About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Kwazulu-Natal High Court, Pietermaritzburg
SAFLII
>>
Databases
>>
South Africa: Kwazulu-Natal High Court, Pietermaritzburg
>>
2018
>>
[2018] ZAKZPHC 56
|
|
BWK Project Management Civils CC v Slice Investments (Pty) Ltd (AR94/2017) [2018] ZAKZPHC 56 (12 October 2018)
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
CASE
NO: AR 94/2017
In
the matter between:
BWK
PROJECT MANAGEMENT CIVILS
CC
Appellant
and
SLICE
INVESTMENTS (PTY)
LTD
Respondent
ORDER
Having
considered the matter and after hearing counsel the following order
is made:
1.
The appellant's application for condonation is refused.
2.
The appellant is to pay the respondent's cost.
APPEAL
JUDGMENT
Delivered: 12 October 2018
MASIPA
J (MARKS AJ CONCURRING)
Introduction
[1]
The appellant appeals against the judgment of the court a quo handed
down in the Ntuzuma Magistrate's Court on 20 April 2016,
wherein the
appellant's rescission applications in respect of three matters under
case numbers 1793/2015, 1984/2015 and 2707/2015
were dismissed. The
appellant failed to prosecute the appeal within 60 days as prescribed
in the Rules of Court and the appeal
lapsed. Subsequent thereto, the
appellant filed a condonation application which is opposed by the
respondent.
The
facts
[2]
The parties in this matter concluded a lease agreement during April
2015, approximately three months prior to the appellant
taking
occupation. Subsequent to the signing of the agreement, the appellant
contends that its financial position underwent an
adverse change and
it became clear to it that occupying the respondent's premises would
worsen its financial standing. As such,
Bongani Khuluse, a member of
the appellant instructed his personal assistant, Zanele Chiliza to
advise the leasing agent Chantal
Williams of JHI Properties that the
appellant would not be taking occupation of the premises. According
to Khuluse, Williams replied
and mentioned that she would revert once
she had spoken to the respondent. There is a dispute as to whether
the respondent failed
to reply to the appellan'ts request. The
appellant contends that thereafter there was no correspondence from
Williams or the respondent
as a result of which, Khuluse assumed that
the respondent had by its conduct accepted the appellant's
cancellation of the lease
agreement. Consequently, the appellant did
not take occupation of the premises.
[3]
Khuluse contended that the respondent had a duty to respond to the
appellant's cancellation notice. The respondent contended
that it
responded to the appellant's letter on 9 June· 2015, advising
that it was holding the appellant to the lease. This
letter was sent
to Chiliza's e-mail address, the one that was used to send the
purported cancellation letter. According to the
respondent, it was
made clear to the appellant that the respondent had a discretion
whether or not to accept the cancellation and
further, that the
appellant did not have a right to unilaterally terminate the lease
agreement. Khuluse also contended that prior
to the institution of
legal action, the respondent did not place the appellant in mora
contrary to the provisions of the lease
agreement. The respondent
avers that the letter it wrote to the appellant on 9 June 2015 placed
it in mora.
[4]
Khuluse further contended that the respondent had since 2005, not
taken any steps to mitigate its losses. The respondent denied
that it
did not take any action to mitigate the loss and stated that it
instructed its agents to market the property. It was also
contended
that the respondent was aware that the appellant was represented by
attorneys Morris Fuller Williams Inc. but did not
inform them of its
intended action. The respondent denied that it had a duty to notify
the appellant's attorneys of any intended
action.
[5]
Summonses were served at the appellant's registered address since the
appellant had not taken occupation of the leased premises.
The
address used is also Khuluse's residence as was apparent from the
CIPC search conducted by the respondent. The sheriff's returns
stated
that the summonses were served by affixing which was the only
possible manner of service. As there was no notice of intention
to
defend, the respondent applied for default judgments which were
granted. Khuluse contended that the appellant did not conduct
business at the address where the summonses were served and was
therefore unaware of them. He further contended that the letter
sent
by the respondent was emailed to the appellan'ts secretary and was
not brought to his attention.
