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[2018] ZAGPPHC 737
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Walker v Williams and Another (84955/2014) [2018] ZAGPPHC 737 (15 February 2018)
HIGH
COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
REVISED
CASE
NO:84955/2014
In
the matter between:
J.
WALKER
Applicant
and
C.A.
Williams
First Respondent
THE
LAW SOCIETY OF THE
NORTHERN
PROVINCES
Second Respondent
JUDGMENT
1.
The applicant herein applied for an order rescinding a default
judgement granted by this court on 5 August
2015 together with
condonation for the late filing of the application. The applicant
stated that at all relevant times he had
the intention to
oppose the relief claimed by the first respondent and secondly that
he has a bona fide defence and is not merely
pursuing this
application for purposes of delaying the first respondent's claim.
The first respondent opposed the application.
For the sake of brevity
I shall refer to the first respondent merely as "the
respondent".
2.
Before going into the merits of the application I must state that the
founding papers had been so poorly drafted
that I found it extremely
difficult to establish exactly what the surrounding facts of the
matter were. The opposing papers also
hardly assisted in giving
clarity in this regard. I was ably assisted by counsel during the
hearing of this matter and most of
the relevant facts turned out to
be common cause.
3.
It is necessary to briefly refer to the salient features of the case.
The applicant is a practising attorney.
At some point he
took over files from an attorney, Me van Heerden, who had closed her
practice. Me van Heerden then entered into
the employ of the
applicant 's firm as a professional assistant. One of the aforesaid
files taken over by the applicant related
to the transfer of certain
immovable property in the Brits Township.
4.
This property was registered in the name of Flying Falcon Properties
CC (hereinafter "FFP").
In terms of written purchase
and sale agreement dated 8 October 2012, FFP sold the property to Mr
GJ Bernardo. Mr Bernardo in turn
sold the property to Mr Y Ismail in
terms of a written purchase and sale agreement dated 11 October 2012.
The intention was that
the transfer of the property to the respective
purchasers would occur simultaneously. Mr Ismail made payments in
terms of his agreement
with Mr Bernardo into the trust account of the
applicant.
5.
During the process of transfer Mr Bernardo, the seller in the second
agreement, approached Mr Ismail, the purchaser,
and requested that
some of the funds be released to him for his personal use. Mr Ismail
agreed and an addendum to the sale agreement
was prepared to make
provision for the sum of R800 000,00 to be paid from the proceeds of
the transaction, which were in the trust
account of the applicant, to
Mr Bernardo.
6.
During February 2G13 Mrs van Heerden was requested by the attorney of
FFP, Mr Storm, to provide his firm with an
undertaking in the amount
of R350 000,00. According to the written undertaking the amount
"in bogenoemde transaksie"
was made available to Mr Storm's
client. The transaction referred to appears, according to the
heading of the undertaking,
to be the following: "Ons
koppeltransporte: Flying Falcon Properties 14 CC / GJ Bernardo en GJ
Bernardo
I
Y Ismail Erf 591 Brits Dorpsgebied (te wete 48
Ludorf straat, Brits)". It is therefore clear that
the undertaking
to keep available the amount of R350 000,00 was
to keep the amount available for the benefit of
FFP
being the
registered owner and seller of the property to Mr Bernardo, before
him on- selling it to Mr Ismail. It seems to be common
cause between
the parties that during these negotiations the respondent acted as
the representative of FFP.
7.
During June 2013 all three the parties involved in the aforesaid
two transactions agreed that the
agreement should be cancelled in the
light of the pending sequestration of Mr Bernardo. The agreements
were duly cancelled and
a new agreement, dated 1 July 2013 was
entered into between FFP and Mr Ismail in terms of which Mr Ismail
purchased the property
from FFP. Registration of transfer occurred 5
November 2013 in the name of Mr Ismail.
8.
It seems that since Mr Bernardo had fallen out of the picture, he had
to pay the money back which he
had already received towards the
purchase price of the property. Apparently he failed to repay the
money. Consequently the parties
apparently met to discuss "settlement
proposals". It is not clear from the papers what
exactly these negotiations
entailed but according to the
plaintiff Mrs van Heerden provided Mr Storm with a further written
undertaking on 12 December
2013.
