About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Eastern Cape High Court, Bhisho
SAFLII
>>
Databases
>>
South Africa: Eastern Cape High Court, Bhisho
>>
2019
>>
[2019] ZAECBHC 1
|
|
MEC For The Department Of Public Works and Another v Ikamva Architects CC (CA 21/2018) [2019] ZAECBHC 1 (15 January 2019)
IN THE HIGH COURT OF
SOUTH AFRICA
(EASTERN CAPE LOCAL
DIVISION, BHISHO)
Case No: CA 21/2018
NOT REPORTABLE
Date Heard:
17
September 2018
Date delivered:
15
January 2019
In
the matter between:
MEC
FOR THE DEPARTMENT OF PUBLIC WORKS
First
Appellant
MEC
FOR THE DEPARTMENT OF HEALTH
Second
Appellant
and
IKAMVA
ARCHITECTS CC
Respondent
JUDGMENT
Goosen J:
[1]
This is an appeal against the dismissal of an application for
rescission of judgment by Hartle
J. The appellants prosecute the
appeal with leave of the court
a
quo
. As an adjunct to
the appeal, there is before this court an application by the
respondent to declare the appeal as lapsed in terms
of Rule 49(7)(b)
and an application for condonation for the late prosecution of the
appeal by the appellants. Given the nature
of the issues raised in
these applications and the appeal it is appropriate to set out the
litigation history in some detail.
Litigation History
[2]
The respondent instituted action against the first and second
appellants by summons sued out of
the Bhisho High Court on 15 August
2008. The respondent claimed payment of an amount of R44 040 032.
00 for damages arising
from the alleged breach of a contract
concluded between the parties. Both appellants filed notices to
defend the action and in
due course delivered their pleas
[1]
.
On 17 February 2009 the respondent filed a notice in terms of Rule
35(1) calling for discovery to be made within twenty days.
The
appellants failed to comply and an order compelling discovery was
made on 9 July 2009. The appellants thereafter filed their
discovery
affidavit. On 12 October 2010 respondent filed a notice in terms of
Rule 35(6) calling upon the appellants to make available
for
inspection certain specified documents. It is common cause that the
appellants failed to comply with the notice. As a result,
the
respondent launched an application to compel compliance with the
notice.
[3]
The application to compel was heard by Majiki AJ (as she then was).
The learned judge granted
an order on 10 November 2011 compelling the
appellants to make discovery. She further ordered that in the event
that the appellants
do not comply that their defences be struck out.
The appellants did not comply with the order. The respondent then
gave notice
of its intention to seek default judgment on 7 November
2012. This resulted in a notice of opposition as well as a notice in
terms
of Rule 30A. The matter eventually came before Dukada J. The
learned judge decided that the terms of Majiki J’s order
required
that an application be made to strike out the defences and
accordingly dismissed the application for default judgment with
costs,
including costs of two counsel. The respondent, aggrieved by
this decision, sought leave to appeal.
[4]
The appeal was heard by the Full Bench of this Division on 18 August
2014. Plasket J, writing
for the unanimous Bench, found that the
terms of Majiki J’s order were clear. The effect of the order
was that upon failure
to comply with the order compelling discovery,
the appellants’ defences were struck out. The learned judge,
having made certain
obiter
comments regarding the desirability
of such orders, pointed out that the appellants could, if they so
desired, purge their contempt
of the order and apply for
reinstatement of their defences.
[5]
The appellants then launched an application to reinstate their pleas.
They did not, however, comply
with the discovery order nor explain
their default. When the application came before Lowe J on 18 June
2015 the appellants abandoned
their reinstatement application. What
remained in issue was the scale of costs payable by the defendants.
On 19 June 2015 Lowe
J delivered judgment on this issue. The learned
judge trenchantly criticised the appellants for their repeated and
on-going contumacy
in relation to the order to compel discovery.
[6]
The respondent thereafter enrolled the matter for default judgment.
On 1 December 2015 the case
came before Malusi AJ (as he was then).
The appellants were represented at the hearing by counsel who
indicated that he was present
to assist the court. No application was
made to enable counsel to make submissions. Malusi J decided to deal
with the matter upon
receipt of affidavit evidence dealing with the
quantification of the respondent’s claim. The learned judge
granted judgment
in favour of the respondent in the sum of
R41 031 279. 58 together with interest and costs. The
learned judge thereafter
furnished his reasons for judgment on 21
April 2016. Following the granting of default judgment the
appellants commenced
an application for leave to appeal the order.
The application for leave was filed conditionally on 21 February 2016
since
by then no reasons for the order had been furnished. On 9 May
2016 the appellants supplemented their application for leave to
appeal.
The rescission application was commenced on 14 June 2016. An
application for leave to appeal was heard on 14 July 2016 and on 2
August 2016 Malusi J refused leave. He did so on the basis that the
appellants had filed an application for rescission of the judgment
on
substantially similar grounds and that the rescission application
should be disposed of before it could be said that the order
is
final.
[7]
This application for rescission of judgment was heard by Hartle J on
18 May 2017. The learned
judge dismissed the application on 19
September 2017. Hartle J however granted leave to appeal against her
judgment on 7 December
2017.
[8]
As is apparent from the aforegoing the matter has a long and
torturous history. For reasons relevant
to submissions advanced in
this appeal it is apposite to record that it is not in dispute that
since the lapse of the time period
provided in Majiki J’s
order, the appellants have failed to comply therewith. The
appellants’ contumacy then elicited
trenchant criticism.
Plasket J described the appellants’ contumacy as “shocking,
particularly given the size of the
claim”. Lowe J, in his
judgment addressing the costs of the abandoned application to
reinstate the appellants’ defences,
referred to the appellants
said non-compliance as egregious.
