDGMENT
This
judgment is handed down electronically by circulation to the parties
or their legal
representatives via
email and by uploading the same onto CaseLines. The handing
down of this judgment is deemed to be 22
September 2021.
MATOJANE J
Introduction
[1]
This is an application for rescission of default
judgment in favor of the first respondent obtained on 14 July 2020 in
terms of
“Rules 42(1)(a)(b)” and various other
declaratory relief sought which are not relevant to a rescission
application.
Background
[2]
The first respondent, as plaintiff, sued the first
and second applicants as well as three other persons arising out of
loan agreements
concluded by Name Plate Center Signs (Pty) Ltd (“Name
Plate”) with the first respondent. The applicants together with
three others had signed as guarantors on behalf of Name Plate for its
indebtedness to the first respondent, and when Name Plate
defaulted
and the guarantors failed to make good its default, the parties were
all held jointly and severally liable for the indebtedness
of Name
Plate in the combined amount of R5 566 298.00
[3]
Only the first and second applicants defended the
action and filed a plea. The parties agreed to exchange pleadings and
notices
in this matter by electronic means.
[4]
The first respondent launched an application under
rule 35(7) to compel applicants to make a discovery. On 12 December
2019, Mogagabe
AJ granted an order compelling applicants to serve and
file their discovery affidavit within five days of service of the
order.
In the event of non-compliance, they struck out their defence
to the application.
[5]
The order was served on the applicant’s
attorneys by email on 12 December 2019, and the applicants have
failed to file and
serve the discovery affidavit as ordered.
[6]
In paragraph 16 of the replying affidavit, the
applicant states:
“
The
applicants admit that they did not make a discovery but denies that
they were
compelled in anyway by the first
respondent to made discovery. The applicants further submit they were
not served with any application
compelling them to discover hence the
applicants were surprised to be informed that there was an order
granted by the Honourable
Acting Judge Mogagabe.”
[7]
On 14 July 2020, Mia J granted judgment in the
amount of R4 500 000.00 against the first and second applicants
together with interest
at the rate specified in the written
agreements and costs on attorneys and client scale.
[8]
Despite the plea being struck out for failure to
comply with Mogagabe AJ's order, the first applicant served a notice
of bar in
terms of rule 26 to the first respondent to “file its
reply to the Defendants Plea and Special Plea” within five
days.
The first respondent brought an application under rule 30(1)
for the notice to be set aside.
[9]
It is on the provisions of rule 42 that the
applicants have chosen to base their application for rescission on
the provisions of
rule 42.
[10]
Rule 42(1) of the Uniform Rules reads as follows:
“
(1)
The Court may, in addition to any other powers it may have,
mero
motu
or
upon
the application of any party affected, rescind or vary −
(a) An
order or judgment erroneously sought or erroneously granted in the
absence of any party affected thereby;
(b) An
order or judgment in which there is an ambiguity, or a patent error
or omission, but only to the extent of such
ambiguity, error or omission;
(c) An
order or judgment granted as a result of a mistake common to the
parties.”
[11]
The
purpose of the rule is to correct expeditiously an obviously wrong
judgment or order
[1]
. The merits
of the matter, including whether or not the applicant has a bona fide
defence to the main claim, is irrelevant
[2]
.
[12]
A
judgment would have been erroneously granted if there existed at the
time of its issue a fact the court was unaware of, which
would have
induced the court not to grant the judgment
[3]
.
There are no allegations of irregularity in the proceedings or that
it was not competent for the court to have granted the default
judgment.
[13]
Rule 42(1)(b) refers to the Court’s
discretionary power to correct errors in its own judgments where the
judgment does not
reflect the intention of the judge pronouncing it.
There are no allegations as to the ambiguity, patent error or
omission that
the applicants rely upon in contending that the order
of Mia J falls to be rescinded under this rule.
[14]
Rule
42(1)(c ) finds application where there has been a mistake common to
the parties linked to the grant of the order and the judgment
[4]
.
This subrule does not assist the applicants.
[15]
At common law, in order to succeed with an
application for rescission, two requirements must be satisfied.
First, the applicant
must provide the Court with a reasonable
explanation for why the judgment was allowed to be issued by default.
Secondly, on the
merits, show a bona fide defence, which
prima
facie
carries some prospects of
success.
[16]
In
Chetty
v Law Society, Transvaal
[5]
,
the court held that:
“
for
obvious reasons a party showing no prospect of success on the merits
will fail
in an application for rescission
of the default judgment against him, no matter how reasonable and
convincing the explanation for
his default. An ordered judicial
process would be negated if, on the other hand, a party who could
offer no explanation of his
default other than his disdain for the
Rules was nevertheless permitted to have a judgment against him
rescinded on the ground
that he had reasonable prospects of success
on the merits.”
[17]
The applicants proffer no explanation for why they
say they were not in wilful default or have a
bona
fide
defence to the application. They
admit that they have not made a discovery as requested and ordered to
do so. Thus, even under
common law, the applicants have not made a
case for the relief they are seeking.
[18]
The applicants question the order of the 12
December 2019 Mogagabe AJ’s order despite being provided with a
formal stamped
and signed order in the answering affidavit. This
order was not erroneously sought nor erroneously granted. In any
event, the applicant
in its notice of motion never sought the
rescission of this order.
[19]
The applicants dispute the service of the court
order of its attorneys. The applicants have failed to raise a genuine
dispute of
facts; the first respondent’s version stands in
accordance with the rule in
Plascon-Evans
.
[20]
The applicants contend that there were
restrictions placed on access to the court precinct for the duration
of the lockdown and
that the matter could not be proceeded with until
the lifting of the lockdown restrictions. There is no merit in this
contention
as since the coming into effect of the amended
consolidated practice directive of 11 May 2020, litigants were not
prevented from
serving any documents such as a notice of opposition
or an answering affidavit. In any event, the parties had agreed to
accept
service by email correspondence.
[21]
In the result, I find that the applicants have not
met the requirements in terms of rule 42(1)(a), 42(1)(b) or at common
law for
having a judgment granted against them rescinded and set
aside.
In the result I make the
following order.
1.
The application is dismissed;
2.
The applicant is to pay costs on
attorney-and-client scale.
K. E. Matojane
Judge of The High
Court
Gauteng Local
Division, Johannesburg
Hearing:
03 August 2021
Judgment:
22 September 2021
Applicant’s
Counsel:
K.D. Magabane
Applicant’s
Attorneys:
KD
Magabane & Associates Inc.
First
Respondent’s Counsel:
Adv. S. Frees
First
Respondent’s Attorneys:
Mngadi Attorneys Inc.
[1]
Bakoven
Ltd v GJ Howes (Pty) Ltd 1992 (2) SA 466.
[2]
Kgomo
v Standard Bank 2016(2) SA 184 (GP) par 11.
[3]
Nyingwa
v Moolman N.O 1993(2) SA 508 at 510 D_G.
[4]
Tshivase
Royal Council v Tshivase
[1992] ZASCA 185
;
1992 4 SA 852
A para 863A.5
[5]
1985
2 SA 756D-E.6