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[2017] ZAFSHC 147
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Matjhabeng Local Municipality v Phakama Security Services CC and Another; In re: Phakama Security Services CC v Matjhabeng Local Municipality (3116/2015) [2017] ZAFSHC 147 (13 July 2017)
FREE
STATE HIGH COURT, BLOEMFONTEIN
REPUBLIC
OF SOUTH AFRICA
Case
number : 3116/2015
In
the matter between:
MATJHABENG LOCAL
MUNICIPALITY
Applicant
and
PHAKAMA
SECURITY SERVICES CC
First Respondent
[Registration
number: 2005/183456/23]
THE
SHERIFF OF THE HIGH COURT, WELKOM
Second Respondent
In
re:
Case
number: 3116/2015
In the matter between:
PHAKAMA
SECURITY SERVICES CC
Applicant
and
MATJHABENG
LOCAL MUNICIPALITY
Respondent
CORAM:
HEFER,
AJ
HEARD
ON:
15 JUNE 2017
JUDGMENT
BY:
HEFER,
AJ
DELIVERED
ON:
13
JULY 2017
[1]
The First Respondent caused an application for what is known as a
structural interdict coupled with payment of certain amounts
to be
issued against the Applicant. The application did not come to
the notice of the Applicant as a result of which the
First Respondent
moved for and obtained a default judgment against the Applicant on an
unopposed basis.
[2]
The Applicant then caused an application for rescission of the order
to be issued. The application was opposed and enrolled
for hearing
during November 2015. After arguments were heard, the presiding judge
reserved judgment which was eventually delivered
during August 2016,
therefore nine months after the hearing. Applicant’s
application for rescission of judgment was dismissed
with costs.
[3]
During September 2016 the First Respondent obtained a warrant of
execution for the attachment of moveable assets of the Applicant
in
regards to the capital amount as well as interest
a
tempore morae
from 7 August 2015, being the date after default judgment had been
obtained against the Applicant, to date of final payment and
costs to
be taxed.
[4]
The capital amount was paid by means of payment in two instalments by
the Applicant.
[5]
In regards to the interest
a
tempore morae
,
the Applicant tendered payment which tender was not acceptable to the
First Respondent.
[6]
The Applicant disputes the underlying causa for the difference
between the amount of interest tendered by the Applicant and
claimed
by the First Respondent.
[7]
As point of departure the Applicant contends that the judgment debt
payable by order of the Court bears interest from date of
such order.
According to the Applicant, an application for rescission suspends
the operation of a judgment. The effect of the suspension
is,
according to the Applicant, temporally prevent from continuing or
being enforced or effect of the judgment and/or order. The
crux of
the Applicant’s calculation of interest is that the running of
interest was suspended until final decision of the
rescission
application. Thereafter it starts to run again from date of final
decision until date of payment. Barring the rescission
application
there would be no quibble: If repayment of the judgment debt was
delayed,
section 2(1)
of the
Prescribed Rate of Interest Act, 55 of
1975
, provides that the Applicant would have to pay interest on the
judgment debt from date of judgment until date of payment in full.
[8]
It is the Applicant’s main contention that whilst the force or
effect of the Court order was suspended and of no force
and effect,
it should not and did not attract interest.
[9]
According to the First Respondent, the Applicant’s contentions
contained in this application have its foundation in an
(in any event
incorrect) interpretation of certain repealed provisions of
Rule 49
which provided that the filing of an application for rescission of
default judgment suspended the operation of the order/judgment.
[10]
Prior to 17 April 2015, Rule 49(11)(a) of the Uniform Rules of Court
contained the following provisions:
“
Where
an appeal has been noted or an application for leave to appeal
against or to rescind, correct, to review or vary an order
of a
Superior Court has been made, the operation or execution of the order
in question shall be suspended pending the rescission
of such appeal
or application, unless the Court which gave such order, on the
application of any party, otherwise directs.”
[11]
Rule 49(11)(a) dated from 15 December 1967 up until 17 April 2015,
when it was repealed.
[12]
With reference to Rule 49(11)(a), Roux J held in
United
Reflective Converters (Pty) Ltd v Levine
1988(4) SA 460 WLD, that save where it deals with appeals, the rule
goes beyond laying down a rule for the conduct of proceedings
and
purports to create a substantive rule of law.
[13]
Mr.
Fischer SC
,
on behalf of the Applicant, referred me to
Peniel
Development v Peterson
2014 (2) SA 503
GJ
,
where Vally J however disagreed with the judgment in
United
Reflective Converters
and
held that the order suspending the operation of the judgment pending
the outcome of an application for leave to appeal or an
application
to have the judgment rescinded merely regulates the procedure as to
the operation of its original judgment in the light
of the fact that
its findings may be disturbed by the now pending application for
leave to appeal or application for rescission.
The effect thereof
was merely that for a certain time period, the operation of the
judgment would be held in abeyance.
[14]
I respectfully agree with the latter finding.
