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[2019] ZAFSHC 178
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Free State Bricks (Pty) Ltd v Marunic Trading (Pty) Ltd (2023/2018) [2019] ZAFSHC 178 (10 October 2019)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Reportable:
NO
Of
Interest to other Judges: NO
Circulate
to Magistrates: NO
Case number: 2023/2018
In
the matter between:
FREE
STATE BRICKS (PTY) LTD
APPLICANT
(REG NO:
2009/013894/07)
And
MARUNIC TRADING (PTY)
LTD
RESPONDENT
(REG. NO:
2006/035636/07)
In Re:
MARUNIC TRADING (PTY)
LTD
PLAINTIFF
(REG. NO:
2006/035636/07)
And
FREE STATE BRICKS
(PTY) LTD
DEFENDANT
JUDGMENT
BY:
CHESIWE, J
HEARD
ON:
06 JUNE 2019
DELIVERED
ON:
10
OCTOBER 2019
[1] This
is an application for a rescission of a default judgment granted by
this court against the applicant
(defendant in the main action)
on the 28 June 2018 under case number 2023/2018 on the grounds that
the respondent (plaintiff
in the main action) issued summons which
were served on a Mrs Koekemoer, and that the applicant did not file a
notice of intention
to defend the action. As a consequence
thereof, respondent proceeded to obtain default judgment against the
applicant for
the amount claimed. The application is
opposed by the respondent. Prior to hearing of the application,
the applicant
requested condonation for the late filing of the
application, which the respondent opposed.
[2] The
applicant seeks an order that the default judgment granted against it
be rescinded and that the
non-compliance with the rules be condoned.
[3] The
background on this matter is briefly as follows: The applicant
manufactures bricks to be used in construction
and building. The
process of manufacturing the bricks entails that a mixture of clay
and coal dust/charcoal/slurry (slurry) is
made in batches. Sometime
in April 2017 the applicant was approached by Mr. Cole on behalf of
the respondent to purchase coal from
the respondent. The
respondent delivered the first batch of slurry in June 2017.
The applicant did a quality test on
the bricks and found that the
slurry was of substandard. Mr Cole on behalf of the respondent
undertook to remove the substandard
slurry and provide credit by way
of the replacement of the slurry and proper coal and this did not
materialized. The respondent
now claimed for payment for slurry
that was delivered to the applicant.
[4] The
parties signed an acknowledgment of debt (AOD), which is in dispute
as the applicant averred that a Mrs
Fouche, secretary of the
applicant had no authority to sign the AOD. However, based on the
AOD, the respondent proceeded to obtain
the default judgement against
the applicant.
[5]
The respondent issued summons against the applicant for an
amount of R398 833, 09 with interest
in terms of the AOD on the
20 April 2018. The default judgment was granted against the
applicant on the 28 June 2018 as no
notice to defend was filed.
On the 7 September 2018 a Writ of Execution was served to attach some
assets of the applicant.
A second Writ was served on the 14
December 2018, in which the Sheriff issued a
Nulla
Bona
return of service. On the 10 December 2018 the
applicant lodged the application for rescission of judgment.
On
the 14 December 2018 the respondent filed a notice to oppose and on
25 January 2019 the respondent filed its opposing affidavit
to which
the applicant filed a replying affidavit of 26 February 2019.
[6] The
applicant filed an application for condonation for the late filing of
the rescission application and it
was opposed by the respondent.
The applicant’s contention is that the application could not be
filed on time due to
the unavailability of the preferred Counsel of
the applicant. The applicant further mentioned that there
is prospects
of success. The respondent’s contention is
that the applicant had taken four months to deliver its application
and
that application is not bona fide. The applicant further
raised an issue that that the Acknowledgement of Debt was not signed
by the applicant.
[7] Counsel
on behalf of the applicant in oral argument and written Heads of
Argument submitted that the applicant
dispute that the money is due
and payable. And indicated that the applicant has a complete
defence and that there is prospects
of success. Counsel
submitted that the Acknowledgement of Debt signed by a Mrs Fouche
should be disregarded, as Mrs
Fouche had no authority to sign the
AOD. As a result of her conduct disciplinary action was taken
against Mrs. Fouche. Counsel
submitted that the applicant’s
application for condonation be granted in order for the applicant to
defend the action.
[8]
Counsel on behalf of the respondent in oral argument and
written Heads of Argument submitted that the
application for
condonation should be dismissed by the court as the applicant gave no
clear and detail explanation for the delay.
Counsel submitted
that during August 2018 the Sheriff to attached assets of the
applicant, the applicant took no action after the
Sheriff’s
attachment. The applicant only consulted on 3 October with
Counsel and on 8 October obtain the documents
from the court file and
still took no steps to file the rescission application. Nor
does the applicant explain to this court
what happened in November
2018. Counsel submitted that the application of the
applicant is therefore not
bona
fide.