The prosecution of
the appeal
[9]
The Notice of Appeal, dated 15 December 2017, was filed with the
Registrar of the Court at Grahamstown
on 18 December 2017. It was
served on respondent on the same date. The Registrar (Grahamstown)
however refused to accept the Notice
and directed that it be filed at
the Court from whence the appeal originates. According to Mr
Basson
,
appellants’ attorney, this was done.
[10] On
15 January 2018, Mr
Basson
wrote to the Registrar, Bhisho
requesting that the original court file be dispatched to the
Registrar, Grahamstown to enable the
appeal record to be prepared. On
22 January Mr
Basson
was advised that the file could not be
transferred in the absence of a court order to that effect. The
Registrar indicated that
the matter would be taken up with the Deputy
Judge President.
[11] On
31 January 2018 the appellants filed an application for a date for
hearing of the appeal. In it, it was
stated that the Record of Appeal
would be filed upon its receipt from the Bhisho High Court. On 6
February 2018 Mr
Basson
travelled to Bhisho to uplift the
court file. He was referred to the Deputy Judge President, Van Zyl
DJP, who advised that full
bench appeals emanating from Bhisho are to
be heard in Bhisho.
[12] Mr
Basson
uplifted the record and commenced preparation of the
Record of Appeal. On 27 March 2018 respondent’s attorney
contacted Mr
Basson
to enquire as to when the record would be
filed. At that stage the index was being prepared. It transpired that
no replying affidavits
were amongst the papers. As a result Mr
Basson
spoke to Mr
Stirk
, respondent’s attorney. This resulted
in Mr
Basson
discovering that the court file upon which the
record was being prepared did not include the papers which had served
before Hartle
J, i.e. the papers in the matter under appeal. Mr
Basson
was able to secure the appropriate bundle of documents
and finalized the record.
[13] On
30 March 2018 the draft index was sent to Mr
Stirk
. It was
also dispatched to appellants’ lead counsel. On 3 April 2018
appellants’ counsel advised that certain documents,
more
particularly those which served before Malusi J on 1 December 2015
had to be included in the appeal record. These documents
were
incorporated into the record which was filed and served on 18 May
2018.
[14] It
will be seen from what is set out above that the Record of Appeal was
not filed simultaneously with the
Notice of Prosecution of the Appeal
as is required in terms of Rule 49(7)(a). It is also apparent that
the record was filed outside
of the prescribed period of 60 days from
date of delivery of the Notice of Appeal, as provided for in Rule
49(6).
[15]
The appellants’ failure to file the Record of Appeal in
accordance with the prescribed time periods,
prompted the respondent
to launch an application, in the Grahamstown Court, for an order that
the appeal had lapsed in terms of
Rule 49(7)(d). This application was
commenced on 10 May 2018 under case number 1368/2018. The appellants
opposed the application
and filed an answering affidavit on 22 May
2018.
[16]
The application came before Lowe J on 4 September 2018. An order was
then made by agreement between the parties:
‘
1.
THAT the appeal in the above matter, insofar as it may still be
pending in this
Honourable Court, be and is hereby withdrawn, as the
appeal will be heard by the Full Bench in the Bhisho High Court on
17
th
September 2018.
2.
THAT the application under case number 1368/2018 (the main
application) be and
is hereby transferred to the Full Bench of the
Bhisho High Court to be heard on 17
th
September 2018
together with the appeal.
3.
THAT the applicants are to pay the costs of this application,
together with any
wasted costs occasioned by the prosecution of the
appeal and the prosecution of the main application in the Eastern
Cape High Court,
Grahamstown.”
[17]
The reference to the ‘main application’ is a reference to
the application launched by the respondent
in terms of Rule 49(7)(d).
The appellants’ application for condonation (in which
essentially the same averments are made
as in the answering affidavit
filed in the main application) was initiated in the Bhisho Court.
[18]
Before turning to deal with these applications, it is appropriate to
address an issue that plainly occasioned
some confusion, namely the
court in which the appeal was prosecuted. Mr
Smuts
S.C.
,
for the respondent, correctly submitted that the ‘confusion’
itself does not account for the delay. As is apparent
from the
outline of the events following leave to appeal being granted,
appellants’ attorneys filed a Notice of Appeal at
Grahamstown,
the seat of the Court. The effect was to commence prosecution of the
appeal before that Court. Section 6(4) of the
Superior
Courts Act
[2]
provides that:
“
(4)
If a Division has one or more local seats-
(a) the main
seat of that Division has concurrent appeal jurisdiction over
the area of jurisdiction of any local
seat of that Division, and the
Judge President of the Division may direct that an
appeal against a
decision of a single judge
or of a Magistrates' Court within that area
of jurisdiction may be heard at
the main seat of the Division;
(b)
the Judge President of that Division must compile a single court roll
for that Division; and
(c)
the Judge President of that Division may assign all the judges of
that
Division within the Division as he or she deems fit.”
[19] Mr
Basson
was subsequently advised that the appeal was one to be
heard by a Full Bench sitting in Bhisho. Mr
Basson
thereafter
proceeded to prosecute the appeal before that Court. To compound
matters no Notice of Appeal appears to have been filed
with the
Bhisho Court. The respondent, no doubt acting on the basis that the
appeal was being prosecuted before the Grahamstown
Court, brought its
application in terms of Rule 49(7)(d) before that Court. When that
application came before the Court it was
transferred in terms of s
27(1)(b) of the
Superior Courts Act
but –
curiously – the appeal before that Court was withdrawn,
presumably on the basis that an appeal had separately
been instituted
before the Bhisho Court.
