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[2016] ZAGPPHC 845
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Van Den Berg v Sayers N.O and Another (2645/2015) [2016] ZAGPPHC 845 (15 September 2016)
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REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NO.: 2645/2015
DATE:
15 SEPTEMBER 2016
In the matter between:
JACQUES VAN DEN
BERG
...................................................................................................
Applicant
And
JOHN MEYRICK WILIAM SAYERS
N.O
...............................................................
First
Respondent
TESSA MARION SAYERS
N.O
.............................................................................
Second
Respondent
Date heard: 25 July 2016
Date delivered: 15 September
2016
JUDGEMENT
DE VOS J:
[1]
In this application the applicant seeks
an order rescinding and setting aside a default judgement granted
against himself on the
22
nd
June 2015. In terms of the said default judgement the applicant has
to pay the respondents:
1.1
the sum of R719 214,54;
1.2
interest on the amount of R719 214,54 at
the rate of 9 per cent per annum a tempora morae to date of payment;
and
1.3
costs of suit.
[2]
The nature of the respondents’
cause of action as set out in their particulars of claim is the
following:
2.1
HBD Property Trust (the Trust)
represented by the first respondent, and Copperzone 124 (Pty) Ltd
represented by the applicant, concluded
an oral lease agreement
during April 2013 for the extension of an existing written lease
agreement. This oral lease agreement would
endure from the 1
st
December 2013 to 28 February 2015. In terms of the oral lease
agreement:
(a)
Copperzone would make payment of a
monthly rental of R150 000 and electricity, water and refuse removal
charges;
(b)
the terms of the prior written lease
agreement concluded between the Trust and Copperzone on 11 December
2008 would be applicable,
save fox is stated in (a) above.
2.2
After expiry of the written lease
agreement Copperzone breached the oral lease agreement in that it
failed to make payment to the
Trust for electricity and water for
February 2014 in the amount of R19 214,54 and failed to make payment
of rental in the amount
of R150 000 for the months of March 2014 and
April 2014 totalling R319 214, 54.
2.3
As a result of Copperzone’s
default the Trust cancelled the oral lease agreement on 30 April 2014
(on which day Copperzone
vacated the premises being the subject of
the oral lease agreement).
2.4
As a result of Copperzone’s
material breach, alternatively repudiation of the oral lease
agreement, and the Trust’s
consequent cancellation of the oral
lease agreement, the Trust suffered damages in the amount of R410
000, being the rental payable
by Copperzone to the Trust for the
balance of the period of the oral lease agreement less the rental
received by the Trust from
other tenants.
[3]
Judgement was granted in favour of the
respondent on the basis of a suretyship signed by the applicant on
1
st
December 2008. It is common cause that the suretyship referred to was
signed pursuant to the written agreement of lease (the lease)
being
concluded between the Trust and Copperzone. The commencement date of
the written lease was the 1
st
December 2008 and its termination date 30 November 2013. The
applicant, acting personally, bound himself in writing in favour of
the Trust as surety in solidum for and joint and several coprinciple
debtor with Copperzone, for the punctual payment of all
sums of money
and obligations which Copperzone might have in the past owed or
incurred or might at present or in the future owe
or incur to the
Trust from whatsoever cause and howsoever and whensoever arising,
including but not limited to damages for breach
of contract or
otherwise arising from the written lease agreement and any extensions
or renewals thereof, and for the due and proper
performance by
Copperzone of its obligations to the Trusts.
[4]
In terms of the deed of suretyship, the
applicant chose his domicilium citandi et executandi
at 1..
[B….] [C…. R….], [C….. L…. E….],
[E….], [P…..]
.
[5]
The summons was served at the
applicant’s chosen domicilium citandi et executandi in terms of
the deed of suretyship on 21
st
January 2015.
[6]
The applicant did not defend the action,
and consequently default judgement was granted against the applicant
in favour of the respondents.