[6]
The court a quo, in determining whether or not to rescind its
decision, looked at whether the explanation for the default was
sufficient. Having considered the application, the court a quo found
that the appellant had not provided a reason why the summonses,
which
were served at its registered office, were not brought to its
attention. The court noted that three different summonses were
served
at the registered address which was Khuluse's residence and concluded
that the explanation provided by the appellant was
unsatisfactory.
[7]
As regards the contention that the appellant had not received the
respondent's letter, the court a quo found that the inefficiency
of
the appellant's office as a result of the secretary failing to bring
the notice to Khuluse's attention could not be levelled
at the
respondent's door. The court a quo was satisfied that the respondent
took necessary steps to mitigate its loss. In view
of this, the
rescission application was dismissed with costs. It is this dismissal
which led to this appeal.
The
issues
[8]
At issue in this appeal is whether or not this appeal should be
reinstated on the strength of the condonation application and
should
condonation be granted, whether the court a quo erred when it refused
the appellant's application for rescission?
The
condonation
[9]
On 21 February 2017, the appellant applied for condonation for the
late delivery of the record and for the reinstatement of
the appeal.
The judgment against which the appeal lies was handed down by the
court a quo on 20 April 2016 and a written judgment
was received by
the appellant on 14 July 2016. It is common cause that the
appellant's notice of appeal was delivered on 15 August
2016. In
terms of rule 49(6) of the Uniform Rules of Court, an appellant shall
within sixty days after delivery of a notice of
appeal, make written
application to the registrar for a hearing date of such appeal. Where
no such application is made, the appeal
is deemed to have lapsed.
Rule
49(6)(b)
provides for the reinstatement of such an appeal
on good cause shown.
[10]
Simultaneously with the application for a hearing date, rule 49(7)
requires an appellant to file with the registrar, three
copies of the
record of appeal and to furnish two copies to the respondent.
Alternatively, the written request for a hearing date
may be
accompanied by a written agreement between the parties that the
record will be handed in late, or the request is delivered
with an
affidavit setting out that the record will be filed later with a
condonation application. The appellant did not comply
with this rule.
[11]
It is settled law that in determining whether to grant condonation
for non compliance with the Uniform Rules of Court,
good cause
must be shown. In determining whether a litigant has shown good
cause, a court must consider all the relevant factors
including a
consideration of the degree of lateness, the explanation for the
delay, the prospects of success and prejudice. See
Melane v Santam
Insurance
Co
Ltd
1962 (4) SA 531
(A) at 532B-E;
Mathibela
v
S (714/2017)
[2017] ZASCA 162
(27 November 2017). These factors
are not individually decisive as set out
in Concrete 2000 (Pty)
Ltd v Lorenzo Builders
CC
t/a Creative Designs
&
others
[2014] 2 All SA 81
(KZD) para 38. In
F v Minister of
Safety and Security
&
others
2012 (1) SA 536
(CC) para
28, it was held that condonation will be granted if it is in the
interests of justice and there appears to be reasonable
prospects of
success on appeal.
[12]
A condonation application should of necessity, set out briefly and
concisely crucial information to enable the court to assess
the
prospects of success. See
Mulaudzi v Old Mutual Life Insurance
Company Limited
&
others
2017 (6) SA 90
(SCA) para 34.
In
Finbro Furnishers (Pty) Ltd v Registrar of Deeds, Bloemfontein
&
others
1985 (4) SA 773
(A) at 789C-D, it was pointed
out that courts are bound to assess an applicant's prospects of
success as one of the relevant factors
in the exercise of its
discretion unless cumulatively, all relevant factors are such as to
render the application for condonation
unworthy to consider.
The
degree of lateness
[13]
The appellant contends that the appeal record was due on or before 7
November 2016 and was not filed as required by the Rules.
Apparent
from the facts set out above, the degree of lateness for the
prosecution of the appeal is approximately 82 days late.
The appeal
record was due on 7 November 2016 and when this was not filed, the
appeal lapsed on the same day. The appellant's attorney
was aware as
at 10 November 2016 that the appeal lapsed. The lateness is excessive
in the circumstances of this case.
