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[2016] ZAGPPHC 435
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Gani v Essa Steel Manufacturers cc (A922.2015) [2016] ZAGPPHC 435 (27 May 2016)
SAFLII Note:
Certain
personal/private details of parties or witnesses have been redacted
from this document in compliance with the law and
SAFLII
Policy
IN
THE HIGH COURT OF SOUTH AFRICA GAUTENG DIVISION, PRETORIA
CASE
NO: A922/15
Date of
hearing: 12 May 2016
Date of
Judgment: 27 May 2016
In the matter
between:
SOOMAIYA
GANI
Appellant
and
ESSA STEEL MANUFACTURERS
CC
Respondent
MOTHLE J
JUDGEMENT
1.Central, Pretoria. The
judgment, which was delivered on 21 October 2015, dismisses
Appellant's application for rescission of a
default judgment that was
granted against her on 23
January 2015 as well as a
condonation application for the late
launching
of the rescission
application.
2. E.. Steel Manufacturers CC
(" the
Respondenf'),
which
obtained a default judgment against the Appellant, opposes
this application.
BAC
KG
ROUN
D
3.
On
27 May 2014, the Respondent issued summons as Plaintiff in the
Magistrate's Court Pretoria, wherein it claimed an amount of
R498,005.50 plus interest at the rate of 15.5% per annum
as well as costs of suit
against the Appellant who was cited as
the Second Defendant. The
First Defendant cited in
those
summons is Build Kwik Wholesalers (Pty) Ltd
("First
Defendant'').
4.
The cause of action in the summons is based on alleged
goods sold and delivered by the Respondent to the First Defendant,
with the
appellant signing as surety and co-principal debtor
in
solidum
with the First Defendant.
5.
According to the two returns of service filed by the
Sheriff, the combined summons were served on the First Defendant on 4
June
2014 at 14HOO, by affixing at the principal door of the address
[…] Church Street Pretoria West. The return states that
"After
a
diligent search and enquiry at the given address no other
manner of service was possible."
On the same day, at the
same address, at 14H01, the second return of service indicates
that a copy of the combined
summons was served on the Appellant personally. The two returns of
service became an issue before the
Magistrate and also on appeal in
this Court.
will revert to this aspect
later in this judgment.
6.
On 23 January 2015, the Respondent obtained judgment in
default against the Appellant (Second Defendant) on the basis
that
the Appellant is alleged to have bound herself as surety and
co-principal debtor with the First Defendant.This default judgment
was granted almost seven months after the summons were issued.
7.
On 25 February 2015, the Respondent issued a letter of
demand to the First Defendant. On the same date, the bank informed
the Appellant
that there is a judgment that has been granted against
the company and her. The events that unfolded from this point are
central
to the dispute that became a subject of debate in the
subsequent applications for condonation and rescission of that
default judgment,
before the Magistrate. I will deal with these
details in this judgment.
8.
At this stage, it is apposite to record that on 3 June
2015, Appellant launched an application for rescission of the default
judgment
together with an application for condonation for the late
filing of the application for rescission. The Respondent filed a
notice
to oppose these applications.
9.
The
applications were heard by the Magistrate in the opposed motion Court
on 21 October 2015. In his judgment dated 28 October 2015,
the
Magistrate concluded that Appellant had failed to convince the Court
that the application for condonation should be successful.
Appellant
then launched an appeal against the dismissal of its application
which is now before this Court.
ISSUES
IN THIS
APPEAL
10.
It is clear from the reading of the reasons for the
decision provided by the Magistrate that he concentrated on the
application
for condonation and decided the fate of the whole
application on that basis. In paragraph 6.10 of his reasons, the
Magistrate states
as follows:
"
6. 10 This Honourable Court being vested with
a
wide discretion
to
exercise
when
considering
condonation applications, the court took
into consideration
the merits of the case as
a
whole, referred to the
submissions made by
the Respondent's
attorneys of record, first
and foremost the
fact that the Second Applicant is not truthful with regards to the
date upon
which
she obtained knowledge of the judgement and secondly the fact that
the Second Applicant denies having received service of
the
processes in these
proceedings. Although the latter becomes more relevant when dealing
with
the
aspects of wilful default, its relevance will
be shown
hereunder."
11.
