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[2016] ZAGPPHC 18
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Airports Company South Africa SOC Limited v Tourvest Holdings (Pty) Ltd and Another (72674/14) [2016] ZAGPPHC 18 (25 January 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
CASE
NO: 72674/14
25/1/2016
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
REVISED
In
the matter between:
THE
AIRPORTS COMPANY SOUTH AFRICA
SOC
LIMITED Applicant
and
TOURVEST
HOLDINGS (PTY)
LTD First
Respondent
TOURVEST
FINANCIAL SERVICES (PTY) LTD Second
Respondent
JUDGMENT
KGANYAGO,
AJ:
[1]
The applicant has launched an application for rescission of an order
of this court granted on 4th December 2014. The applicant
is also
seeking a costs order against the respondents, in the event of them
opposing their application. The respondents are opposing
the
applicant's application. Mr Eric de Jager has deposed the opposing
affidavit on behalf of both first and second respondents.
[2]
The default order obtained on 4th December 2014 read as follows:-
"
HAVING HEARD COUNSEL FOR THE
APPLICANT and in the absence of opposition or appearance by the
Respondent, THE COURT MAKES THE FOLLOWING
ORDERS:
1.
In respect of bid number ORT01112013 (" the 2013RFB")
the following decisions taken by the respondent are reviewed and
set
aside:
1.1.
the decision taken by the
respondent to disqualify the first applicant in regard to its bid
submitted in respect of the open retail
concept for shop OFE09 in
terms of the 2013 RFB,
1.2.
the decision not to make an
award with respect to opportunity DFE09 in terms of the 2013 RFB;
1.3.
the decision to issue
a
new bid in respect of OFE09 in terms of bid number ORT 32412014
("the 2014 RFB');
2.
The respondent is ordered and directed to award opportunity DFE09
in terms of the 2013 RFB to the first applicant on the terms of
the
first applicant's bid.
3.
In respect of the bid number ORT01112013 (" the 2013 RFB"
) the following decisions of the respondent are reviewed and
set
aside:
3.1.
the decision to disqualify the
second applicant in regard to its bids submitted in respect of the
foreign exchange outelets F-01,
F-02, F-03 and F-04 in terms of the
2013 RFB ("the forex opportunities').
3.2.
the decision not to make an
award with respect to the forex opportunites in terms of the 2013
RFB;
3.3.
the decision to issue a new
bid in respect of the forex opportunities in terms of bid ORT334/2014
(" the 2014 forex RFB'? and
4.
The respondent is directed and ordered to award opportunity
F0-02 in the 2013 RFB to the second applicant on the
terms of
the second applicant's bid.
5.
The respondent is ordered to pay the costs of the application."
[3]
The respondents, have given consent to the rescission of paragraphs
2,3 and 4 of the order granted in favour of the second respondent
by
Mr Justice De Vos on the 04th December 2014. Therefore, paragraphs
2,3 and 4 of the order of the 04th December 2014 are hereby
rescinded
by consent of the respondents.
[4]
What I am now called upon is to determine whether paragraph 1 and its
sub paragraphs 1.1 to 1.3 and paragraph 5 of the
order of the
04th December 2014 should be rescinded.
[5]
The applicant was served with the respondents' review application on
the 2nd October 2014. The applicant took the application
to their
present attorneys of record, and instructed them to oppose the review
application. The applicant's attorneys of record
did not enter the
notice to oppose, and that resulted in the respondents obtaining a
default order.
[6]
According to deponent on behalf of the applicant, Mr Leslie Mkhabela,
the applicant's attorney instructed a junior colleague,
Mr Ehimeren
Enabor, to enter a notice of intention to oppose the main application
and to attend to the filing of the record in
terms of rule 53 only
after they have held a consultation with the applicant. However, it
seems Mr Enabor had misunderstood the
instruction to mean that he
should await for the consultation with the applicant before a notice
of intention to oppose the main
application is filed.
[7]
The consultation between the applicant and its attorneys was held on
the 13th November 2014. All along Mr Mkhabela was under
the
impression that the notice of intention to oppose has been filed as
per his instructions. It was only on the 5th December 2014
when the
applicant was informed by the respondents' attorneys that a default
judgment had been granted against them. The applicant
was under the
impression that the application was opposed. They had every intention
of opposing the respondents' application, and
they were therefore not
in willful default. The respondents have also conceded that the
applicant was not in willful default.
