City of Tshwane Metropolitan Municipality v Brooklyn Edge (Pty) Ltd and Another (A290/2015) [2016] ZAGPPHC 1088; [2017] 1 All SA 116 (GP) (11 November 2016)

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[2016] ZAGPPHC 1088
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City of Tshwane Metropolitan Municipality v Brooklyn Edge (Pty) Ltd and Another (A290/2015) [2016] ZAGPPHC 1088; [2017] 1 All SA 116 (GP) (11 November 2016)

IN
THE HIGH COURT OF SOUTH AFRICA
/ES
(
GAUTENG
DIVISION, PRETORIA
)
CASE
NO:  A290/2015
A QUO
CASE NO: 37681/2012
DATE:
11/11/2016
Reportable:
no
Of
interest to other judges: no
Revised.
IN
THE MATTER BETWEEN
CITY
OF TSHWANE METROPOLITAN
MUNICIPALITY                                                                                    APPELLANT/DEFENDANT
AND
BROOKLYN EDGE (PTY)
LTD                                              1ST

RESPONDENT/1ST PLAINTIFF
PIVOT PROPERTY DEVELOPMENT
(PTY)
LTD                                                                               2ND

RESPONDENT/2ND PLAINTIFF
JUDGMENT
PRINSLOO
J
[1]
The appellant appeals against the dismissal by the court
a quo
,
per Bosman AJ, of an application by the appellant (as applicant) for
the rescission of a judgment granted against it, by default,
by
Collis AJ on 9 May 2014.
[2]
The judgment dismissing the rescission application is dated 13
November 2014.
[3] On
24 March 2015, the learned Judge
a quo
granted leave to appeal
to the Full Court of this Division.  The appeal came before us
on 14 September 2016.
[4]
Before us, Mr Strydom SC, with Mr Mkhwanazi, appeared for the
appellant and Mr Labuschagne SC, with Mr Pretorius, appeared
for
the respondents.
Brief
synopsis of the factual background of the case
[5] In
a lengthy opposing affidavit to the rescission application, the
respondents offered a useful summary of the background facts
from
which I will paraphrase some extracts for the sake of convenience.
[6] In
terms of a written deed of sale, dated 31 July 2003, the first
respondent (with the second respondent as its nominee, as
briefly
described hereunder), bought certain immovable properties from the
appellant for the sum of R9,5 million.
[7]
The properties are erven 162, 163, 164, 165, 193 and 194 as well as
portions 1 and 2 and the Remainder of erf 195, Muckleneuk,
Pretoria.
[8] In
terms of the deed of sale, erven 162 to 194 had to be transferred
into the name of the first respondent, and portions 1 and
2 and the
Remainder of erf 195 into the name of the second respondent,
described as the nominee of the first respondent in terms
of clause
7.4 of the deed of sale.  For present purposes, nothing turns on
this.
[9] At
the time of conclusion of the deed of sale, the property was zoned as
"
Public Open Space
" in terms of the Pretoria Town
Planning Scheme, 1974 ("the 1974 Scheme").
Collectively, all the properties
are referred to, for purposes of
this judgment, as "the property".  At the time, the
property, zoned as it was,
was used mainly as public tennis courts.
[10]
The respondents acquired the property in order to develop it into a
mixed use development leading to the necessity for
the
respondents to rezone the property.
[11]
Because the property was zoned as a public open space, the
respondents had to ensure its closure in terms of certain provisions

of the Local Government Ordinance 17 of 1939 ("the 1939
Ordinance").  The deed of sale specifically provided for

the rezoning and closure as mentioned.
[12]
In terms of the deed of sale the appellant had the responsibility to
secure closure of the property and the respondents the
responsibility
to apply for the rezoning of the property.
[13]
The deed of sale provides that the property may not be transferred
into the name of the respondents before the rezoning process
is
completed.  For that to happen, the closure must first be
completed.
[14]
In terms of the deed of sale the existing tennis courts,
clubhouse and sport facilities on the property must be relocated
by
the respondents to another property of the appellant's choosing.
[15]
In December 2003 the respondents applied for removal of restrictive
conditions and rezoning of the property.
[16]
In July 2005 the City Planning Committee recommended to the full
Council of the appellant that the rezoning be approved.
[17]
After some delay, the respondents, in March 2007, launched an appeal
against the perceived unreasonable delay in taking the
required
decision with the Department of Local Government, Gauteng Province.
The appeal was upheld and, in March 2010, the
application for removal
of restrictive conditions and rezoning was granted.
[18]
The prescribed closure of the property,
supra
, was not
effected as required by certain sections of the 1939 Ordinance.
The respondents allege that objections raised against
such closure
were formally withdrawn, but the appellant denies that the objections
were, indeed, withdrawn.  It is common
cause that the appellant
did not finalise the closure of the property as a public open space
by presenting the Surveyor-General
and the Registrar of Deeds with a
closure certificate as intended by section 67 of the 1939 Ordinance.
[19]
In October 2010, more than seven years after the deed of sale was
signed, the respondents launched an application for relatively

wide spread relief, including a
mandamus
to force the
appellant to issue the closure certificate and, after compliance with
certain other requirements, to sign transfer
documents to enable the
respondents to take transfer.  There was also a claim for
declaratory relief relating to the liability
of the respondents, or
lack thereof, to pay interest and alternative claims for cancellation
of the deed of sale and damages.
[20]
In 2011, the respondents withdrew the application after the appellant
served a notice of intention to defend and, in June 2012,
almost nine
years after the deed of sale was signed, the respondents instituted
the action, for essentially the same relief applied
for in terms of
the aborted application, which action is relevant for present
purposes and during the course of which proceedings
the orders were
granted by default against the appellant.
Procedural
developments leading up to the judgment granted by default
[21]
The appellant's attorneys failed in their duty to serve a discovery
affidavit timeously and also to formulate comprehensive
answers to
questions posed by the respondents during a pre trial
conference.
[22]
The respondents' attorneys wrote regular reminders to their
counter-parts for the appellant, calling for these failures to
be
remedied and for the discovery affidavit and the comprehensive
answers to be supplied.
[23]
Most, if not all, of these reminders went unanswered.  The
conduct of the appellant's attorneys is to be frowned upon,
and not
up to the standard expected from the reasonable attorney.
[24]
Details of these reminders appear from the comprehensive opposing
affidavit filed in the rescission application.  I consider
it
unnecessary to repeat those details.
[25]
Against this background, the respondents' attorneys launched an
application to compel.  In one application, they
proceeded
in terms of rule 35(7) to compel discovery and in terms of rule 30A
to compel the furnishing of proper answers.
[26]
The appellant's attorneys did not react when the application to
compel was served on them so that the order was granted by
default on
27 January 2014.  As far as discovery is concerned the appellant
was ordered to deliver its discovery affidavit
within ten days of
service of the order failing which the respondents were given leave
to apply for the striking out of the defence
and for granting of
judgment in the main action.  There was also an adverse costs
order.  A similar order was made
in respect of the rule 30A
application to compel a response to the pre trial conference
questions.
[27]
The order was served on the appellant's attorneys on 17 February
2014.  This was preceded by another letter, dated 6 February

2014, calling for compliance.
[28]
When there was no response, the application to strike out the defence
and to obtain judgment by default was launched on 7 March
2014.
It was set down for 9 May 2014 when the orders were granted by
default.  The appellant's attorneys did not
react to the
applications which were served on them.
[29]
Given the nature of some of the defences offered on behalf of the
appellant for purposes of obtaining a rescission of the judgment,
to
which I will refer hereunder, it is useful to quote the contents of
the somewhat lengthy 9 May 2014 order:
"1. The defendant's defence in case no 37681/2012 ('the action')
is struck out;
2. The defendant is ordered to pay the costs of this application;
3. Judgment is granted in favour of the plaintiffs in the action as
follows:
3.1 the defendant is directed to, within 7 (seven) days of this
order, submit to the Surveyor-General and the Registrar of Deeds,