[20] It
seems to us that there is presently considerable scope for
unnecessary confusion. The practice in the
Grahamstown and Port
Elizabeth Courts of this Division is that all appeals (whether from a
single judge or from the Magistrates’
Court) are prosecuted at
the seat of the Division. This is despite the fact that s 6(4) of the
Superior Courts Act
confers concurrent appeal
jurisdiction upon the court at the main seat of the Division.
[21] A
practice has recently developed in terms of which appeal matters
emanating from the area of jurisdiction
of the Mthatha and Bhisho
local seats of the Division, are heard in Mthatha and Bhisho
respectively. There is however no Practice
Directive which determines
that such matters may only be prosecuted before the local seats. Nor
is there a Directive which precludes
prosecution of an appeal at any
of the local seats.
[22]
In our view this is an undesirable state of affairs which gives rise
to considerable scope for confusion
in practice, and significant
logistical difficulties in the compilation of a single court roll in
the face of limited judicial
resources. In the present matter
it may have contributed to the problems encountered in prosecuting
the appeal. The appellants
were plainly within their rights to
prosecute the appeal before the main seat of the Division, and having
done so, the respondents
were entitled to insist upon proper
prosecution of the appeal before that court
[3]
.
Once so prosecuted the appeal could be removed to another seat in
terms of s 27(1)(b) but it could not be done without an order
to that
effect.
[23] It
is not altogether certain in our view that the appeal has – as
a matter of fact – been properly
prosecuted before this Court.
We shall accept that it was so prosecuted. We do so in order to reach
the question whether the appeal
has lapsed and whether, in the
circumstances, it should be reinstated. We take this course because
both parties accepted that the
appellants have sought to prosecute
the appeal before this court following a directive to that effect
given by the Deputy Judge
President.
The lapsing of the
appeal
[24]
Rule 49(7)(a) provides that:
“
(7)
(a) At the same time as the application for a date for the hearing of
an appeal in terms of subrule (6) (a) of this rule the
appellant
shall file with the registrar three copies of the record on appeal
and shall furnish two copies to the respondent. The
registrar shall
further be provided with a complete index and copies of all papers,
documents and exhibits in the case, except
formal and immaterial
documents: Provided that such omissions shall be referred to in the
said index. If the necessary copies of
the record are not ready at
that stage, the registrar may accept an application for a date of
hearing without the necessary copies
if-
(i) the application is
accompanied by a written agreement between the parties that the
copies of the record may be handed in late;
or
(ii) failing such
agreement, the appellant delivers an application together with an
affidavit in which the reasons for his omission
to hand in the copies
of the record in time are set out and in which is indicated that an
application for condonation of the omission
will be made at the
hearing of the appeal.”
[25] It
is common cause that the appellants made written application to the
Registrar for a date for hearing of
the appeal on 31 January 2018,
within sixty days after the filing of their Notice of Appeal. It is
also common cause that the appellants
did not, as required by Rule
49(7)(a), file the requisite copies of the Record. In the Notice of
Prosecution of the Appeal it was
stated that the appellants would
“file the requisite copies of the record upon receipt of the
original record from Bhisho
High Court which, despite requests, is
still being awaited.”
[26] On
6 March 2018 respondent’s attorney contacted the Registrar of
the Bhisho High Court to enquire as
to the progress regarding the
provision of the court record. Mr
Stirk
was informed that the
court file had been uplifted by appellant’s attorney, Mr
Basson
, on 6 February 2018. Mr
Stirk
endeavoured to
contact Mr
Basson
, to no avail. On 27 March 2018 Mr
Basson
wrote to advise that the index to the appeal record was being
prepared.
[27] An
exchange of email correspondence ensued relating to whether a
replying affidavit had been filed in a certain
interlocutory
application. On 5 April 2018 Mr
Basson
wrote to advise
respondent’s attorney that appellant’s counsel had
suggested certain amendments to the index and that
same would be
furnished shortly. In response Mr
Stirk
enquired whether the
record had been provided to the Registrar so that a date for hearing
could be allocated. It was pointed out
that the delays in finalising
the matter were unacceptable and that the litigation had already
extended over a 10 year period.
[28] On
10 May 2018 the respondent launched an application, sued out of the
Grahamstown High Court, for an order
declaring the appeal to have
lapsed by reason of the late filing of the Record of Appeal. In
the opposing affidavit the delay
is explained in the following terms.
(a)
Prior to the filing of the Notice of Appeal
on 31 January 2018 the appellants’ attorney encountered
difficulties in obtaining
the court file from the Registrar of the
Bhisho High Court. He was apparently advised that the file could not
be made available
unless the matter was ‘transferred to the
Grahamstown Court’.
(b)
On 6 February 2018 Mr
Basson
travelled to Bhisho to uplift the court file. He was referred to the
Deputy Judge President who advised him that Full Bench appeal
matters
emanating from Bhisho were to be heard in the Bhisho Court.
(c)
Upon preparing the appeal record based on
the content of the court file supplied to him, Mr
Basson
discovered that certain documents were not included. It transpired
that the court documents related to earlier, abandoned proceedings.
(d)
Once the court documents were obtained a
draft index was prepared. On 30 March 2018 a copy was furnished to
respondent’s attorney.
By then a master copy of the record had
been prepared.
(e)
On 3 April Mr
Basson
was advised by counsel to amend the record and index so as to ensure
that the record included the pages and documents which served
before
Malusi AJ on 1 December 2015.
(f)
Mr
Basson
undertook to amend the index and record. He completed the task on 17
May 2018 and filed the record with the Registrar of the Bhisho
High
Court on 18 May 2018.