The
explanation for the lateness
[14]
The explanation tendered in this regard was by Chantel Schutzler of
the appellant's attorneys. Her explanation was that the
failure to
comply with the provisions of rule 46(7) relating to the filing of
the record was as a result of a miscommunication
between herself and
one Shanan Tylor, an associate in the firm. Schutzler avers that upon
receiving the written judgment and on
her instructions, Tylor
delivered a notice of appeal and returned the file to Schutzler.
Pursuant to this, Schutzler instructed
Tylor to take the necessary
steps to prosecute the appeal which included compiilng the record of
appeal and believed that Tylor
was attending to this.
[15]
According to Schutzler, when she enquired on the status of the appeal
on 10 November 2016 , she discovered that Tylor had not
taken further
steps to prosecute the appeal and it was established that the appeal
had lapsed. On 11 November 2016, Schutzler and
Tylor contacted
Document Exchange, who collected the documents on 14 November 2016
for delivery at Appeal Document Services for
the preparation of the
appeal record on an urgent basis. The appeal record was initially
received by the appellant's attorneys
on 22 December _2016. There
were a few amendments required on the record with the result that the
complete compilation was received
on 26 January 2017. Tylor filed a
confirmatory affidavit in this regard.
[16]
The appellant's attorneys communicated with the respondent's
attorneys on 24 November 2016 advising that they would be applying
for condonation as the appeal had lapsed due to their failure to
deliver the record. Despite being aware of this, there was no
condonation application filed until 21 February 2017 when the record
was filed together with a condonation application. This was
approximately 60 days late. Service was only effected on the
respondent's attorneys on 2 March 2017. According to Schutzler, the
delay in lodging the appeal record was not inordinate and it would be
unduly harsh for the court to refuse condonation and to refuse
the
appellant the right to appeal on the basis of a miscommunication
between Tylor and herself.
[17]
The respondent's answering affidavit was filed on 25 April 2017.
Tamara Botha, the deponent to the respondent's affidavit averred
that
as at 15 August 2016, the appellant was in receipt of the transcribed
record which it had received on 14 July 2016. In view
of this, the
appellant was in a position to file the appeal record at any stage
after 15 August 2016. The appellant had 60
court days
(approximately three months) after noting the appeal to prosecute it.
This meant that the appellant had up until 7 November 2016
to
prosecute the appeal.
[18]
Botha attributed the delay to a lack of diligence or laxity,
alternatively ignorance of the rules of court and appeal procedures
on the part of the appellant's attorneys. Having realised that the
appeal had lapsed on 10 November 2016 which was only three days
late,
the appellant's attorneys could have compiled the record and ensured
that it was served and filed immediately. Botha contends
that it was
not necessary for the appellant's attorneys to employ the services of
Appeal Document Services in view of the lateness
and the need for the
record to be filed urgently. The appellant's attorneys ought to have
undertaken the task themselves. It was
also peculiar that the record
was initially released on 22 December 2016 and payment was only made
when the record was returned
for corrections.
[19]
The appellant, in its replying affidavit deposed to by Tylor, which
was served and filed on 11 May 2017, raises in limine,
the fact that
the respondent's answering affidavit opposing the appellant's
condonation application was substantially out of time
with no
condonation application, which rendered it to be improperly before
the court. This point was however not pursued by Mr
Boulle
who
appeared for the appellant during argument. Tylor denied any lack of
diligence on their part and mentioned that she had corresponded
with
Appeal Document Services from 11 November 2016 and throughout the
month of November 2016, three emails in December 2016, one
email from
Appeal Document services for payment on 26 January 2017 and a reply
to that email from the appellant's attorneys on
6 February 2017.
[20]
According to Mr
Boulle,
there was a miscommunication between
the appellant's attorneys as to who was responsible to pursue the
appeal which led to a delay
in the preparation of the record,
resulting in, the appeal lapsing. He conceded that they could have
perhaps conducted the matter
better but argued that that there was no
suggestion by the respondent that there was any negligence. What the
respondent was contending
was that the two attorneys were sloppy. It
could not however be said that their conduct was unreasonable. Mr
Anderton
for the respondent submitted in light of the urgent
need to transcribe the record, and considering that all the relevant
records
were in the possession of the appellant's attorneys since
August 2016, they ought to have prepared the record themselves.