[7]
The main issue to be determined in this
matter is whether the suretyship, which was signed on the same date
as the written lease
agreement was signed, has been transferred to
become part of the oral lease agreement subsequently entered into,
extending the
expiry date of the written lease agreement
[8]
Before the applicant can succeed in his
application brought pursuant to rule 31(2)(6) of the Uniform rules,
the applicant must show
good cause for his application and must show
that his application is made bona fide. I further keep in mind that
the applicant
need not deal fully with the merits of the case but
that he must produce evidence that the probabilities are actually in
his favour.
After considering all the relevant circumstances it falls
within the discretion of the court whether to set the judgement aside
or not. It is the respondents’ contention that the applicant’s
application is not bona fide and that the applicant
has no bona fide
defence to the respondents’ claim and that the application
should be dismissed.
[9]
It is the applicant’s contention
that he was unaware that the summons was served on the address
referred to as his domicilium
citandi et executandi in terms of the
deed of suretyship. The applicant also contends that the deed of
suretyship ended when the
written lease was terminated. Accordingly
there existed no domicilium citandi et executandi on which the
respondents could rely
upon for service of the particulars of claim.
The applicant further states in his application that he presently,
and at the time
when the particulars of claim was served, resides at
another address namely Stand 122, Benquela Cove Lagoon Wine Estate,
Hermanus.
It further appears that when the Sheriff served the summons
at the applicant’s chosen domicilium (as set out in the deed of
suretyship), the Sheriff was advised that the applicant had left the
given address. The applicant contends that he only became
aware of
the default judgement for the first time on the 17
th
August 2015 when the Sheriff served a warrant of execution at 5 Main
Road, Bryanston. The Sheriff was bearing a letter recording
the
applicant’s details and a case number and instructions to the
Sheriff to attach at the movable property located there.
A Mr Gavin
Green, a director working at the above address then made contact with
the applicant to advise him of same. Only then
was the applicant able
to instruct his attorneys to investigate the matter and to ascertain
what had indeed transpired. The applicant
states that had he known of
the summons when it was served, he would have immediately defended
the action. The respondents do not
dispute that the applicant was not
in wilful default of having defended the action. However, the
respondents contend that the application
is not bona fide and that
the applicant has no bona fide defence to the respondents’
claim.
[10]
The applicant further contends that the
respondents were aware of the applicant’s whereabouts and that
they misled the court
a quo in their affidavit filed in support of
their application for default judgement. In this regard the applicant
relies on a
letter dated 12
th
August 2015 written by the respondents’ attorneys confirming
that they are aware of the applicant’s whereabouts. At
this
stage of the proceedings I do not think it is necessary to go into
detail about the applicant’s whereabouts at the time
when the
summons was served. It is
quite clear from the Sheriff’s
return of service that the applicant has left the said address
referred to in the suretyship
at the time when summons was served.
For record purposes it must be noted that the respondents, in their
opposing affidavit, state
that they were unaware of the applicant’s
new address.
[11]
It is not in dispute between the parties
that the written lease agreement was terminated on the 30
th
November 2013. In paragraphs 6 and 7 of the particulars of claim the
respondents allege that during or about April 2013 (ie seven
months
before the termination date of the written lease agreement) . . the
Trust represented by the First Plaintiff and Copperzone
represented
by the Defendant concluded an oral lease agreement. . . ’ the
terms of which were, inter alia, that the written
lease . . would be
extended subsequent to the termination thereof on 30 November 2013,
for the period 1 December 2013 to 28 February
2015 In paragraph 7.1
to paragraph 7.3 of the particulars of claim the respondents describe
the oral lease agreement as a separate
lease agreement. In paragraph
20 of the particulars of claim the respondents described the oral
lease agreement as '. . . an extension
and/or renewal of the written
lease agreement . . . ’. The respondents allege in paragraph 13
of the particulars of claim
that Copperzone ‘ . . breached the
oral lease agreement. . . ’ by failing to make certain payments
to the Trust and
that the applicant was therefore indebted to the
Trust as he had ‘bound himself as surety, and by virtue of the
oral lease
agreement being an extension and/or renewal of the written
lease agreement’ (paragraph 20 of the particulars of claim).
