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[2017] ZAGPPHC 449
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EM & S Property Development t/a EM & S Property Development v Toyota Financial Services Ltd (598581/2015; 59582/2015; 59583/2015; 59565/2015) [2017] ZAGPPHC 449 (28 March 2017)
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
CASE NUMBERS: 59581/2015; 59582/2015;
59583/2015; 59565/2015
DATE
:
2017-03-28
Reportable: NO
Of interest to
other judges: NO
Revised.
In the matter between:
EM & S PROPERTY DEVELOPMENT
t/a
EM & S PROPERTY
DEVELOPMENT
Applicant/Defendant
and
TOYOTA FINANCIAL SERVICES
LTD
Respondent/Plaintiff
JUDGMENT
AC
BASSON, J
[1] The defendant/respondent in this
action is EM & S Property Development t/a EM & S Property
Development (hereinafter
referred to as "the defendant").
The plaintiff/respondent is Toyota Financial Services SA Ltd
(hereinafter referred to
as "the plaintiff").
[2] There are four matters before this
court all dealing with the same parties and the same issues. One set
of heads of argument
has also been filed on behalf of both parties in
all the matters. In light of this, I intend to deal with all four
matters in one
judgment.
[3] The defendant (under case numbers:
59581/2015; 59582/2015; 59583/2015 and 59565/2015) failed to enter
any appearance to defend
and on 10 September 2015 the Registrar
granted default judgment against the defendant, in its absence.
[4] The defendant now approaches this
court for an order rescinding and setting aside the (four) default
judgments granted in favour
of the plaintiff against the defendant,
by the Registrar. The defendant further prays for leave to defend the
plaintiff's actions,
under the respective case numbers.
[5] The application appears to be
brought squarely in terms of Rule 42 of the Uniform Rules in that it
was contended that the default
judgment was erroneously sought and
granted in the absence of the defendant.
Particulars of Claim
[6] In the Particulars of Claim the
plaintiff claims that on 28 February 2013, the plaintiff, represented
by a one Louis Ehlers
(sic) entered into a written Instalment Sale
Agreement with the defendant, represented by a one Louis Ehlers in
terms of which
the plaintiff sold to the defendant the following
motor vehicles:
1.Case
number 59582/2015: Toyota Hilux 3.0 Raider Extra Cab 4x4 with engine
number: 1IK5979225 and chassis number: AHRHZ295302201838.
2.Case
number 59582/2015: Toyota Hilux 2.0 D-4D S RX R/B P/ U S/C with
engine number: 2KDA31503 1 and chassis number: AHTCR32G408023445.
3.
Case number 59583/2015: Toyota Hilux 2.5 D-4D S RX RIB P/U S/C with
engine number: 2KDA006315 and chassis number: AHTCR32GX080200064.
4.
Case number 59565/2015: Toyota Hilux 2.5 D-4D S RX R/B P/ U S/C
With
engine number: 2KDA284475 and chassis number: AHTCR32G008023037.
[7] The Instalment Sale Agreement
("the agreement") is annexed to the papers as "Annexure
A". I will return
to the dispute about the validity of this
agreement. It is further claimed that, despite the fact that the
plaintiff has performed
all of its obligations in terms of the
agreement, the defendant has breached the agreement by failing to pay
the required instalment
payments in terms of the agreement. The
plaintiff claims that despite delivery of the vehicle to the
defendant, the ownership of
the vehicles remained vested in the
plaintiff. On 27 July 2014 the plaintiff was in arrears in respect of
all four vehicles.
[8] The summons was served on the
chosen
domicilium
address as was stated in the agreement
between the parties, being 107 Van Tonder Street,Sutherland Ridge. I
will return to the submissions
in respect of the validity of the
agreement herein below.
[9] The despondent (Mr Ehlers) on
behalf of the defendant states in the Founding Affidavit that it only
came to its notice during
2015 that the plaintiff's agents were
looking for the vehicle referred to in the order. It is further
stated that he then contacted
the plaintiff's agents directly in an
attempt to settle the dispute. On 26 January 2016 the defendant's
attorneys then made a settlement
proposal to the plaintiff's
attorneys. The matter could not be settled.
[10] The defendant essentially raises
four issues as to why the default judgment was erroneously sought and
granted in the absence
of the defendant.