[29] In
his affidavit Mr
Basson
explains that apart from the delay
occasioned by the difficulties in obtaining the correct court
documents, the task of preparing
the record was bedevilled by illness
suffered by him. He states that he sought medical advice in February
2018. He was then diagnosed
with a depressive disorder and chronic
fatigue, for which medication was prescribed. He further states that
in the period between
April and the filing of the record in May 2018
he suffered a relapse. It was this, he said, which further delayed
the filing of
the record.
[30]
The appellants not only oppose the respondent’s application
made in terms of Rule 49(7)(d); they seek
by way of a substantive
application an order condoning the late filing of the Record of
Appeal. The two applications are inextricably
interlocked. In
considering whether or not to grant condonation this court is
required to consider the reasons advanced for the
appellants’
default; whether good cause in relation thereto is demonstrated and
the prospects of success on appeal.
[31] It
was argued by Mr
Smuts
, for the respondent, that the court
ought to take into consideration the history of the litigation. This
history demonstrates serial
non-compliance with the Rules of Court
and a failure to explain such default. It was submitted that the
present failure to comply
with the Rules relevant to the prosecution
of the appeal demonstrate a disregard for the rights of the
respondent and a lack of
bona
fides
. In consequence, it
was submitted that the respondent’s interests in the finality
of the judgment has been disregarded and
that the respondent
continues to suffer prejudice thereby.
[32] Mr
Smuts
further argued that, in relation to the merits, the
appeal enjoys no prospect of success inasmuch as the appellants have
still failed
to offer an explanation for their default; have no
defence to the respondent’s claims and are precluded from
advancing any
defence by reason of their contumacy. Mr
De Bruyn
S.C.
, for the appellants, argued that for purposes of the
application for condonation the prior default of the appellants is
not relevant.
It was submitted that the relevant period to be
considered is that following the granting of leave to appeal. In
relation to this
period it is apparent that the appellants undertook
the necessary procedural steps to prosecute the appeal. The default
lies therein
that the record of appeal was not filed timeously. Mr
De
Bruyn
submitted that an explanation for this default is provided
and that same is reasonable. It was submitted that the period of
delay
is not so excessive as to warrant dismissal on that ground
alone. In relation to the prospects of success Mr
De Bruyn
submitted that the appeal is at least arguable. Indeed, Hartle J
accepted that there are reasonable prospects of success upon the
narrow grounds advanced by the appellants. In the context of the
application for condonation that is all that is required.
[33] I
agree with Mr
De Bruyn
that for purposes of the application
for condonation of the late filing of the record the appellants’
prior conduct of the
litigation is not strictly relevant. Whilst the
litigation history paints a poor picture there is nothing to suggest
that the appellants’
attempt to prosecute the appeal was not
bona fide
. In my view a reasonable explanation has been
furnished. Mr
Smuts
accepted that Mr
Basson’s
illness would have played a role. We can also not lose sight of
the fact that there was some confusion as to the court in
which the
appeal was to be prosecuted.
[34] In
addition to the explanation of the default it is necessary to
establish prospects of success. This would
necessarily involve
consideration, to an extent, of the merits of the appeal. For present
purposes however, it suffices to have
regard to the reasons set out
by Hartle J in her judgment on leave to appeal. The learned judge
expressed the view that another
court may reasonably consider that
the appellants are not required to provide an explanation for the
default that resulted in the
defence being struck out. The learned
judge considered that another court might reasonably conclude that
the challenge based on
the ‘legality’ of the order of
Malusi J was sufficient to give rise to a reasonable defence in the
context of a rescission
application.
[35]
The argument advanced by Mr
De Bruyn
was that the question of
rescission was to be approached on the basis of an assessment whether
the material placed before Malusi
J could sustain the order made. If
it is found that the evidence did not sustain the judgment or order
then it falls to be set
aside whether or not an adequate explanation
for the default has been advanced. The argument, based upon the
assertion of the principle
of legality, is akin to one based on the
competence of the order.
[36]
In
Promedia
Drukkers & Uitgewers (Edms) Bpk v Kaimowitz and Others
[4]
the principle was established that a judgment obtained upon a summons
not disclosing a cause of action falls within the ambit of
a judgment
or order ‘erroneously’ granted. Where it is sought to set
aside a judgment on that basis, it is not necessary
to establish
‘good cause’ and accordingly the reason for the default
plays little or no role. Although
Promedia
Drukkers
,
unlike the present matter, involved a rescission application brought
in terms of Rule 42(1)(a) it cannot be said, for purposes
of deciding
whether or not to grant condonation, that the argument advanced by
the appellants enjoys no prospect of success.
[37] In
the circumstances I am satisfied that the appellants have made out a
proper case for the reinstatement
of the appeal. I shall address the
costs of the respondent’s application hereunder.
The merits of the
appeal
[38]
The appellants’ appeal lies against the judgment of Hartle J
dismissing an application for rescission
of a judgment granted by
default, of Malusi J. The appellants seek an order that the appeal be
upheld; that the default judgment
and order granted on 1 December
2015 be rescinded; and a further order that the appellants be granted
leave to defend the matter
on the basis that the contract relied on
by the respondent is void for vagueness. In respect of the quantum of
the claim an order
is sought that the respondent has failed to prove
that it had suffered damages or failed to prove the quantum of its
loss.
[39]
This further relief sought on appeal is amplified in the heads of
argument filed on behalf of the appellants
inasmuch as it is sought
to substitute the order of Hartle J with,
inter alia
, an order
declaring the agreement upon which the respondent relied to be void
for vagueness; that the suspensive conditions set
out in said
agreement have not been fulfilled and that the contract is void; and
that the respondent has not proved its damages.
In the alternative
the appellants seek leave to defend the matter on this basis.