[8]
The applicant argues that the respondents in their main review
application.has failed to join other interested parties, and
that the
default judgment should be rescinded on that ground alone. Secondly,
the applicant has submitted that the respondents
have failed to show
exceptional circumstances in their main review application why the
reviewing court should award them the tender.
Thirdly, the applicant
argues that the default judgment application was not served on ACSA
in terms of Rule 6(5) of the Uniform
Rules of Court, so that it could
oppose it, despite the fact that the respondents knew where to serve
the papers on the applicant.
The applicant contends that the failure
by the respondent to serve it with the default application, has
denied them an opportunity
to oppose it.
[9]
The applicant submits that they have given a reasonable explanation
for its failure to enter a notice of intention to oppose.
The
applicant further submits that it has good prospects of success in
the main application and a bona fide defence.
[10]
The first respondent submits that even though they have consented to
rescission on paragraphs 2,3 and 4 of the order, they
did not concede
that the applicant has made out a good case for rescission in
paragraph 1 and 5 of the order. However, the first
respondent, do
concede that the applicant did not willfully elect not to oppose the
review application, but contends that the applicant
and its attorneys
were grossly negligent in the handling of the intended opposition to
their review application. According to the
first respondents, an
attorney's negligence does not always constitute a reasonable
explanation.
[11]
The respondents submits that the applicant has failed to establish
good prospects in its defence to the main review application.
The first respondent further submit that the applicant
has failed to establish that it has a bona fide defence to the
relief
claimed in prayer 1 of the notice of motion in the main review
application, and that the application for rescission should
accordingly be dismissed with costs, inclusive of senior
counsel.
[12]
The applicant has brought their application for rescission under both
common law and rule 42(1). Under common law, in order
to succeed, an
applicant for rescission of a judgment taken against him/her must
show good cause. Rule 42(1) provides
that the High Court
may, in addition to any other powers it may have,
mero motu
or
upon the application of any party affected, rescind or vary an order
or judgment erroneously sought or erroneously granted
in the
absence of any affected thereby. (See Colyn v Tiger Food Industries
LTD t/a Meadow Feed Mills (Cape)
2003 (6) SA 1
(SCA)).
[13]
In Chetty v Law Society, Transvaal
1985 (2) SA 756
(AO) at 765 B-D
the court stated:
"But it
is
clear that
in principle and in the long-standing practice of our Courts two
essential elements of sufficient cause for rescission
of a judgment
by default are:
(i)
that the party seeking relief must present a reasonable and
acceptable explanation for his default, and
(ii)
that on the merits such party
has
a bona fide defence
which, prima facie, carries
some
prospect of
success.
(De
wet
case
supra at 1042; PE Bosman Transport Works Committee
and Others v Piet Bosman Transport (Pty) Ltd
1980 (4) SA 794
(A);Smit
No v Brummer
1954 (3) SA 352
(0) AT 357-8.)
It is
not sufficient if only
one of these two requirements
is
met; for obvious
reasons a party showing no prospect of success on the merits will
fail in an application for rescission
of a default judgment against
him, no matter how reasonable and convincing the explanation of his
default."
[14]
It is not in dispute that the applicant was properly served with the
review application. On been served with the review application
the
applicant took that application to its attorneys of record and
instructed them to oppose the respondents review application.
Due to
a misunderstanding that occurred at the attorney's office, the notice
of intention to oppose was not entered. It is clear
that the
applicant's intention was to oppose the respondents' application.
However, the respondents contends that the applicant
and its
attorneys were grossly negligent in the handling of the intended
opposition to the review application.
[15]
The applicant in instructing their attorneys of record expected them
to execute their mandate with the necessary diligence,
skill and care
required of a reasonable attorney under the circumstances. Once he
had given his attorney proper instructions, it
will be for the
attorney to take the matter forward. In this case the instruction to
their attorneys was clear, and that was to
oppose the respondents'
review application. The instruction was even given on time. I
therefore, do not find any ground to find
that the applicant was
negligent in handling of the intended opposition to the review
application. It did all what was within its
powers to hand the matter
to the people whom it regarded to be skilled to handle the matter
further, and in this case their attorneys.
[16]
I now turn to the issue whether the applicant's attorneys were
grossly negligent in handling the applicant's matter. It is
not in
dispute that the applicant's attorneys had a legal duty to execute
the applicant's mandate with the necessary diligence,
skill and care
required of a reasonable attorney under the circumstances.