9.
This undertaking has the same heading as the first undertaking and
thus referred to both the transaction
and in the last paragraph
stated that "this additional arrangement will have no bearing
whatsoever on the original undertaking
from our firm and will not
change or effect in any which way." (sic).
10.
The undertaking related to the amount of R350 000,00 and also
contained provisions regarding, inter
alia, interest and legal fees.
Of importance, however, is that it was noted in the undertaking that
the amount of R350 000,00 was
due to "Mr Williams in regard to
the above-mentioned transaction". I shall refer to the relevance
of this aspect later
in this judgement.
11.
It is common cause that Mr Williams, the respondent, issued summons
against the applicant for payment
of the amount of R 350 000,00
during November 2014 based on the undertaking of 12 December 2013
referred to above. It was also
alleged the particulars of claim that
the plaintiff, being the respondent in this application , was a trust
creditor of the defendant,
being the applicant in this
application. As mentioned before judgement was entered into against
the applicant in favour of
the respondent and it is this judgement
and order which form the subject of the present application.
12.
Upon receipt of the summons the applicant contacted Mr Storm and
requested him to hold over further
legal steps pending the filing of
a claim by him with the Attorneys Insurance Indemnity Fund ("the
Fund").
13.
The applicant corresponded with the Fund and supplied them with the
necessary documentation. According
to the applicant he was informed
by the Fund that they would attend to the matter on his behalf and
would appoint an attorney from
their panel to represent him.
According to the applicant he was at all times under the
impression that the matter was
properly taken care of when, on 27
August 2015, he was served with a writ of attachment of movable
property in execution of the
judgement against him. It appears
that there was a miscommunication between him and the Fund and he was
also later informed
that they would not assist him in any manner or
form. He was informed that the Fund had declined his claim and
would not
proceed with the rescission of the judgement on his behalf.
14.
The applicant filed an application for rescission of judgement which
was served on 25 November 2015.
After the affidavits had been filed
the applicant realised that due to a mistake his defence had not been
included in his answering
affidavit. Consequently the applicant had
to withdraw the application and tender the cost of the
application. Consequently
the applicant filed the second application
for rescission of judgement which is the one relevant in the
proceedings before this
court.
15.
In his founding affidavit the applicant denied that the respondent
was a trust creditor of his firm
and stated that no monies had ever
been paid into his trust account for the credit of the respondent.
The applicant furthermore
stated that Mrs van Heerden never had the
authority to give the undertaking which she did. She also had no
authority to bind the
applicant or his firm as set out in the
undertaking. The applicant further stated that Mrs van Heerden should
have familiarised
herself with the financial situation of the
transaction before giving the undertaking to attorney Storm. If she
had done so she
would have realised that the funds held on trust for
this specific transaction had been paid to Mr Bernardo during October
2012
in terms of the addendum to the agreement between the parties.
Mrs van Heerden, according to the applicant, didn't have the
authority
or permission to give any of the
two undertakings mentioned above. The only person who was
obliged
to pay any amount was Mr Bernardo who had earlier received
part of the purchase price.
16.
In the answering affidavit much was made by the respondent of the
fact that the defence of the applicant to
the main claim as set out
in the second application for rescission, which is the present
application before this court, does
not appear in the first
application for rescission and that the defences offered in the two
applications consequently differ. The
respondent also took issue with
some of the factual averments made by the applicant.
17. Although
the issue of Me van Heerden's authority seems to be a triable dispute
between the parties which can
only be adjudicated in a trial process,
the application should in my view mainly be granted for the reasons
submitted by Advocate
Jooste, on behalf the applicant, during the
hearing of this matter. Shortly prior thereto he filed supplementary
heads of argument
to which Advocate Harms, on behalf of the
respondent, also replied by way of supplementary heads of argument.
18.
