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[2017] ZAGPPHC 67
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Top Ten Catering and Security Services CC v Sinclair Consulting (Pty) Limited (A3091/2016) [2017] ZAGPPHC 67 (17 February 2017)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO:
A3091/2016
Reportable:
No
Of
interest to other judges: No
Revised.
17/2/2017
In
the matter between
Top
Ten Catering and Security Services
CC
Applicant
and
Sinclair
Consulting (Pty)
Limited Respondent
Judgment
Van
der Linde, J:
Introduction
[1]
This is an appeal against the dismissal by a Magistrate of an
application for rescission of a default judgment. The application
for
rescission was opposed, but only nominally, since a notice of
intention to oppose was filed, but no answering affidavit. The
appeal
was likewise unopposed.
[2]
The statutory framework within which the rescission application had
to be decided, is made up of Magistrates’ Court Rules
49(1) and
(3), and s.36(1)(a) of the Magistrates’ Court Act 32 of 1944.
These provide as follows.
“
Rescission
and variation of judgments
49.
(1)
A party to proceedings in which a default judgment has been given, or
any person affected by such judgment, may within 20 days
after
obtaining knowledge of the judgment serve and file an application to
court, on notice to all parties to the proceedings,
for a rescission
or variation of the judgment and the court may, upon good cause
shown, or if it is satisfied that there is good
reason to do so,
rescind or vary the default judgment on such terms as it deems fit:
Provided that the 20 days' period shall not
be applicable to a
request for rescission or variation of judgment brought in terms of
subrule (5).
(2) …
(3) Where an
application for rescission of a default judgment is made by a
defendant against whom the judgment was granted, who
wishes to defend
the proceedings, the application must be supported by an affidavit
setting out the reasons for the defendant's
absence or default and
the grounds of the defendant's defence to the claim.”
“
36 What
judgments may be rescinded
(1) The court may,
upon application by any person affected thereby, or, in cases falling
under paragraph (c), suo motu-
(a) rescind or vary
any judgment granted by it in the absence of the person against who
that judgment was granted;…”.
[3]
These
provisions, and their similar forebears, have been applied to mean
that a successful applicant for rescission will have given
a
reasonable explanation for her default; her application will have
been bona fide; and she will have shown a bona fide defence
to the
plaintiff’s claim.
[1]
[4]
Thus the
applicant’s affidavit is required to have set out “
the
reasons for the defendant's absence or default and the grounds of the
defendant's
(the
appellant’s)
defence
to the claim”
and, if so, whether either “
good
cause”
was
shown, or the court ought to have been satisfied that there was “
good
reason”
to
rescind the judgment. Importantly, these issues must be considered
within the context of the affidavit as a whole, since not
doing so,
would constitute a misdirection that would entitle a court of appeal
to inference in the exercise by the court a quo
of its discretion.
[2]
[5]
The
Magistrate also approached the matter from this perspective,
[3]
but concluded that the appellant was unable to explain its default of
appearance;
[4]
and held that the
court a quo was unable to conclude that the rescission application
was bona fide.
[5]
The
facts
[6]
The facts,
thus uncontested, are that the summons was served personally on the
appellant’s Chief Executive Officer, Mr Patrick
Dlamini, on 10
September 2015. He perused it, and then gave it to a messenger in his
office to deliver to the appellant’s
attorneys for purposes of
legal advice and defence. The particular firm of attorneys dealt with
all the appellant’s legal
matters, and “…
all
legal documents received at our offices are immediately delivered to
them for purposes of legal advice and defence.”
[6]
[7]
As it
happened, the summons was only delivered to the attorneys on 22
October 2015,
[7]
by which time,
unbeknown to either the appellant or its attorney, judgment had
already been given on 29 September 2015. On the
same day, an
attorney’s clerk, Mr Malebana Boshomane, looked for but could
not find the court file, the reason recorded at
the clerk’s
office being to inspect the “
return
of service.”
[8]
However, the file was not
available. On the next morning Mr Boshomane served a notice of
intention to defend.
[8]
Mr Dlamini
came to know of the judgment only when at around 28 January 2016 he
received an email from the plaintiff’s attorneys
advising him
of this fact.
