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[2019] ZANCHC 9
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Tsantsabane Local Municipality v Mosegedi and Associates (Pty) Ltd (800/2014) [2019] ZANCHC 9 (15 March 2019)
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTHERN
CAPE HIGH COURT, KIMBERLEY)
CASE
NO.: 800/2014
Date
heard: 15-06-2018
Date
delivered:15-03-2019
In
the matter between:
Tsantsabane Local
Municipality
Applicant
And
Mosegedi
and Associates (PTY) LTD
Respondent
CORAM:
WILLIAMS J:
JUDGMENT
WILLIAMS
J:
1.
This
is an application for the rescission of a default judgment granted in
favour of the respondent Mosegedi & Associates (PTY)
Ltd against
the applicant, the Tsantsabane Municipality, in the amount of
R498 919, 24 for professional fees and disbursements
in terms of
a written consultant’s agreement entered into between the
parties.
2.
The
application is brought in terms of the Rule 31(2) (b) alternatively
the common law.
Default judgment was
granted on 26 January 2018 after the applicant was in default of
filing a plea to the respondents declaration
delivered on 27 June
2017 and the applicant had been
ipso facto
barred from
pleading on 28 August 2017.
3.
Rule
31(2) (b) provides that the court may on good cause shown set aside
the default judgment. To succeed with an application
for
rescission under this subrule it is generally accepted that the
applicant has to; (i) give a reasonable explanation for his
default.
If the default was wilful or due to gross negligence the court should
not come to his assistance; (ii)
the application must be
bona
fide
and not made with the intention of delaying the plaintiff’s
claim; and (iii) he must show that he has a
bona
fide
defence
(it is sufficient however to make out a
prima
facie
defence by setting out averments, which if established at the trial
would entitle him to the relief asked for).
The reasons for the
delay
4.
The
applicant provides a long history and time-line of the events leading
up to the default judgment which I will attempt to briefly
summarise,
4.1.
Mr
H Mathobela the deponent to applicant’s affidavits is the
applicant’s municipal manager, a position he held at the
time
the action was instituted by way of a simple summons issued on 24 May
2014. At the time he was able to consult with
Mr Johann Barnard
who was intricately involved as technical manager on the project and
who also assisted the applicant with general
oversight over the
project as well as the other relevant key- individuals who had
knowledge of the dispute between the parties.
He was thus able
to instruct the applicant’s attorneys to oppose an application
for summary judgement brought by the respondent,
who subsequently
consented that leave be granted to defend the action on 12 November
2014.
4.2
Thereafter, after settlement proposals failed and Mr Barnard had
passed away, and key individuals and employees
with personal
knowledge had left the employ of the applicant, the respondent filed
the declaration on 27 June 2017, more than 3
years after the simple
summons.
4.3 Mr
Mathobela explains that it was then impossible to obtain sufficient
information and documentation, to consult
with the relevant
knowledgeable individuals and instruct applicant’s attorneys of
record to file a plea within the specified
time limits.
4.4
Even after the respondent filed a notice of bar on 25 August 2017,
the relevant information could not be obtained
to instruct the
applicant’s attorneys to file a plea before the applicant was
ipso facto
barred from doing so.
4.5
Thereafter Mr Mathobela left the employ of the applicant and a new
municipal manager was appointed who had
even less knowledge of the
matter. He could also not properly instruct an attorney to
bring an application to uplift the
bar and file a plea.
4.6 The
applicant nevertheless requested a removal of bar on 16 September
2017, which request was refused by the
respondent on 18 September
2017. The respondent served notice of default judgment on the
applicant on 27 September 2017.
4.7 Mr
Mathobela was re-appointed as municipal manager during December 2017,
when most of the applicant’s
employees were on holiday and he
could not obtain the relevant information to formulate a plea.
4.8
Notice of set down of the default judgment application was served on
the applicant on 17 January 2018, for
hearing on 19 January 2018.