Despite
this, the appellant's attorneys instructed Appeal Document
Services to transcribe the record which took a further three months
to prepare the record.
[21]
The explanation for the delay provided by both Schutzler and Tylor is
highly inadequate. They became aware that the appeal
lapsed three
days after its lapsing on 10 November 2016 which meant that they
needed to act in haste in dealing with the matter.
They however
conducted the matter as if everything was normal and they still had
all the time to deal with the matter like they
did. Since they had
all the relevant documents, nothing stopped them from compiling the
record themselves but they elected to leave
the matter in the hands
of an external party. They also failed to ensure that they had the
necessary funds to pay for the record
which resulted in a further
delay of another month from 26 January 2017 to 21 February 2017.
[22]
Schutzler and Tylor would have been aware that the record had to be
filed within 60 court days but were seemingly not concerned.
They
disregarded the provisions of Uniform rule 49(6) since upon realising
that the appeal had lapsed, they did not file a request
for a hearing
date with an affidavit explaining that the record would be filed
later with a condonation application. They could
have even done so on
24 November 2016 when they informed the respondent's attorney about
the lapsing of the appeal. The appellant's
had numerous opportunities
to curtail the delay in the filing of the record but for reasons
known only to them failed to do so.
Prospects
of success
[23]
Schutzler averred that the appellant's prospects of success are good
since it was clear that the summonses were served at a
domicilium
address identified in the lease agreement when the respondent
knew that the appellant had not taken occupation of the leased
premises.
She contended therefore that the appellant could clearly
not have been in default. This is denied by the respondent who
contended
that the summonses were not served at the address nominated
in the lease agreement but at the appellant's registered address
which
was identified in the CIPC documents after the respondent
conducted a search. The respondent contended that such service
amounts
to proper service in terms of Magistrates' courts rule 9.
[24]
The appellant set out its defences in the main action as being that
the termination of the lease before commencement date was
lawful
since its obligation to pay rent and other charges under the lease
had not commenced. Secondly, that the respondent had
an obligation to
communicate its election to enforce the terms of the lease and could
not have relied on the
domicilium
clause in the lease
agreement. Further, that the respondent had an obligation to mitigate
its loss and whether this was done was
an issue which could best be
resolved through evidence at trial.
[25]
The respondent averred that the appellant failed to demonstrate good
cause for the reinstatement of the lapsed appeal due to
the excessive
delay and an unacceptable explanation. Botha contended that the
appellant failed to satisfy the court that there
is sufficient excuse
for its non-compliance with the rules. There was no merit in the
appellant's defence since it was not entitled
to cancel the lease
which was binding on it despite the commencement date not having been
reached. The respondent informed the
appellant that it was holding
the appellant to the agreement by sending a letter by way of
registered post to the
domicilium
address and by email on 9
June 2015. The appellant concedes that the email address used was
that of the secretary to the principal
member of the appellant.
[26]
The respondent contends that the onus to prove that the respondent
failed to take steps to mitigate its loss rests with the
appellant.
In any event, it averred that it only sought arrear rental for the
months of July to September 2015, being a period
of four months
instead of seeking rental for the entire lease period, alternatively
until a new tenant was secured during mid-2006.
[27]
It is common cause that in respect of the prospects of success in
this matter, the appellant must show that its case which
was before
the court a quo satisfied the requirements for the granting of the
rescission application. Magistrates' courts rule
49(1) provides that
the court may rescind a judgment granted by default on good cause
shown or where it is satisfied that there
is good reason to do so. In
order to show good cause, the appellant must show that it was not in
wilful default, it has a bona
fide defence, and the application is
not made to delay the finalisation of the respondent's claim.
