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[2021] ZAGPJHC 449
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Wesbank, A Division of Firstrand Bank Limited v Investment Auto Group (Pty) Ltd and Others (2020/7439) [2021] ZAGPJHC 449 (24 September 2021)
REPUBLIC OF SOUTH
AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 2020/7439
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
REVISED
24/9/2021
In
the matter between:
WESBANK,
A DIVISION OF FIRSTRAND BANK LIMITED
PLAINTIFF
And
INVESTMENT
AUTO GROUP (PTY) LIMITED FIRST
DEFENDANT
GAVIN
ANTHONY
SMITH SECOND
DEFENDANT
ERIKA
COETZER THIRD
DEFENDANT
JUDGMENT
WINDELL,
J:
INTRODUCTION
[1]
This
matter was set down for hearing on the trial roll before this court
on 25 May 2021. On 17 May 2021 the third defendant filed
a special
plea. The nub of the special plea is that the plaintiff had set the
matter down in the face of a judgment against the
third defendant,
which judgment has not been rescinded. It is pleaded that the matter
is therefore
res iudicata
.
[2]
It
was agreed between the parties that the special plea needs to be
resolved before the trial can proceed. The plaintiff further
conceded
that even if the special plea is decided in the plaintiff’s
favour that the trial could not proceed before this
court as certain
interlocutory applications, to which I will return to later in the
judgment, had not been dealt with and were
still unresolved.
[3]
This
judgment therefore deals with one issue only: Is the matter
res
iudicata
.
BACKGROUND
FACTS
[4]
Summons
was issued against the three defendants on 3 March 2020. The
plaintiff sought monetary judgment for damages suffered due
to the
first defendant's breach of an agreement. The second and third
defendants were cited in their capacities as sureties for
the first
defendant's indebtedness towards the plaintiff. Only the third
defendant filed a notice to defend the matter. On 10 June
2020 the
plaintiff filed an application for default judgment in terms of Rule
31(5)(a) against the first and second defendants
only. The default
judgment application served before the Registrar on 19 September
2020, who referred the application to open court.
[5]
The
plaintiff also applied for summary judgment against the third
defendant, which was opposed. On 30 June 2020 the summary judgment
was heard and the third defendant was granted leave to defend.
Litigation between the plaintiff and the third defendant thereafter
continued in the normal course of litigation, and the plaintiff
discovered all the relevant documents in its possession for purposes
of proceeding to trial. However, on 10 December 2020, despite the
fact that the application for default judgment was sought against
the
first and second defendant only, default judgment was granted against
all three defendants. The order granted followed the
terms of the
draft order presented by the plaintiff to the court verbatim.
[6]
Both
the plaintiff and the third defendant were unaware that default
judgment was granted against the third defendant. Consequently,
on 18
February 2021 the plaintiff set the matter down against the third
defendant for trial for 25 May 2021. On the same date the
third
defendant requested further documentation from the plaintiff in terms
of Rule 35(3), and simultaneously filed a request for
further
particulars to prepare for trial. On 4 March 2021 the plaintiff filed
its response to the third defendant's request for
further particulars
for purposes of trial. On 26 February 2021 and 10 March 2021 the
plaintiff filed its notice in terms of Rule
35(6) and its reply to
the third defendant's Rule 35(3) notice respectively. On 26 March
2021 the plaintiff filed its affidavit
in compliance with Rule 35(3)
and on 19 April 2021 filed its answering affidavit to the third
defendant's application to compel
in terms of Rule 35(7). On 1 April
2021, the third defendant filed an application to compel further and
better discovery in terms
of Rule 35(7), and simultaneously filed an
application seeking further and better particulars. The plaintiff
opposed both applications
and on 13 April 2021 the plaintiff filed
its answering affidavit to the third defendant's application to
compel further and better
particulars.
[7]
On
19 April 2021 the third defendant became aware of the judgment
granted against her. As a result, on 20 April 2021, the attorneys
representing the third defendant, wrote to the plaintiff recording
that:
i. Judgment
had been granted against the third defendant on 10 December 2020;
ii. The
steps taken after the judgment were granted, are null and void;
iii. An
application to rescind the judgment would have to be brought;
iv. The
parties cannot continue litigating in the face of the judgment.