The citation of the defendant
[11] The defendant firstly takes issue
with the citation of the defendant in the Particulars of Claim in
that it is cited as a "private"
company instead of it
having been cited as a "public" company. In this regard it
is submitted that this allegation is
"false" and that
Registrar should never have granted the default judgment in
circumstances where a party is incorrectly
cited.
[12] In the answering affidavit, the
plaintiff explains that this is a typing error and that the word
"private "should
have read "public".
[13]
There is no merit in the defendant's complaint: It is accepted that
an error in the name under which a party has been cited
in the
summons will not necessary constitute a good ground for a rescission,
if it is clear from the summons that the correct party
had been
cited. See in this regard:
Dawson
&
Fraser
(Pty) Ltd v Havenga Construction (Pty) Ltd.
[1]
"It
is clear that the relief sought by the respondent goes no further
than that granted in the
Mutsi
v Santam Versekeringsmaatskappy Bpk en 'n Ander
case
supra.
There
is no substitution of the actual defendant, merely a correction of
the citation and, in my view, it falls well within the
ambit of the
principles in the
Firestone
South Africa (Pty) Ltd v Genticuro A
G
case
supra.
It
remains to deal with the applicant's submission that the mere error
in the citation of the summons entitles them to rescission.
As
previously mentioned, they rely on the judgment of
Bakoven
Ltd v
G
J
Howes supra).
I am
not convinced that the learned Judge, in saying 'once the applicant
can point to an error in the proceedings, he is without
further ado
entitled to rescission', intended it to include the type of situation
which has arisen in this case. His use of the
word 'proceedings'
leaves me in some doubt as to whether he meant an obvious error in a
citation to be part of the 'proceedings'.
However, if that was indeed
the meaning, then I must respectfully disagree with him."
[14] I am further also of the view
that the citation of the defendant as a "private" company
as opposed to a "public"
company is clearly is a typing
error and one which cannot in any way prejudice the defendant.
Moreover, if regard is had to the
summons it is clear who the
plaintiff intended to sue.
The citation of "Ehlers"
as the plaintiff's representative
[15] In the Particulars of Claim it is
stated that a certain "Louis Ehlers" was the individual
duly authorised to enter
into a written Instalment Sale Agreement
with the defendant on behalf of the plaintiff. The defendant contends
that it is "impossible"
to determine from the Particulars
of Claim who acted on behalf of the plaintiff and therefore the
plaintiff's papers did not justify
the granting of default judgment.
[16] This complaint which is purely
technical has, in my view, no merit: If regard is had to the
Particulars of Claim it is patently
clear that the reference to
"Ehlers" as the person who represented the plaintiff during
the negotiations with the defendant
(Mr Louis Ehlers) is a mere
misnomer. From a plain reading of the Particulars of Claim and the
relevant annexures thereto, it is
clear that Louis Ehlers
represented the defendant and not the plaintiff. In any event, there
is no suggestion that this misnomer
in any way prejudiced the
defendant.
The Payment Schedule
[17] The defendant also takes issue
with the payment schedule referred to by the plaintiff with reference
to the account numbers
and submitted that it "seems that the
records of the Plaintiff are confused". This allegation is
denied by the plaintiff:
The plaintiff simply changed the current
account numbers and generated them to new numbers. In its replying
affidavit, the defendant
merely states that the plaintiff ought to
have disclosed this in the Particulars of Claim.
[18] This complaint against the
Particulars of Claim has no merit: If regard is had to the papers it
is clear that the payment schedule
is irrelevant to the claim as set
out in the Particulars of Claim, particularly if regard is had to the
fact that it is not the
defendant's contention that any payments that
have been made had not been taken into account by the plaintiff.
The contract
[19] It is common cause that the
agreement attached to the Particulars of Claim is unsigned. In the
regard it was submitted on behalf
of the defendant that, because no
signed agreement is attached to the Particulars of Claim, no
agreement came into being between
the plaintiff and the defendant and
consequently the Registrar could not have granted the default
judgment.