[28]
The appellant's submission in respect of the wilful default is that
service was effected at the residential address of its
member Mr
Khuluse. The manner of service was affixing as appeared in the
sheriff's return. A member of the appellant and his wife
defended the
action under case number 10877/2015. In this regard, it was argued
that members of the appellant would have defended
the other three
actions had they come to their attention. The respondent submitted
that the explanation for the default must be
sufficiently full to
enable the court to understand how it came about. See
Silber v
Ozen Wholesalers (Ply) Ltd
1954 (2) SA 345
(A) at 353A-B. It
argued that the appellant had not provided reason why the summonses
in the three matters served at its registered
address being the home
of Mr Khuluse would not have come to its attention. It was submitted
that even if the court was to find
that the default was not wilful,
-the appellant still had to show that it had a bona fide defence.
[29]
Mr
Boulle
submitted that in respect of the bona fide defence,
while the appellant initially raised three points of challenge in
respect of
the merits on the case, being the duty to mitigate,
whether the lease can be cancelled before its commencement date and
the status
of the repudiation letter, it was abandoning the first two
and only pursuing the issue of the repudiation letter. He was also
raising
a new point of law being that if the appellant was able to
establish a defence to part of the judgment, then it is entitled to
the rescission of the entire judgment. In this regard he relied on
Kavasis v South African Bank of Athens Ltd
1980 (3) SA 394
(D).
[30]
On the issue of the repudiation letter,
Boulle
submitted that
having accepted that there was a duty on the respondent to respond to
the cancellation, such response was addressed
to the
domicilium
address set out in the lease agreement being the leased premises
and to an email address. It was not in dispute that Khuluse did
not
receive the letter. He argued that the email address used was that of
the secretary, and there was no right for the respondent
to say that
the letter was deemed to have been received. Since there was no
response by Williams as undertaken, the appellant did
not take
occupation of the leased premises. He argued that the decision of the
court a quo was not correct. While it was not unreasonable
that the
letter was sent to the secretary, her address was not the registered
address.
[31]
Contrary to the argument by the appellant, Mr
Anderton
submitted
that the appellant had tacitly agreed to the letter being sent to it
by way of email when it sent correspondence to the
respondent using
the same email. This is because the email sent by the appellant
called for a response to the cancellation. Since
the appellant had
not taken occupation of the
domicilium
address, Mr
Anderton
conceded that it made no sense that the letter was posted to this
address. It was submitted that Khuluse did not state that his
secretary had not received the letter and there was no confirmatory
affidavit from her in this regard.
[32]
The appellant's initial point that the respondent had not responded
to its cancellation letter is incorrect taking into account
the
letter of 9 June 2015. According to the appellant, an undertaking had
been given that a response to its cancellation latter
would be sent.
While Khuluse expected the letter to emanate from Williams, it
emanated from the respondent's attorneys. The court
a quo found that
the email method used to send the letter was competent since it was
in response to the letter which the appellant
had sent using the same
method of communication. It was reasonable for the court a quo to
conclude that the letter was sent and
received. I say this because
save for Khuluse averring that the letter was not brought to his
attention, there is nothing to say
that it was not received by
Chiliza. There is also no affidavit from Chiliza to say whether or
not she received it and if she had
received it, what she did with it.
[33]
Whether or not the appellant had received the respondent's letter
cannot determine the issue of the cancellation since according
to
Khuluse, he was told that a response would be forthcoming. It was
therefore necessary that he follow up with Williams when such
response was not received. He could not simply assume that the
cancellation was accepted from the mere fact that he had not received
a response.
[34]
The court a quo correctly found that the appellant was in wilful
default since the summonses in the three matters were served
on three
different dates at the appellant's registered address which was
Khuluse's home. It was insufficient for him to therefore
merely
allege that the summonses were not received without providing an
explanation why this would occur. This, especially because
the fourth
summons was served at the same address and received. Notably, the
summons which was defended was that issued against
Khuluse and his
wife in their personal capacities. Since the onus was on the
appellant to show that it was not in wilful default,
it was not
sufficient to simply say the summonses did not come to Khuluse's
attention.
[35]
On the second issue being that relating to the point of law,
Boulle
conceded that the issue was being raised for the first time in
argument before this court. In fact, this appeared for the first time
in his supplementary heads of argument which was handed up in court
prior to him commencing his argument. The point was never part
of the
notice of appeal. He argued that there was no unfairness nor was
there a suggestion of any prejudice to the respondent.
