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[2019] ZAMPMBHC 12
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Kunene Motors Holdings Limited v Izicwe Mining Maintenance & Trading CC (21/6/2019) [2019] ZAMPMBHC 12; RATSHIBVUMO AJ (4 December 2019)
THE
HIGH COURT OF SOUTH AFRICA
MPUMALANGA
DIVISION, MBOMBELA MAIN SEAT
CASE
NO: A154 / 2018
In
the matter between:
KUNENE
MOTORS HOLDINGS
LIMITED APPELLANT
and
IZICWE
MINING MAINTENANCE
&
TRADING
CC RESPONDENT
J U D G M E N T
RATSHIBVUMO AJ:
Civil
Procedure
- Rescission –
of default judgment – Rule 49 requirements for rescission met –
Reasonable explanation for not
defending the action – existence
of a valid defence. Procedure to challenge the authority to act on
behalf of the applicant
– no company resolution attached
mandating the deponent to act on behalf of the applicant –
Respondent challenging
the authority as a point in limine –
Trial court upholding point in limine and dismissing the application.
Held
–
on appeal – that Rule 52 of the
Magistrates Court Rules provides for procedure to be followed –
Challenge to be raised
by way of notice to applicant.
Held
further – that the trial court should
have afforded the deponent
the
opportunity
to prove his
authorisation to act on behalf of the applicant.
1.
This is an appeal against the order of the
Regional Magistrate for the Regional Division of Mpumalanga sitting
in Middleburg in
which he dismissed an application for rescission of
judgment. The learned magistrate dismissed the application for
reasons that
the deponent to the affidavits in support of the
application (the appellant’s managing director) did not have
the authority
to bring the application on behalf of the appellant as
no resolution to that effect was attached to his founding affidavit.
2.
Background: The judgment sought to be
rescinded was granted by default after the appellant failed to enter
a notice to defend the
action. Summons in the action had been served
by the sheriff by affixing them to the door at the registered address
of the appellant.
In its application for rescission of judgment, the
appellant averred that no summons was received by any of its
employees and that
it could not have been served at its registered
address since the service was done during business hours and
employees would have
been present at the said address making it
unnecessary to affix it to the door. The appellant only became aware
of the default
judgment when a warrant of execution was served on its
managing director on 17 May 2018 and the rescission of judgment was
launched
thereafter only to be heard and dismissed on 19 July 2018.
In an affidavit filed for the appellant, detailed reasons are
advanced
as a defence to the action by the respondent.
3.
It is trite that a rescission of judgment
granted by default is granted on satisfaction of two requirements, to
wit, a satisfactory
explanation by the applicant on why he or she did
not defend the action and existence of a valid defence to the action
itself.
Rule 49 of the Magistrates Court Rules provides,
(1) A party to proceedings in which a default judgment
has been given, or
any person affected by such judgment
, may
within 20 days after obtaining knowledge of the judgment serve and
file an application to court, on notice to all parties
to the
proceedings, for a rescission or variation of the judgment and the
court may, upon good cause shown, or if it is satisfied
that there is
good reason to do so, rescind or vary the default judgment on such
terms as it deems fit: Provided that the 20 days'
period shall not be
applicable to a request for rescission or variation of judgment
brought in terms of sub-rule (5) or (5A).
(2) …
(3) Where an application for
rescission of a default judgment is made by a defendant against whom
the judgment was granted, who
wishes to defend the proceedings, the
application must be supported by an affidavit setting out the
reasons
for the defendant's absence or default and the grounds of the
defendant's defence to the claim
.”
[
Own emphasis
].
4.
In respect of the above, the court below
remarked that the reasons advanced for the rescission are reasonable
and understandable.
It however proceeded to dismiss the application
for reason that failure to attach a company resolution mandating the
managing director
was fatal to the application. It appears the court
did not go further to entertain the aspect of the managing director
of the appellant
who deposed to the affidavit as being a person
affected by the default judgment.
5.
The fact that the managing director of the
appellant failed to attach a company resolution mandating him to act
on its behalf to
his affidavit was raised for the first time by the
respondent on the date of the hearing as a point
in
limine,
and this was only after the
appellant had addressed the court on why a rescission application
should be granted. It is evident that
the respondent was well
prepared in this argument as he referred to no less than three
authorities in support of his argument.