[9]
In terms of Rule 27 of the Uniform Rules of Court, the Court may, on
good cause shown condone any non-compliance.
In the
matter of
Federated
Employers Fire and General Insurance Co Ltd And Another v
McKenzie,
[1]
where the court listed the following grounds to be considered in an
application for condonation: “…
the
factors usually weighed by the court include the degree of
non-compliance, the explanation of the delay, importance of the case,
the prospects of success, the nature of the relief, the other party’s
interest in finality, prejudice to the other side,
convenience of the
court, the avoidance of unnecessary delay in the administration of
justice and the degree of negligence of the
persons responsible for
the non-compliance.”
[10] A
condonation application is not merely a formality and nor is it
merely for the taking. What is require
is an explanation not
only of the delay in the timeous seeking of the condonation for
non-compliance, but a full and reasonable
explanation which covers
the entire period of delay must be given.
[2]
If there has been a long delay, the court require the party in
default to satisfy it of the relief sought. The
court will
refuse to grant the application where there has been reckless or
intentional disregard of the rules of court or the
court will grant
the application if it is convinced that the applicant has a bona fide
defence.
[11] The
summons against the applicant were issued on the 20 April 2018, and
was served on a Mrs Koekemoer on
the 8 June 2018, to which the
applicant averred that the summons were misplaced by Ms Koekemoer.
The question is when the
applicant was informed that the summons were
issued and thereafter misplaced, what steps the applicant take to
ensure immediately
that a copy of the summons is obtained.
The applicant only requested a copy from the court file in October
2018.
That is nearly four month later. The
applicant lodged the application for rescission only on the 10
December 2018.
[12] The applicant
in the founding affidavit mentioned that Counsel that was briefed was
not available as Counsel was involved
in other matters in the Labour
Court in Johannesburg. In
Maharajh
v Mabaso,
[3]
where
the applicant blamed the attorney for the delay in the proceedings.
The court state that: “
I
might add that although there was clearly inexcusable dilatoriness on
the part of the applicant’s attorney, the applicant
himself was
not entirely blameless
.”
[13] The
founding affidavit of the applicant paragraph 29 reads as follows: “I
received knowledge of the
judgement entered into during August 2018 when the Sheriff of the
above Honourable court attached certain
assets of the applicant.
I consulted with my attorney of record. We had follow-up
consultations and eventually consulted
Counsel in Bloemfontein on the
3 October 2018. Counsel requested
certain
documents pertaining to the delivery notes and emails exchanged
between the applicant and specifically Mrs. Fouche and the
respondents’ representatives.”
[14]
The
applicant
does not explain in detail what was the delay after the two
Writ of executions were served on the office on the
7 September 2018
and 14 December 2018, except to say that the documents were not
available as well as Counsel was not available.
The last two weeks of
September 2018 are also not explained as consultation took place only
on the 3 October2018. Nor does the
applicant explain in
detail what the delay was in November 2018.
[15] An
application for rescission should be brought without delay and as
soon as possible once an applicant realises
that there is
non-compliance of the rules of court. The applicant must show
that he did not wilfully disregard the time frames
provided for in
the rules of court. The applicant is obliged to satisfy court
that there is sufficient good cause for non–compliance
of the
rules. In
Ferreira
v
Ntshingila,
[4]
the
court said:
“
Where
non-observance of the Rules in a matter have been flagrant and gross,
and application for condonation should not be granted,
whatever the
prospects of success might be.”
[5]
[16] On the
applicant’s own version as stated in the Founding Affidavit,
the applicant became aware of the Judgement
in August 2018.
Thus the applicant’s failure to lodge the application timeously
and not give a detailed explanation
of the timeline delay, in my
view, the applicant has shown good cause for the delay, nor took
reasonable steps to lodge the application
timeously.
[17] The
Rules of courts serve as a necessary purpose. Their primary aim
is to ensure that the courts are run
effectively and efficiently,
which in turn will bring about expeditious disposal of cases.
Thus the reasons advanced for
the condonation application are not in
any way bona fide or sufficient for the court to grant the
condonation application.
RESCISSION
OF JUDGEMENT
[18] It
is trite that an application for rescission of judgment in terms of
Rule 31 (2) (b) requirements are
well established as stated in
Colyn v
Tiger Food Industries Ltd T/A Meadow Feed Mills (Cape),
[6]
that:
“
The
applicant must show cause why the remedy should not be granted.