Pretoria, a closure certificate confirming the closure of erven 162,
163, 165 (
sic
), 165, 196 and 194 and portions 1 and 2 and the
Remainder of Erf 195 Muckleneuk Township ('the properties') as
public open
space in terms of the provisions of section 67(9)(a) of
the Local Government Ordinance 17 of 1939 ('the 1939 Ordinance'),
read
with section 68 thereof;
3.2 it is declared that the first and second plaintiffs,
alternatively the first plaintiff, are/is not liable for the payment
of interest on the balance purchase price for a period of 18
(eighteen) months from date of conclusion of the deed of sale by
virtue
of clause 1.2.2 of the deed of sale;
3.3 it is declared that the first and second plaintiffs,
alternatively the first plaintiff, are/is further excused from the
payment
of interest on the balance purchase price from 15 January
2007 until the date of compliance by the defendant with its
contractual
and statutory obligations pertaining to closure of the
properties as a public open space;
3.4 the defendant is ordered to, after compliance with the Orders
above, and after publication of the amendment scheme by the MEC
in
terms of section 7(16) of the Gauteng Removal of Restrictions Act 3
of 1996 ('the GRRA'), to sign all transfer documents which
are
required in order to pass transfer of Erven 162, 163, 164, 165,
193 and 194 Muckleneuk Township into the name of the first
plaintiff
and in order to pass transfer of Portions 1 and 2 and the Remainder
of Erf 195 Muckleneuk Township into the name of the
second plaintiff,
alternatively to effect transfer of all the aforesaid properties into
the name of the first plaintiff;
3.5 the first and second plaintiffs, alternatively the first
plaintiff are/is ordered to pay, jointly and severally, the purchase

price, less 50% of the replacement cost of the tennis courts and
clubhouse, being R10 919 000,00 to the defendant
against
registration of transfer of the properties, together with interest
thereon pursuant to the deed of sale, such interest,
however, limited
in accordance with the order granted in 3.2 and 3.3 above;
3.6 the first and second plaintiffs, alternatively the first
plaintiff are/is ordered to, prior to or simultaneously with any
development of the properties, at its cost and to the reasonable
satisfaction of the Defendant's City Planning Division and General

Manager: Land and Environmental Planning, relocate the existing sport
and recreational facilities, consisting of two clubhouses
and six
tennis courts to the same existing standards and size thereof to
the substituting property identified by the defendant;
3.7 in the event of the defendant failing to sign all transfer
documents and to take all reasonable steps necessary to pass transfer

of the aforesaid erven to the first and second plaintiffs
respectively, as set out above and/or fails to issue the certificate

referred to in 3.1 above, within 10 (ten) days of date of demand, the
Sheriff is authorised to do so and to take all reasonable
steps in
regard thereto; and
3.8 the defendant is ordered to pay the costs of the action."
Brief
synopsis of the exchanges to be found in the papers comprising the
opposed rescission application
[30]
The application was launched within twelve court days after the 9 May
judgment.
In the
founding papers, it is not explicitly stated whether the application
is launched in terms of rule 31, rule 42 or the common
law.
However, in the founding papers the questions of wilful default (or
lack thereof),
bona fides
on the part of the appellant and a
true intention to proceed with the defence of the action and some
defences relied upon were
raised.
[31]
In the notice of motion rescission is sought of the 9 May orders
striking out the defence and granting the default judgment
referred
to.
[32]
The deponent to the founding affidavit is Ms Marike Pretorius, a
candidate attorney in the employ of the appellant's attorneys.

She states that she had been dealing with the matter personally
together with one of the directors, Mr Schalk Willem Hugo whose

confirmatory affidavit is attached to the founding affidavit.
I will refer to them as "Pretorius" and "Hugo"

without intending any disrespect.
[33]
What follows is a brief summary of some of the allegations in the
founding affidavit:
• Pretorius had inadvertently and mistakenly confused the date
of the hearing of the striking out and default judgment application

with the date of hearing of another interlocutory application, issued
separately and under another case number (22046/14) by the

respondents in the same case and dealing with the question of whether
or not there was compliance with the requirements of the
Institution
of Legal Proceedings Against Certain Organs of State Act no 40 of
2002
.  This latter application dealt with the question of
applicability of that Act and, if applicable, condonation for failure

to comply with the requirements as intended by section 3 of Act 40 of
2002 ("the section 3 application").
• The deed of sale was dated 31 July 2003.  I add that the
original particulars of claim is dated June 2012, almost twenty

months after the abortive October 2010 application was withdrawn.
In an amendment dated 3 December 2013 (more than ten years after the
date of the deed of sale) the respondents, as plaintiffs,
inserted a
new allegation into the particulars of claim, relying on a
notification by the MEC of Economic Development, Gauteng
Province to
the first respondent on 8 June 2010 to the effect that an appeal
regarding the rezoning application had been upheld
and the rezoning
approved.  This was in terms of the Gauteng Removal of
Restrictions Act no 3 of 1996 ("the GRRA").
• In a special plea delivered before the amendment, the issue of
non-compliance with the provisions of Act 40 of 2002 was
raised.
In the amendment, the respondents alleged compliance with Act 40 of
2002.
• However, on 14 March 2014 about a week after the striking out
and default judgment application ("the default judgment

application") was served, the respondents delivered a notice of
motion consisting of some 238 pages seeking a declarator to
the
effect that section 3 of Act 40 of 2002 does not apply to this
particular action.  In the alternative condonation for

non-compliance is sought in terms of section 3 of that Act.
• The trial had been set down for hearing on 16 September 2014.
• The section 3 application was set down for 22 May 2014.
In order to mainly consider the section 3 application, Pretorius (and
presumably Hugo as well) consulted with officers of the appellant
and
counsel on 9 May 2014, the very day when the default judgment
was granted.  These consultations followed prior consultations

between the appellant's senior and junior counsel.  One of the
main issues considered during the 9 May consultation was
the
issue whether or not the section 3 application could be granted if
the claim had already been extinguished by prescription.
I add
that section 4(b) of Act 40 of 2002 stipulates that a court may grant
condonation for failure to comply with the notice
requirements of the
Act if,
inter alia
, "the debt has not been
extinguished by prescription".
• In the affidavits supporting the section 3 application, the
respondents submitted that the issue of prescription would "better

be ventilated" at the trial.  I add that the papers of
this application were not before us during the appeal hearing.
• In view of the aforegoing, it was decided by the appellant and
its representatives that the respondents, as plaintiffs,
ought to be
approached with the proposal that the section 3 application be
postponed for hearing at the trial and be considered
after the
leading of evidence.  According to Pretorius, this issue was
also addressed in correspondence.
• In the meantime, says Pretorius, the appellant was in the
process of complying with the issues of discovery and pre trial

answers which formed the basis of the default judgment application.
Significantly, for present purposes, she adds
"... and in this process I erroneously became under the
impression that the two above-mentioned applications, that is the
one
for striking out and judgment and the application for leave regarding
(Act 44 of 2002) had both been set down for hearing on
22 May 2014
and have advised the defendant accordingly.  It subsequently
transpired that this was an error and omission on
the part of the
defendant's attorneys and should not be held against the defendant.
This inadvertent diarising had now led
to a judgment against the
defendant without a hearing, without condonation having been granted
to the plaintiffs and by default
whilst the main action had been
enrolled for 16 September 2014 as already aforesaid."
I add that, on a general reading of the papers, I am left with the
clear impression that the appellant, at all relevant times,
had the
desire to defend the action and that the rescission application
represented a
bona fide
effort to achieve that result.
After all, the abortive application was opposed, the action was
defended and a plea was filed
and representatives of the appellant
attended the consultation with their legal team on 9 May 2014, the
very day when the default
judgment application was granted.  By
the same token, I have difficulty in concluding, on the
probabilities, that this is
a proper case for blaming the appellant,
a vast metropolitan municipality organisation represented at
different times in this litigation
by different officers, for
mistakes made by Pretorius with her diary, and, for that matter, for
the unsatisfactory failure by Pretorius
and/or Hugo to answer
promptly to letters and demands from their opponents, as described.
I will revert to this subject.
• As to late discovery, Pretorius alleges that during the course
of the abortive 2010 application "extensive documentation"

was exchanged between the parties, and "all the facts" had
already been within the knowledge of the parties.  The

documentation in question, particularly relating to the various
rezoning applications and appeals, are voluminous.  They cover

developments which took place over a whole decade.  Some had
been archived in various sections of the appellant's administration

sections from time to time. According to Pretorius it was not
possible to timeously comply with the rule 35 notice or the ten day

