Brief Summary

Condonation — Late filing of application for rescission — Applicant sought condonation for late filing of rescission application against summary judgment order — Applicant's delay attributed to inability of Council to convene urgently — Respondent opposed on grounds of lack of corroboration and absence of prospects of success — Court held that the applicant failed to provide a satisfactory explanation for the delay and did not demonstrate good prospects of success, thus the application for condonation was dismissed.

Comprehensive Summary

Summary of Judgment

Introduction

The proceedings concerned two related interlocutory applications brought by Phumelela Local Municipality (the applicant/defendant in the main action) against SA Fence and Gate (Pty) Ltd (the respondent/plaintiff in the main action). The first application sought condonation for the late filing of an application to rescind a judgment. The second application sought rescission of an order granting summary judgment in favour of the respondent.

The matter arose after the respondent sued the applicant for payment of a substantial contractual amount. After procedural steps in the action culminated in the granting of summary judgment on 15 June 2017, the applicant launched rescission proceedings outside the time limits it was required to meet. The respondent opposed both the rescission and, later, the condonation application, contending that the delay was not satisfactorily explained and that the applicant had no bona fide defence with prospects of success.

The general subject-matter of the dispute was thus procedural and remedial in nature: whether the applicant should be allowed, despite non-compliance with the time limits and earlier court directions, to reopen the litigation by setting aside the summary judgment, and whether it had shown good cause to justify both condonation and rescission. The applicant’s purported defence in the background was that the respondent’s claim allegedly arose from an invalid procurement process, but the court’s task in this judgment was to assess the adequacy of the applicant’s explanations and the disclosed prospects of success for purposes of condonation and rescission.

Material Facts

The respondent issued summons against the applicant on 10 April 2016 for payment of R4 355 917.42. The matter initially proceeded as if undefended: the respondent sought default judgment from the Registrar, which was refused, and the matter was referred to open court. The respondent then re-served the summons, whereafter the applicant delivered a notice of intention to defend.

The respondent launched an application for summary judgment under Uniform Rule 32. When the summary judgment application first served on the unopposed roll on 13 April 2017, the parties agreed to an order postponing the matter to the opposed roll and regulating further steps. That order required, among other things, that the applicant file (i) its opposing affidavit to summary judgment and (ii) an application for condonation for the late filing of the notice of intention to defend, by 28 April 2017.

It was common cause in the judgment that the applicant did not comply with the 13 April 2017 order within the stipulated time periods. When the matter served before Gela AJ on 15 June 2017, the court granted summary judgment in favour of the respondent for the amount claimed, together with costs. The applicant then served and filed an application for rescission of that summary judgment order on 27 July 2017.

The respondent raised a time-bar point: the rescission application was alleged to be 10 days out of time, and therefore not properly before the court in the absence of condonation. The applicant only served and filed its condonation application on 27 September 2017, which the respondent also opposed.

On the explanation for delay, the applicant relied chiefly on the version of its Acting Municipal Manager. The explanation was that, although the applicant’s officials received the summary judgment order timeously, the municipal Council (described as the highest decision-making body) could not convene urgently and only met on 21 July 2017. The Acting Municipal Manager stated she could not act without a mandate. The applicant also referred to difficulties in obtaining documentation and briefing from former employees. The applicant asserted it had prospects of success because the respondent allegedly failed to comply with lawful procurement processes.

The respondent disputed the adequacy of the explanation, including by pointing out the absence of confirmatory affidavits from Council members to substantiate the alleged inability to convene earlier. The respondent further contended the applicant had failed to comply with the earlier court order, had not brought a substantive postponement application when summary judgment was heard, and had not shown prospects of success on rescission. The respondent also asserted it would suffer prejudice if the matter were delayed further because payment under a lawfully granted judgment would be impeded.

A further dispute arose during argument as to whether the respondent’s deponent, Mr Hugo van der Merwe, was properly authorised to depose to affidavits on behalf of the respondent (a juristic person). The court treated this as a legal point governed by established authority on authorisation in motion proceedings.

Legal Issues

The central legal questions were whether the applicant had shown good cause for (i) condonation of the late filing of the rescission application and (ii) rescission of the summary judgment order, given the applicant’s procedural defaults and its asserted defence on the merits.