[20] In its answering affidavit the
plaintiff maintains that the agreement attached to the papers
constitute a valid written agreement
between the parties: The
agreement was transmitted through electronic means between the
parties and as such no copy of the agreement
that was physically
signed, exists. As further proof that the agreement attached to the
Particulars of Claim is in fact the signed
written agreement referred
to in the Particular of Claims, the court was referred to the
defendant's own Round Robin Resolution
where the following is
recorded:
"That
the corporation acknowledges and accepts the terms and provisions of
the relevant Agreement/s of the Bank referred to
in 1 above [Standard
With or Without Recourse Discounting and/or Provisional and Agency
and/or Lease and/or Instalment Sale and/or
Rental and/or Loan and/or
Purchase and Sale and/or Sale and Lease Back and/or Full Maintenance
Rental and/or Full Maintenance Operating
Rental and/or Card
Agreement/s and/or Electronic Agreement through the Bank's website]."
[21] It is further pointed out by the
plaintiff that the defendant in fact took possession of the vehicles
which was sold in terms
of this written agreement as far back as 2014
and had not once raised any issues in regard to the validity of the
agreements.
[22]
In
Spring
Forest Trading
CC
v
Wilberry (Pty) Ltd tla Ecowash and Another
[2]
the
SCA, with reference to the Electronic Communications and Transactions
Act
[3]
and
more specifically section 13 thereof, held that the formal
requirement of writing and signature imposed by statute or the
parties
can generally be satisfied through electronic transmission:
"[15]
The Act's main objective is to 'enable and facilitate electronic
communications and transactions in the public interest'.
'Electronic
communication' is defined as 'communication by means of data
messages; ..'Transaction' is defined to include 'a transaction
of
either a commercial or non-commercial nature ...'.An email means
'electronic mail, a data message used or intended to be
used as a
mail message between the originator and addressee in an electronic
communication...' It is thus common ground that
the email
exchange between the parties is governed by the Act.
[16]
One of the Act's aims is to promote legal certainty and confidence in
respect of electronic communications and transactions.
So when
interpreting the Act the courts are enjoined to recognise and
accommodate electronic transactions and data messages in
the
application of any statutory law or the common law. Thus, when there
are formal requirements of writing and signature imposed
by statute
or the parties to a transaction, these can generally be satisfied
through electronic transactions. There are, however,
exceptions where
agreements may not be generated electronically. These are the
agreements for the sale of immovable property, wills,
bills of
exchange and stamp duties."
[23]
See also an earlier judgment where the Labour Court followed a
similar approach:
Jafta
v Ezemvelo KZN Wildlife
[4]
"[98]
The significance of that dictum for this case is that electronic
communications systems are now standard forms of transacting
in the
information age. Anyone seeking to exclude particular forms of
communication must expressly contract out of them, or else
the
provisions of s 23 of the ECT Act are triggered as default rules,
that is, rules that apply when the parties have not agreed
otherwise.
When they do agree on the mode of communication, they must abide by
it. Furthermore, when time is of the essence and
the communication
system used accelerates the speed of communication, contracting
parties should be especially vigilant about sending
and receiving
offers and acceptances electronically."
[24] The defendant's reliance on the
common cause fact that the copy of the contract attached to the
particulars of claim, is invalid,
is therefore misplaced in light of
the case law.
Rescission in terms of rule 42(1)
of the Uniform Rules of Court
[25] The defendants have founded their
case squarely on the provisions of Rule 42(1)(a) of the Uniform
Rules:
"42 Variation and Rescission of
Orders
(1) The court may, in addition to any
other powers it may have,
mero motu
or upon the application of
any party affected, rescind or vary:
(a) An order or judgment erroneously
sought or erroneously granted in the absence of any party affected
thereby;"
[26]
The purpose of Rule 42 is to correct expeditiously an obvious wrong
judgment or order. In this regard the Court in
Bakoven
Ltd v
G
J
Howes
explained:
[5]
"
Rule
42(1)(aJ, it seems to me, is a procedural step designed to correct
expeditiously an obviously wrong judgment or order. An order
or
judgment is 'erroneously granted' when the Court commits an 'error'
in the sense of a 'mistake in a matter of law (or fact)
appearing on
the proceedings of a Court of record'
(The
Shorter Oxford Dictionary).
It
follows that a Court in deciding whether a judgment was 'erroneously
granted' is, like a Court of appeal, confined to the record
of
proceedings.In contradistinction to relief in terms of Rule 31
(2)(b)
or under the common
law, the applicant need not show 'good cause' in the sense of an
explanation for his default and a
bona
fide
defence
(Hardroad (Pty) Ltd v
Oribi Motors (Pty) Ltd (supra
at
578F-G);
De Wet
(2)
at 777F-G;
Tshaba/ala
and Another v Peer
1979
(4) SA 27
(T) at 30C-D). Once the applicant can point to an error in
the proceedings, he is without further ado entitled to rescission.It
is only when he cannot rely on an 'error' that he has to fall back on
Rule 31
(2)(b)
(where
he was in default of delivery of a notice of intention to defend or
of a plea) or on the common law (in all other cases).In
both latter
instances he must show 'good cause'. This pattern emerges from the
decided cases."