[40] It
will be noted from this that the relief sought on appeal extends
beyond that which would ordinarily flow
from an order rescinding the
judgment of 1 December 2015. The relief contemplates a determination
of that which would be the subject
of the revived action flowing from
the setting aside of the judgment. The relief amounts to the
determination, by this court, of
that which would fall to be decided
by the court dealing with the action in due course.
[41] Mr
Smuts
pointed out, correctly in my view, that the granting of
such relief would impugn not only the judgments of Hartle J and
Malusi
J but indeed that of Plasket J. The effect of the declaratory
relief would be to introduce and determine a defence to the action
which was not pleaded. The alternative relief similarly bears upon
the judgment of Plasket J (and indeed that of Lowe J) since
it would
have the effect of permitting the introduction of a defence to the
action in circumstances where the appellants’
defences have
been struck out and where the appellants have abandoned an attempt to
reintroduce a defence. All of this would be
achieved in circumstances
where the appellants have not sought to provide an explanation for
their default which gave rise to the
striking out of the pleaded
defences.
[42] In
my view this extended relief cannot competently be granted in these
appeal proceedings. At best the appellants
would be entitled, if
successful, to an order setting aside the order of Hartle J and
substituting it with an order rescinding
the order of Malusi J
granted on 1 December 2015. That would leave the parties in precisely
the same position they were in immediately
prior to the order made on
1 December 2015 i.e. in circumstances where the appellants have no
pleaded defence to the respondent’s
claim.
[43] In
order to succeed the appellants must necessarily establish that
Hartle J’s judgment is assailable
on the basis of error or
misdirection. The notice of appeal sets out a number of respects in
which it is contended that the judgment
is tainted by error or
misdirection. Properly considered however the appeal is prosecuted
upon a narrow basis, it being the appellants’
case that the
application for rescission is premised upon errors and/or
irregularities which arose in the application for default
judgment
which served before Malusi J on 1 December 2015. On this basis, since
the order made by Malusi J is not an order which
could competently be
made, the appellants need not (i) explain the reason for their
default nor (ii) reinstate their struck out
pleas. To the extent that
Hartle J considered that the appellants were obliged, in seeking
rescission, to explain and/or purge
their contumacy, it is contended
the learned judge was wrong. It is also contended that the learned
judge misdirected herself in
holding that the appellants were not
bona fide
in seeking rescission in circumstances where they
had no intention of addressing their default.
[44]
The appellants’ application for rescission of judgment was
brought in terms of Rule 31(2)(b) and the
common law; alternatively,
in terms of the court’s inherent jurisdiction to control its
affairs. No reliance was placed on
Rule 42(1)(a) either before the
court
a quo
or before this court.
[45]
The court
a
quo
accordingly was required to determine whether the appellants had
satisfied the requirements for rescission of judgment in terms
of
Rule 31(2)(b) or the common law. It was not called upon to, nor did
it, consider the matter in the context of Rule 42(1)(a).
This is
important since it is by now well established that a party seeking
rescission of judgment in terms of Rule 42(1)(a), on
the basis that a
judgment is either erroneously sought or erroneously granted in the
absence of a party, need not establish ‘good
cause’ for
the granting of such relief.
[5]
The Rule is principally directed at irregularities in the
proceedings; or where the court lacked legal competence to have made
the order; or was unaware of facts which, if known to it, would have
precluded the granting of the order. As noted in
Colyn
v Tiger Food Industries Ltd t/a Meadow Feed Mills (Cape)
:
[6]
“
[6]
Not every mistake or irregularity may be corrected in terms of the
Rule. It is, for the most part at any rate, a restatement
of the
common law. It does not purport to amend or extend the common law.
That is why the common law is the proper context for
its
interpretation. Because it is a Rule of Court its ambit is entirely
procedural.
[7] Rule 42 is confined
by its wording and context to the rescission or variation of an
ambiguous order or an order containing a
patent error or omission
(Rule 42(1)(b)); or an order resulting from a mistake common to the
parties (Rule 42(1)(c)); or 'an order
erroneously sought or
erroneously granted in the absence of a party affected thereby' (Rule
42(1)(a)). In the present case the
application was, as far the Rule
is concerned, only based on Rule 42(1)(a) and the crisp question is
whether the judgment was erroneously
granted.
[8] The trend of the
Courts over the years is not to give a more extended application to
the Rule to include all kinds of mistakes
or irregularities. This is
illustrated by the facts of
De Wet and Others v Western Bank Ltd
,
which is a decision of this Court.”
[46]
No doubt no reliance was placed on the Rule because no procedural
irregularities occurred, the appellants
having received due and
effective notice of the proceedings. Furthermore, the judgment
granted by Malusi J was not granted in the
absence of the appellants.
This bears emphasis because it is common cause that in order to
obtain rescission whether under Rule
31(2)(b) or the common law, the
appellants were required to establish ‘good’ or
sufficient cause and a
bona
fide
defence which carries some prospect of success. Both requirements
must be established.
[7]
[47]
In
Harris
v Absa Bank Ltd t/a Volkskas
[8]
it was held that:
[10] A steady body of
judicial authorities has held that a court seized with an application
for rescission of judgment should not,
in determining whether good or
sufficient cause has been proven, look at the adequacy or otherwise
of the explanation of the default
or failure in isolation.
'Instead,
the explanation, be it good, bad, or indifferent, must be considered
in the light of the nature of the defence, which
is an important
consideration, and in the light of all the facts and circumstances of
the case as a whole.'
De
Witts Auto Body Repairs (Pty) Ltd v Fedgen Insurance Co Ltd
(supra) at 711D.