That entails (a) giving a reasonable explanation of the
default; (b)
showing that the application is made bona fide; (c) showing that
there is a bona fide defence to the plaintiff’s
claim which
prima facie has become prospectus success. In addition, the
application must be brought within 20 days after
the defendant has
obtained knowledge of the judgment
.”
[19]
The
law governing an application for rescission under Uniform Rule 42(1)
(a) is trite. The applicant must show that the default
judgment
or order had been erroneously sought or erroneously granted. If
the default judgment was erroneously sought or granted,
a court
should, without more, grant the order for rescission.
[7]
It
is not necessary for a party to show good cause under the
subrule.
[8]
Generally
a judgment is erroneously granted if there existed at the time of its
issue a fact which the court was unaware
of, which would have
precluded the granting of the judgment and which would have induced
the court, if aware of it, not to grant
the judgment. I doubt
if any such error existed when the default judgment was granted.
The court in granting the default
judgment was indeed satisfied that
the respondent be granted the relief it sought.
[20] In order
for a rescission order to succeed in terms of common law, the
applicant must give a reasonable (and
obviously acceptable)
explanation for his default; show that the application is made
bona fide and show that he has a bona
fide defence which prima facie
carries some prospect of success.
[9]
[21] Mr
Johannes Machiel Barnard, a director of the applicant stated in the
Founding Affidavit that:
“
In
terms of the return of service that my attorney has shown me, summons
was served on the 8 June 2018. It was served on one
Mrs
Koekemoer who is an employee of the applicant. Summons was
served on a Friday. Mrs Koekemoer placed the summons
in the
office as I was not present at site at that stage. It seems
during the course of the weekend, we do work shifts over
the weekend,
the summons was misplaced, I accordingly did not receive any notice.
”
[22] The Sheriff in
the return of service does confirm that on the 8 June 2018 at 10:51
the summons and particulars of claim
was served on Mrs Koekemoer at
the
domicilium
citandi et executandi
of the applicant. The applicant in the Founding Affidavit mentioned
that the summons were served but were misplaced by Mrs
Koekemoer.
However, the applicant failed to attach the Confirmatory Affidavit of
Mrs Koekemoer which should have confirmed
that after receiving the
summons, she misplaced the summons in the office of the applicant.
It is therefore difficult to
accept that version of the applicant.
[23] The
party’s signed an Acknowledgment of Debt, to which the
applicant denied that it was signed by an authorised
staff member.
The applicant’s Founding Affidavit in respect of Mrs Fouche
reads as follows: “
She
was harassed and manipulated into signing the acknowledgment of debt
to the extent that she had the assurance from Mr Cole that
he will
see to the removal of the substandard product and the
provision of the credit and as such thought it would
be an opportune
time to sign the agreement.”
[24] Mrs
Fouche’s Confirmatory Affidavit does not deal in detail with
the issue of her signature, but she rather
confirms the contents of
the Founding Affidavit of Mr Johannes Machiel Barnard.
According to the respondent the signature
of Mrs Fouche on the AOD is
that of a person who signed as a witness. I am not a writing
expert, but on the face of it, the
signature on the Confirmatory
Affidavit of Mrs Fouche, as well as the signature on the amended AOD
where the signature appears
on witness 1, the signatures do look
similar. The applicant raised various versions that Mrs Fouche signed
the AOD because she
was harassed and manipulated by the
representative of the respondent; that she signed the agreement due
to the promises made by
Mr Cole that the slurry will be removed and
also that she was not authorized to sign the AOD; this makes it
difficult for the court
to accept as to which version is the correct
one. I am inclined to agree with the respondent that Mrs Fouche
signed as a
witness and not on the signatory section.
[25]
Annexures “EVL2” and “EVL3” attached to the
application showed that the applicant
acknowledged the debt was owing
and thus agreed to the arrangements made between the parties. I am
convinced that Mrs Fouche therefore
signed as a witness on the
amended AOD. And indeed there was an acknowledgement of debt between
the parties.
[26] The
applicant in the Opposing Affidavit further indicated after testing
the slurry, it was discovered that
the slurry was of substandard and
the respondent was informed about the standard of the slurry.
The respondent on the other
hand denied the slurry was of
substandard, and explained that it was arranged that whatever product
was left, will be collected
by the respondent, but the respondent
discovered that applicant had used up of most of
the product and was already
in arrears by then. The respondent
elected to minimise costs and no longer provided the applicant with
the product until the parties
agreed to enter into an AOD. The
respondent mentioned in the Opposing Affidavit that when the
applicant realised that it
was in arrears then applicant raised the
issue of the substandard slurry. The respondent could obviously
not test or check
this slurry as the applicant had already made used
of the product. That defence of the applicant that the slurry
was of substandard
cannot stand as it was only raised after the issue
of the arrears was brought to the attention of the applicant and by
then the
product was used up by the applicant.