order.  Pretorius says she did not intend to disrespect the
order although, in my view, her failure to ask for an extension
is
difficult to understand.  She says that the trial was still some
six months away when she started working on the discovery
effort and
the discovery affidavits had been ready by 17 April 2014.
She thereafter heard that the appellant's legal
officer who attended
the 9 May consultation said that he had been authorised to depose to
the discovery affidavit (and not a different
legal officer who had
previously deposed to affidavits on behalf of the appellant).
Pretorius amended the discovery affidavit
and attached a copy to her
founding affidavit.  The schedule appears to be a lengthy and
involved affair, running into some
96 items.  Pretorius
submitted that there was no real prejudice to the respondents,
because they received the discovery
affidavit some four months,
rather than five or six months, prior to the scheduled trial date.
• As to the pre-trial answers, Pretorius argued that the issues
raised in the questions were largely of a formal nature.
After
the pre-trial conference, the respondents amended their particulars
of claim and subsequently sought to deal with the issues
involving
compliance with Act 44 of 2002.  The question of separating
certain issues for adjudication during the trial became
relevant and
she held back delivery of the answers.  She argued that there
was no prejudice to the respondents, but, in any
event, the pre-trial
answers had been served on the respondents' attorneys by the time
Pretorius deposed to the founding affidavit
on 27 May 2014.
• Under a heading "public interest and merits"
Pretorius, in the founding affidavit which was crafted in a rather

unorthodox style, deals with the "merits" of the case and
alludes to certain defences which the appellant relies upon:
(i) Pretorius refers to paragraph 10 of the plea which contains
allegations that the Council of the appellant approved the closure

and subsequent sale of the properties to the first respondent on the
basis of a report made to the Council by the then acting municipal

manager.  This report was based on oral and written
representations made on behalf of the first respondent by its
attorneys
to the Strategic Executive Officer: Housing, City Planning,
Land and Land Environmental Planning and other officials of the
appellant.
The case of the appellant is that the
representations included that an international corporation would
invest and develop the property
in a joint venture with the first
respondent.  The development of the property would also serve as
the headquarters for the
"South African interest" of the
international corporation.  There would be a huge influx of
foreign capital as part
of the development costs.  The
shareholding of the first respondent would be proportionate to the
development and the majority
of the shareholding in the first
respondent would be held by the United States based company.
It is alleged that these representations were false so that the
approval of the sale by the Council did not comply with the relevant

sections of the Ordinance alternatively the approval is a nullity and
should be set aside as it did not lawfully empower the appellant
to
dispose of the property.
These allegations are based, so it is pleaded, on a forensic report
commissioned by the appellant prior to the institution of the

action.  The respondents were aware of the contents of the
forensic report but did not attach same to any of their applications

nor place the conclusions reached before the court.
Attached to the founding affidavit, is a copy of this forensic
report.  It is dated June 2005, and styled "Forensic

investigation on the alienation of erf 162 to 165, 193, 194, portions
1 and 2, and the Remainder of erf 195, New Muckleneuk".
It
was addressed to the appellant.  Before us, the forensic report
was not analysed and debated.  It is also clear from
the
opposing affidavit submitted by the respondents that the conclusions
arrived at in the forensic report are in dispute.
It is not necessary, for present purposes, to express a view about
the correctness of the forensic report, but it can be said that,

according to the forensic report, the initiator of the report leading
to the sale being approved by the Council, was one Ms R Van
Coller,
"municipality legal advisor".  It is also alleged that
she had a hand in the preparation of the deed of
sale.
For illustrative purposes, I quote two of the conclusions of the
forensic investigator:
"8.5.3 Furthermore, Van Coller misled or attempted to mislead
the Council through a report which indicated, among other things,

that there was an overseas investor, which would be making a capital
investment in addition of about R100 million and that
this would
'have substantial positive spin-offs and benefits to the city' and
would result in 'the creation of thousands of job
opportunities'.
To date, almost two years after the conclusion of the transaction,
there is no sight of such investor or
the development envisaged in
the report.
8.5.4 In addition, the valuation department, through the Strategic
Executive: Corporate Services, Administrative Services (Property

Valuation), did not act in the best interest of the municipality, in
that it recommended a selling price of R9,5 million when the
land was
in fact worth approximately R28 million."
The investigator also recommends that corrective and/or disciplinary
measures should be considered against Van Coller "in
respect of
her negligence and misconduct", and also against the Department
of Corporate Services, Administrative Services
(Property Valuation)
"in respect of their negligence and misconduct".
In this regard, and after having referred to the forensic report in
her founding affidavit, Pretorius says the following:
"I respectfully submit that it is of crucial importance to the
defendant and also in the public interest that this matter
proceed to
trial and that the plaintiffs not be allowed to proceed with the
judgment in their favour which they have obtained by
default in the
circumstances as set out above and which would result in the sale and
transfer of property belonging to the defendant
which sale would have
been
ultra vires
and which default judgment had in any event
been obtained without the issues of prescription and compliance with
the
Institution of Legal Proceedings Against Certain Organs of State
Act, having
even been considered by this honourable court."
It seems to me that this defence represents a triable issue, in the
spirit of the principles applied when adjudicating upon rescission

applications, which may well result in success for the appellant, if
the allegations were to be ventilated in evidence before a
trial
court.  This remark may be fortified by the finding of the
forensic investigator that the property was sold to the respondents

at a fraction of its true value.
In my view, a court presiding over a rescission application, and
considering the relevant principles applicable, to which I will

refer, ought to be slow to dismiss this defence as one without merit
or reasonable prospects of success.
(ii) Pretorius also bemoans the fact that the defence of prescription
raised by the appellant was overtaken by the granting of
the default
judgment application.  Prescription was raised as a special plea
and the pleadings were before the learned judge
a quo
when the
rescission application was heard.  This much is emphatically
stated by the deponent to the opposing affidavit.
I now turn to this further defence offered by the appellant for
purposes of obtaining rescission of the judgment.  This is
done
in the exercise, in the spirit of considering rescission
applications, of deciding whether good cause was shown to justify

such a rescission.
• The defence of prescription is raised in the special plea,
which came before the learned judge
a quo
, in the following
terms (only extracts are quoted for the sake of brevity):
"
First
special plea
:
1.
1.1 The deed of sale on which the plaintiffs rely was entered into on
31 July 2003.
1.2 The plaintiffs further plead that they had complied with all
their obligations pursuant to the deed of sale and further plead
that
the defendant has, since the alleged withdrawal of objections against
the closure process prescribed by
section 68
read with section 67 and
63 of the 1939 Ordinance '... failed, despite demand, to carry out
the closing of the property as a public
open space' and further '...
failed to, from date of submission of the first plaintiff's rezoning
application to it on 8 December
2003 until 16 March 2007
consider such application and/or to take a final decision with
regards thereto ...'.
1.3 The plaintiffs allege that the aforementioned failures amounted
to breaches of the deed of sale which, according to the plaintiffs

'... resulted in the transfer of the property being kept in
abeyance by virtue of the provisions of clause 7.2 of the deed
of
sale'.
1.4 The second plaintiff, in so far as it may have
locus standi
and subject to the defendant's third special plea
infra
,
further claims that it has been nominated by the plaintiff in respect
of an entitlement to receive transfer of certain portions
of the
immovable property, with reliance on the same deed of sale entered
into on 31 July 2003.
1.5 The plaintiffs further allege that the defendant could have
complied with all its obligations and could thereafter have
transferred
the property or portions thereof to the first plaintiff
and its nominee at the latest by 15 January 2007.
1.6 Based on the aforesaid, the plaintiffs jointly claim specific
performance of the defendant's obligations pursuant to the deed
of
sale and jointly tender payment of the purchase price as calculated
by them.
2.
The plaintiffs' summons was served on the defendant on 29 June
2012 and the application in case no 66099/10 issued on 25 October