[27]
Rule 42 is thus aimed at correcting a mistake. See in this
regard:
Colyn
v Tiger Food Industries Ltd tla Meadow Feed Mills (Cape):
[6]
"[5]
It is against this common-law background, which imparts finality to
judgments in the interests of certainty, that Rule
42 was introduced.
Rule caters for mistake. Rescission or variation does not follow
automatically upon proof of a mistake. The
Rule gives the courts a
discretion to order it, which must be exercised judicially (Theron NO
v United Democratic Front (Western
Cape Region) and Others) and
Tshivhase Royal Council and Another v Tshivhase and Another;
Tshivhase and Another v Tshivhase and
Another.
[6]
Not every mistake or irregularity may be corrected in terms of the
Rule. It is, for the most part at any rate, a restatement
of the
common law. It does not purport to amend or extend the common law.
That is why the common law is the proper context for
its
interpretation. Because it is a Rule of Court its ambit is entirely
procedural.
[7]
Rule 42 is confined by its wording and context to the rescission or
variation of an ambiguous order or an order containing a
patent error
or omission (Rule 42(1 )(b)); or an order resulting from a mistake
common to the parties (Rule 42(1 )(c)); or 'an
order erroneously
sought or erroneously granted in the absence of a party affected
thereby' (Rule 42(1 )(a)). In the present case
the application was,
as far the Rule is concerned, only based on Rule 42(1 )(a) and the
crisp question is whether the judgment
was erroneously granted."
[28]
Typically a judgment is erroneously granted "if there existed at
the time of its issue a fact of which the judge was unaware
which
could have precluded the grating of the judgment and would have
inducted the judge, if aware thereof not to grant the judgment."
(See in this regard:
Nyingwa
v Moo/man N0.
[7]
)
[29] I am not persuaded that there was
an irregularity in the proceedings nor that the Registrar lacked
competence to make the orders.
No persuasive facts (apart from
technical complaints regarding citation of parties and a groundless
submission regarding the validity
of the Instalment Sale Agreement)
were placed before the Registrar that would have precluded it, at the
time the order was made,
had it been aware of these facts, would have
precluded the granting of the order.
[30] Lastly, the defendant denies the
existence of the written agreement as pleaded by the plaintiff in the
Particulars of Claim
but nonetheless took possession of the vehicles
in circumstances where it is common cause that the plaintiff is the
owner of the
vehicles. Yet the defendant does not plead any other
contract that would entitle it to remain in possession of the
vehicles. Furthermore,
although the defendant does not deny that it
had received the vehicles from the plaintiff and that it took
possession of the four
vehicles, no defence is put up - apart from
boldly stating that it has a
bona tide
defence - against the
latest statement of accounts attached to the plaintiff's papers
setting out the arrears on the account in
respect of each of the
vehicles.
[31] In the event it is concluded that
the defendant has not made out a case for the order sought in the
Notice of Motion.
Order
[32] In the event the following order
is made in respect of case numbers: 59581/2015; 59582/2015;
59583/2015; 59565/2015:
The
application to rescind and set aside the default judgment granted in
favour of the plaintiff against the defendant by the Registrar
in the
absence of the defendant on 10 September 2015 is dismissed with costs
AC
BASSON
JUDGE
OF THE HIGH COURT
Appearances
:
For the applicant/defendant: BP Geach,
SC
Instructed by: Rina Rheeders Attorneys
For the respondent: Adv CJ Welgemoed
Instructed by: Strauss Daly Inc.
[1]
1993
(3) SA 397
(BG) at 402I – 403B.
[2]
2015
(2) SA 118 (SCA)
[3]
Act
25 of 2002
[4]
(2009)
30 ILJ 131 (LC)
[5]
1992
(2) SA 466E
at 471E-H
[6]
2003(6)
SA 1 (SCA) at paragraph [5].
[7]
1993
(2) SA 508
(TK) at 510D-G