[12]
It is the applicant’s contention
that the respondents acknowledged in their particulars of claim that
the basis for the applicant’s
alleged liability ultimately
stems from the fact that the suretyship was originally intended to be
in respect of the written lease
agreement. Therefore it is contended
that the applicant was released from the obligations recorded in the
suretyship when the written
lease agreement terminated on 30 November
2013 as it was only applicable in respect of the written lease
agreement. Apart from
the applicant’s denial that his
suretyship was extended to the oral lease agreement he further denies
that he concluded any
form of oral lease agreement on behalf of
Copperzone, or of entering into any oral extension of the written
lease on behalf of
Copperzone.
[13]
There cannot be any doubt that the
respondents’ cause of action is the suretyship signed by the
applicant on 01 December 2008.
The written lease agreement was signed
on the same date. The respondents’ particulars of claim contain
ambiguous allegations
as to whether the oral lease agreement was a) a
separate lease agreement as read from paragraphs 14 and 15 of the
particulars of
claim; or b) an extension and/or renewal of the
written lease agreement as read from paragraphs 20 of the particulars
of claim.
These allegations are contradictory in a material respect
and were not pleaded in the alternative. The respondents acknowledge
that the basis for the applicant’s alleged liability ultimately
stems from the fact that the suretyship was originally intended
to be
in respect of the written lease agreement. In contrast thereto the
applicant contends that Copperzone had complied with all
its
obligations in terms of the written lease agreement and was released
from the obligations recorded in the suretyship when the
written
lease agreement terminated on 30 November 2013.
[14]
Having regard to the aforementioned
facts there is a reasonable explanation given by the applicant for
his failure to defend the
action. Accordingly, it must be decided
whether the applicant sets out grounds for a bona fide defence in his
application. Apart
from the respondents’ particulars of claim
being excipiable, it appears that the applicant denies concluding an
oral agreement
of lease and/or entering into any oral extension of
the written lease agreement on behalf of Copperzone. This denial
constitutes
a dispute of fact and on the papers as it stands I cannot
find anything that contradicts the applicant’s version in this
regard. If this denial was placed before the court a quo before
judgement was granted, judgement in favour of the respondents would
not have been granted. The denial in itself constitutes a defence
which in my view is bona fide.
[15]
The respondents’ contention as
formulated in the particulars of claim that the oral agreement was a
renewal/extension of the
written lease agreement must further be
considered. It is not disputed that the wording of the deed of
suretyship provides that
the applicant bound himself as surety in
solidum for and joint and several co-principal debtor with Copperzone
for the ‘punctual
payment of all sums of money and obligations
which (Copperzone) may have in the past owed or incurred or may at
present or in the
future owe or incur to the Trust from whatsoever
cause and howsoever and whensoever arising, including but not limited
to damages
for breach of contract or otherwise arising from the
written lease agreement and any extensions or renewals thereof, and
for the
due and proper performance by (Copperzone) of its obligations
to the Trust’. Broadly speaking the respondents’ cause
of
action as pleaded in the particulars of claim falls within the ambit
of the obligations of Copperzone in respect of which the
applicant
bound himself in favour of the Trust as surety and co-principal
debtor.
[16]
The question that must be determined is
whether the suretyship binds the applicant as alleged by the
respondents or at all. The
applicant contends that the suretyship has
been terminated when the written lease agreement came to an end. If
it did come to an
end, the default judgement was granted erroneously.
It is the applicant’s contention that clause 28 of the written
lease
agreement provides that ‘[tjhis agreement shall be the
whole and only contract between the landlord and the tenant. ..
Should
any variations be required at any time during the currency of
this Agreement of Lease, including this clause [own emphasis], such
variations shall only be binding on the parties, if contained in
writing and signed by the Landlord and the Tenant’. It is
the
applicant’s case that clause 28 is an entrenched clause, since
it applies not only to the rest of the lease agreement
but also to
itself. It is therefore contended that any oral extension or renewal
of the written agreement was accordingly of no
force unless same was
reduced in writing and signed by the parties. The applicant further
contends that clause 4 of the written
agreement of lease stipulates
that the option to renew the lease could only be exercised by a
written notification to the landlord.