[11] In amplifying the
nature of the preferable approach in an application for rescission of
judgment, I can do no better than quote
Jones J with whose
dicta
I am in respectful agreement:
'An
application for rescission is never simply an enquiry whether or not
to penalise a party for failure to follow the rules and
procedures
laid down for civil proceeding in our courts. The question is,
rather, whether or not the explanation for the default
and any
accompanying conduct by the defaulter, be it wilful or negligent or
otherwise, gives rise to the probable inference that
there is no bona
fide defence and hence that the application for rescission is not
bona fide. The magistrate's discretion to rescind
the judgments of
his court is therefore primarily designed to enable him to do justice
between the parties. He should exercise
that discretion by balancing
the interests of the parties. . . . He should also do his best to
advance the good administration
of justice. In the present context
this involves weighing the need, on the one hand, to uphold the
judgments of the courts which
are properly taken in accordance with
accepted procedures and, on the other hand, the need to prevent the
possible injustice of
a judgment being executed where it should never
have been taken in the first place, particularly where it is taken in
a party's
absence without evidence and without his defence having
been raised and heard.'
Also see
Mnandi
Property Development CC v Beimore Development CC
1999 (4) SA 462
(W) at 464G - 466B;
Buckle v Kotze
2000 (1) SA 453
(W) at 458D
et seq
;
Wright v Westelike Provinsie Kelders Bpk
2001
(4) SA 1165
(C) at 1180J - 1181E.
[48]
This approach was endorsed in
Fick
[9]
and
Scholtz
and Another v Merryweather and Others
.
[10]
It is with these general principles in mind that we turn to
consideration of the essential basis of the appeal.
[49] In
regard to the merits of the appeal, the first point to decide is
whether good cause is to be demonstrated
with reference to what was
before Malusi J, i.e. that it was not necessary for the appellants to
purge their default in respect
of the failure to discover or at least
to offer a reasonable explanation therefor. Hartle J found that it
was necessary. This was
premised upon a finding that the rescission
can only be granted in accordance with the court’s common law
jurisdiction to
do so. The learned judge dealt with the legal effect
of the striking out of the appellants’ defences, finding that
in the
absence of the defences being reinstated, the appellants would
be left with no defence at the re-opened trial. The court
a quo
took the view that the effect of a striking out is to create a
sui
generis
procedure. The judgment by “default” is not
one obtained pursuant to Rule 31. Instead such matter properly
conceived
proceeds in accordance with Rule 39(1) and (2). This, in my
view, appears to be correct. It is however not necessary to pronounce
definitively upon this. It suffices to note that Hartle J approached
the application on the basis of the common law requirements
for
rescission of judgment. In this, the learned judge cannot be faulted.
Indeed the very basis upon which the appellants framed
their
application for rescission was that it was necessary to establish
good or sufficient cause, and a defence which enjoys reasonable
prospects. This much is clear from the founding affidavit filed in
the rescission application which served before Hartle J.
[50]
Dealing with the requirements to be satisfied Hartle J said the
following:
“
32.
The term “sufficient cause” defies a precise
comprehensive definition, but it is clear
that in principle and the
long-standing practice of our courts two essential elements are: (1)
that the party seeking relief must
present a reasonable and
acceptable explanation for the default, and (2) that on the merits
that party has a
bona fide
defence which,
prima facie
,
carries some prospect or probability of success. The phrases “good
cause” and “sufficient cause” are synonymous
and
interchangeable. In the context of an applicant who
applied for the rescission of a default judgment obtained subsequent
upon the striking out of his defences, the default requiring
explanation is in my opinion that which was casual to the striking
out order. On the issue of a defence, I expect that he will be
entitled to refer to his pleaded defence which was struck out, and
possibly even to an amended plea that he might have raised but for
the fact that his defence was struck out and his participation
in the
further conduct of the proceedings cut short thereby, or wishes to
still pursue in the event of the trial being reopened.
I do not agree
with the submission made on behalf of the respondent in this regard
that the extensive matter marshalled by the
applicants in their
founding affidavit by way of “defences on merits and quantum”
is “legally irrelevant”
because their defence have been
struck out and never resurrected, the application that might have
revived their position having
been withdrawn. While that is indeed a
factor in the overall consideration of the matter that they are in
this unfortunate position,
they must be entitled to persuade the
court, in this unique scenario – not to be equated with the
situation where a defendant
is in default of appearance in the sense
contemplated in rule 31 (2) which has its own distinct features, how
the outcome of the
litigation might have been different if their
defences which were struck out were in fact given consideration in a
trial in which
they fully participated. It is perhaps more correct to
say that the applicants’ supposed defences are rendered
redundant,
in effect, by the fact that they remain irrevocably struck
out.”
[51] In
addressing the first of these requirements Hartle J found that the
appellants “have not even tried
to present a reasonable and
acceptable explanation for their default . . .” This finding,
based on a reading of the founding
affidavit in the application,
cannot be assailed. If, as the authorities indicate, it is a
requirement that a reasonable and acceptable
explanation be given
for
the default
, then that must be the end of the matter.
[52]
Mr
De
Bruyn
however sought to develop an argument highlighting the centrality of
the principle of legality
[11]
.
It was submitted that a legality challenge is open to a party
notwithstanding such party’s prior non-compliance with the
Rules of Court or an Order of Court. Such a legality challenge is
tantamount to a challenge as to the competency of the order sought
to
be impugned. The argument proceeded on the basis that if it is
established that, on the basis of what was before Malusi J, the
order
ought not to have been granted, then it ought to be rescinded whether
or not the default was explained.
[53]
In my view this would conflate two separate requirements for
rescission of a judgment of the court and would
be tantamount to
dealing with the rescission of the judgment as if it was an appeal
against the judgment sought to be rescinded.
Hartle J was alive to
this, noting in a footnote to the passage cited above, that the need
to address the default does not apply
in circumstances of an appeal.
