About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2016
>>
[2016] ZAGPPHC 294
|
|
Mpumalanga Department of Public Works, Roads And Transport and Others v CF & PS Investments CC (A794/2014) [2016] ZAGPPHC 294 (31 March 2016)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
CASE
NO: A794/2014
DATE:
31 MARCH 2016
In
the matter between:
MPUMALANGA
DEPARTMENT OF PUBLIC WORKS,
....................................
1
ST
APPELLANT
ROADS
AND TRANSPORT
THE
MEC OF MPUMALANGA PUBLIC
WORKS,
..............................................
2
nd
APPELLANT
ROADS
AND TRANSPORT
THE
PREMIER, MPUMALANGA PROVINCIAL GOVERNMENT
..................
3
rd
APPELLANT
And
CF
& PS INVESTMENTS
CC
......................................................................................
RESPONDENT
JUDGMENT
KUBUSHI,
J
INTRODUCTION
[1]
On 17 November 2014
the appellants noted an appeal against the entire judgment granted by
the Magistrate V Joubert, dated 5 June
2014, which judgment dismissed
the appellants’ application for rescission of judgment. The
respondent opposed the appeal
and in addition, launched a declarator
application for an order directing that the appeal lodged by the
appellants has lapsed.
In response to the declarator application the
appellants launched an application for condonation for prosecuting
the appeal out
of time which was opposed by the respondent. However,
when the matter appeared before us, the dispute in relation to the
late prosecution
and/or the lapse of the appeal had been resolved
between the parties and as such we granted an order that the appeal
be proceeded
with.
PROCEEDINGS
AT THE TRIAL COURT
[2]
The respondent had on
1 November 2012 issued summons against the appellants in terms of a
contract of lease claiming, amongst others,
arrear rental in the
amount of R369 442, 50. The appellants entered appearance to defend
whereby the respondent applied for summary
judgment. The appellants
opposed the summary judgment application on the basis that the
respondent had failed to comply with or
to serve notice on the
appellants in terms of s 3 (1) (a) of the Institution of Legal
Proceedings Against Certain Organs of State
Act 40 of 2002 (“the
Act”).
[3]
Before the summary
judgment application could be heard, the respondent launched two
interlocutory applications, which were both
opposed by the
appellants, namely, an application to amend the respondent’s
particulars of claim to include an alternative
claim of damages, and
an application for condonation of the respondent’s failure to
give notice to the appellants in terms
of the Act.
[4]
Both applications
were enrolled for hearing on 10 April 2014. There was no appearance
for the appellants on that day and the respondent
obtained judgment
in default in respect of the two applications. The amendment was
subsequently effected and does not form part
of the appeal before us.
THE
APPLICATION FOR RESCISSION
[5]
Pursuant the default
judgment the appellants applied for a rescission of judgment in
respect of the condonation application. The
respondent filed a notice
of intention to oppose the rescission application but did not file an
answering affidavit. As a result
when the parties appeared before the
trial court only the appellants’ papers were before court. The
appellants’ counsel
took issue with the respondent’s
legal representative arguing the application without the respondent
filing opposing papers.
[6]
The application for
rescission was premised on three grounds, namely the appellants’
excuse for non-appearance, the defence
and prejudice. There was no
dispute in respect of the appellants’ excuse for
non-appearance. The trial court had only to
determine whether a bona
fide defence existed and prejudice. The issue of prejudice was not
taken on appeal and I shall therefore
not deal with it in this
judgment.
[7]
The appellants in
support of their submission that they had a bona fide defence
contended that the respondent in its application
for condonation in
terms of s 3 (4) (b) of the Act, failed to meet the criteria set out
in that section and in particular that
the respondent failed to
demonstrate good cause as required, in that the respondent was
forewarned as early as 13 February 2013
about its non-compliance with
s 3 (1) (a) of the Act and the need to apply for condonation. This
defence, the appellants contended,
prima facie, carried some prospect
of success.
[8]
In opposition to the
appellants’ alleged bona fide defence, the respondent submitted
that there was no reason for the trial
court to rescind the
condonation order due to the fact that the initial claim contained in
the respondent’s summons, that
is, a claim based on a lease
agreement was not covered by the Act and the respondent was
consequently not obligated to serve the
appellants with a s 3 (1) (a)
notice. It only became necessary for the respondent to serve the
notice after the amendment to its
particulars of claim, which
introduced an alternative claim for damages, was effected; hence, the
condonation application granted
on 10 April 2014, so it was argued.
In support of this submission the trial court was referred to a
judgment in Thabane Zulu and
Company v Minister of Water Affairs
2012
(4) SA 91
(KZD), in which it was held that the definition of a debt
in Act 40 of 2002 only refers to a debt related to the payment of
damages.
It was further argued that the trial court granted the
condonation because the respondent has satisfied all the requisites
of s
3 (4) (b) of the Act.
[9]
In reply to the
aforesaid submissions of the respondent, the appellants’
argument is that the respondent was obliged to comply
with the
requirements of s 3 (1) (a) of the Act because the Act applies to all
claims whether based in delict or contract.