Again, in paragraph 6.14 of the reasons for the
decision the Magistrate opined thus:" ... .
The Court, while
considering the application for condonation, it assessed the merits
of the application
in its entirety, purely to
accordingly establish the conduct and motive of the Second Applicant
..."
12.
The reasons for the decision point out that in dealing
with the condonation application, the Magistrate ignored what was
common
cause between the two parties, namely, that the Appellant came
to know about the judgment on 21 of April 2015.
13.
In
regard to the service of the summons, notwithstanding an affidavit by
the Sheriff that service was effected personally on the
Appellant,
there are two problems which arise in this regard. The first is that
the return of service in regard to Appellant and
the company are one
minute apart. However, the one for the Appellant indicates there was
personal service while the other return
of service for the First
Defendant was by affixing the documents on the entrance of the
premises as per the same address of
domiculum citandi et
executandi.
This does not make sense as Appellant is a director
of the First Defendant and if she was present and received service
personally,
nothing prevented her from doing so on behalf of the
First Defendant.This relationship is clear from the combined summons
[1]
. The First and second Defendants mentioned in the combined summons
shared the same address. The affidavit of the Sheriff
does
not clear this anomaly up.
14.
Secondly, the evidence that Appellant was informed by
the bank that there is a judgment against her and the company, does
not clear
up the question as to when Appellant first came to know
about the judgment. The information from the bank as conveyed to the
Appellant
shortly after 25 February 2015, was such that it would not
on its own, constitute knowledge of the judgment within the meaning
of the rule. One cannot rely on such information to launch a
rescission of judgment. At best, the information only serves to
sensitise
the party involved to investigate further or verify. The
Magistrate erred in paying attention to any suggestion that verbal
information
from the bank constitutes sufficient notice as envisaged
in the rule.
15.
Appellant further raises two reasons why there was
delay in launching the application for rescission of the judgment.
First reason
is that her legal attorneys struggled to obtain
documents
from the Court relating to the
default judgment. This happens
to be a common occurrence
even in the High Court and
is unfortunately part of
the administration. There was no evidence to
refute this
allegation
and the
Magistrate
strangely
did not give reasons why
he rejected
it.
16.
The second reason is that Appellant's attorney was on
leave for approximately 11 days. I would agree with the Magistrate
that this
appears to be a flimsy reason. Any attorney, who
understands that he/she is an officer of the Court, cannot afford to
be tardy
in dealing with time frames set by the rules in civil
proceedings. A diligent attorney would have realised that once
instructions
from a client indicate that there is a possible or
probable default judgment, the proverbial clock is ticking and the
application
has to be scrupulously dealt with.
17.
Rule 49 of the Magistrate's Court Rules provides for
rescission and variation of judgments. The genesis of the rule arise
from the
provisions of
Section 36(1)
of the
Magistrate's Court's Act,
32 of 1944
, which empowers the Court to rescind or vary any judgment
granted by it, considered in the absence of the person against whom
that
judgment was granted.
Rule 49
takes off from this provision by
stating in detail the procedures relating to the variation or
rescission of judgment in the Magistrate'
s Court.
Rule 49(1)
provides thus:
"49.
Rescission
and Variation of
Judgments
(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 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 a 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 sub-rule
(5).
It will
be presumed that the Applicant had knowledge of the default judgment
10 days after the date on which it was granted, unless
the
Applicant proves
otherwise."
18.
Sub-rule (5) dispenses with the 20 days period where a
Plaintiff in whose favour the judgment was granted, has agreed in
writing
that the judgment be rescinded or varied. In the matter of
Phillips t/a Southern Cross
Optical v S A Vision Care (Pty) Ltd
[2]
,
the Court emphasised
that:
"
Rule 49(1)
provides that
a
Court
may rescind or vary
a
default judgment on
such terms as it may deem fit
(a)
upon good cause shown;
or
(b)
if it is satisfied that there is good reason to do so."
The Court
found that the introduction of the concept
"good reason"
in
Rule 49(1
), intended to expand the discretion of the
Magistrate's Court in rescission applications by introduction of
less stringent criteria.
The need to prove absence of wilful default
is no longer a necessary requirement for rescission.
20.
Considering
that after she became aware of the default judgment on 21 April
2015, the application was launched on 3 June 2015,
Appellant was a
few days late with her application sine the 10-day period had
expired sometime in May 2015.