These questions involved a mixed enquiry. The court was required to make (a) factual findings about the sufficiency and credibility of the applicant’s explanation for delay (an issue of fact assessed on motion papers), (b) an evaluative assessment of whether the applicant disclosed a bona fide defence with prospects of success (application of legal requirements to the pleaded facts), and (c) an overall discretionary decision on condonation and rescission in light of fairness, prejudice, and the interests of justice.

A subsidiary legal issue was whether the respondent’s opposing affidavits were defective because the deponent allegedly lacked proper authority, and how that challenge should be approached in motion proceedings.

Court’s Reasoning

The court first dealt with the challenge to the respondent’s authority to depose to affidavits. Relying on Eskom v Soweto City Council 1992 (2) SA 703 (W), the court held that it is generally sufficient to establish whether the attorney is authorised to act, because the proceedings are those of the litigant once properly instituted. The court endorsed the approach that it is the institution of proceedings, rather than every act in the prosecution of the proceedings (such as the deposing of affidavits), that must be authorised. On this basis the court did not uphold the applicant’s objection to the respondent’s affidavits.

Turning to condonation, the court emphasised that an application for condonation is not a mere formality and requires a litigant to demonstrate a sufficient cause for non-compliance. The court noted the broader rationale for adherence to procedural rules, namely the efficient and effective functioning of courts. In evaluating condonation, the court applied the discretionary framework drawn from authority, identifying relevant factors as including the degree of lateness, the explanation for it, the prospects of success, and the importance of the case.

The court approached factual disputes on the papers by applying the motion-proceedings rule that undisputed facts advanced by the applicant must be accepted, together with the respondent’s version where it is tenable and credible, as formulated in Plascon-Evans Paints Ltd v Van Riebeeck Paints 1984 (3) SA 623 (A).

On the facts, the court accepted that the rescission application was brought 10 days late. The court considered it trite that once a litigant is aware of non-compliance with the rules, an application for condonation must be brought without delay, and that this standard applies equally to government litigants. The court found that the applicant did not act promptly: despite being aware of the lateness, it only brought the condonation application approximately ten weeks after the relevant deadline and, further, did not incorporate a prayer for condonation as the first prayer in the rescission notice of motion.

The court rejected the applicant’s main explanation that the Acting Municipal Manager could not proceed without a Council mandate. The court reasoned that the Municipal Manager is the accounting officer with substantial administrative powers to sue and defend proceedings on behalf of the municipality, whereas the Council’s role was described as analogous to a board of directors focusing on policy and oversight rather than day-to-day management. The court considered it implausible that the Council would need to provide instructions at each litigation step, and characterised the applicant’s explanation as an “invention of the reality” that could not be accepted. This conclusion was reinforced by the lack of confirmatory affidavits and the absence of explanation as to why a smaller structure (such as the mayoral committee) could not have taken urgent decisions. The court also highlighted a material gap in the explanation: there was no account of what occurred between 21 July and 26 September 2017.

The court further took into account the applicant’s broader non-compliance with procedural obligations and court orders. It noted that the applicant had failed to comply with the 13 April 2017 order requiring the filing of condonation relating to the notice of intention to defend, and had also not sought relief under Uniform Rule 27 for extension or condonation when summary judgment was granted. This pattern of disregard for procedural requirements weighed against the exercise of the court’s discretion in the applicant’s favour.

On prospects of success, the court held that condonation could not be granted without an enquiry into the merits, because the applicant needed to show a bona fide defence with good prospects. Applying the principles referenced in the judgment on rescission requirements, the court stated that the applicant had to set out averments which, if proved at trial, would sustain the defence. The court found that the applicant’s alleged defence—namely that the respondent relied on an invalid agreement due to non-compliance with procurement procedures—was stated in a vague and unsupported manner. The court described the applicant’s case as a “veiled reference” to unlawfulness: it did not articulate the unlawfulness in a meaningful way, and it did not allege that the municipality had taken steps such as launching a review application to set aside an allegedly unlawful contract or pursuing other remedial proceedings.