[8]
The
plaintiff’s attorneys responded on 21 April 2021. In the letter
it was stated that the default judgment was granted erroneously
against the third defendant, and that the plaintiff has therefore
decided to abandon the judgment against the third defendant.
The
plaintiff further attached a notice to the letter in terms of Rule
41(2) wherein it unconditionally abandoned the whole of
the judgment
against the third defendant.
[1]
[9]
In
the meantime the interlocutory applications reached a point where it
could be set down for argument in the interlocutory court.
On 23
April 2021 the plaintiff, with reference to paragraph 9.10 of the
Practice Manual for Gauteng dealing with interlocutory
applications,
requested that the third defendant, in respect of the two
applications to compel, urgently place the applications
on the
interlocutory roll for hearing, due to the trial being set down for
trial on 25 May 2021. The plaintiff’s attitude
was that as it
had properly sought and obtained a trial date, it was entitled to
proceed with the hearing and therefore the interlocutory
applications
had to be resolved timeously in order to avoid any postponement of
the trial.
[10]
On
14 May 2021 the third defendant filed heads of argument in respect of
the application to compel further and better discovery
and the
application to compel further particulars. In the heads of argument,
the third defendant raised a point
in limine
which dealt with
the default judgment granted against the third defendant. On 17 May
2021 the third defendant filed a notice of
intention to amend her
plea to include a special plea of
res iudicata
.
[11]
On
20 May 2021 both applications to compel were heard before Siwendu J.
The learned Judge refused to hear the two interlocutory
applications
in the light of the default judgment. She specifically held that it
was “
superfluous and contrary to the established principle
to call on this Court to adjudicate on interlocutory applications in
respect
of a lis between the same parties, over the same cause of
action, for the same relief, over which there is an existing
pronouncement
by a court — at least until its validity is set
aside.”
The two interlocutory applications were
consequently removed from the roll and the plaintiff was ordered to
pay the costs of the
hearing of the two applications.
IS
THE MATTER PROPERLY BEFORE COURT?
[12]
The
third defendant raised a point
in limine
, namely the
non-compliance of the Practise Directive dated 18 September 2020. It
is contended that as a result the matter is not
properly before
court. The Practice Directive provides in paragraphs 6 and 13 thereof
that:
"Prior to the
enrolment of any matter or the allocation of a hearing date, the
litigating party or its representative is to
upload a Directive
Compliance declaration in the form of an affidavit which is to
confirm that no duplicate file for the matter
exists on CaseLines ...
Where no affidavit is filed the Registrar cannot allocate a hearing
date."
And
"When applying
for a hearing date, the litigating party or its legal representative
shall complete and upload a date application
form (as per the example
annexed to this Directive) together with the Directive Compliance
declaration in terms of paragraph 6
above prior to inviting the
relevant Registrar's Office profile."
[13]
The
plaintiff filed an application for a trial date on CaseLines on 8
January 2021. It also filed Form 4 provided for in the relevant
Practice Directive on 22 January 2021. The third defendant submits
that no Directive Compliance Declaration as required by the
aforesaid
directives and notices was uploaded on CaseLines, nor was one served
on the third defendant. That being so, a trial date
should not have
been allocated.
[14]
The
failure to upload a Directive Compliance Declaration had serious
consequences. A duplicate file did exist on CaseLines on the
date
that the plaintiff sought a trial date. That duplicate file contained
a judgment against the third defendant — granted
on 10 December
2020. If the plaintiff complied with the Directive, the fact that a
judgment had been granted against the third
defendant would have
become known to the Registrar allocating the trial date and to the
third defendant.
[15]
I
agree that there was non-compliance with the Practice Directive and
the Registrar should not have given a trial date. It does,
however,
not mean that the matter is not properly before court. To insist that
the matter be removed because of the non-compliance
with the Practice
Directive would be to place form above substance. That would be a
narrow technical approach that serves nothing
but that a particular
procedure should be followed. In the particular circumstances of this
matter it does however have an impact
on the cost order that is
granted. The point in
limine
is dismissed.
IS
THE MATTER RES JUDICATA?
[16]
The
requirements of
res
judicata
are that the proceedings are in respect of a dispute between the same
parties on the same cause of action for the same relief as
has
previously been dispositively adjudicated. In
Prinsloo
NO v Goldex 15 (Pty) Ltd & Another,
[2]
Brand JA recognised that, in time, the requirements were relaxed in
situations which gave rise to what became known as issue estoppel
and
stated that the recognition of the defence in certain cases will
require careful scrutiny. Each case will depend on its own
facts and
any extension of the defence will be on a case-by-case basis.