[17]
Now it must be determined whether, given the circumstances of this
case, can it be said that the applicant's attorneys conduct
in not
entering a notice of appearance to oppose, which resulted in the
default judgment been granted, amounted to a failure to
measure up to
conduct expected of a reasonable attorney acting with due care, skill
and diligence. Or put it otherwise, whether
by failing to enter the
notice of appearance to oppose, the applicant's attorneys have failed
to act with the necessary skill and
diligence expected of an ordinary
reasonable attorney. The next question will be how does one determine
how a reasonable attorney
would have acted in similar circumstances.
[18]
According to the applicant's attorneys, consultation with the
applicant was held on the 13th November 2014.Still they did not
realize that the notice of intention to oppose the respondent review
application has not yet been served and filed. The applicant
became
aware of the default judgment on the 5th December 2014 when they were
notified by the respondents' attorneys. At that stage
still the
notice of intention to oppose has not yet been served and filed. If
indeed the intention of the applicant's attorney
was to file the
notice of intention to oppose after consultation with the applicant,
what prevented them from serving and filing
the notice to oppose
after the 13th November 2014. It is unfortunate that there is
insufficient evidence regarding what happened
after consultation with
the applicant on the 13th November 2014, except to say that Mr
Mkhabela all along assumed that the notice
of intention to oppose had
been filed in accordance with his instructions to the junior
attorney.
[19]
In my view on the 13th November 2014,a reasonable attorney would have
updated his/her client as to when the notice to oppose
was filed and
also as to when was the last day to file their answering affidavit.
It seems that did not happen. Had Mr Mkhablela
updated the applicant
about the status of their case, he would have realized that the
notice of intention to oppose had not yet
been served and filed.
[20]
Under the circumstances, I am satisfied that the applicant's
attorneys has failed to act with the necessary care and skill
expected of an ordinary reasonable attorney under the circumstances.
The applicant's attorney was therefore negligent in handling
the
applicant's matter.
[21]
Now it must be determined whether the applicant is bound by the
negligence of their attorney. To put it otherwise, is negligence
by
an attorney an acceptable explanation to rescind the default
judgment.
[22]
In Webster and Another v Santam Insurance
1977 (2) SA 874
(A) at 883
G-884A the court stated:
"
A lay client, like each of
the appellants, is ordinarily entitled to regard an attorney duly
admitted to the practice of law as
a
skilled professional
practitioner. Ordinarily he places considerable reliance upon the
competence, skill and knowledge of an attorney
and he trusts that he
will fulfil his professional responsibility. It is, of course, not
unknown for an attorney or his firm to
be negligent in carrying out
professional duties, but that is not usual and
a
fortiori to
the lay client it would be
a
most unsual and unexpected
occurrence. Consequently, in considering whether the neglect of an
attorney constitute
a
special circumstances within the meaning
of that phrase in sec. 24 (2)(a) of the Act, the correct approach
should be to regard it
as
a
relevant factor and to recognize
that such neglect by an attorney may frequently be
a
special
circumstance on its own vis-a-vis his client. To hold, without
qualification, as was done in Snyman's case, supra at p.
194 A-B,
that
a
client is bound by the negligence of his legal advisor
is, in my respectful view, wrong."
[23]
While courts are slow to penalize a litigant for his attorney's inept
conduct of litigation, there comes a point where there
is no
alternative but to make the client bear the consequences of the
negligence of his attorneys (See Salojee and Annother NNO
v Minister
of Community Development
1965 92) SA 135
(A) and Colyn Tiger Foods
Industries Ltd t/a Meadow Feed Mills (Cape)
2003 (6) SA 1
(SCA).
[24]
From the beginning the applicant's instructions to their attorneys,
was clear, and was to oppose the respondents' review application.
Even after they have given instruction to their attorneys to oppose
the matter, when called for further consultation, they did
attend
those consultations. In their view, they were relying upon the
competence, skill and knowledge of their attorney. They have
trusted
that their attorney will fulfil his
professional responsibility. In my view
the
negligence of their attorney cannot be imputed to them. The applicant
could not have foreseen that their attorney would
have acted they way
they did.
[25]
It is therefore, my view, that even though the applicant's attorney
have acted negligently, the applicant has given a reasonable
explanation for its failure to enter a notice of intention to oppose
the main application.
