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[2016] ZAGPPHC 661
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Standard Bank of South Africa v Mahlangu (19879/2014) [2016] ZAGPPHC 661 (29 July 2016)
HIGH
COURT OF SOUTH AFRICA
(GAUTENG
DIVISION,
PRETORIA)
………………………………………………
Case
no. 19879/2014
(1)
REPORTABLE: YES/
NO
(2) OF INTEREST
TO OTHER JUDGES: YES/
NO
(3) REVISED:
YES
DATE: 29/7/16
SIGNATURE
In
the matter between:
THE
STANDARD BANK OF SOUTH AFRICA
……………………………
Applicant
and
B.J.
MAHLANGU
…………………………………………………………………..
Respondent
JUDGMENT
RABIE
J
Background:
1.
The applicant instituted action against the respondent claiming the
return of a certain motor vehicle
purchased from the applicant in
terms of a written instalment sale agreement together with
damages, interest and costs. The
respondent failed to give notice of
his intention to defend the action and the applicant obtained default
judgement against him
on 24 April 2014.
2.
The respondent served an application for the rescission of the
aforesaid default judgement
on the applicant on 6 June 2014.
According to the Notice of Motion the application was to be heard on
28 July 2014. The applicant,
as the respondent in that application,
did not give notice of its intention to defend the application for
rescission but entered
into negotiations with the respondent. On 28
July 2014 the respondent obtained a judgement by default rescinding
the judgement
for rescission obtained by the applicant on 24 April
2014.
3.
In the present application by the applicant, the applicant seeks to
set aside the aforesaid order obtained
by the respondent by default
on 28 July 2014. Should the present application succeed, the
respondent's application for rescission
served on 6 June 2014 would
become alive and would be heard on an opposed basis in due course.
The
Present Application:
4.
According to the applicant the respondent was not entitled to
move
for a default judgement on 28 July 2014 and, accordingly, that
the present application should succeed. In this regard the applicant
submitted, inter alia, that the applicant was entitled to obtain
judgement against the respondent on 24 April 2014 and, in respect
of
the respondent's application for rescission, that although the
applicant had not filed a formal notice of intention to defend
that
application, the parties were in bona fide settlement
negotiations which did not allow for the respondent
to
proceed to obtain default judgement against the applicant behind its
back and without notice to it.
5.
In order to put to the applicant's case in perspective, it is
necessary to refer to the chronology
of events and the correspondence
between the parties.
6.
Subsequent to the initial default judgement obtained by the applicant
on 24 April 2014 the respondent's
attorney wrote a letter to the
applicant's attorney dated 23 May 2014. In this letter reference was
made to the judgement obtained
against the respondent and it was
stated that the arrears in the account of the respondent was caused
by the fact that the respondent
had erred by using the incorrect
reference number with his payments. It was further stated that the
respondent had approached
the applicant and the applicant was
requested to withhold further proceedings pending an application by
the respondent for the
rescission of the judgement.
7.
On 26 May 2014 the applicant's attorney responded to the aforesaid
letter and stated,
inter alia, the following:
"We confirm our
client will only accept the full settlement of the balance being R158
602, 59 in order to stop legal action.
Should your client not
settle the full outstanding balance immediately we hold instruction
to proceed executing the warrant.
In the premise any
application for rescission of judgement brought by your client will
be opposed accordingly.
Our client's rights and
or remedies remain strictly reserved."
8.
On 6 June 2014 the respondent's application for rescission of the
applicant's default
judgement was served on the applicant's
attorneys. Subsequent thereto, on 18 June 2014, the applicant's
attorney wrote a letter
to respondent's attorney acknowledging the
respondent's application for rescission which was served on 6 June
2014 and then stated
the following:
"We have discussed
the above matted with our client. Should your client be willing to
settle the arrears and legal costs occasioned
herein, our client is
willing to enter into a Settlement Agreement on these terms and your
client can continue as per the Instalment
Sale Agreement.
Should your client accept
the above, our offices will furnish your offices with a Settlement
Agreement on the above terms, and our
client will agree to the
Rescission of the Default Judgement.
We await your response."
9.
Two days later, in a letter dated 20 June 2014, the respondent's
attorney responded as follows
to the aforesaid letter:
"We
refer to the above matter and in particular your letter dated 18 June
2014.
We have noted the
contents of your letter and we appreciate that you are willing to
have the matter amicably settled.
However there is
confusion on the issue of outstanding arrears referred to in your
letter. Our instructions are that your client
has updated and
credited all payments made by our client to his correct account.
We therefore request that
you clarify as to how much is the amount of the arrears.
As to the rest of the
issues our client is willing to settle costs occasioned as ordered by
the court.
Kind regards."
10.
According to the applicant's attorney his letter dated 18 June 2014
was clearly an invitation
to settle the matter amicably and without
the need for unnecessary legal procedures and costs. The respondent's
letter dated 20
June 2014 was similarly a clear indication that the
respondent appreciated that the applicant was willing to settle the
matter
amicably and was himself willing to do so. As much was
specifically stated in the letter and for that reason clarification
was
requested as to the amount of the arrears. The issue of
costs was not in dispute as the respondent had acknowledged his
obligation
to pay the costs of the applicant as ordered by the court.
11.