[9]
[9]
Concerning
the merits of the appellant’s intended defence, the appellant
accepted that a contract had been concluded with
the plaintiff
whereby the latter would design and implement a turnaround strategy
for the defendant.
[10]
The
deponent accepted too that performance of the agreement would take
place in three phases, the first of which was comprised
of diagnostic
review and assessment.
[11]
The
contract price too was negotiated, being R60 000 per month, and
Mr Dada was assigned to the contract.
[12]
[10]However,
the deponent says that in negotiating the contract the plaintiff
presented itself as an expert in the fields of diagnostic
review and
turnaround, and said that the plaintiff would improve the appellant’s
business.
[13]
[11]When
Mr Dada commenced with the purported execution of the contract, it
became clear, said the deponent, that the plaintiff
was not an expert
in the fields stipulated.
[14]
When Mr Dada was approached about this, he undertook to speak to Mr
Given, his partner. He did this, and returned saying that Mr
Given
had agreed to a reduction in the price of the contract to R10 000
per month.
[15]
Mr Dada was
however to proceed with the job. After three months of payments but
no progress, the parties agreed to cancel the agreement.
[16]
[12]As
to the adequacy of the reasons for the default, the court a quo
concluded that the explanation given was tantamount to no
explanation
at all.
[17]
In consequence it
held that the court was unable to assess how the default came about.
[13]As
to the adequacy of the grounds of the defence, the court a quo
reasoned that the assertion that Mr Dada was not an
expert in the
fields stipulated in the agreement, was a mere inference not
substantiated by facts.
[18]
It
concluded too that the assertion of an agreed cancellation was
lacking in particulars,
[19]
and
as to the assertion that the payments agreed upon had been made, it
said that this was needlessly bald, vague and sketchy.
[20]
The
approach of a court of appeal
[14]The
next consideration is the approach to be adopted by this court to the
consideration of the appeal. In particular, is this
court free,
sitting as it does on an appeal against the exercise of a
discretion
[21]
by the court a
quo, to substitute its own discretion for that of the court a quo? Or
can it only do so if it is able first to conclude
that the court a
quo misdirected itself? Put differently, was the discretion exercised
by the court a quo a discretion in the narrow
sense or one in the
wide sense?
[15]In
Tjospomie Boerdery, Stegmann, J writing for a full bench in a
judgment that has been widely followed since, suggested the
following
answer:
[22]
“
In the light of
all these considerations, I come to the conclusion that the legal
position governing the present appeal may be summed
up in the
following propositions:
1. There is no rule of
law to the effect that in every appeal against the exercise of any
discretionary power vested in the court
of first instance the Court
of appeal has no jurisdiction to interfere with the decision appealed
against unless such decision
is shown to have been unjudicial in one
of the respects mentioned in Ex parte Neethling and Others
1951
(4) SA 331
(A) at 335D - E.
2. In an appeal
against the exercise of a discretionary power by a court of first
instance, the first task of the Court of appeal
is to examine the
nature of the discretionary power, and to decide whether it belongs
to the category of discretionary powers contemplated
by the decision
in Ex parte Neethling and Others.
3. If the power is
found to belong to such category, the Court of appeal has no
jurisdiction to interfere with the exercise of the
power decided on
by the court of first instance unless such decision is shown to have
been unjudicial in one of the respects mentioned
in Ex parte
Neethling and Others, ie that such decision was capricious, that it
was based on a wrong principle, that it was not
reached by unbiased
judgment, or that it was not based on substantial reasons.
4. If the
discretionary power is not found to belong to such category, the
Court of appeal must decide to what category it does
belong. One
possibility is that it may be found to belong to the same category as
the discretionary power in Mahomed v Kazi's Agencies
(Pty) Ltd and
Others
1949 (1) SA 1162
(N).
5. If the power is
found to belong to the last-mentioned category, the function of the
Court of appeal is to hear all such arguments
as may be addressed on
the basis of the record before it, and to give due consideration to
the decision of the court of first instance.
6. In some cases it
may be possible to conclude that the exercise of the discretionary
power by the court below was 'wrong' in some
sense other than the
sense of 'unjudicial' contemplated by Ex parte Neethling and Others.