[3]
Relevant considerations will include questions of equity and
fairness, not only to the parties themselves but also to others.
[16]
Counsel
on behalf of the third defendant, Adv. van Reenen contends that,
having regard to the facts in this case, the court became
functus
officio
upon the granting of the judgment on 10 December 2021.
Until the judgment is rescinded, the plaintiff could not continue
litigating
as though the judgment had not been granted. The plaintiff
was not entitled to seek a trial date and enrol the matter for trial
with such judgment in place. In addition, the interlocutory
applications were abortive, having been launched in the face of the
judgment.
[17]
Counsel
on behalf of the plaintiff, Adv. Marx submits that the plaintiff was
not aware that default judgment was granted against
the third
defendant. It is contended that the third defendant has not suffered
any prejudice, and to the extent that she has, it
is cured by the
abandonment. The steps taken after the judgment was granted were not
null and void and the matter must proceed
to trial.
The
law
[18]
It
is trite that the discretion to correct a judgment is that of the
court and that a judgment stands until it is rescinded by a
court,
regardless of whether it was erroneously granted, or not.
[4]
In
De
Wet and Others v Western Bank Ltd,
[5]
Trengrove AJA (as he then was), made it clear that the power to
rescind judgments on default of appearance “was entrusted
to
the discretion of courts” and courts have laid down principles
to guide them in this process. There is also a need to
proceed
rapidly to correct an order mistakenly granted as it is in the
interests of justice that there should be relative certainty
and
finality as soon as possible concerning the scope and effect or
orders of court.
[6]
[19]
There
are three ways in which a judgment taken in the absence of a party
may be set aside – in terms of rule 31(2)(b) or rule
42(1) of
the Uniform Rules, or at common law. Rule 42(1) was designed, “to
correct expeditiously an obviously wrong judgment
or order”.
[7]
A party has to satisfy the court that there is a satisfactory
explanation in order to rescind a judgment. In
Firestone
South Africa (Pty) Ltd v Gentiruco
[8]
AG
Trollip JA stated the following:
“
The general
principle, now well established in our law, is that, once a court has
duly pronounced a final judgment or order, it
has itself no authority
to correct, alter, or supplement it. The reason is that it thereupon
becomes
functus
officio
: its jurisdiction in the case having been fully and finally
exercised, its authority over the subject-matter has ceased.
[9]
[20]
There
are exceptions to this principle. If a court is approached within a
reasonable time it may correct, alter, or supplement the
judgment in
certain instances recognised in law. The court itself may also
mero
moto
correct errors in its own judgment in appropriate circumstances.
Trollip JA however warned that this discretionary power “
should
be very sparingly exercised, for public policy demands that the
principle of finality in litigation should generally be preserved
rather than eroded – interest rei publicae ut sit finis
litium.”
[10]
[21]
The
reason for the warning is obvious: a judgment, even if it is voidable
ab
origine
,
and ought to have been set aside or rescinded, has the appearance of
res
judicata
,
noted in a public record and will be looked upon and be acted upon as
res
judicata
until set aside. As stated in
Jacobsen
[11]
“
it
proclaims itself to the world to be valid until set aside by the
court”
and it “
has
to be treated as if it is what it proclaims to be.”
[12]
[13]
[22]
In
FirstRand
Bank Ltd t/a First National Bank v Fondse Adriaan Rudolph N.O. and
Another
,
[14]
(“
Fondse
”)
the plaintiff obtained summary judgment in circumstances where such
judgment should not have been granted. An appeal was
lodged by the
defendant. The plaintiff abandoned the summary judgment and then
formally withdrew the action. The plaintiff issued
a fresh summons,
claiming an increased amount. The defendant raised a plea of
res
judicata
in the new action. Sutherland J (as he then was), on appeal,
referred,
inter
alia
,
to the matter of
Molaudzi
v The State
[15]
and found that when a court is confronted with a substantial
injustice that would result from the application of
res
judicata
and,
in the absence of an 'effective alternative remedy', that
res
judicata
should
be relaxed to prevent injustice. In
Molaudzi
,
the Constitutional Court explained it as follows:
'[32]
Since res judicata is a common-law principle, it follows that this
court may develop or relax the doctrine if the
interests of
justice so demand. Whether it is in the interests of justice to
develop the common law or the procedural rules
of a court must be
determined on a case-by-case basis. Section 173 [of the Constitution]
does not limit this power. It does,
however, stipulate that the power
must be exercised with due regard to the interests of justice. Courts
should not impose
inflexible requirements for the application of this
section. Rigidity has no place in the operation of court procedures.