He relied on
the decision of
Barkhuizen v Napier
[2007] ZACC 5
;
2007 (5) SA 323
(CC) to
support the argument that a new issue can be raised for the first
time on appeal.
[36]
In para 39 of
Barkhuizen,
the court stated that the raising of
a point of law for the first time on appeal is not in itself
sufficient reason to refuse to
consider it. It went on to say:
'If the point is covered by the
pleadings, and if its consideration on appeal involves no unfairness
to the other party against
whom it is directed, this Court may in the
exercise of its discretion consider the point. Unfairness may arise
where, for example,
a party would not have agreed on material facts,
or on only those facts stated in the agreed statement of facts had
the party been
aware that there were other legal issues involved. It
would similarly be unfair to the other party if the law point and all
its
ramifications were not canvassed and investigated at trial. A
party will not be permitted to raise a point not covered in the
pleadings
if its consideration will result in unfairness to the other
party.' (Footnotes omitted)
[37]
In
GUSA v Tao Ying Metal Industries
&
other2009
(2)
SA 204 (CC) paras 67- 68, the court stated that a litigant may not,
on appeal, raise a new ground of review. To permit a party
to do so
may very well undermine the objective of the LRA to have labour
disputes resolved as speedily as possible. These principles
are
subject to one qualification that 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
which would infringe on the principle of legality.
[38]
In
Maphango
&
others v Aengus Lifestyle Properties
(Pty) Ltd
2012 (3) SA 531
(CC) para 109 the court stated that the
rule dealing with whether a court permits a party to raise a point of
law is subject to
well-known conditions to ensure fairness to all
parties. First, the point sought to be raised must be a point of law
in the true
sense of the word. Second, if not foreshadowed in the
pleadings, it must be supported by the established facts in the
record. Third,
the entertainment of the point must not prejudice the
other parties. The purpose of this rule is to give a fair hearing to
all
parties as entrenched ins 34 of the Constitution.
[39]
The issue which was raised for the first time was in respect of the
three judgments which were the subject of the rescission
before the
court a quo.
Boulle
submitted that with regard to case
1793/2015, the quantum claimed included the deposit payable when the
deposit was only due prior
to the appellant taking occupation. This
meant that the appellant could only breach its obligation in this
regard upon taking occupation,
which never occurred. In the result,
the claim for the deposit was premature and the judgment was higher
than it ought to have
been in that an amount of R75 236.80 was
awarded when it ought to have been R26 236.80, a difference of R46
000. On the issue of
interest, there were two scenarios being that if
the lease is not cancelled, interest payable will be at prime
overdraft rate charged
from time to time by ASSA Bank Limited plus
2%. Where however the lease is cancelled and in the event of a
breach, interest payable
after cancellation would be at the rate of
2% above prime per month. He argued that since the respondent had not
cancelled the
lease, it was obliged to claim interest at 2% above the
ASSA rate. The respondent did not make out a case for the interest
granted.
These reasons accordingly justified the granting of the
rescission.
[40]
Mr
Anderton
admitted that the appellant had not taken
occupation and that the four main banks charged the same interest
rates. He submitted
that this court has powers to grant such judgment
as it sees fit and can vary or reduce the quantum of the judgment. He
submitted
further that the issue of the deposit was never raised as a
ground of appeal or before the court a quo.
[41]
As regards case 1984/2015, the court a quo corrected the amount
claimed in respect of arrears
mero motu
and reduced it by
R440.61. Secondly, the interest charged was similarly impermissible
in the absence of a cancellation. The court
a quo however allowed the
interest at the prime rate and not the ASSA rate. The appellant
alleges that since it has a defence to
part of the claim, rescission
should be granted. The respondent conceded that the court a quo
reduced the amount it had initially
awarded under this case number
and submitted that the court a quo was empowered to correct its own
judgment.
Boulle
argued that it was never raised as an issue
that the court a quo can correct its own judgment and that this was
being raised for
the first time during argument.