The court also held that the Acting Municipal Manager’s own account undermined the applicant’s prospects because she claimed not to have access to the relevant documents and could not obtain briefing from former employees. This lack of direct knowledge and documentation meant that the affidavits did not establish a prima facie defence. The court considered it significant that those persons who did have knowledge of the underlying transactions did not depose to affidavits.

Finally, the court considered prejudice and the interests of justice. It noted that the matter had already been ongoing for approximately two years, that the applicant had not complied with the rules, and that its prospects were poor. The court accepted that the respondent would be severely prejudiced by further delay in enforcing a judgment that had been lawfully granted. While recognising that the object of rescission is to restore an opportunity for a real dispute to be ventilated, the court concluded that the applicant had not shown a sufficient basis to justify reopening the matter.

Having weighed the relevant factors, the court exercised its discretion against granting condonation. Because condonation failed, the rescission application could not succeed. Costs were dealt with on the ordinary principle that costs follow the result.

Outcome and Relief

The court dismissed the application for condonation with costs.

The court further ordered the applicant to pay the costs of the application for rescission of the summary judgment order. The practical consequence was that the summary judgment granted on 15 June 2017 remained in force.

Cases Cited

Eskom v Soweto City Council 1992 (2) SA 703 (W)

Free State Agriculture v The President of the Republic of South Africa and 13 Others (Case no A96/2016) (Free State Division, Bloemfontein) (as referenced in the judgment)

Saloojee and Another v Minister of Community Development 1965 (2) SA 135 (A)

Derrick Grootboom v National Prosecuting Authority and Another 2013 ZACC 37

Melane v Santam Insurance Co Ltd 1962 (2) SA 531 (A)

Plascon-Evans Paints Ltd v Van Riebeeck Paints 1984 (3) SA 623 (A)

Commissioner for Inland Revenue v Burger 1956 (4) SA 447 (A)

Colyn v Tiger Food Industries Ltd t/a Meadow Feed Mills (Cape) 2003 (6) SA 1 (SCA)

E H Hassim Hardware (Pty) Ltd v Fab Tanks CC 2017 ZASCA 145

Legislation Cited

Local Government: Municipal Structures Act 32 of 2000 (section 2)

Rules of Court Cited

Uniform Rules of Court, Rule 32

Uniform Rules of Court, Rule 31(2)(b)(i)

Uniform Rules of Court, Rule 27(3)

Uniform Rules of Court, Rule 7(1) (referred to in the context of authority)

Held

The court held that the applicant failed to provide a satisfactory and credible explanation for its non-compliance with the procedural time limits and prior court directions, including an inadequately explained delay in bringing condonation.

The court further held that the applicant failed to disclose a bona fide defence with reasonable prospects of success on rescission, because its allegations of procurement unlawfulness were vague, unsupported on the papers, and not advanced by persons with direct knowledge, with no coherent remedial steps (such as review proceedings) described.

The court accordingly held that condonation should not be granted and, as a consequence, the rescission application could not succeed. The applicant was ordered to pay costs.

LEGAL PRINCIPLES

The judgment applied the principle that condonation is discretionary and requires good cause to be shown; it is not a routine indulgence. In exercising the discretion, a court considers, among other factors, the extent of the delay, the adequacy of the explanation, the prospects of success on the merits, and the broader interests of justice, including prejudice to both parties.

The judgment applied the principle that litigants who become aware of procedural non-compliance must seek condonation without delay, and that this obligation applies equally to state litigants, including municipalities.

The judgment applied motion-proceedings principles for resolving factual disputes on affidavit, accepting undisputed allegations by the applicant and the respondent’s version where it is tenable and credible, consistently with the approach in Plascon-Evans.

The judgment applied the requirement that an applicant seeking rescission (and related condonation) must set out a bona fide defence with sufficiently particularised averments which, if proven at trial, would constitute a defence; vague or unsupported allegations, especially where the deponent lacks knowledge and relevant documentation, will not satisfy this standard.

The judgment applied the principle that challenges to authority in motion proceedings are approached with reference to whether the proceedings were properly authorised, and it endorsed the approach that it is the institution of proceedings that must be authorised rather than each step in their prosecution, in line with Eskom v Soweto City Council.

Phumelela Local Municipality v SA Fence and Gate (Pty) Ltd (1650/2016) [2018] ZAFSHC 6 (15 February 2018)