Mr Mathobela states that the matter was postponed to 26 January 2018
to give the applicant an
opportunity to bring an application to
uplift the bar. He states once again that he was unable to
obtain the relevant information
to draft the application before 26
January 2018, on which date the court refused to grant any further
indulgence and default judgment
was granted against the applicant.
5.
The
respondent, although agreeing with the time-line of events, does not
agree with all the allegations made by Mr Mathobela.
I need not
go into all the counter-allegations however, since in my view it is
clear that the explanation for the delay does not
pass muster.
I have had sight of the opposing affidavit to the summary judgement
application which was filed on 31 October
2014, wherein the
applicant’s defence to the claim is set out in almost the exact
terms as the defence proferred in the application
before me. The
excuse that the respondent’s delay of 3 years before filing the
declaration had made it almost impossible
to find and consult with
the relevant role players, can therefore not hold water.
6.
Another
interesting anomaly is that according to Mr Mathobela a draft plea
and counterclaim (which is attached to the founding papers)
had been
compiled during September 2017 before the respondent’s refusal
to consent to the removal of bar. This was
during the time when
the acting municipal manager had been appointed, who on the
applicant’s version had no knowledge of
the matter. Where
the instructions had come from to enable the applicant’s
attorneys to draft the plea and counterclaim
is not explained.
According to Mr Mathobela, he was only able to locate the necessary
documentation and relevant knowledgeable
individuals to assist in
providing the instructions for this application during January 2018.
These individuals have also
not been identified.
7.
I cannot but find in these circumstances that the information
necessary to draft a plea had been
available at least since October
2014.
8.
Whether
the delay was deliberate and with full knowledge of the consequences
of the default or whether it was just due to the plain
negligence on
the side of the applicant is difficult to find since the applicant
has obviously not played open cards in explaining
the delay. At
best for the applicant, the explanation for the delay is extremely
poor and as such the strength of the defence
on the merits becomes
crucial.
The
defence on the merits.
9.
It
is common cause that the applicant appointed the respondent during
2010 as consulting engineers to perform consulting services
in
respect of the upgrade of a 1.6 kilometre section of a street in the
Boichoko Township of Postmasburg. Inclusive in the
brief was
the design of a storm water drainage system and construction
supervision.
10.
A
construction firm, Maptisi Civil, were awarded the tender to
construct the works under the supervision of the respondent.
11.
According
to the applicant, a dispute arose regarding the performance by the
respondent in terms of their agreement. Mr Barnard,
the
technical advisor for the applicant was involved in facilitating the
process to reach a solution to the dispute, to no avail.
12.
The
main problem appears to be the design and construction of the storm
water drainage system. The applicant alleges that
after the
works had been in progress for about a year, during early January
2012, it came to their knowledge that the respondent
had, contrary to
its obligations in terms of the agreement failed to design the storm
water drainage system, nor had a storm water
master plan been
produced or executed by the respondent. The respondent had also
failed to monitor the construction of the
drainage system. Once
this had come to the knowledge of the applicant, it decided to
withhold all further payments until
the matter had been rectified by
the respondent. The applicant attaches copies of letters sent
to the respondent demanding
that respondent rectify the breach.
Despite these letters, it is alleged, the respondent has failed to
rectify the breach.
13.
The
applicant alleges that since the respondent has not performed its
obligations in terms of the agreement, it is not entitled
to the
payments claimed and had in fact been enriched by payments made.
The applicant contends that the costs at present
for the design and
construction of an appropriate storm water drainage system far
exceeds the respondent’s claim and that
it intends to
counterclaim for damages in an estimated amount of R1.8 million.
14.
The
letters which the applicant sent to the respondent and referred to
herein in paragraph 12 above, are dated 29 March 2012 and
21 May
2012. The letter of 29 March refers
inter
alia
to
the storm water drainage design and states that it is “
unbefitting
and fails to operate for its intended purpose. It cannot drain
storm water away. . . You are hereby instructed
to issue drawings
(approved by us) to the contractor to rectify this problem to collect
and dispose of storm water at you costs.”