[42]
Mr
Boulle
argued that this court sitting as a court of appeal
does not enjoy the powers of the high court. The court a quo lacked
the powers
to rewrite its judgment. He submitted that the court a quo
was not correcting an error but effecting substantial changes to the
judgment. He argued that nothing in the
Magistrates' Courts Act 32 of
1944
empowers a magistrate to rescind part of the judgment. If the
court a quo could not do this, then this court cannot either.
[43]
It was argued that while the high court has powers to rescind
judgments in part, such powers did not exist in the court a quo·
since it is a creature of statute and therefore only possesses those
powers set out in the statute. There is no provision in the
Magistrates' Courts Rules for a partial rescission of a judgment. It
was further argued that as a point of law, rescission must
be granted
where there exists a partial defence to the claim.
[44]
Mr
Anderton
relied on the provisions of rule 49(1) read with
rule 49(9) of the Magistrates' Court Rules which provides for a
magistrate to correct
his own judgment in terms of
s 36(1)
of the
Magistrates' Courts Act. He
argued that the court a quo is empowered
to set aside part of its judgment and may vary it as it deems fit. In
this regard,
Anderton
argued that the provisions were similar
to those in the high court which consequently meant that the
magistrate's court had similar
powers. He relied on
Silky Touch
International (Pty) Limited
&
another v Small Business
Development Corporation Limited
[1997] 3 All SA 439
0/1/) and
Conekt Business Group (Pty) Ltd v Navigator Computer Consultants
CC
2015 (4) SA 103
(GJ) where the court confirmed a magistrate's
powers to rescind or vary part of a judgment. In respect of the
powers of this court,
Mr
Anderton
argued that the appeal court
is empowered in terms of s
19(d)
of the
Superior Courts Act 10
of 2013
to render any decision which the circumstances may require.
[45]
A reading of Magistrates' courts
rule 49(1)
and
49
(9) and
s 36(1)
of
the
Magistrates' Courts Act together
with the authorities relied on
by Mr
Anderton
leads to a conclusion that indeed partial
rescission of judgment is possible. There is of course a condition to
this as set out
by these authorities being that the judgment must be
capable of being divided. See
Makhafola v Scania Finance Southern
Africa (Pty) Limited
[2016} JOL 36329
(GJ) and
Conekt Business
Group (Pty) Ltd v Navigator Computer Consultants
CC,
In re:
Navigator Computer Consultants
CC
v Conekt Business Group
(Pty) Ltd
[2018] JOL 39795
(GJ). It was therefore competent for
the court a quo to correct its judgment in respect of arrears under
case 1984/2015.
[46]
In respect of case 2707/2015, Mr
Boulle
submitted that the
claim was for the months of September and October 2015 relating to
rates in the form of bank charges which were
not pleaded. The claim
also included interest on arrear rental at 11.25% and 11.5% while
these could only be claimed at ASSA Bank
prime rate plus 2%. Mr
Boulle
argued that there were no supporting documents dealing
with the applicable ASSA Bank rate. Therefore, the respondent was not
entitled
to judgment for these amounts. It was submitted that these
factors evidence the presence of a defence by the appellant and in
the
result, the rescission should be granted.
[47]
On the issue of the interest awarded by the court a quo under case
number 2707/2015, again Mr
Anderton
argued that this issue was
raised for the first time during argument. In any event, the
respondent would not take issue to the amount
being reduced by R384.
He argued that part of the legal fees were charged prior to the
default judgment in the amount of approximately
R12 000. An amount of
approximately R2 707 could be deducted which deduction was acceptable
to the respondent. Mr
Anderton
submitted that the appellant
had failed to establish that it had a bona fide defence to the
judgment. He asked for the appeal to
be dismissed with costs on an
attorney and client scale.
[48]
Mr
Boulle
submitted that these issues arose from the
respondent's documents and did not occasion any surprise or prejudice
as set out in
Barkhuizen.
In reply, Mr
Anderton
argued
that the issues raised by Mr
Boulle
were not issues of law but
were findings of fact. In view of the nature of the application which
was before the court a quo, it
was necessary that these new points be
set out in the notice of appeal to afford the court a quo opportunity
to deal with them.