2010, both of which are more than three years after the alleged date
of breaches and/or the alleged date upon which the plaintiffs'
claim
for specific performance arose.
3.
In the premises, the plaintiffs' claims have become prescribed in
terms of
section 11
of the
Prescription Act 68 of 1969
."
• The respondents, as plaintiffs, filed a replication to the
plea, dealing only with the prescription plea.
The case offered by the respondents to counter the prescription plea,
in summary, is that monthly statements sent to the respondents
by the
appellant over a period of some ten years from October 2003 to
January 2013 pertaining to the outstanding purchase price
arising
from the deed of sale of 31 July 2003 amounted to an express or
tacit acknowledgement by the appellant of the liability
due in terms
of the deed of sale (presumably the duty to give transfer against
payment of the purchase price).
In this replication, the crux of the argument offered to defeat the
prescription plea is crafted as follows:
"2.3 Each monthly statement issued by the defendant to the first
plaintiff, acknowledging the outstanding purchase price and
interest
thereon due, has interrupted prescription in terms of
section 14(1)
of the
Prescription Act 68 of 1969
and prescription commenced to run
afresh from the date of each of the aforesaid tax invoices."
In addition, it was pleaded in the replication that the appellant's
obligations in terms of the deed of sale, ie to bring about
closure
of the property as a public open space in terms of the 1939
Ordinance, and to publish an amendment scheme as also contemplated
in
the deed of sale, "are obligations reciprocal to the plaintiffs'
obligation to take transfer and make payment of the purchase
price in
terms of the deed of sale."
It was pleaded that the appellant's reciprocal debt arising from the
contract has not become prescribed so that the respondents'
right to
claim transfer against payment of the purchase price has not become
prescribed either by virtue of the provisions of
sections 11
and
13
(2) of the
Prescription Act 68 of 1969
.
• In their opposing affidavit to the rescission application, the
respondents, in their efforts to persuade the learned Judge
a quo
not to grant the rescission because the appellant had failed to show
good cause as required for that purpose, also dealt with their

replication in response to the prescription plea, details of which I
have now referred to.
However, the respondents in this opposing affidavit only refer to the
portion of the prescription plea based on the provisions
of
section
14(1)
of the
Prescription Act and
the argument that prescription was
interrupted with the delivery of each invoice, over the period of
some ten years, with each
invoice representing an express or tacit
acknowledgement of liability.
The additional argument, based on
section 13(2)
of the
Prescription
Act, raised
in the replication, was not mentioned in the opposing
affidavit to the rescission application.  As mentioned, it has
to do
with the prescription of the reciprocal obligations flowing
from the deed of sale.  During the proceedings before us, the
argument was also not pressed with any force.  It may have
something to do with the fact that the respondents themselves pleaded

that the appellant ought to have been able to transfer the property
by not later than 15 January 2007 so that "a reasonable

period required for finalisation of the closure and rezoning would
have expired on or about 15 January 2007".
• As to the
section 14(1)
plea to the effect that the monthly
invoices constituted repeated acknowledgements of liability, the
following is said in the appellant's
replying affidavit in the
rescission application (it is in the form of a confirmatory replying
affidavit attested to by an employee
of the Finance Department of the
appellant, and I only quote extracts for the sake of brevity):
"3.3 ... For this purpose a separate account is created, even
for contractual payments, in similar fashion as the accounts
of
individual ratepayers.  This is to ensure that, when an amount
is paid to the Defendant, it is allocated to the correct
account.
3.4 In the present instance such an account was created for the
purchaser.  The invoices, in referring to the balance purchase

price and interest thereon as provided for in the agreement merely
confirm the creation of the aforesaid infrastructure so that
if and
when payments were made, it would, accounting wise, be correctly
allocated.  It would not have been possible to render
the
necessary infrastructure without such an account and invoices having
been created in the Defendant's accounting system.
3.5 The creation of the accounting system and the rendering of
invoices did not amount to any tacit or express acknowledgement
of
the liability of either the purchasers or the Defendant and neither I
nor the Finance Department has any authority to make such

acknowledgements on behalf of the Defendant.
3.6 Lastly, had the agreement been fulfilled or complied with and had
transfer of the property taken place, all of which fall outside
the
ambit of the Finance Department, then the creation of the account
against which the invoices had been raised, would simply
have
resulted in an account having been created for bookkeeping purposes
to enable
contra
entries to be made balancing the diminishing
of the Defendant's asset register upon transfer of the property.
The creation
of the infrastructure amounted to this and not the
acknowledgements which the Plaintiffs seek to ascribe to the Finance
Department."
• Against this background, it is difficult to see how the
rendering of the monthly statements could have amounted to an
acknowledgement
of liability by the appellant, as the seller of the
property, in the spirit of
section 14(1)
which simply provides: "The
running of prescription shall be interrupted by an express of tacit
acknowledgement of liability
by the debtor."
• I add that, during the proceedings before us, a somewhat
concise submission was made by counsel for the respondents
representing,
if I understood it correctly, a further argument why
the claim could not have become prescribed.  Counsel's
submission, as
recorded in my notes, is simply to the effect that
"The right to transfer is yet to arise."
According to my
notes, counsel referred us to clauses 7.1 and 7.2 of
the deed of sale dealing with the appellant's duty, in terms of the
provisions
of section 67 of the 1939 Ordinance, to close the property
as a public open space, and clause 7.2 stipulates that the property
will only be transferred after the publication of the amendment
scheme contemplated in clause 7.3.
This argument was not raised in the opposing affidavit to the
rescission application or, for that matter, in the replication to
the
plea, and, at first blush, it also does not appear to be in harmony
with the argument,
supra
, offered in the particulars of claim
and dealt with in the prescription plea, to the effect that
"a reasonable period
required for finalisation of the
closure and rezoning would have expired on or about 15 January 2007".
In his address in reply before us, counsel for the appellant, dealing
with this "alternative" argument to counter prescription,

reminded us that it was not raised in the opposing affidavit and
submitted that if the right to transfer is yet to arise, it is

arguable that the action in itself is premature.  Of course,
where the argument was not raised in the answering affidavit,
the
appellant was also not able to address it in the replying affidavit.
It is also fair to assume that it was not mentioned
before the
learned Judge
a quo
.
• In all the circumstances, I have come to the conclusion, and I
find, that the plea of prescription was raised as a
bona fide
defence by the appellant and that it represents a triable issue.
I am unable, for all the reasons mentioned, to find that
the
prescription argument has no prospects of success, and I decline to
do so.
[34] I
turn to some more defences raised in the founding affidavit, by
reference to the plea and the special pleas which were also
dealt
with in the answering affidavit and the replying affidavit in the
rescission application before the learned Judge
a quo
.
I have mentioned that it is stated unequivocally in the papers
that the pleadings were placed before the learned Judge
a quo
and they were also placed before us in the form of volume 6 of
the record.
(iii) A second special plea was raised by the appellant, based on
section 3 of Act 40 of 2002, already referred to earlier.
• Section 3 of the said Act provides that 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 of his or her or its intention to institute
the
legal proceedings in question.  (Provision is also made for the
organ of state to consent in writing to the institution
of the
proceedings without such notice or upon receipt of a notice which
does not comply with the requirements of section 3(2).
This
does not apply for present purposes.)
• Section 3(2) provides that the notice must be given within six
months from the date on which the debt became due, be served
on the
organ of state in accordance with section 4(1) and set out the facts
giving rise to the debt and particulars which are within
the
knowledge of the creditor.  It was not disputed before us that
the appellant is an organ of state.
• Section 3(4) of the Act stipulates:
"(4)(a)  If an organ of state relies on a creditor's
failure to serve a notice in terms of subsection (2)(a), the creditor

may apply to a court having jurisdiction for condonation of such
failure.
(b) The court may grant an application referred to in paragraph (a)
if it is satisfied that –
(i) the debt has not been extinguished by prescription;
(ii) good cause exists for the failure by the creditor; and
(iii) the organ of state was not unreasonably prejudiced by the
failure.
(c) If an application is granted in terms of paragraph (b), the court
may grant leave to institute the legal proceedings in question,
on
such conditions regarding notice to the organ of state as the court
may deem appropriate."
• In the second special plea it is submitted that the
respondents failed to comply with these provisions by not only
failing
to give the notice within six months from when the alleged
debt became due, but, indeed, by failing to give any notice at all.