15.
The
letter of 21 May states in this regard, “
As
pointed out on numerous occasions. . . , the road design cannot
accommodate storm water. We are still waiting for a solution
to
be designed and constructed at the sole costs of Mosegedi and
Associates.”
These letters are signed by a Rev Moselane, who appears to have been
the municipal manager at the time.
16.
In
its opposing affidavit the respondent admits that it was responsible
for the design of the storm water drainage system and oversight
of
its construction, but denies that it was responsible for the storm
water master plan which was applicable to the entire township
and
designed by BVI Consulting Engineers. The respondent admits
that certain problems were encountered as pointed out in
the two
letters referred to herein, but denies a dispute in this regard.
The respondent states that if there was a dispute
it should have been
dealt with in terms of and as provided for in the contract governing
the parties’ relationship.
Likewise no dispute has been
raised in terms of the agreement regarding the respondent’s
accounts which the applicant has
refused to pay.
17.
The
respondent states that the problems regarding the stormwater drainage
system were in fact attended to, to the satisfaction of
the applicant
in the extent that it had issued Practical Completion and Final
Completion Certificates of the project.
18.
The
certificates are attached to the respondent’s opposing papers.
The Practical Completion Certificate is dated 25
July 2012 and
contains a snag list which includes amongst the works outstanding a
water channel to be attended to, a drain on a
kerb and a chute to
drain water away from houses (all seemingly related to drainage).
The Certificate of Completion is dated
15 August 2012 – and
states that there are no outstanding works – that the works
“
shall
be considered completed to such an extent, as to revert the
possession of the site to the Employer for its intended purpose
of
use by the Employer. . . “
The Certificate of
Completion was signed by the representative of the contractor and the
respondent on 15 August 2012 and by the
applicant’s
representative on 2 October 2012
19.
The
applicant failed to refer at all to these certificates. In its
replying affidavit the applicant states that it was understood
between the parties that the storm water drainage issues would be
finalised independently from the main project and the certificates
issued related to the remainder of the project. As proof of
this contention an e-mail from Mr Barnard to the respondent,
dated 9
August 2012, is attached and which reads as follows:
“
If all is done,
we will recommend that the Tsantsabane Municipality sign the
Completion Certificate, because the Contractor would
have fulfilled
his obligations in terms of Clause 51.4 of the GCC.
However, no commitment
have been received from Mosegedi and Associates regarding resolving
the drainage problem, and the Municipality
will not take possession
in terms of Clause 51.5.4 of the GCC because of the incomplete design
as pointed out in the attached correspondence
more than once.
In fact this short coming was acknowledged by mr Elmar Jansen Van
Vuuren an pointed out to you in the letter
of 20 March 2012. In
your letter of 23 May 2012, you in fact undertook to have a special
meeting to discuss and resolve this
problem.”
20.
This
e-mail from Mr Barnard precedes the applicant’s signing off on
the project by almost two months, which tends to confirm
the
respondent’s version that all problems were rectified before
the Certificate of Completion was issued. The applicant
has
failed to provide any proof of an arrangement whereby the storm water
drainage system would be finalised separately.
In fact this
averment appears to be an afterthought to explain away the issue of
the Certificate of Completion and is yet again
an example of the
applicant’s failure to play open cards with the court.
21.
The
applicant has failed to show a
bona
fide
defence and in my view the application for rescission of judgment has
been brought merely to frustrate and delay the finalisation
of the
respondent’s claim.
The
following order is made:
The
application for rescission of judgment is dismissed with costs.
CC
WILLIAMS
JUDGE
For
Applicant:
Adv M Jacobs
Weavind & Weavind
Inc.
c/o Engelsman Magabane
Inc
For
Respondent:
Adv R Grundlingh
Scheepers & Aucamp
Attorneys
c/o Roux Welgemoed &
Du Plooy Attorneys