JUDGMENT
OF THE TRIAL COURT
[10]
The trial court after
considering the parties’ arguments dismissed the application
for rescission of the condonation order
and, amongst others, stated
as follows in its judgement:
“
The
court accepts that the matter can be argued on the pleadings and the
affidavit of the applicant.
The
only issue in dispute is if the presence of a bona fide defence
exists or facts supporting the rescission of the judgment on
the
merits.
Prior
to the amendment the respondent’s claim was for enforcement of
the lease agreement.
Upon
the defendant’s plea, the oversight to include a damages claim
for loss of rental for the
month
of September 2012 was realized, and introduced.
Payment
of damages by an organ of state is regarded to be a debt in terms of
the Act and
notice
in terms of section 3 of Act 40 of 2002 becomes relevant.
The
three requirements for condonation are:
•
The debt has
not been extinguished
•
Good cause
exists for the failure by the creditor
•
The organ of
state was not unreasonably prejudiced by the failure
The
claim has not prescribed.
The
notice became evident after the plea of the defendant.”
The
appeal before us is noted in respect of this judgment.
THE APPEAL
[11]
Three grounds of
appeal are raised by the appellants, namely;
11.1
that the trial
magistrate erred in finding that there was no need for the
respondent’s attorneys to serve its opposing affidavit
and that
the respondent’s representative will argue from the bar.
11.2
that the trial
magistrate erred in not making judgment only to the papers submitted
and where the issues of the rescission of judgment
application would
have been laid out by the parties.
11.3
that the trial
magistrate misdirected itself by focusing on the merits of the
condonation application instead of dealing with the
issue whether
there was good reason for the default judgment obtained by the
respondent on the 10
th
April 2014 to be rescinded so as to allow the issue of condonation to
be argued by the parties.
The
grounds of appeal are set out here as they appear in the notice of
appeal.
THE
ISSUES
[12]
The issues before us
are the same issues that were argued at the hearing of the rescission
application. The arguments are also the
same.
[13]
The main issue before
us is whether the defence raised by the appellants in the rescission
judgment was a bona fide defence. There
are two other issues
underlying the main issue, namely, whether the trial court erred in
allowing the respondent’s legal
representative to argue the
rescission application whilst no opposing papers were filed by the
respondent and whether the trial
court erred in focusing on the
merits of the condonation application. It is my view that the
determination of the main issue, that
is, whether the appellants’
defence was a bona fide defence may dispose of the appeal before us.
I therefore will deal with
that issue first.
Whether
or not the defence of the appellants In the rescission application
was a
bona
fide defence
[14]
The rescission and
variation of judgments in the magistrate court are regulated in terms
of rule 49 of the Magistrate Court Rules.
The rule provides 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 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. ..
[15]
Two
principal requirements for the favourable exercise of the courts
discretion in determining good cause has been held to be: an
explanation of the delay and a bona fide defence. As regards the
requirement of a bona fide defence, it has been held that the
requirement of good cause cannot be held to be satisfied unless there
is evidence not only of the existence of a substantial defence
but,
in addition, a bona fide presently held desire on the part of the
applicant for relief actually to raise the defence concerned
in the
event of the judgment being rescinded.
[1]
[16]
It
is trite that in an application for the rescission of judgment the
applicant must satisfy the court that he or she has a bona
fide
defence in order to show good cause. It has been held that the
minimum that the applicant must show is that his or her defence
is
not patently unfounded and that it is based upon facts which if
proved, would constitute a defence.
[2]
[17]
The defence raised by
the appellants is, in my view, not bona fide in that it is patently
unfounded and is based upon facts which
cannot be proved to
constitute a defence.
[18]
The starting point
should be to consider the grounds upon which the respondent satisfied
the trial court that it is entitled to
a condonation in terms of s 3
(4) (a) of the Act.
[19]
The main ground
raised by the respondent in the condonation application is that the
Act does not apply in contractual claims but
only in claims for
damages. The submission by the respondent in this regard is that at
the time of the issue of the summons the
respondent was not obliged
to serve a notice on the appellants in terms of s 3 (1) (a) of the
Act because the claim was contractual.
According to the respondent,
the section became applicable only after the amendment to the
respondent’s particulars of claim,
which introduced an
alternative damages claim to the contractual claim, was effected. As
a result, the respondent argued, the question
of non-compliance did
not, in the circumstances of this case, arise.
[20]
The appellants on the
other hand insisted at the hearing of the rescission applicant and
still persists before us that the respondent
was obliged to have
complied with the requirements of s 3 (1) (a) of the Act before it
issued summons. The argument of the appellants
is that the Act does
not cover only claims for damages but covers all claims whether in
delict or damages. Consequently, it was
argued, that the respondent
should have served the notice.
[21]
In terms of s 3 (1)
(a) of the Act no legal proceedings for the recovery of a debt may be
instituted against an organ of state unless
the creditor has given
the organ of state in question notice in writing for his or her
intention to institute the legal proceedings
in question. The notice
must in terms of s 3 (2) (a) of the Act be served within six months
from the date on which the debt became
due.