It is accordingly pleaded that the respondents are precluded from
having instituted the action and should further be precluded
from
proceeding therewith or claiming judgment in respect thereof.
• The respondents' replication to the plea is silent as to the
second special plea.
• In the opposing affidavit to the rescission application, the
respondents deal with this special plea, incorporated, as I

mentioned, in the founding affidavit by reference.
• The deponent on behalf of the respondents makes the following
submissions:
"31.32  I am advised that, in terms of the definition of
the word 'debt' in section 1 of the Act, demand notice of intended

legal proceedings to an organ of state is only required in terms of
section 3 of the Act, if payment of damages is claimed.
31.33   The relief that was sought and obtained by default
was for specific performance and a declaratory order.
The
relief does not impose liability on the defendant to pay damages.
31.34   Accordingly, in respect of the relief obtained by
default against the defendant, the plaintiffs were not required
to
give notice in terms of section 3(2) of the Act and were not
precluded in the absence of such notice, from proceeding with those

claims in the action."
• In their heads of argument, counsel for the appellant deal
with this argument in the following terms:
"The respondents' answer is a rather transparent attempt at
erasing from both their original and amended particulars of claim
the
fact that they claimed damages as alternatives to the specific
performance claims at the time when the learned Judge Collis
had to
exercise his/her discretion.  It bears noting that the damages
claims have as yet to be abandoned.  It is only
at the judgment
stage that Judge Collis granted specific performance in the absence
of the appellant.
Accordingly, at the time of default judgment, the respondents had
failed to comply with the Act and the Supreme Court of Appeal

judgment of
Vhembe District Municipality v Stewarts & Lloyds
[2014] ZASCA 93.
"
This judgment has since been reported at
[2014] 3 All SA 675
(SCA).
In
Vhembe
it was a straightforward claim for a liquidated
amount of money with interest and costs.  Damages did not enter
the equation
at all, as in the present matter, as argued by counsel.
I need not say any more for present purposes.
• It is also useful to quote the definition of "debt"
where it appears in the Act, as it is relied upon by the respondents

in their answer:
"'
Debt
' means any debt arising from any cause of action-
(a) which arises from delictual, contractual or any other 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."
(The fixed date is the date of commencement of the Act, in this case
28 November 2002.)
• Given the wide ranging nature of the definition, and the
submissions made by counsel for the appellant, it seems to me that

the second special plea raises a triable issue, and represents a
bona
fide
defence which ought not to be dismissed as having no
prospects of success.  This conclusion is also fortified by the
fact
(already referred to earlier in this judgment) that the
respondents chose to launch a separate application under a separate
case
number (22046/2014) served on 14 March 2014 shortly after
the respondents launched the striking out application and the
application
for default judgment.  This is the application that
was enrolled for 22 May 2014, after the default judgment application
which
was enrolled for 9 May 2014.  This is the state of affairs
which, according to Pretorius, led to her confusion and her incorrect

assumption that both the applications were enrolled for the same
day.  In the first mentioned, separate application, the
respondents seek declaratory relief as to the applicability of
section 3 to the present action and, in the alternative, condonation

for the late service of the notice contemplated in section 3 of the
Act.  This application never required attention from the
court
because it was overtaken by the 9 May default judgment forming
the subject of the present proceedings.  The conclusion
about
the triable issue raised in the second plea is fortified by the fact
that, under these peculiar circumstances, condonation
has not yet
been granted and, if the prescription plea were to be upheld, such a
result will be dispositive, not only of the whole
case, but also of
any condonation application in view of the provisions of section
3(4)(b)(i) already mentioned.
(iv) Another defence raised by the appellant in its plea, and
incorporated by reference in the founding affidavit in the rescission

application, is based on the provisions of clause 1.2.2 of the deed
of sale which provides:
"The balance namely R8 550 000,00 (eight million five hundred
and fifty thousand rand) plus interest thereon at the bond interest

levied by the seller's approved Banker, against registration of
transfer of the Property in the name of the Purchaser: provided
that
no interest shall be payable until the closure and rezoning referred
to in clauses 7.1 and 7.3 had been completed or for a
period of 18
(eighteen) months from the date of signing of the Deed of Sale,
whichever period expires first:
provided further that, should the
closure and rezoning not be finalised successfully, this transaction
shall be deemed to have been
mutually cancelled by the parties
,
in which instance the seller will refund the purchaser all payments
made by him in terms of this deed of sale, excluding those
in respect
of assessment rates and service charges, if any, plus interest at the
rate referred to above."  (Emphasis
added.)
• The plea on this subject is crafted as follows:
"12.1 In terms of clause 1.2.2 of annexure A to the particulars
of claim, the deed of sale shall be deemed to have been mutually

cancelled by the parties in the event of '... the closure and
rezoning not be (
sic
) finalised successfully'.
12.2 The closure and rezoning has not been finalised successfully.
12.3 In so far as the aforesaid clause does not prescribe a time
period for the successful finalisation of the closure and rezoning,

the defendant pleads that it was a tacit, alternatively implied term
of the said clause that such successful finalisation should
have
taken place within a reasonable period of time.
12.4 The defendant further pleads that, in the circumstances a period
of one year, alternatively two years, alternatively three
years would
constitute a reasonable period of time and that all of the
aforementioned periods have already elapsed.
12.5 In the premises the defendant pleads that the deed of sale
should be deemed to have been mutually cancelled."
• The plea is dated August 2012, more than nine years after the
deed of sale was signed and the default judgment was granted
in May
2014, almost eleven years after the event.
• It is also recorded in paragraph 13 of the plea that the
objections against the closure had not been withdrawn as alleged
by
the respondents in their particulars of claim.
It is further recorded in the plea that prior to the dates for the
alleged compliance with the appellant's obligations regarding
the
closure and rezoning procedures, the forensic report referred to
earlier, dealing with the possible irregular and fraudulent
disposal
of the property to the respondents, was received already on 18 July
2005, inspiring the appellant, as a responsible local
authority, not
to proceed with the closure and rezoning process.
• As I mentioned, this aspect was not addressed in the
replication but, as it was raised by reference in the founding
affidavit
to the rescission application, it was also dealt with in
the opposing affidavit of the respondents in the following terms:
"31.52  I am advised that on a proper interpretation of the
deed of sale, clause 1.2.2 does not apply in the event of
any party
obstructing the finalisation of the closure and rezoning of the
property.  To do so would enable a party to
frustrate the
implementation of the deed of sale and leave the other party in those
circumstances without remedy.
31.53   The defendant has obstructed the successful
finalisation of the closure and rezoning of the property.  In

the premises, the deed of sale should not be deemed to have been
mutually cancelled."
The same stance is adopted by the respondents in paragraph 2.2.31 of
the amended particulars of claim.
In this regard, counsel for the appellant argued that "if one
interprets the 2003 deed of sale, no mention is made of such
a term
(
my note
: that the deeming provision will not apply in the
event of any party obstructing the finalisation of the closure and
rezoning)
and it cannot be a tacit or implied term as it is contrary
to the express terms and intention of the parties".  This
is a reference, if I understood counsel correctly, to the so-called
"non-variation" provision contained in clause 5 of
the deed
of sale which stipulates:
"This agreement contains the total agreement between the
parties, and no addition, amendment or suspension of any provision
in
this agreement shall be effective unless reduced to writing and
signed by both parties."
• In my view, it is also arguable that the decision of the
appellant not to finalise the closure and rezoning procedures in
view
of the damning forensic report, cannot be said to amount to
"frustrating and obstructing" the successful finalisation

of these procedures.
• In the result, I have come to the conclusion, and I find, that
this defence based on clause 1.2.2 also represents a
bona fide
and triable one which may redound, if presented to a trial court, to
the advantage of the appellant.
[35] I
add that, quite apart from the defences raised by the appellant in
order to show good cause for purposes of obtaining a rescission,
it
is well settled that it is open to a party to raise a new point of
law on appeal for the first time if it involves no unfairness
to the
other party and raises no new factual issues – see for example
Naude and Another v Fraser
1998 BCLR 945
(SCA) at 960;
Paddock
Motors (Pty) Ltd v Igesund
1976 3 SA 16
(A) at 24B G and
Bank of Lisbon and South Africa Ltd v The Master and Others
1987 1 SA 276
(A) at 290E I.
[36]
On the wings of this principle, counsel for the appellant raised a
number of legal arguments aimed at demonstrating that a
number of
jurisdictional and statutory requirements for the passing of transfer
of the properties to the respondents were absent,
and were not
pleaded either in the amended particulars of claim so that those
particulars lack essential averments to sustain the
respondents'
cause of action for the relief claimed.  In the result, so it
was argued, the default judgment was erroneously
sought and granted
in the spirit of rule 42(1)(a), and for that reason alone, falls to
be rescinded.
[37]
In support of his argument, Mr Strydom relied heavily on the case of
Marais v Standard Credit Corporation Ltd
2002 4 SA 892
(WLD).
In
Marais
, the agreement underlying the dispute between the
parties was governed by the Credit Agreements Act 75 of 1980.
It was held
that where the agreement relied upon was governed by this
Act, the averment that the initial payment had been made was
essential.
Its absence would render the summons excipiable in
the sense that the summons would not disclose a cause of action.
Rule
42(1)(a) provides as follows:
"42(1)  The Court may in addition to any other powers it
may have
mero motu
or upon the application of any party
affected rescind or vary
(a) an order or judgment erroneously sought or erroneously granted in
the absence of any party affected thereby."
At
897A-B the learned Judge said the following:
"In terms of rule 42(1)(a) I can rescind the judgment on
application by the party affected.  In my view the word
'erroneously'
covers a matter such as the present one, where the
allegation is that for want of an averment there is no cause of
action, ie nothing
to sustain a judgment, and that the order was
without legal foundation and as such was erroneously granted for the
purposes of
rule 42(1)(a)."
[38]
It is also trite that once the court holds that a judgment was
erroneously granted, it should without further enquiry rescind
or
vary the judgment.  The applicant is not required in addition
thereto to show "good cause" for the rule to find