However, discretionary powers being what
they are, there is usually
no objective criterion according to which the exercise of such power
can be judged to be 'right' or
'wrong'. The criteria according to
which it may be judged to be 'judicial' or 'unjudicial' are dealt
with in Ex parte Neethling
and Others. However, there are always
criteria according to which the exercise of a discretionary power may
be judged to be 'appropriate'
or 'inappropriate'. Such criteria
depend upon the circumstances of the particular case. In the very
nature of things, therefore,
when the subject-matter of an appeal is
the exercise of a discretionary power of the kind referred to in para
5 above, the Court
of appeal is not bound to uphold the decision of
the court below unless satisfied that such decision was 'wrong'.
7. In an appeal
against the exercise of such a discretionary power, the function of
the Court of appeal is to consider whether,
in the light of all
relevant factors, the exercise of the power by the court of first
instance was appropriate to the circumstances
of the particular case.
If it was, the appeal must fail. If it was not, the Court of appeal
must exercise the discretion anew,
and must substitute its own
discretion for the discretion of the court below.
That concludes the
first question in this appeal.”
[16]Cloete,
J (as he then was) explained in Bookworks that the categorisation of
discretions in the narrow sense, implying limited
scope for
interference on appeal, as being founded in the notion that the court
of first instance is in a better position to exercise
the discretion,
was not always sound. The learned judge said (emphasis supplied):
[23]
“
And then there
is the discretion vested in a civil court as to the incidence of
costs, which is pre-eminently an example of a discretion
in the
narrow sense: Fripp v Gibbon & Co
1913 AD 354
; Warner v Reid and
Others (supra at 311 and 313). In each of these latter three
instances an appeal Court is in, or can for practical
purposes be
placed in, as good a position as the trial court to make a decision.
The justification for the reluctance of a Court
of appeal to
interfere must therefore be sought on other grounds.
The
justification, it seems to me, is to be found in the fact that
different judicial officers, acting reasonably, could legitimately
come to different conclusions on the same facts, coupled with a
policy decision dictated by the purely practical consideration
that,
if an appeal were to be allowed in such cases, appeal Courts would be
overburdened by unsuccessful litigants hoping that
the majority might
differ from the conclusion of the court below
.”
[17]I
would propose that in the case of a discretion to grant or refuse a
rescission of a default judgement, the discretion being
exercised is
of the second, the wider, type principally for the following three
reasons. First, the court a quo is confronted with
the simple
application of fact on affidavit to a statutory provision. A court of
appeal is in as good a position as the court a
quo to engage with
this endeavour.
[18]Second,
the grant or refusal of an application for the rescission of a
default judgment has a final and definitive effect on
the rights of
litigants. If a default judgment is not rescinded, a litigant will
find itself forever bound by the judgment. The
general approach to
appeal jurisdiction has been one in which judgments that are final in
effect have been considered as appealable.
[24]
An approach that affords wide latitude to a court of appeal against
the refusal of an application to rescind a default judgment,
would
fit with that approach.
[19]And
third, all law must be interpreted in the light of the values
underlying the Constitution; and the development of the common
law
must promote the spirit, purport and objects of the Bill of Rights.
These include, of course, the fundamental right of access
to courts
under s.34.
[20]To
be true, access may be regulated, but it is suggested that an
approach that allows an appeal against the exercise of a discretion
to exclude access to courts, rather than to constrain such an appeal
by limiting it to those cases of misdirection a quo, more
accords
with the constitutional imperative.
[21]It
follows that in my view this court is free to approach this appeal
untrammelled by first having to find some misdirection
by the court a
quo.
Re-assessing
the appellant’s case
[22]The
first issue is the explanation for the failure to have entered
appearance to defend in time. The explanation has been given
above.
No doubt the appellant’s representative could have followed up.
But he did put the summons in the pipeline for treatment
in the
expected way. And there is no suggestion that this method has failed
the appellant before. There is the point too that a
consultation took
place at which the appellant was preparing its defence.
[25]
The attorney there said that he was awaiting the notice of bar from
the other side before he could file the plea.
[23]But
whatever one makes of the attorney’s explanation, the fact of a
consultation in preparation of the plea conveys that
the deponent
must have been put at ease that the matter was in the safe hands of
the appellant’s attorneys, and was being
attended to.