There is, so far as I have been able to establish no authority which
in terms provides support for
the proposition that it is necessary to
explain the default where reliance is placed upon the common law
grounds for rescission
of judgment. The common law gives expression
to the principle of finality of judgments.
[12]
The mechanism of a rescission of judgment seeks to place the parties
in the position they were in before the judgment i.e. the
status
ante
quo
.
It does so by setting aside the judgment so that the parties may
pursue their respective claims. Since the mechanism seeks to
do
justice to the parties, it is the party who is in default of
compliance with procedural requirements who must satisfy the court
that the status
ante
quo
ought to be restored to allow that party to defend the action. In
dealing with the second requirement, namely whether a
bona
fide
and reasonable defence is disclosed, Mr
De
Bruyn
submitted that the agreement relied upon by the respondent is void
for vagueness and not enforceable. It was submitted that the
learned
judge had failed to consider,
mero
motu
,
whether the agreement as pleaded was enforceable.
[54] Mr
Smuts
argued that the appellants cannot now raise this issue
because it amounts to a “lawyer’s point” lacking in
bona fides
and that, in any event, the effect of striking out
of the defences pleaded by the appellants and the subsequent
abandonment of
the application to reinstate the defences was such as
to preclude the appellants from now seeking to raise a defence which
was
not before Malusi J.
[55]
Mr
Smuts
argued that the pleaded agreement as set out in the particulars of
claim must necessarily be approached on the basis that there
is no
defence to the respondent’s claims. In this regard reference
was made to
Lodhi
2 Properties Investments CC and Another v Bondev Developments (Pty)
Ltd
[13]
where it was held:
“
[27]
Similarly, in a case where a plaintiff is procedurally entitled to
judgment in the absence of the defendant the judgment if
granted
cannot be said to have been granted erroneously in the light of a
subsequently disclosed defence. A Court which grants
a judgment by
default like the judgments we are presently concerned with, does
not grant the judgment on the basis that the
defendant does not
have a defence: it grants the judgment on the basis that the
defendant has been notified of the plaintiff's
claim as required by
the Rules, that the defendant, not having given notice of an
intention to defend, is not defending the matter
and that the
plaintiff is in terms of the Rules entitled to the order sought. The
existence or non-existence of a defence
on the merits is an
irrelevant consideration and, if subsequently disclosed, cannot
transform a validly obtained judgment into
an erroneous judgment.”
[56]
In regard to the pleaded case Mr
Smuts
relied upon a passage in
Baliso
v Firstrand Bank Ltd t/a Wesbank
[14]
where the court held:
“
[12]
In terms of our civil procedure, default judgment for a debt or
liquidated demand is granted on an acceptance of the allegations
as
set out in the summons, without any evidence. Where the claim is not
for a debt or liquidated demand, the court may, after hearing
evidence, grant judgment. This is usually only evidence on the amount
of unliquidated damages. The reason for not hearing evidence
on the
other factual allegations made in the summons or particulars of claim
is that, because the claim is not opposed, it may
be accepted that
those allegations are admitted or not disputed.”
[57] On
the basis of this it was submitted that Malusi J had correctly
accepted the cause of action as being established
requiring only the
presentation of evidence as to the pleaded damages.
[58]
Mr
De
Bruyn
argued that the appellants are not precluded from raising this issue
as a basis for rescission of judgment even at the stage of
the
appeal. He referred to the following passage
Quartermark
Investments (Pty) Ltd v Mkhwanazi and Another
:
[15]
“
The
learned judge added that a 'judge is an administrator of justice' who
has to see that justice is done. While these remarks were
made in the
context of a criminal trial, they are equally applicable in civil
proceedings and, in my view, accord with the principle
of legality.
The essential function of an appeal court is to determine whether the
court below came to a correct conclusion. For
this reason the raising
of a new point of law on appeal is not precluded, provided the point
is covered by the pleadings and its
consideration on appeal involves
no unfairness to the party against whom it is directed. In fact, in
such a situation the appeal
court is bound to deal with it as to
ignore it may 'amount to the confirmation by it of a decision clearly
wrong', and not performing
its essential function. This, in turn,
would infringe upon the principle of legality, which was explained by
Ngcobo J in
CUSA v Tao Ying Metal
Industries
as follows:
'Where
a point of law is apparent on the papers, but the common approach of
the parties proceeds on a wrong perception of what the
law is, a
court is not only entitled, but is in fact also obliged,
mero
motu
, to raise the point of law and
require the parties to deal therewith. Otherwise, the result would be
a decision premised on an
incorrect application of the law.'
[59] Mr
De Bruyn
further argued that the fact that the agreement was
concluded and repudiated, as alleged, does not necessarily establish
that the
respondent is entitled to damages. Such damages still have
to be proved in order to obtain judgment. Accordingly the court
hearing
the default judgment ought to have considered whether the
damages are indeed proved and also reasonable. In this respect
reliance
was placed upon the basis of the calculation set out in the
affidavits filed in the application for default judgment. It was
submitted
that the damages were calculated upon the basis of the
Coega Development Corporation document which reflects several phases
of
the projects which had not yet been approved. Furthermore the loss
was calculated upon the inclusion of those unapproved amounts
in the
total value of the project. It was further submitted that the
calculation was done on the basis of the value of the works
as
opposed to the cost of the works.
[60]
Mr
De
Bruyn
submitted that a court is obliged to consider,
mero
motu
,
whether the agreement relied upon is enforceable. He placed reliance
on
Mansell
v Mansell
[16]
and on
Coppermoon
Trading 13 (Pty) Ltd v Government of the Province of the Eastern Cape
and Another
[17]
.