21.
Apart from stating that he has considered the merits of
the main action between the parties, the Magistrate does not provide
detail
as to which aspect of the merits did he consider and what
conclusions he reached.
22.
It
is indeed trite that a Court considering an application for
rescission should also guard against any prejudice which might affect
the interests of the parties. See in this regard
Grant v Plumbers
(Pty) Ltd
[3]
as well as HOS Construction (Pty) Ltd v
Wait
[4]
•
A measure of flexibility is
necessary for the Court to exercise, especially in cases where a
bona
fide
defence
may compensate for a poor
explanation.
23.
Appellant, with reference to a number of invoices
relating to the alleged goods sold and delivered to the First
Defendant, demonstrates
that she has a
bona fide
defence in
that the invoices relate to another company. Appellant demonstrates
with reference to specific invoices that purchases
and deliveries
were made by a company called
Build kwik
Trading
(Pty)
Lt
d
,
which was liquidated in May 2014. According to
Appellant, the Respondent claims payment from First Defendant which
is
Build Kwik
Wholesalers
(Pty)
Ltd
for these purchases. She attaches
a
number of purchase orders made by Build kwik Trading. These claims
are refuted by the Respondent. The Respondent admits that indeed
there appears to have been two
separate companies bearing
similar names but sharing the same
address. The one company
had a director who was a previous director
of the First
Defendant.
24.
On the face of it, it seems to me that this discrepancy
needs to be adjudicated by the Court and cleared. Failure to do so
may result
in an injustice where the one party is settled with the
debts of another entity that has been liquidated.
25.
For these reasons, I am of the view that the Magistrate
erred in refusing to grant condonation for the late filing of the
application
for rescission of judgment as well as the application for
rescission itself.
26.
It should have been apparent to the Magistrate when
considering the merits of the application that there is a
bona
fide
defence on the part of the Appellant in that some of
the purchases which constitute the amount claimed relate to a
different entity.
To refuse a rescission of this judgment would
result in prejudice and injustice to the Appellant. The Appellant
will be compelled to pay
for goods that she or the First Defendant never purchased or even
received delivery thereof.
27.
Considering the conspectus of the evidence in this
case, I am of the view that the applications for condonation and
rescission of
judgment should be granted and the Appellant should be
allowed to file her plea. The matter should follow the normal course
of
civil proceedings in terms of the Rules.
28.
In
regard to the costs, the Respondent argued that it should be awarded
the costs as a rescission is an indulgence granted to the
Applicant.
I do not agree. By electing to oppose this appeal, the Respondent
incurred the risk of being mulcted with costs.
29.
In the premises I make the following order:
1.
The appeal succeeds.
2.
Condonation
for the late filing of the application for the rescission is hereby
granted.
3.
The decision by the Magistrate dismissing the application for
both condonation and rescission of judgment dated 28 October 2015 is
hereby set aside;
4.
The default judgment
granted against Appellant on 23 January 2015 is hereby rescinded;
5.
The Appellant is granted leave to file her plea within 10 days
from the date of this order;
6.
The costs of the
applications for condonation and rescission in the Magistrate's Court
will be costs in the cause; and
7.
Appellant is granted the
costs of appeal in this Court.
S P MOTHLE
Judge of the High Court
Gauteng
Division
Pretoria
I
concur:
H
K KOOVERTJIE
Acting Judge of the High
Court Gauteng Division
Pretoria
For
the A
ppellant:Adv.
R J
Groenewald
Instructed
b
y:Lacante
Henn
Inc
Attorneys Appellant: Ashley
Gardens, Pretoria.
For
the
Respondent:
Advocate A S
L
Van
Wyk
Instructed
b
y:Pratt Luyt
and De Lange
Attorneys c/o
Savage Jooste
&
Adams Inc Neuw
Muckelneuk,
Pretoria
[1]
Paragraphs 2 and 3 of the
particulars of claim, as
well as on page
1
of the summons.
The
Appellant is described as an employee of the First Defendant, which
description the
Sheriff
should have
noted.
[2]
2000 (2) SA1007 CPD, page
1012.
[3]
1949 (2) SA 470
(0).
[4]
1979
(2) SA 298
(E).