[15]
Both these matters referred to, were adjudicated whilst Rule
49(11)(a) was still in operation. In view of this rule however
being
repealed,
Mr.
Fischer
urged me to extend the common law rule, to the effect that an
application for leave to appeal which suspends the operation
of a
judgment, to an application for the rescission of judgment. In this
regard Vally J in
Peniel
Development
said the following at
507
C – E
:
“
There
is no reason why the Court in
United
Reflective Converters
should
not have pronounced its extension in relation to rescission
applications. The common law itself is dynamic and fluent. It
has to
adapt to an ever changing modernity. The conditions and circumstances
under which the law operates today are very different
from those that
prevailed during the time of Voet, but its presence in our Courts
till then is prevailent. Hence, if the judgment
in
United
Reflective Converters
is correct, then there is a need to develop common law in this area.
This has already been done. In
Khoza
v Body Corporate Ella Court
this Court, facing the difficulty posed by the judgment in
United
Reflective Converters
,
decided to overcome it by extending the common law rule (of
suspending the operation of a judgment upon the noting of an
application
for leave to appeal) to the noting of an application for
rescission.”
[16]
Vally J further held that a proper application for the suspension of
an order pending the outcome of an application for rescission
of
judgment in view of the provisions of Rule 19(11)(a) was not
necessary for, if it is necessitated, it will result in a
proliferation
of applications to Court. This was done with reference
to the plain meaning of the rule.
[17]
Rule 49(11)(a) does not form part of the rules of procedure anymore.
This is in regards to both applications for leave to appeal
as well
as applications for rescission of judgments. Presently,
Section 18(1)
of the
Superior Courts Act, 10 of 2013
only provides for the
suspension of a Court order pending a decision in regards to an
application for leave to appeal or an appeal
itself. The
Superior
Courts Act nor the
Uniform Rules of Court contain any corresponding
provision in regards to applications for rescission of judgments.
As correctly
pointed out by Meyer J in
Tenants,
Willison Court v Lewray Investments
2016 (6) SA 466
GJ neither the
Khoza
nor
Peniel
matters refers to any authority in support of a substantive rule of
law that an application to vary or rescind an order or judgment
automatically suspends its operation. In the present matter I was
also not referred to such authority. Meyer J further said the
following at
471
E – F
:
“
There
is also nothing which indicates an intention on the part of the
legislator to broaden the automatic suspension of operation
and
execution of decisions beyond those included in
Section 18.
A Court
can always be approached under
Rule 45
A to suspend the operation and
execution of orders not included in
Section 18.
But the operation and
execution are not automatically suspended.”
[18]
Rule 45A
therefore provides for the suspension of the execution of
any orders which will include orders in regards to which application
for rescission are pending. I therefore find that there is no need
for extending the common law rule for rescission of judgment
and
orders.
[19]
Section 18(1)
of the
Superior Courts Act provides
for suspension of
the operation and execution of a decision which is the subject of an
application for leave to appeal or of an
appeal. It is only in
respect of execution in a narrow sense of the issue of a writ or
attachment of goods, that the judgment is
suspended by an appeal.
(See:
Erasmus
Superior Court Practice
Second edition, Vol. 1
).
In the same breath, Rule 45A of the Uniform Rules of Court referred
to, only provides for suspension of the execution of such
an Order of
Court. In
South
African Cape Corporation (Pty) Ltd v Engineering Management Services
1977 (3) SA 534
A Corbett JA at
544
H – 545 A
stated the following in regards to Section 18:
“
The
purpose of this rule as to suspension of a judgment on the noting of
an appeal is to prevent irreparable damage from being done
to the
intending appellant, either by levy under a writ of execution or by
execution of the judgment in any other matter appropriate
to the
nature of the judgment appealed from.”
[20]
Although the operation and execution of an Order of Court may be
suspended pending an application for leave to appeal, an appeal
or an
application for rescission of judgment, such suspension does not
affect the run of interest which a judgment debt may attract
in terms
of the
Prescribed Rate of Interest Act referred
to. There may be
exceptional circumstances where a Court, and in particular a Court of
the first instance may be asked to disregard
a certain period of time
for purposes of attraction of interest in regards to the judgment
amount. Such exceptional circumstances
will for instance be in
instances where one of the parties to the litigation through its own
actions causes unduly extensive delay
of the proceedings. In
such circumstances it might be just and equitable to grant such an
order. However where the delay
in delivering the judgment in the
application for rescission of judgment was not due to the actions of
either one of the parties
and in particular of the First Respondent,
there is no reason why the period between the hearing of the
application up until the
judgment in the application of rescission of
judgment should be disregarded for purposes of the attraction of
interest. The application
should therefore fail.
ORDER
[21]
The application is dismissed with costs.
_____________________________
J.J.F
HEFER, AJ
On
behalf of the Applicant :
Adv. P.U
Fischer SC
Instructed by Moroka
Attorneys
BLOEMFONTEIN
On
behalf of First Respondent:
Adv. M.C Louw
Instructed
by Hill, McHardy & Herbst Inc.
BLOEMFONTEIN