[22]
The meaning of ‘debt’
in respect of actions against organs of state was crisply discussed
in Vhelaphi Peter Muthevhuli:
De Rebus, October 2014:25 [2014] DE
REBUS 190. For a better understanding, I intend to quote the
discussion verbatim in this judgment.
“
In
terms of s 1 (1) of the Institution of Legal Proceedings Against
Certain Organs of State Act 40 of 2002 (the Act) a ‘debt’
means ‘any debt arising from any cause of action -
(a)
which arises from delictual, contractual or any liability,
including a cause of action which relates to or arises from any -
i.
act performed under or in terms of any law; or
ii.
omission to do anything which should have been done under
or in terms of any law; and
(b)
for which an organ of state is liable for payment of
damages, whether such debt became due before or after the fixed
date.’
Subsections
3 (1) and (2) require that a notice of intended legal proceedings
must be given to the concerned organ of state by the
creditor within
six months from the date on which the debt became due. This is a
peremptory step before legal proceedings can be
instituted.
Before
compliance with the requirement of s 3 (1) is needed, it must be
ascertained whether the claim at hand constitutes a debt
in terms of
s 1 (1). This presupposes that there are claims against the organ of
state which are not debts as envisaged in s 1
(1) of the Act.
In
Thabani Zulu & Co (Pty) Ltd v Minister of Water Affairs and
Another
2012 (4) SA 91
(KZD) at para 11, the court held that:
‘Paragraph (a) of the definition [of the Act] is widely worded
and
makes it clear that a debt is any liability whatsoever. It is,
however, followed by para (b) and the question which arises is
how
the two paragraphs relate to each other. They can be read either
disjunctively or conjunctively. The paragraphs are linked
by "and”
and not "or”. Ordinarily, paragraphs or phrases linked by
“and” are read conjunctively
and those by “or”
disjunctively. Accordingly, although the courts have read “and”
to mean “or”
and vice versa in appropriate circumstances,
there must be compelling reasons to change the words used by
legislature.’
The
court in para 12 held that: 'Using the ordinary meaning of the words
in the definition, therefore, the two paragraphs must be
read
conjunctively. When this is done, para (b) qualifies or limits the
generality of para (a) in two ways. First, it restricts
debts to
those which constitute a liability to pay damages and, secondly, it
restricts debts to those where an organ of state is
the debtor. On an
ordinary reading of the definition it boils down to this. A debt is
the liability of an organ of state to pay
damages, arising from any
cause of action.’
In
the Zulu matter, what was claimed against the organ of state was
arrear rental in terms of a lease agreement. The court held
that s 3
(1) of the Act was not applicable as arrear rental was non-damages
debt, but the claim for arrear rental was for specific
performance.
The
Supreme Court of Appeal quoted paras 11 and 12 in the Zulu matter
with approval in Vhembe District Municipality v Stewarts &
Lloyds
Trading (Booysens) (Pty) Ltd (SCA) (unreported case no 397/13,
26-6-2014) (Van Zyl AJA). This means that all the claims
arising out
of a contract with an organ of state, as long as they are for
specific performance and not damages, are not covered
by the word
‘debt’ under s 1 (1) of the Act. Consequently, this means
that the Act would not be applicable and creditors
need not comply
with its provisions.
I
submit that, as soon as a claim for specific performance or
non-damages is due, the creditor may immediately proceed with an
application to enforce payment or issue summons, without wasting time
and costs by complying with the Act, as such compliance would
be
legally unnecessary.
See
also
Nicor IT Consulting (Pty) Ltd
v
North West Housing Corporation
2010
(3) SA 90
(NWM) and
Director-General, Department of Public
Works v Kovacs Investment 289 (Pty) Ltd
2010
(6) SA 646
(GNP) for more”
[23]
Once the trial court
had accepted that the respondent’s defence in the condonation
application was bona fide it had to reject
the defence of the
appellants in the application for rescission of the condonation
order.
[24]
On the basis of the
above discussion, to which I am aligned, I have to conclude that the
trial court’s decision in dismissing
the application was
correct. The appellants’ defence did not carry any prospects of
success. This ground on its own is dispositive
of the appeal.
[25]
The appeal is
dismissed with costs.
E.M.
KUBUSHI
JUDGE
OF THE HIGH COURT
I
agree
R.
NONYANE ACTING JUDGE OF THE HIGH COURT
HEARD
ON THE : 13 OCTOBER 2015
DATE
OF JUDGMENT : 31 OCTOBER 2016
APPLICANT’S
COUNSEL : ADV. S SIGABA
APPLICANT’S
ATTORNEYS : MACBETH ATT INC
FIRST
RESPONDENTS’ COUNSEL : ADV. F. DU TOIT
FIRST
RESPONDENTS’ ATTORNEY : CHRISTO SMITH ATTORNEYS
[1]
See Mnandi Property Development CC v Beimore Development CC
1999 (4)
SA 462
(W) at 464 H-l.
[2]
See Ford v Groenewald
1997 (4) SA 224
(T) at 226A-C.