application – see
Tshabalala and Another v Peer
1979 4
SA 27
(T) at 30D-E.  See also
Topol and Others v L S Group
Management Services (Pty) Ltd
1988 1 SA 639
(WLD) at 650C J.
[39] I
also revisit my earlier remarks that no mention is made in the
founding papers of the rescission application, crafted in
a rather
unorthodox fashion, of the specific rule in terms of which the
application is brought, or, for that matter, that it is
brought in
terms of the common law.  Nevertheless, it appears from the
context of the founding and replying papers that the
deponents
covered the various requirements for rescission without making
mention of the particular rules or the common law.
In
this regard, we were also referred to
Mutebwa v Mutebwa and
Another
2001 2 SA 193
(Tk HC) where the learned Judge, in
dealing with the relevant authorities said the following at 198F H:
"On the basis of these two authorities the fact that an
application is specifically brought in terms of one Rule does not

mean it cannot be entertained in terms of another Rule or under
common law provided the requirements thereof are met."
It was
not argued before us that the application is flawed because the
specific rules or the common law were not mentioned or identified.
[40] I
turn to mention only two of the legal arguments raised by Mr Strydom
in support of his submissions that the particulars of
claim lack the
required averments to found a cause of action and that rule 42(1)(a)
can be applied for present purposes.
The submissions are very
briefly summarised:
• In terms of section 7(16) of the Gauteng Removal of
Restrictions Act, 3 of 1996 ("the GRRA") the Registrar,
upon
receipt of the MEC's decision (in this case upholding the
rezoning application) shall give notice of the decision in the
Provincial Gazette
without delay and shall in addition give
written notice of the decision together with the reasons therefore to
all parties to the
appeal by registered post within 14 days of the
decision of the MEC.
The approved application shall come into operation on a date stated
in the notice contemplated in the section.  If an appeal
is
lodged the application shall not come into effect until such time as
the appeal is approved in terms of section 7(16).
It is common cause that the MEC has yet to publish in the
Provincial
Gazette
the notice of approval in terms of section 7(16).
As such, despite the 8 June 2010 letter from the MEC his
decision
to "uphold the appeal and approve the rezoning"
has never come into operation because the provisions of section 7(16)

have not to date been complied with.
The respondents have made no case in their amended particulars of
claim (served on 3 December 2013) why –
(a) a party (namely the MEC) with a direct and substantial interest
in whether or not to publish the amendment scheme has not been
joined
to the proceedings.  This amounts to a fatal non joinder;
(b) There is no relief seeking the court to compel the MEC to publish
the mandatory section 7(16) notice in order to enable the
approval of
the application to come into effect.
The amendment of the Pretoria Town Planning Scheme, 1974, by rezoning
the property and the publication of the amendment scheme
is a
pre condition of transfer of the property in terms of clauses
7.2 and 7.3 of the deed of sale.
In the premises the default judgment was erroneously granted.
• The judgment was granted in breach of the mandatory provisions
of the Municipal Finance Management Act 56 of 2003 ("the
MFMA")
which expressly forbid the transfer of appellant owned land absent
compliance with the mandatory jurisdictional facts
set out in section
14 of the MFMA.
What is contemplated is that the Council must take the decision and
it must be minuted that the Council had considered, in accordance

with section 14(2)(b) of the said Act the economic and community
value to be received in exchange for the asset and that this must

happen before ownership of the capital asset is transferred or
permanently disposed of.
Additionally, the appellant may only lawfully transfer ownership or
otherwise dispose of a capital asset in the following circumstances,

where the appellant may prove that it did "at a meeting open to
the public, ..., decide that the (property) was not needed
to provide
the minimum level of basic municipal services and ... set out the
reasonable grounds for such a decision" –
see
Emalahleni
Local Municipality v Propark Association
[2013] 1 All SA 277
(SCA) at 285d g.
The amended particulars of claim lacked the essential averments to
sustain a cause of action for the relief claimed.  The
relevant
statutory requirements had to be complied with.  None of these
mandatory statutory requirements have been complied
with neither was
compliance pleaded.
Consequently, the principles laid down in
Marais
fall to be
applied.
So much for two of counsel's legal arguments.  For present
purposes I need only to conclude, as I do, that the arguments appear

to represent
bona fide
defences which ought not to be
dismissed at this stage as carrying no prospect of success.
I add that the learned author Harms,
Civil Procedure in the
Supreme Court
at B 301 - B 302 also recognises, with
reference to
Marais
, that an order is erroneously sought where
it was granted on a summons that did not disclose a cause of action.
This remark
is made by the learned author when dealing with the
provisions of rule 42(1).
Brief
remarks about submissions made in reply by Pretorius about the
subjects of wilful default (or lack thereof) and the
onus
to
show good cause
[41]
What follows is a brief summary of the submissions which, in my view,
are relevant for purposes of deciding the rescission
application and,
of course, also served before the learned Judge
a quo
:
• The inadvertent diarising of the applications, already
explained, is not something to be laid at the door of the appellant

which played no part in this oversight.
• It is denied that the appellant was disinterested and did not
follow the proceedings with the necessary diligence.
The
defendant furnished the attorneys with the necessary copies of the
documents, always attended consultations and confirmed its
obligation
to protect the assets of the local authority and not dispose thereof
irregularly or to the detriment of the ratepayers
or the citizens.
• The appellant (obviously, always a reference to its
representatives) participated in dealing with the amendment of the
particulars of claim and the introduction of a special plea regarding
non compliance with the requirements of Act 40 of 2002.
It
was in pursuance thereof that further consultations took place with
witnesses from the appellant's financial department.
At the
consultations the issue of prescription was also considered as well
as suggestions that had been made to have the matter
dealt with at
the trial as it required the leading of evidence.  It was during
this process that, rather than electing to
proceed to go to trial,
the plaintiffs elected to avoid the giving of evidence by having the
appellant's defence struck out and
default judgment granted.
• Accordingly, officers of the appellant were at all times fully
interested in the litigation.
• Submissions in the opposing affidavit regarding a lack of
bona
fides
of either Pretorius or the appellant's representatives is
without foundation and malicious.
• The defences raised, including those flowing from the forensic
report, are
bona fide
and triable issues are evident
therefrom.
• Failure to make discovery timeously or file pre-trial answers
timeously, months before the trial, resulted in no real prejudice
to
the respondents.
• Details, already appearing from the founding papers, about how
the mistaken diarising came about, are explained further.
In
the office of the appellant's attorneys, trial dates (which are
customarily far in the future) are entered into written/hard
copy
diaries.  Other dates such as short-term court appearances or
applications, are noted on a whiteboard which is accessible
to all
relevant personnel in the office.  The dates on the whiteboard
are in the form of a calendar and customarily cover
the following
four months (roughly equal to a High Court term).  If a month
passes, the whiteboard is cleared and the dates
for yet a further
month are written thereon.  Dates for interlocutory applications
are diarised in the same fashion and, in
this case, had indeed been
so diarised.
• The mistake, as already explained in the founding papers, was
that of Pretorius and had nothing to do with the conduct or
approach
of the appellant's officers.
Brief
remarks about the legal position
[42]
It seems to me that the following may be offered as a concise summary
of legal principles applicable to the adjudication of
rescission
applications:
(i) Rescission in terms of rule 31 does not apply to this case.
The application either resorts under rule 42(1)(a), the common
law or
both.
(ii) As to rule 42(1)(a), I have dealt with
Marais
, and the
supporting remarks made by the learned author
Harms
.
Once the rule finds application, it is not necessary to show good
cause.  The authorities have been listed.
In the leading case of
Colyn v Tiger Food Industries Ltd t/a
Meadow Feed Mills (Cape)
2003 6 SA 1
(SCA) the following is said
about rule 42 at 7B C:
"Not every mistake or irregularity may be corrected in terms of
the Rule.  It is, for the most part at any rate, a restatement