Whereas the appellant had
indeed not attached a company resolution as contended, he had alleged
in his affidavit that he was a
managing director of the appellant and
that he was “duly authorised to launch this application and
depose to the founding
affidavit on behalf of the applicant and
generally represent the applicant in these proceeding by virtue of my
appointment and
employment.”
6.
Relevant parts of Rule 52 of the
Magistrates Court Rules which deals with representation and
substitution of the parties provides,
(1)
(a)
A party may institute or defend and may
carry to completion any legal proceedings either in person or by a
practitioner.
(b)
A
local authority, company or other incorporated entity in doing so may
act through an officer thereof authorised by it for that
purpose.
(c)
…
(d)
…
(2)
(a)
It shall not be necessary for any person
to file a power of attorney to act, but
the authority of any
person acting for a party may be challenged on notice by the other
party within 10 days of such party becoming
aware that such person is
so acting
or with the leave of the court on good cause shown at
any time before judgment.
(b)
If
a person's authority to act for a party is challenged, he or she may
not, without the leave of the court, so act further until
the court
is satisfied that he or she has authority so to act, and the court
may adjourn the hearing of the proceedings to enable
him or her to do
so. [
Own emphasis
]
7.
It seems as if in the
quest to win the battle, the purpose of this rule was lost. The
existence of this rule is not to help any
party to the proceedings to
win or lose the case through technicalities, but to prevent any
person whose name is cited in the process
from thereafter repudiating
the process and denying his authority for the issue of the process,
and also to prevent persons from
bringing an action in the name of a
person who never authorized it.
[1]
It is for this reason that this rule is not punitive in its wording,
but gives allowance for the party whose authority is challenged,
to
avail the necessary authorisation before judgment can be handed down.
8.
A party that uses the
rules as his ammunition should also make sure that he or she uses the
same rules as his shield. Had the respondent
been mindful of this
principle, this matter would not have dragged to where it is today.
The respondent was well within its rights
to challenge the authority
of the deponent to the affidavit attached in support of the
appellant’s application, but this
should have been guided by
Rule 52 of the Magistrates Court Rules
[2]
.
In terms of Rule 52 (2) (a), any challenge to the authority of the
managing director should have been brought within 10 days after
the
respondent became aware that he was acting on behalf of the
appellant. This action can only be brought by way of notice to
the
other party. The respondent points
in
limine
were raised
only of the date of hearing, more than 10 days after it became aware
of the application and this was done without any
notice to the
appellant.
9.
In
Eskom
v Soweto City Council
[3]
Flemming DJP held “The
care displayed in the past about proof of authority was rational. It
was inspired by the fear that
a person may deny that he was party to
litigation carried on in his name. His signature to the process, or
when that does not eventuate,
formal proof of authority would avoid
undue risk to the opposite party, to the administration of justice
and sometimes even to
his own attorney… If then applicant had
qualms about whether the 'interlocutory application' is authorised by
respondent,
that authority had to be challenged on the level of
whether [the respondent's attorney] held empowerment. Apart from more
informal
requests or enquiries, applicant's remedy was to use Court
Rule 7(1). It was not to hand up heads of argument, apply textual
analysis
and make submissions about the adequacy of the words used by
a deponent about his own authority.”
10.
In
Circle
Construction (Pty) Ltd v Smithfield Construction
[4]
the court of appeal
had to consider a ruling by the magistrate based on apparent lack of
authorisation by the litigant. After the
close of plaintiff's case,
the defendant applied for, and was granted, absolution from the
instance. The reason was that, inasmuch
as neither of the witnesses
called were employed by plaintiff company in a representative
capacity (one being a salesman in the
employ of the company, and the
other having no relationship with the company), and inasmuch as
there was no evidence on record
of any meetings of the company
regarding the case and no resolution empowering the salesman to
represent the company, the plaintiff
company could not be said to be
before the court. This point had not been canvassed in the pleadings
and was raised for the first
time at the time of the application for
absolution. On appeal, the court set aside the absolution granted by
the magistrate and
remitted the matter back the trial to continue.
11.