[26]
I now turn to the applicant's prospects of success, entailing among
others whether the applicant has a bona fide defence, which
prima
facie carries some prospects of success. It is not in dispute that
the respondent in the main application did not join all
the affected
parties. The respondents were not the only bidder in the tender that
they were disqualified. Other bidders who were
part of the tender or
the successful bidders should have been joined to the proceedings.
They are the interested parties as the
outcome of the main
application will also affect them. Their exclusion in my view is
fatal to the respondents' main application.
[27]
In Amalgamated Engineering Union v Minister of Labour 1949(3) SA 637
(A) at 657 the Court stated:
"
The question of joinder
should surely not depend on the nature of the subject matter of
the suit, as some of the head-notes
I have referred to would seem to
imply, but whether the suit relates to a will, an aqueduct,
a
partnership or anything else on the manner in which, and the
extent to which, the court's order may affect the interests of third
parties."
[28]
The successful bidder or other bidders who were not disqualified when
the respondents were disqualified, will definitely be
affected by the
court order and their interests are also to be affected. They must be
given an opportunity to decide whether they
wish to oppose or support
the respondent's main application or not. That can only be done if
they are a party to the proceedings
and the application is brought to
their attention.
[29]
The first respondent is challenging the manner in which they were
disqualified from the bidding. They are of the view that
the decision
to disqualify them was irrational.
[30]
According to the applicant, at the briefing of the 06 December 2013,
they clarified the criteria already contained in the RFB,
and that
the clarification did not introduce a new criterion. In my view, the
applicant has raised a triable issue, and has therefore
shown good
cause for the relief it seeks.
[31]
I now turn to the issue of costs. The award of costs is in the
discretion of the court, which discretion should be exercised
judiciously, having regard to what is fair to both sides.
[32]
In Giuliani v Diesel Pump Injector Services (Pty) Ltd
1966 (3) SA 451
(R) at 453 B-E the Court said the following:
"The language used by Lord
Justice Bowen in the case of Forster v Farquhar
(1893) 1
Q.
B.
0.
564 at p.
568,
appears to me to reflect the law with regard
to costs which is appropriate to this case:
" The measure of what is fair as
to costs is not to be found in a mere consideration of his conduct
towards the opposite side.
It may have been reasonable from his point
of view to do so that which it would be unreasonable to make the
opposite litigant pay
for. Although he has won the action, he may
have succeeded only upon a portion of his claim under circumstances
which make it more
reasonable that he should bear the expense of
litigating the remainder than that it should fall on his opponent.
The point is not
merely whether the litigant has been oppressive in
the way he waged his suit or prosecuted his defence, but whether it
would be
just to make the other side pay. We can get no nearer to a
perfect test than the inquiry whether it would be more fair as
between
the parties that some exception should be made in the special
instance to the rule that the costs should follow upon success ....
'I am cannot entertain a doubt,' says Lord Halsbury, LC, 'that
everything which increases the litigation and the costs, and which
places on the defendant a burden which he ought not to bear in the
course of that litigation, is perfectly good cause from depriving
the
plaintiff of costs.' The language of Lord Watson is to the same
effect: ' I shall not attempt,' he says, a complete definition
of
what is meant by these words. They at all events embrace in my
opinion everything for which the party is responsible, connected
with
the institution or conduct of the suit and calculated to occasion
unnecessary litigation and expense.'
(see Scheepers and Nolte v Pate,
1909
T.S.
353
at p.359, and Kerwin v Jones,
1958 (1)
SA
400
(SR)"
[33]
Counsel for the respondents have submitted that an application for
rescission of judgment is regarded as an indulgence and,
as a general
rule, the applicant would be ordered to pay the costs of such an
application if the respondent's opposition thereto
was reasonable. It
was common cause from the onset that the applicant was not willful in
its failure to deliver notice of intention
to oppose. In my view,
there was very little basis for its opposition. Taking into
consideration the circumstances under which
the applicant's attorneys
have failed to serve and file the applicant's notice of appearance to
oppose, and also for the respondents
to oppose the applicant's
application whereas it was clear from the onset that the applicant
was not in willful default, I am of
the view that it will be fair and
just if each party pays its own costs.
[34]
In the result I make the following order:
34.1. The default judgment of this
Court granted against the applicant under case no 72674/14 on the 4th
December 2014 is hereby
rescinded.
34.2. Each party to pay its own costs.
____________________________
MF
KGANYAGO
ACTING
JUDGE OF THE HIGH COURT