[49]
Mr
Anderton
argued that the issue raised was a factual issue
and not an issue of law. He argued that the interest issue raised was
in any event
a non-issue since there was a link in the prime rate of
interest used by the four big banks. Mr
Anderton
submitted
that the fact that
Boulle
never argued that the appellant was
not liable for the rental, rates, taxes, parking and interest as
claimed and that the argument
was restricted to the quantum of such
claims confirmed that it had no bona fide defence on the merits. The
court a quo was therefore
correct to find that the prospects of
success were so remote that it could not be said that a bona fide
defence existed. Mr
Anderton
argued that consequently it would
be improper and against the interests of justice to grant the
rescission. He submitted that in
the absence of a bona fide defence
on the merits and a poor explanation for the delay, condonation for
the late prosecution of
the appeal ought to be refused and the appeal
dismissed with costs. Alternatively, the court may grant such
judgment as it deems
fit in respect of the three cases which were the
subject matter of the rescission application. He submitted that the
costs of the
appeal should be borne by the appellant on the scale
between attorney and client as provided in the lease.
[50]
The question whether a new issue can be raised for the first time on
appeal has been answered by numerous the authorities referred
to
above. This can however only occur where such issues are issues of
law. A determination must therefore be made whether the issue
raised
is an issue of law or fact. The issues referred to by Mr
Boulle
relating to the charging of rent deposit and the agreed or
prescribed rate of interest are factual issues and not issues of law.
The issue relating to whether the court a quo can correct its own
judgment is a quasi-legal issue which in my view does not qualify
for
the test set out in
Maphango.
Consequently, I am of the view
that while raising new issues may be permissible in so far as these
are issues of law, the issues
raised by Mr
Boulle
do not
qualify. I am of the view that in order to minimise the prejudice, if
any, to be suffered by one of the parties where new
issues of law are
raised on appeal, these should be raised in the notice of appeal and
not during argument which would result in
taking the other party by
surprise. The respondent was afforded opportunity to file
supplementary heads of argument to remove any
potential prejudice in
this case.
[51]
The respondent conceded that there are certain errors in the default
judgments granted by the court a quo. Since I have found
that the
court a quo has authority to correct its judgments, nothing prevents
the parties from approaching the court a quo for
this purpose.
[52]
It is apparent that the court a quo considered the matter adequately
guided by relevant applicable principles relating to rescission
applications and was satisfied that there were was no good cause
shown. It was therefore reasonable for the court a quo to conclude
that the appellant was in wilful default taking into consideration
what has been said above. In my opinion, the appellant has failed
to
show that it has any prospects of success for the granting of
condonation.
[53]
In respect of the prejudice, the appellant’s conduct of the
matter is the likely cause of any prejudice it will suffer
as a
result of the refusal of this application. The respondent on the
other hand has been severely prejudiced by the delay in bringing
this
matter to finality. It initially suffered prejudice when the
appellant wrongfully cancelled the contract as it is apparent
from
the facts that no rental was paid until after sometime when a new
tenant was found. The respondent then applied for default
judgment
which was then challenged by the appellant and when the rescission
was refused in July 2016, it had to endure a further
delay by the
noting of the appeal which then lapsed due to the appellant's
attorney's conduct.
[54]
Having considered the matter, I find that the appellant has failed to
make out a case for the granting of the condonation application.
Mr
Anderton
asked that costs be awarded against the appellant on
an attorney and client scale. After considering the matter, I see no
reason
why such a cost order should be awarded.
Order
[55]
In the result, I propose the following order:
1. The appellant's application for
condonation is refused.
2. The appellant is to pay the
respondent's cost.
_______________________
MASIPA
J
I
AGREE
_______________________
MARKS
AJ
DETAILS
OF THE HEARING
Appearances:
For
The Appellant: Mr A J Boulle
Instructed
by: Morris Fuller Williams Inc.
For
the Respondent: Mr S P Anderton
Instructed
by: Larson Falconer Hassan Parsee Inc.
Matter
heard on: 4 May 2018
Judgment
delivered: 12 October 2018