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[2018] ZAKZPHC 68
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BWK Project Management Civils CC v Slice Investments (Pty) Ltd (AR 94/2017) [2018] ZAKZPHC 68 (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
appellant’s 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 appellant’s 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 compiling 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 (Pty) 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
CUSA v Tao Ying Metal
Industries & other
[2008] ZACC 15
;
2009
(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 in s 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 ABSA
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 ABSA 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 ABSA 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
(W) 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 ABSA Bank
prime rate plus 2%. Mr
Boulle
argued that there were no
supporting documents dealing with the applicable ABSA 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
September 2018