As this did not occur there
been no valid extension/renewal of the written lease agreement.
[17]
The respondents contend that clause 28
of the written lease agreement is not applicable. It only deals with
variations to the written
lease agreement which must be in writing.
The separate oral lease agreement pleaded by the respondents is not a
variation of the
written lease agreement. The respondents’
claim is therefore evidently a separate oral lease agreement and not
a variation
of the written lease agreement. The respondents further
contend that clause 4 of the written lease agreement is not
applicable.
This clause provides for written notification of the
renewal of the written lease agreement. The separate oral lease
agreement
pleaded by the respondents is not a renewal of the written
lease agreement as envisaged in terms of clause 4 of the written
lease
agreement.
[18]
It is quite clear that the respondents
in their particulars of claim describe the oral agreement as an
extension or renewal of the
written lease agreement. The respondents’
argument before me that it is merely an oral agreement seems to be in
direct contrast
with what is alleged in the particulars of claim. If
the oral agreement was a renewal of the written lease agreement or an
extension
thereof, it was not legally competent for the court
considering the application for default judgement to have made the
order. The
respondents’ particulars of claim must be read
together with the written agreement of lease and the suretyship. The
respondents’
claim is not supported by its own documentation
and their claim could simply not succeed on that basis. The same
holds for the
contradictory supposition that the oral agreement was a
new agreement. If a separate oral agreement of lease was entered
into,
the words ‘extension ’ or ‘renewal ’ of
the written lease agreement as pleaded become nonsensical. On the
respondents’ version the exact same terms identical to those
contained in the written agreement of lease, including clauses
28 and
4 thereof, became applicable save for terms relating to duration,
rental and other payments. The two sets of allegations
regarding the
nature and import of the oral agreement are clearly contradictory and
incompatible with each other - they are mutually
inconsistent, and
such inconsistency goes to the root of the respondents’ cause
of action. Having regard to the fact that
the differing averments
referred to above were not pleaded in the alternative, the problem
arises that the applicant is prejudiced
to the extent that he is
unable properly to prepare to meet his opponent’s case. Even a
complete denial of the allegations
contained in the particulars of
claim does not detract from the fact that same are patently
contradictory and incompatible. The
lack of clarity referred to above
constitutes a bona fide technical defence that must be upheld in
favour of the applicant.
[19]
Whatever the terms of any oral agreement
were, of whatever nature, and who acted on behalf of Copperzone, is a
question of fact
which must be proven by the respondents on a balance
of probabilities. The applicant’s denial of entering into an
oral agreement
read together with the
vagueness
of the allegations contained in the particulars of claim referred to
above constitutes, in my view, a bona fide defence
on behalf of the
applicant. Prima facie it appears that the suretyship relied upon by
the respondents refers specifically to the
terms of the written lease
agreement and terminated on the same day as the written lease
agreement came to an end. The respondents
admit that Copperzone fully
complied with its obligations in terms of the written lease as
appears from paragraph 44 of their opposing
affidavit. It follows
logically that if the written lease was ‘extended' as alleged,
then by implication there was no outstanding
obligations in respect
of the ‘extended’ oral lease agreement. There is no new
separate suretyship which accompanied
the so-called new lease
agreement. It is not necessary for me to speculate at this stage of
the proceedings as to the outcome of
the factual dispute between the
parties. It is sufficient to conclude that in my view the applicant
is entitled to have the judgement
being set aside as prayed for.
ACCORDINGLY,
I MAKE THE FOLLOWING ORDER:
1)
The default judgement granted on 22
nd
June 2015 against the applicant is rescinded and set aside;
2)
The first and second respondents are
ordered to pay the costs of this application; the one paying, the
other to be absolved.
DE VOS J
JUDGE
OF THE GAUTENG DIVISION OF THE HIGH COURT OF SOUTH AFRICA
For
the applicant:
Adv. D. Milne
Instructed
by: Schwarz-North Incorporated
c/o
A.L. Maree Incorporated
For
the first and second respondents:
Adv. L. Hollander
Instructed
by: Darryl Furman & Associates
c/o
Morris Pokroy Attorney