of the common law.  It does not purport to amend or extend the
common law.  That is why the common law is the proper
context
for its interpretation.  Because it is a Rule of Court its ambit
is entirely procedural."
It was held, at 8G H, that a filing error in the office of the
attorneys was not a procedural irregularity or mistake in respect
of
the issue of the order which would render rule 42 applicable.
(iii) As to the relief under the common law, it was demonstrated in
Colyn
, at 9C F, that in order to succeed, an applicant
for rescission of a judgment taken against him by default must show
good
cause.  This is generally achieved by -
(a) giving a reasonable explanation of the default;
(b) showing that the application is made
bona fide
; and
(c) showing that the applicant has a
bona fide
defence to the
claim which
prima facie
has some prospect of success.  In
Marais
, the learned Judge, dealing with the same subject,
points out, at 895H-I, that the
bona fide
defence, which
prima
facie
carries some prospect of success has also been
described as "dat die verweer nie klaarblyklik ongegrond is nie
en berus
op feite wat in hooftrekke vermeld moet word en wat, indien
bewys, 'n verweer daarstel" –
Du Plooy v Anwes Motors
(Edms) Bpk
1983 4 SA 212
(O) at 217.
(iv) What is also of particular importance, in my view, is that the
court has a wide discretion to grant or refuse a rescission.
In
Colyn
at 9D-E reference is made to what was said in
HDS Construction (Pty) Ltd v Wait
1979 2 SA 298
(E) at
300:
"When dealing with words such as 'good cause' and 'sufficient
cause' in other Rules and enactments the Appellate Division
has
refrained from attempting an exhaustive definition of their meaning
in order not to abridge or fetter in any way the wide discretion

implied by these words ... the court's discretion must be exercised
after a proper consideration of all the relevant circumstances."
In
De Wet and Others v Western Bank Ltd
1979 2 SA 1031
(A) the
following is said about the discretion at 1042F-H:
"Thus, under the common law, the Courts of Holland were,
generally speaking, empowered to rescind judgments obtained on
default
of appearance, on sufficient case (
sic
?) shown.
This power was entrusted to the discretion of the courts.
Although no rigid limits were set as to the circumstances
which
constituted sufficient cause ... the courts nevertheless laid down
certain general principles, for themselves, to guide them
in the
exercise of their discretion.  Broadly speaking, the exercise of
the courts' discretionary power appears to have been
influenced by
considerations of justice and fairness, having regard to all the
facts and circumstances of the particular case.
The
onus
of showing the existence of sufficient cause for relief was on the
applicant in each case ...  It follows from what I have
said
that the courts' discretion under the common law extended beyond, and
was not limited to, the grounds provided for in rules
31 and 42(1)
..."
In
Wahl v Prinswil Beleggings (Edms) Bpk
1984 1 SA 457
(TPA)
the learned Judge says the following at 461H:
"Die hof het by beoordeling van goeie redes ook 'n diskresie om
toe te sien dat reg en billikheid teenoor partye geskied ..."
On the same subject, the learned Judge in
Abraham v City of Cape
Town
1995 2 SA 319
(CPD), at 321I J, refers to the judgment
in
Cairns' Executives v Gaarn
1912 AD 181
in the following
terms:
"In his judgment at 186 Innes J declined to frame what he called
'an exhaustive definition of what would constitute sufficient

cause to justify the grant of indulgence'.  'Any attempt to do
so', he says, 'would merely hamper the exercise of a discretion
which
the rules have purposely made very extensive, and which it is highly
desirable not to abridge'."
(v) On the question of wilful default I consider the words of the
learned Judge, Moseneke J, as he then was, in
Harris v Absa
Bank Ltd t/a Volkskas
2006 4 SA 527
(TPD) at 530A J as being
of considerable significance:
"[8] Before an applicant in a rescission of judgment application
can be said to be in 'wilful default' he or she must bear
knowledge
of the action brought against him or her and of the steps required to
avoid the default.  Such an applicant must
deliberately, being
free to do so, fail or omit to take the step which would avoid the
default and must appreciate the legal consequences
of his or her
actions.
[9] The decision freely taken to refrain from filing a notice to
defend or a plea or from appearing, ordinarily will weigh heavily

against an applicant required to establish sufficient cause.
However, I do not agree that once wilful default is shown the

applicant is barred; that he or she is then never entitled to relief
by way of rescission as he or she has acquiesced.  The
court's
discretion in deciding whether sufficient cause has been established
must not be unduly restricted.  In my view,
the mental
element of the default, whatever description it bears, should be one
of the several elements which the court must weigh
in determining
whether sufficient or good cause has been shown to exist ..."
See
also
Neuman (Pvt.) Ltd v Marks
1960 2 SA 170
(SR) at 173.
The
judgment of the learned Judge
a quo
[43]
At this point it is necessary, and convenient, to consider the
findings of the learned Judge, and to determine whether or not
there
is room for this court of appeal to interfere therewith.  For
this purpose, I will proceed to deal with the question
as to whether
or not there were any misdirections on the part of the learned Judge.
[44]
The learned Judge, correctly in my view, deals with the neglect on
the part of the appellant's attorneys to react to correspondence

demanding compliance with the discovery and rule 30A notices and even
to respond adequately after the orders granted by Baqwa J
on
27 January 2014, compelling the appellant to comply with the
respective notices, were served on the appellant's attorneys.

The same applies to the service of the actual striking out and
default judgment applications.  I have already expressed the

view that the conduct of the appellant's attorneys fell short, in my
view, of what is expected of a reasonable diligent attorney.

The explanations by Pretorius and Hugo for these failures are also
less than perfect.
[45]
What I am in respectful disagreement with, is the finding by the
learned Judge that the appellant, under these circumstances,
"cannot
hide behind the mistakes of their attorneys".  I also
disagree with the findings of the learned Judge that
the appellant
manifested a complete disinterest in the conduct of its defence to
the action and that there was no effort on behalf
of the appellant to
request a postponement in regard to compliance with the Baqwa J
orders.  The same applies to the
finding that the "delays
and neglect" were on the side of the appellant.
In my
view, it is patently clear that the officers of the appellant played
no part in these delays and neglects, and this much is
stated
emphatically and repeatedly by both Pretorius and Hugo (in the case
of the latter, in the form of a confirmatory affidavit).
I
expressed the view earlier, that it is clear from the evidence read
as a whole, that the officers of the appellant, throughout,
played an
active role in the conduct of this litigation: they attended
consultations, a plea was filed to the particulars of claim
and the
abortive application which preceded the institution of the action was
opposed.  The appellant's Director: Litigation
Management
deposed to the replying affidavit and dealt with relevant issues such
as the forensic investigation, the abortive application,
the need to
have the evidence considered at a trial, certain constitutional
issues and the defences relating to prescription and
lack of
compliance with the requirements of section 3 of Act 40 of 2002.
The
employee in the Finance Department also filed an affidavit, already
referred to, about the nature of the monthly invoices and
the
question whether or not that could have amounted to express or tacit
acknowledgements of liability by the appellant.
What
is plain, is that there is no evidence whatsoever to suggest that the
officers of the appellant played a role in, or even had
knowledge of,
earlier failures of their attorneys to promptly answer letters or
respond to demands or the service of court orders.
[46]
In support of his conclusion that the appellant cannot hide behind
the mistakes of its attorneys and that the appellant manifested
a
complete disinterest in the conduct of the case and that there was no
effort on behalf of the appellant to request a postponement
in regard
to compliance with the Baqwa J orders, the learned Judge relies
on the decision in
Silber v Ozen Wholesalers (Pty) Ltd
1954 2
SA 345
(A).  In my view that case is distinguishable from
the present: in that case the defendant's attorney withdrew as its