[33]
This inherent power to regulate process does not apply to substantive
rights but rather to adjectival or procedural rights.
A
court may exercise inherent jurisdiction to regulate its own process
only when faced with inadequate procedures and rules in the
sense
that they do not provide a mechanism to deal with a particular
scenario
. A court will, in
appropriate cases, be entitled to fashion a remedy to enable it to do
justice between the parties. This court
held in
South
African Broadcasting Corp Ltd:
'The
power in s 173 vests in the judiciary the authority to uphold, to
protect and to fulfil the judicial function of administering
justice
in a regular, orderly and effective manner. Said otherwise, it is the
authority to prevent any possible abuse of process
and to allow a
court to act effectively within its jurisdiction.'
[34]
The power in s 173 must be used
sparingly otherwise there would be legal uncertainty and potential
chaos.
In addition, a court cannot
use this power to assume jurisdiction that it does not otherwise
have.' (footnotes omitted) (Emphasis
supplied)
[23]
In
arriving at this conclusion, Sutherland J in
Fondse
performed
an evaluation of all the previous cases to establish whether the
requirements of
res judicata
had to be relaxed in that case.
In doing so he found that the earlier cases were distinguishable on
the facts and did not “
offer strong support for the
proposition that an abandonment of a judgment ought ordinarily to
result in a successful defence of
res judicata”.
The court
specifically considered the unique facts of the case before it and
noted that it was not possible in that case to seek
a rescission of
the judgment in terms of Rule 42 – as no error had been
committed within the meaning of the rule and that
there was no
alternative suitable remedy. It was held that the summary judgment
ought not to have been granted because the section
129 point was
good, but that is not a procedural error as contemplated by Rule 42;
rather, it is a reason to overturn the judgment
on appeal.
[24]
I
agree with counsel for the third defendant that the facts in the
present matter are very different. The plaintiff,
in casu
,
refused to make use of the clear remedy afforded by rule 42(1) –
which provides for the rescission of the judgment in the
prescribed
manner. Instead, the plaintiff elected to abandon the judgment and
proceed with the trial and then contends that the
mere abandonment of
the judgment is sufficient to trump the defence of
res judicata
.
[25]
The
matter raises important considerations of policy and practice.
Firstly, if the plaintiff argument is correct it would create
uncertainty in regard to the finality of judgments and serve to
divest the courts from the discretion vested in it and enable parties
to “correct” the judgment themselves. This is without
precedent, and as a matter of public policy, it cannot be allowed.
Secondly, it is clearly prejudicial to the third defendant. The
public record will show that this court granted judgment against
the
third defendant and that it was not rescinded by the court. The
record will proclaim to the world at large that the plaintiff
was
entitled to a judgment and that this court found the third defendant
to be liable. In a modern commercial world, such record
holds the
potential of harm. The fact that the judgment was abandoned does not
change this. Even if it is made known that the judgment
was
abandoned, all it signifies is that the plaintiff elected to waive
its rights in terms of the judgment. The reasons why it
did so are
not recorded and will not serve to inform the world at large that the
judgment was not validly granted. In the matter
of
Body
Corporate of West Road South v Ergold Property Number 8 CC
[16]
,
Boruchowitz
J stated: "
The
act of abandonment is of a unilateral nature and operates ex nunc and
not ex tune. It precludes the party who has abandoned
its rights
under the judgment from enforcing the judgment but the judgment still
remains in existence with all its intended legal
consequences
.”
Thirdly, there is a suitable remedy available to the plaintiff,
namely an application for rescission of the judgment, as
it was
plainly an order taken in error as contemplated by Rule 42 of the
Uniform Rules of the High Court.
[26]
In
the result it follows that the judgment stands, even though
incompetent, and will continue to do so until it is set aside. The
plea of
res judicata
is good and the abandonment of the
judgment in the current circumstances is ineffectual. The judgment
must first be rescinded before
the trial can proceed.