[27] The
applicant raised a counterclaim that the respondent owed the
applicant an amount of R2 000 000. 00,
due to the damage
suffered of the substandard bricks. Indeed it is quite a
substantial amount to be owed. The alleged
counterclaim of the
applicant is raised only after the two Writ of Executions was served
on the applicant. It is difficult
to accept that if a person or
a company is owed such a huge amount of money, would just keep quiet
and only made an issue about
it counterclaim when there is a default
judgment. For such a huge amount of money, one would have
expected that the applicant
should have issued summons even before
the respondent issued its summons as the amount claimed by the
respondent is very minimal
compared to the counterclaim amount of the
applicant.
[28]
The general approach of the courts to an application for
rescission was stated by Smalberger J, (as he then
was) in the matter
of
HDS
Construction (Pty) Ltd v Wait,
[10]
the
court said that
:
“
the
judgment
is not merely for the taking. The applicant must prove that
good cause exists to rescind the judgment before the
court will grant
a rescission order. The applicant must satisfy the principle of “good
cause”. In determining
whether or good cause has
been shown, the applicant must give reasonable explanation as to the
reasons for his default in defending
the matter.”
[29]
The court is given a wide discretion in terms of
Rule 31 (2) (b) when dealing with words such as good cause.
The
Court’s discretion must be exercised after proper consideration
of all the relevant circumstances. The court
may not come
to the assistance of an applicant/defendant whose default was wilful
or due to gross negligence.
[11]
The applicant was served summons to which it failed to react, though
the applicant acknowledged that the default judgment
came to its
attention when the Sheriff came to serve the first Writ of Execution,
the applicant only consulted with the legal representative
on the 3
October 2018, which still makes the application for rescission to be
way out of the required time period.
[30]
The reasons proffered by the applicant that the summons were
misplaced and that Counsel was occupied with other matters,
as well
as the documents were lifted from the court file only in October
2018, are insufficient. I am not satisfied that
the applicant
has a bona fide defence, nor has the applicant any shown good cause.
[31]
In my view, I am satisfied that the applicant has failed to
defend the default judgement and therefore should not
be granted
condonation. Nor has the applicant met the requirements to
succeed with a Rescission of the Default Judgment.
Therefore
the relief sought in the Notice of Motion cannot be granted.
COSTS
[32]
It is trite that the general rule in respect of costs is that costs
order usually follows the successful party.
The respondent prayed for
costs on an attorney client scale due to the fact that the applicant
has brought the application mala
fide and has not raised a proper
defence nor a proper explanation.
[33]
The basic rule is that costs are in the discretion of the court.
This discretion is wide, though unfettered
and must be exercised
judicially upon a consideration of the facts of each case.
Bearing in mind that such an order as to
costs should be fair and
just between the parties.
[12]
The attorney and client scale as prayed for by the respondent is a
form of punishment for the losing party. In some cases
the
court will grant such an order to show its disapproval to the conduct
of the losing party. However, such an award will
not be granted
lightly by the courts as it punishes a person who has exercised his
right to obtain a judicial decision. There
is thus no
justification to penalize the applicant with a cost order on attorney
client scale.
[34]
I accordingly make the following order;
1.
The Application for Rescission of Judgment is dismissed with costs on
a party and party scale.
S.
CHESIWE, J
On
behalf of applicant: Adv. LA Roux
Instructed
By: EG
Cooper Majiedt Inc.
BLOEMFONTEIN
On
behalf of respondent: Adv. PC
Ploos Van Amstel
Instructed
By:
Blair by Blair
BLOEMFONTEIN
[1]
[1969]
3 All SA 424 (A).
[2]
Van Wyk V Unitas Hospital
[2007] ZACC 24
;
2008 (2) SA 472
( CC) at 477E-G
[3]
1997 JOL 1285 (SE).
[4]
1990 (4) SA (A) at 281J-282A.
[5]
See also Blumenthal and Another v Thomson NO and
Another
[1993] ZASCA 190
;
1994 (2) SA 118
(A) at 121I-122B.
[6]
2003
(6) SA (SCA)
2 ALL SA 113
, at para 11
[7]
National Pride Training 452 v Media 24 Ltd
2010
(6) SA 587
ECP para 31.
[8]
Bakoven Ltd v GJ Howes Pty Ltd
1992 (2) SA 466
(E) at 471G.
[9]
Chetty v Law Society, Transvaal 1985 (2) SA 756.
[10]
1979 (2) SA (E) at 3000F – 301 C.
[11]
Grant v Plumbers (Pty) Ltd 1949 (2) SA 470 (O)
[12]
Fripp v Gibbon & Co
1913 AD 354
at 363.