The reliance on
Mansell
is, in my view, misplaced. That matter dealt with circumstances in
which a court will make an agreement an order of court. It finds
no
application in the present case. The
Coppermoon
matter similarly concerned the question of the enforceability of an
agreement sought to be made an order of court.
[61] It
was submitted that the letter of appointment of the appellants
referred to specifications still to be
determined and that the costs
of the project has yet to be approved. On this basis it was argued
that the agreement constituted
no more than an agreement to agree. It
could therefore not found a claim such as advanced by the respondent.
Mr
Smuts
argued that this “defence” had never been
raised, did not form the basis of the erstwhile defences struck out
and that
the appellants are precluded from relying upon such
“defences”. In any event, the agreement and its
repudiation are
established on the uncontested allegation in the
particulars of claim and are confirmed in the evidence placed before
the court
at the stage of judgment.
[62] Mr
Smuts
further submitted that the nature of the agreement was
one involving costs which were yet to be determined, that the
agreement
had been repudiated and accordingly that the costs could
not be determined. Since the project had proceeded with Coega the
best
available evidence in circumstances of the appellants’
failure to discover relevant documents establishing the actual cost,
are those set out in that document and that the only basis for
determining the loss was to take the value of the project less the
expenses which would reasonably be incurred in carrying out the
project. These, he submitted, were only determinable on the basis
set
out in the affidavits filed in the application for default judgment.
It was accordingly submitted that Malusi J was entitled
to deal with
the matter on affidavit and that the affidavits fairly established
the pleaded loss.
[63]
In my view the contentions advanced by the respondent must be upheld.
Firstly, whilst it is so that a court
dealing with a matter, even by
way of default, is required to satisfy itself that the cause of
action is established, it does so
mindful of the principles to which
reference have been made in the
Lodhi
and
Baliso
matters. In this context the pleaded agreement and its repudiation
required no evidence to be led. Secondly, in relation to those
aspects in respect of which evidence was required Malusi J exercised
a discretion in permitting those aspects to be addressed by
way of
affidavits.
[18]
[64] It
is to be emphasised that what was before Hartle J was an application
for rescission of a judgment to which
well-established principles
apply. The essence of the learned judge’s reasons for
dismissing the application came down to
this: the appellants had
failed to demonstrate good cause or sufficient cause and a
bona
fide
defence to the action. Although it was submitted that the
court
a quo’s
conclusion was wrong, I am unable to find
that it was inasmuch as I am unable to find that the appellants had
established the requirements
for rescission of the judgment.
[65] It
follows that the appeal cannot succeed. There is no reason why the
costs should not follow the result
and that said costs should include
the respondent’s costs of the application in terms of Rule
49(7)(d). It will be recalled
that the facts establish that the
appellants had not complied with the requirements of Rule 49. The
Record of Appeal was filed
on 18 May 2018 after the respondent had
launched the Rule 49(7)(d) application. The appellants only filed a
condonation/reinstatement
application thereafter. In the
circumstances it will be fair and just if appellants be ordered to
pay these costs. The costs of
two counsel are clearly warranted given
the nature of the appeal and the importance of the matter.
[66] I
therefore make the following orders:
1.
The appeal is reinstated.
2.
The appellants are ordered to pay the
respondent’s costs in respect of the application in terms of
Rule 49(7)(d), such to
include the costs of two counsel.
3.
The appeal is dismissed with costs, such
costs to include the costs of two counsel.
G.G. GOOSEN
JUDGE OF THE HIGH
COURT
Nhlangulela, DJP
I agree.
Z. NHLANGULELA
JUDGE OF THE HIGH
COURT
Stretch, J
I agree.
I T. STRETCH
JUDGE OF THE HIGH
COURT
Appearances:
Obo
the Appellants:
Adv
De Bruyn S.C. assisted by Adv Nyangiwe
Instructed
by
State
Attorneys, East London
Ref:
Mr S Mgujulwa
Tel:
(043) 706 5100
Obo
the Respondent:
Adv
Smuts S.C. assisted by Adv Dugmore S.C.
Instructed
by
Stirk
Yazbek Attorneys
Ref:
G.J. Yazbek
Tel:
(043) 726 8310
[1]
The
pleas were delivered on 28 November 2008 and 24 November 2008
respectively.
[2]
Act
No, 10 of 2013
[3]
It
is not without significance that an earlier appeal in this case was
prosecuted at the seat of the court.
[4]
1996
(4) SA 411 (C)
[5]
See
Promedia
Drukkers
(supra) at 417B-I
[6]
2003
(6) SA 1
(SCA) at par [6]-[8]
[7]
Chetty
v Law Society, Transvaal
1985
(2) SA 756
(A);
Government
of the Republic of Zimbabwe v Fick and Others
2013
(5) SA 325
(CC) at 350D
[8]
2006(4)
SA 527 (T) at para [10 and [11]
[9]
(supra)
[10]
2014
(6) SA 90
(WCC) at 96B
[11]
See
South
African National Road Agency Pty Ltd v Cape Town City
2017 (1) SA 468
(SCA) ; see also
Oudekraal
Estates (Pty) Ltd v City of Cape Town and Others
2002 (6) SA 573 (C)
[12]
See
Conlyn
(
supra
)
[13]
2007
(6) SA 87
(SCA) at par [27]
[14]
2017
(1) SA 292
(CC) at par [12]
[15]
2014
(3) SA 96
(SCA) at 103A-D
[16]
1953
(3) SA 716 (N)
[17]
Case
No. 451/2009 ECB Unreported, 16 April 2015
[18]
See
Colarossi
v Gerber
[2005] JOL 15118
E; see also
Abraham
v City of Cape Town
1995 (2) SA 319
(C)