COSTS
[27]
Siwendu
J found that the court will not hear the third defendant’s
interlocutory applications as a result of the fact that
a judgment
has been granted against the third defendant and removed the
interlocutory applications from the roll. This had the
effect that
the interlocutory applications were not finalized and that the trial
was in any event not able to proceed on 25 May
2021.
[28]
Furthermore,
the plaintiff was invited more than a month ago to remove the matter
from the roll. No costs were then sought against
the plaintiff. It
however, rejected the invitation and demanded that the interlocutory
applications be heard and that the trial
must proceed - with the
judgment on record. Had the plaintiff utilised the correct remedy,
these consequences would not have followed.
The plaintiff should be
ordered to pay the all the costs arising from the hearing set down
for 25 May 2021.
[30]
In
the result the following order is made:
1. The special plea of
res judicata
is upheld.
2. The matter is removed
from the roll
3. The plaintiff to pay
the costs.
L.
WINDELL
JUDGE
OF THE HIGH COURT
GAUTENG
LOCAL DIVISION, JOHANNESBURG
Delivered:
This judgment was prepared and authored by the Judge whose name is
reflected and is handed down electronically to the
parties/their
legal representatives by email and by uploading it to the electronic
file of this matter on CaseLines. The date for
the hand-down is
deemed to be …….. 2021.
APPEARANCES
Counsel
for plaintiff: Advocate
Marx
Instructed
by: Rossouws
Leslie Inc
Counsel
for third defendant Advocate WHJ van
Reenen
Instructed
by: Bezuidenhout
Lak Attorneys
Date
matter heard: 25
May 2021
Further
submissions 25 August 2021
Judgment
date: 24
September 2021
[1]
Rule 41 (2) states: Any party in whose favour any decision or
judgment has been given, may abandon such decision or judgment
either in whole or in part by delivering notice thereof and such
judgment or decision abandoned in part shall have effect subject
to
such abandonment.
[2]
2014 (5) SA 297 (SCA)
[3]
See
Kommissaris
van Binnelandse Inkomste v Absa
1995 (1) SA 653
(A) at 669D, 667J - 671B.
[4]
See
Jacobsen
v Havinga t/a Havingas
2001
(2) SA 177
(T) where Patel J, writing for the full bench, endorsed a
finding in
Ramodike
v Mokeetsi Trading Store
1955
(2) SA 169
(T) in relation to a magistrate’s court judgment
and stated the following: “
Until
properly attacked and rescinded a judgment of court of record, even
if obtained by default, must stand and be presumed to
be binding.”
[5]
1979 (2) SA 1031
(A) at 1042G-1043A.
[6]
Firestone
South Africa (Pty) Ltd v Gentiruco AG
1977 (4) SA 298
(A) at p 306 F-G. Also see
Liberty
Group Limited and Johan Coenraad Bezuidenhout,
Unreported
judgment in the Kwa-Zula Natal High Court, Pietermaritzburg, case
number 4072/2010
.
[7]
Bakoven
Ltd v G J Howes (Pty) Ltd
1992 (2) SA 466
(E) at 468H and 471E-F.
[8]
Supra
footnote 6.
[9]
See
West
Rand Estates Ltd. v New Zealand Insurance Co. Ltd
.
1926 AD 173
at p.176,178 186-7 and 192;
Estate
Garlick v Commissioner of Inland Revenue
1934 AD 499
at p. 502.
[10]
At page 309 A-B.
[11]
Footnote 4.
[12]
See also
African
Farms and Townships Ltd v Cape Town Municipality
1963 (2) SA 555
(A) at 564F. The court held: “
It
is quite clear, therefore, that a defendant is entitled to rely on
res judicata notwithstanding that the judgment is wrong.
That being
what the law allows for reasons of public policy, his knowledge that
the decision is erroneous would not, I consider,
expose a defendant
to a charge of bad faith cognisable in a court of law.”
[13]
See also
Minister
of Justice v Bagattini
1975 (4) SA 252
(T) at 265G. Botha J held: “
Whatever
the nature of the third respondent’s error, and however
glaring it may have been, his judgment stands and constitutes
res
judicata until it is set aside.”
[14]
2017
JDR 1043 (GJ)
[15]
2015 (2) SACR 341
(CC).
[16]
2014
JDR 2258 (GJ)