[24]In
my view, the explanation given adequately provides the reasons for
the appellant’s default, for the following reasons.
First, the
appellant did not ignore the summons but sought to bring it to the
attention of its attorneys, in the way that it always
did. Second,
there nothing suggests that that method was unreasonably unreliable.
Three, a subsequent event, the consultation,
would reasonably have
created a sense of security that the matter was being attended to
properly.
[25]The
second issue concerns the grounds of the defence. The contents of the
affidavit have been set out above. There is the assertion
of an
agreed variation; there is the assertion of an agreed cancellation;
there is the assertion of a reason for that agreed cancellation;
and
there is the assertion of payment of what was owing under the agreed
variation. In purely technical terms, a defence is disclosed.
Is the
disclosure too lacking in essential detail to render it credible?
[26]In
my view not. The deponent is not required to convince the court that
the party will succeed in the trial. All a deponent
need do, in
addition to disclosing valid grounds of a defence, is to depose to an
affidavit that is not inherently unconvincing,
or which does not
smack of tell-tale signs dishonesty or opportunism.
[27]In
my view that standard has been met in the present case. I would
propose the following order:
(a) The appeal is
allowed.
(b) The judgment of the
court a quo is altered to read:
(i) “The default
judgment of this court granted on 5 October 2015 under case number
44682/2015 is rescinded.
(ii) The warrant of
execution issued on 25 January 2016 under case number 44682/2015 is
set aside.
(iii) The defendant is
granted leave to defend the action.”
WHG van der Linde
Judge, High Court
Johannesburg
I agree, and it is so
ordered.
B Vally
Judge,
High Court
Johannesburg
For
the applicants: Adv. A.R. Scott
Instructed
by Ndhlovu A.J. Inc.
6
th
Floor, JHC Building
51
main Street
Johannesburg
Tel:
011 838 4394
Ref:
AJN/C/T447
For
the respondent: No appearance
Instructed
by WMK Matlala Attorneys
Tel:
076 774 6533
Ref:
N.A Phooko
(c/o
TM Serage Attorneys)
4
th
Floor, Khotso House
62
Marshall Street
[1]
Some of the leading cases are Grant v Plumbers (Pty) Ltd,
1949 (2) SA
470
(O); Silber v Ozen Wholesalers (Pty) Ltd,
1954 (2) SA 345
(A);
HDS Construction (Pty) Ltd v Walt,
1979 (2) SA 298
(E); and De Witts
Auto Body Repairs (Pty) Ltd v Fedgen Insurance Co Ltd, 1994 (4) SA
705 (E).
[2]
Compare De Witts Auto Body Repairs supra at p709 in fin.
[3]
Reasons in terms of rule 51(1), p41, para [2].
[4]
Ibid.
[5]
Ibid, p42, para [6].
[6]
Founding affidavit (“FA”), p6, para 10.
[7]
Ibid, para 11.
[8]
PD3, p26.
[9]
FA, p7, para 15.
[10]
FA, p9, para 24.
[11]
Ibid.
[12]
FA, p9, paras 24, 25.
[13]
Ibid.
[14]
FA p9, para 25.
[15]
Ibid.
[16]
Ibid.
[17]
Reasons, p41, para 2.
[18]
Reasons, p41, para 3.
[19]
Reasons, p42, paras 3, 4.
[20]
Reasons, p42, para 5. Here the court was relying on Breitenbach v
Fiat SA (Edms) Bpk,
1976 (2) SA 226
(T), a case decided in a
different context.
[21]
Jones, J in DeWitt at 709.
[22]
In Tjospomie Boerdery (Pty) Ltd v Drakensberg Botteliers (Pty) Ltd
and Another, 1989(4) SA 31 (T) at p40 ff. see also the full
bench in
Bookworks (Pty) Ltd v Greater Johannesburg Transitional Metropolitan
Council and Another, 1999(4) 799 (W), and the cases
annotated on it,
including ABSA v Molotsi, [2016] ZAGPJHC 36 (8 March 2016), a full
bench judgment.
[23]
At 806.
[24]
Compare
ss. 16
,
17
of the
Superior Courts Act 10 of 2013
.
[25]
FA, p7, para 14.