In the founding affidavit to the present application the applicant's
attorney stated that at this
point, she and the applicant accepted
that the respondent would not proceed with its application for
Rescission of Judgement pending
finalisation of the settlement
negotiations. Consequently, in an attempt to save legal costs for the
respondent and since they
accepted that the respondent would prefer
to settle the matter amicably rather than in court, a notice of
intention to Oppose was
not filed. This was done in good faith and in
the spirit of collegiality that, when there are pending settlement
negotiations,
and especially in the light of the offer made by the
applicant to the respondent, and the respondent's acceptance thereof,
the
application for rescission of judgement would not be proceeded
with unless the applicant was afforded the opportunity to file a
notice of intention to oppose.
12.
However, unbeknown to the plaintiff or its attorney, the respondent
moved for and obtained judgement
by default against the plaintiff on
28 July 2014.
13.
Still being under the impression that the parties were negotiating in
good faith and that
the respondent would not proceed with his
application for rescission, the applicant's attorney wrote an email
to the respondent's
attorney dated 9 October 2014. This letter, inter
alia, stated the following:
"The above matter
bears reference.
Kindly take notice that
our client has confirmed that, as on 26 August 2014, the arrears is
the amount of R 18 822, 33 excluding
legal costs and interest.
As soon as all payments
have been made in this account and the contract terms have ended,
your client is welcome to rescind the
Application at his own cost.
We urgently await your
response. Kind Regards."
14.
The respondent's attorney did not respond to the aforesaid email and
subsequent attempts
by the applicant's attorney to contact the
respondent's attorney were unsuccessful. Thereupon the applicant's
attorney had the
court file drawn from the Registrar's Office
and established for the first time that the respondent had proceeded
to obtain
an order for rescission by default on 28 July 2014. The
applicant thereupon immediately proceeded with the present
application
to have that order rescinded and set aside.
15.
As far as the applicant's right to obtain the original order against
the respondent on an
unopposed basis on 24 April 2014 is concerned,
the applicant, firstly, referred to the requirements of the
provisions of the National
Credit Act which had been complied with
and which entitled the applicant to proceed against the respondent.
Secondly, reference
was made to the Payment History of the
respondent's account which shows arrears since May 2013. The payments
referred to by the
respondent, although not sufficient to satisfy all
the arrears, were in any event made subsequent to the judgement
against him.
On the respondent's own version he was therefore in
arrears at the time judgement was entered against him.
16.
In his answering affidavit the respondent submitted that there was
never an agreement to hold
the application in abeyance and that the
applicant only indicated an intention to negotiate once it realised
that it was out of
time in filing a Notice of Intention to Defend. It
is correct that the respondent's attorney never in so many words
stated that
the application would not be proceeded with pending
finalisation of the settlement negotiations but in my view that fact
is not
conclusive. According to the correspondence referred to
above the parties were clearly involved in bona fide settlement
negotiations
which had all probability of being successful and which
would have prevented the matter proceeding to a full blown
opposed
application. Firstly, the respondent had accepted the
liability to pay the applicant's costs and, secondly, he was
awaiting
the final figure of the arrears which he had indicated he
was prepared to pay. That would have been the end of the matter. The
respondent also knew that the applicant never intended to
abandon its judgement obtained against the respondent but was merely
willing to avoid further costly legal procedures. In these
circumstances I agree with the submission that the applicant's
attorney
was entitled to accept that the respondent's attorney would
notify her if the respondent nevertheless intended to proceed
with the application on 28 July 2014. I also agree with the
submission on behalf of the applicant that if the court had been made
aware of this state of affairs prior to making the order on 28 July
2014, that order would not have been made by default against
the
applicant. The applicant was clearly not in wilful default.
17.
The respondent's statement that the applicant indicated an intention
to negotiate only when
it realised that it was out of time with a
Notice of Intention to Defend, is clearly wrong. The negotiations
already commenced
during May 2014 and proceeded on 18 June 2014,
which is prior to the launching of the application for rescission by
the respondent
and/or the obligation to file a Notice of Intention to
Defend. In any event, the applicant could have opposed that
application
at any time up and until the date of the order made
therein.
18.
As far as the arrears are concerned the respondent stated in his
answering affidavit that
he continued with the rescission application
"on the understanding that the applicant has checked its record
and realised
that there was no outstanding amount due in arrears,
therefore, consented to rescission." I can find no basis for
this alleged
understanding. As stated before, the respondent
accepted that his account was in arrears at the time the applicant
originally
obtained judgement against him. In any event, if the
respondent really believed that he was not in arrears, one would have
expected
confirmation to the applicant's attorney that no amounts
were due to the applicant. Furthermore, the respondent did not
address
the fact that he had already admitted liability for the
applicant's costs.
19.
It is not necessary to analyse in detail the respondent's allegation
that he never received
the summons nor the section 129 notice. Those
issues in my view had been adequately addressed by the applicant for
purposes of
the present application.
20.
Consequently and having regard to the aforesaid, I am satisfied that
the applicant has adequately
explained the reasons why the matter
went against him by default
-9-
and similarly that he has
a bona fide defence against the application of the respondent.
21.
As far as costs are concerned there is no reason why the costs of
this application should
not follow the event.
22.
In the result the following order is made:
1.
The default judgement granted by this court in favour of the
respondent on 28 July 2014 is
hereby rescinded and set aside.
2.
The respondent is ordered to pay the applicant's costs of this
application.
C.P.
RABIE
JUDGE
OF THE HIGH
COURT