Brand JA held in
Unlawful Occupiers,
School Site v City of Johannesburg,
[5]
“
now that the new Rule
7(1) remedy is available, a party who wishes to raise the issue
of authority should not adopt the procedure
followed by the
appellants in this matter, i.e. by way of argument based on no more
than a textual analysis of the words used by
a deponent in an attempt
to prove his or her own authority. This method invariably resulted in
a costly and wasteful investigation,
which normally leads to the
conclusion that the application was indeed authorised. After all,
there is rarely any motivation for
deliberately launching an
unauthorised application. In the present case, for example, the
respondent's challenge resulted in the
filing of pages of resolutions
annexed to a supplementary affidavit followed by lengthy technical
arguments on both sides. All
this culminated in the following
question: Is it conceivable that an application of this
magnitude could have been launched
on behalf of the municipality with
the knowledge of but against the advice of its own director of legal
services? That question
can, in my view, be answered only in the
negative.”
[6]
12.
When the court
a
quo
allowed this
challenge to be raised in a manner that can only be described as
irregular, and did not extend the opportunity to
allow the appellant
to prove the authorisation through postponing the matter, as
envisaged by Rule 52,
[7]
it deprived itself of the opportunity to have insight of the company
resolution that apparently already existed at the time of
the
hearing, the same resolution that the managing director was referring
to when he alleged in his affidavit in support of the
application
that he was “duly authorised to launch this application and
depose to the founding affidavit on behalf of the
applicant…”
The said resolution was made available to us as the appellant proved
its argument that had the court below
allowed a postponement, a
resolution would have been made available. The said resolution was
dated 17 May 2018, some two months
before the date of the hearing.
13.
For the reason that this matter can be
decided without deciding on the validity of the second affidavit
filed for the appellant
by the managing director, we do not deem it
necessary to make a pronouncement on whether it was a properly sworn
statement. We
also note that the contents thereof do not allege
anything substantially new or different to what already existed in
the first
affidavit in support of the rescission application.
14.
It is very clear that when the ruling was
made by the court below, it was after it was fully addressed on the
merits of the application.
The presiding officer also expressed a
view on the reasonableness of the application or the prospects of
success but chose to dismiss
the application for reasons above. I do
not deem it necessary to revert the matter back just for the court
below to now express
a ruling in line with what it already expressed.
Reverting the matter just for that exercise as requested by the
respondent, who
continues to enjoy the existence of a default
judgment in his favour, would in my view be an unnecessary judicial
yoyo at the expense
of the litigants and is not be in the interests
of justice.
15.
Consequently, the following order is made:
1.1
Appeal
is upheld with costs.
1.2
The
order of the court below is set aside and replaced with the following
order:
“
Application for the rescission
of judgement granted against the applicant in favour of the
respondent under case no. MRCC 151/16
on 14 September 20187 is
allowed with costs.”
_____________________
TV RATSHIBVUMO
ACTING
JUDGE OF THE HIGH COURT
I
agree.
_____________________
MBG LANGA
ACTING JUDGE OF THE HIGH COURT
FOR
THE APPELLANT: ADV AD THEART
INSTRUCTED
BY: PRINSLOO-VAN DER LINDE ATTORNEYS
Care
of JOHAN ALBERTS ATTORNEYS
MIDDLEBURG
FOR
THE RESPONDENT: ADV WR DU PREEZ
INTRUSCTED
BY: POTGIETER & BEEKEN ATTORNEYS
Care
of VAN DEN BERG & KOEKEMOER
MIDDLEBURG
DATE
HEARD: 07 JUNE 2019
JUDGMENT
DELIVERED: 21 JUNE 2019
[1]
See
Texeira v Industrial and Mercantile
Corporation
1979 (4) SA 532
(O) at 539C–D.
[2]
Similar provisions in Superior Court Rules are contained in Rule 7.
[3]
1992 (2) SA 703
(W) at 705 D-E and 706 B-D.
[4]
1982 (4) SA 726 (N).
[5]
2005 (4) SA 199
(SCA)
paragraphs 14-16
[6]
See also
ANC
Umvoti Council Caucus v Umvoti Municipality
2010 (3) SA 31 (KZP)
[7]
This has been referred to as Rule 7 of the Superior Court Rules –
see footnote 2 above.