attorney of record and wrote a letter to the defendant reiterating
the withdrawal and suggesting that the defendant should instruct
a
Johannesburg attorney to act and, if possible, brief counsel.
About three weeks after these events, the plaintiff's attorney
sent a
notice to discover as well as a notice of set down for the hearing of
the trial on 27 January 1953 to the defendant.
The notices
were addressed to the defendant's local office in Pretoria but the
notice of set down was evidently not sent to Johannesburg.
The
one director of the defendant said that it "subsequently slipped
my memory".  A few days later the plaintiff
served by
post on the defendant's Pretoria office a further notice of set down
of the trial.  Both the directors of the defendant
company
stated on oath that they received the notice informing them that
their attorney had withdrawn from the case.  It also
appears
from the judgment (at 350F) that the two notices of set down were
addressed to the correct Church Street address of the
defendant.
The learned Judge of Appeal states, at 351B: "... it is
difficult to understand how the receipt of the
notices of set down
could have continued to be forgotten by the latter"
(the reference to one of the directors).
In the
present case, nothing of the kind happened: no notices of set down or
other notices were sent to the appellant's officers,
neither did
their attorney withdraw from the case.
For
all the reasons mentioned, I find no basis to justify the conclusion
of the learned Judge that the appellant manifested "a
complete
disinterest" in the conduct of the defence of the action.
Similarly, I cannot support the finding that, in
this particular
case, the appellant must be blamed for the failures of its attorneys.
In
this regard, I have come to the conclusion that the learned Judge
misdirected himself.
[47]
The finding that no official of the appellant filed any supporting
affidavit is also not correct, for the reasons mentioned.
[48]
The finding of the learned Judge that "the indifferent attitude
of the defendant is further illustrated in the fact that
no
correspondence was received from the defendant's attorneys after the
launching of the strike-out application and prior to the
hearing
thereof" also, in my view, amounts to a misdirection: I fail to
see how the appellant's officers can be blamed for
the failure of
their attorneys to keep them up to date with correspondence.
This, in my view, is also a misdirection.
[49]
The finding that there was no condonation application accompanying
the late filing of the replying affidavit is also not, strictly

speaking, correct: built into the replying affidavit, more
particularly in paragraph 8 of the Pretorius supporting affidavit, is

an explanation for the late filing of the replying affidavit and a
request for condonation.
[50]
The learned Judge, in support of his finding that the appellant
should be penalised for the failure of its attorneys, points
out that
"there comes a point where there is no alternative but to make
the client bear the consequences of the negligence
of his
attorneys".  In this regard the learned Judge relies on the
well known judgment in
Saloojee and Another N.N.O. v Minister
of Community Development
1965 2 SA 135
(A).  It appears to
me that that case is distinguishable in the sense that it has nothing
to do with a rescission application
but involved a delay in noting an
appeal and in lodging the record timeously, as well as a delay in
seeking condonation.
It is trite that, where condonation is
sought under such circumstances, the prospects of success on appeal
are of cardinal importance.
In that case, at 142H 143A,
the learned Chief Justice held that although he could not find that
there were no prospects of
success, "I cannot regard it
otherwise than doubtful and uncertain".
I have
already expressed the view, by referring to a number of defences
raised, that, for purposes of meeting the common law requirements
for
a rescission, the appellant showed
bona fide
defences "which
prima facie
carry some prospect of success" in the words
of the learned Judge in
Marais
at 895G.  I also revisit
the words of the learned Judge in
Du Plooy, supra
, when
dealing with this requirement, namely "dat die verweer nie
klaarblyklik ongegrond is nie en berus op feite wat
in hooftrekke
vermeld moet word en wat, indien bewys, 'n verweer daarstel".
In
these circumstances, I am of the view that the learned Judge
misdirected himself by relying on
Saloojee
for purposes of his
judgment.
[51]
In the circumstances of this case, I am also not in sympathy with the
finding of the learned Judge that "the application
of the
defendant is not
bona fide
".  The weight of the
evidence, for reasons mentioned, clearly indicates the contrary.
This is also a misdirection.
[52]
As to the approach by the learned Judge to the defences raised by the
appellant, for purposes of showing good cause, I make
the following
brief and respectful remarks:
• I cannot agree with the finding that the reference by
Pretorius to the forensic report, which is attached to the founding

affidavit, amounts to hearsay evidence: it is common cause that the
report was brought out on the subject matter underlying
this
case and the respondents, in their answering affidavit, dealt with
the contents of this report at some length, in denying
any
impropriety on their part.  In the replying affidavit, the
Director: Litigation Management, of the appellant, also refers
to the
forensic report at some length.
• As to the defences of prescription, and failure to comply with
the requirements of section 3 of Act 40 of 2002, the learned
Judge
referred to them in rather sweeping terms.  He simply found that
the monthly invoices constituted express or tacit acknowledgements
of
liability by the appellant and that the need for a section 3
notice only applies if payment of damages is claimed.
I went to the trouble to deal with these defences at some length
earlier in this judgment, something which, in my respectful view,
is
not evident from the approach adopted by the learned Judge.  In
my view, the learned Judge misdirected himself by finding
that the
appellant failed to present sufficient evidence to constitute "
prima
facie
, a prospect of success in the action".
It appears that the learned Judge failed to consider the
relatively generous
requirement, for purposes of obtaining a
rescission, at common law, of showing a
bona fide
defence
which
prima facie
carries some prospect of success.
• The learned Judge did not deal at all with the other defence
raised in the plea namely that based on a proper interpretation
of
clause 1.2.2 of the deed of sale and the deeming provision that if
the closure and rezoning procedures are not completed successfully,

the transaction must be regarded as having been mutually cancelled.
• The learned Judge, correctly, referred to the judgment in
Harris
and found that the wilful or negligent nature of the
default of an applicant for rescission is one of the considerations
which
the court would take into account in the exercise of the
discretion to determine whether or not good cause is shown.
However,
it appears, with respect, that the learned Judge failed to
appreciate the full significance of the judgment and the nature of
the
discretion which appears from the extract I quoted earlier in
this judgment and, more particularly, the remarks made by the learned

Judge at 530A J.  This, in my view, also amounts to a
misdirection.
[53]
In conclusion, I record that I did not overlook the trite principle
that the powers of a Court of Appeal to interfere with
the findings
of fact of a
trial
court are limited (emphasis added).  I
refer to the well known cases of
Rex v Dhlumayo and Another
1948 2 SA 677
(A) and later decisions like
Taljaard v Sentrale
Raad vir Koöperatiewe Assuransie Bpk
1974 2 SA 450
(A) at
452A B and
S v Francis
1991[1] SACR 198 (A) at 204c e.
In
this case the court
a quo
did not sit as a trial court where
the presiding Judge was "steeped in the atmosphere of the trial"
and had the opportunity
to observe the demeanour of the witnesses.
In the result, although certain findings of fact of the learned Judge
a quo
are criticised in this judgment, it seems that the
trite approach referred to does not find strict application.
Moreover,
the findings of fact which came under scrutiny had to be in
harmony with the legal principles applicable to rescission
applications.
[54]
In all the circumstances I have come to the conclusion, and I find,
that this is a proper case for this Court of Appeal to
interfere with
the findings and conclusions of the court below.
Conclusionary
remarks
[55]
The appellant succeeded in making out a case for good cause in order
to succeed with a common law rescission application: there
was a
"reasonable and acceptable" explanation for the appellant's
default, although the appellant's attorneys did not
cover themselves
in glory.  There is no evidence that the appellant's officers
had knowledge of the applications for striking
out and default
judgment and deliberately failed or omitted to take the necessary
steps to avoid the default judgment and appreciated
the legal
consequences of their actions, in the spirit of the words of the
learned Judge in
Harris
at 530A-J.
[56]
The court's wide discretion in deciding whether or not there was
wilful default on the part of the applicant for rescission
as
described in
Harris
and other cases mentioned in this
judgment, should therefore be exercised in favour of the appellant.
[57]
As to the second element, constituting the requirement to show good
cause, I have come to the conclusion, and I find, that
the appellant
raised a number of
bona fide
defences which
prima facie
carry some prospect of success.  The reasons for these
conclusions have been mentioned.
[58]
The appeal falls to be upheld and the costs should follow the result,
and include the costs of two counsel.
The
order
[59] I
make the following order:
1. The appeal is upheld with costs, including the costs flowing from
the employment of two counsel.
2. The order of the court
a quo
is set aside and replaced with
the following:
"1. The application is granted, and the order of 9 May 2014 is
rescinded and set aside.
2. The plaintiffs/respondents, jointly and severally, are ordered to
pay the costs of the application, which will include the costs

flowing from the employment of two counsel."
W R C
PRINSLOO
JUDGE OF THE
GAUTENG DIVISION, PRETORIA
I
agree
J R
MURPHY
JUDGE OF THE
GAUTENG DIVISION, PRETORIA
I
agree
N V
KHUMALO
JUDGE OF THE
GAUTENG DIVISION, PRETORIA
HEARD
ON:  14 SEPTEMBER 2016
FOR
THE APPELLANT:  T STRYDOM SC ASSISTED BY T MKHWANAZI
INSTRUCTED
BY:  HUGO & NGWENYA INCORPORATED
FOR
THE RESPONDENTS:  E C LABUSCHAGNE SC ASSISTED BY H P PRETORIUS
INSTRUCTED
BY:  ADAMS & ADAMS