On behalf the applicant it was submitted that even if it was accepted
for purposes of the argument that
the applicant was bound by the
undertaking given by Mrs van Heerden, the respondent never had the
right to institute a claim against
the applicant for the reason that
he did not have locus standi to do so. It was submitted that it was
at all times common cause
that the undertaking was given for the
benefit of FFP, as seller of the property, which was the
only entity
entitled to receive money
in terms of the first set of agreements
between
it and Mr Bernardo and Mr Ismail, and later in terms of
the second agreement between it and Mr Ismail.
19.
It was submitted that the undertakings, and especially also the last
undertaking, was given on the basis of
the respective purchase and
sale agreement and for the sole purpose of benefiting the person
entitled to the money namely the seller,
FFP.
20.
This submission was based not only on the facts which were alleged to
be common cause, but support therefore
is to be found in the wording
of the first undertaking which, in its heading, refers to the two
agreement between FFP, Mr
Bernardo and Mr Ismail and also in
the heading of the second agreement between FFP and Mr Bernardo,
which refers to the same transaction.
Support is also to be found in
the reference to the fact that the money was available for Mr Storm's
client, which was FFP. It
was submitted that the respondent was
not Mr Storm's client, or at least not the client referred to
in the undertaking,
and that the client referred to was FFP.
21.
It was further submitted that the second undertaking, on which the
claim was based as set out in the
particulars of claim, also supports
the aforesaid. The heading thereof still referred to the aforesaid
transactions and the effect
have not changed except for the fact that
Mr Bernardo had fallen out of the picture. Consequently, although the
second undertaking
refers to the money being held available for
the respondent, such a reference was clearly wrong as the respondent
was
at no stage and/or for any
reason entitled to the money referred to
in
the undertaking. It was submitted that the reference to the
respondent in the second undertaking was consequently clearly a
mistake which was a mistake of which the respondent and his attorney,
Mr Storm, had at all times been aware.
22.
Reference was also made in support for the aforesaid contentions to
an email dated 12 December 2013 by Mr
Storm in which he referred to
the undertaking "as conclusion of the Ludorf Street property
transaction" and which in
its heading also referred to the
subject of the email being "TRS: Flying Falcon Properties/
GJ Bernardo Ismail".
23.
It was thus submitted on behalf of the applicant that the respondent
never became entitled to the payment
of any money and that insofar as
the second undertaking may have created such an impression, such an
impression was the result
of a mistake common to the parties.
The cause of action of the respondent's claim against the applicant
was consequently flawed
and could never have led to a judgement in
his favour. To put it differently, the respondent had at all
times merely been
the representative of FFP and had never been
entitled to receive for his own account any money arising from the
transaction between
FFP and Mr Ismail and thus from the undertaking
which was given as a result thereof. If anybody became entitled to
payment in terms
of the undertaking, it would have been FFP as the
seller of the property.
24.
Advocate Harms, inter alia, referred to another agreement between the
respondent and Mr Bernardo
relating to the
transfer of a member interest in FFP and submitted
that money had been due to the respondent
by Mr Bernardo and
that the undertaking could have referred to that debt.
There is no merit in this submission.
It is clear from the
facts before this court and to which I have to some degree referred
to above, that both the undertakings,
which included the December
2013 undertaking, clearly related to payment due to the
seller of the properties, being
FFP,
in terms of the
respective transactions.
25.
Having regard to the aforesaid I am satisfied that the applicant has
shown that there is a triable dispute
between him and the respondent
and that he consequently has a bona fide defence. As a result of this
finding I need not refer to
the issue of Mrs van Heerden's authority.
26.
Furthermore, and having regard to all the information before me I am
satisfied that the applicant has explained
adequately how the order
came to be granted against him by default. Consequently I find that
the application for rescission should
be granted.
27.
As far as costs are concerned I am of the
view
that the usual
order for costs should be granted.
28.
In the result the following order is made:
1.The default
judgement granted by this court on 5 August 2015 is hereby rescinded
and set aside.
2. The costs of
this application shall be costs in the cause.
C.P.
RABIE
JUDGE
OF THE HIGH COURT