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[2015] ZAGPPHC 419
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Vunene Mining (Pty) Ltd v VB Minerals (Pty) Ltd; In Re: VB Minerals (Pty) Ltd v Vunene Mining (Pty) Ltd (32806/2014) [2015] ZAGPPHC 419 (13 May 2015)
THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
CASE NO: 32806/2014
DATE
OF HEARING: 13 MAY 2015
In
the matter between:
VUNENE
MINING (PTY)
LTD
Applicant
and
VB MINERALS
(PTY)
LTD
Respondent
In Re:
VB MINERALS
(PTY)
LTD
Plaintiff
and
VUNENE
MINING (PTY)
LTD
Defendant
J U D G M E N T
AVVAKOUMIDES, AJ
1.
The
applicant is the defendant in the main action between the parties,
against whom default judgment was granted against it by the
registrar
of this court in the sum of R4 621 140.07 together with interest and
costs.
2.
The
plaintiff issued summons against the defendant for payment in the sum
of R4 621 140.07 being in respect of mining services rendered
in
terms of a written contract. The plaintiff’s claim is based on
the alleged breach of this contract. The plaintiff’s
claim,
despite being based on the breach of the contact, is also alleged to
be based upon a partly written and partly oral agreement
in the
particulars of claim. Furthermore the plaintiff relies on express
alternatively tacit, further alternatively implied terms
of the
contract, the terms of the latter two which are not evident in the
particulars of claim.
3.
In
any event the contract relied upon by the plaintiff contains a so
called non-variation clause, which prohibits the amendment
of the
agreement without it being reduced to writing and signed by the
parties thereto. Thus, in the absence of pleading the implied
or
tacit terms of an oral agreement, one cannot rely on such terms.
4.
The
applicant chose its domicilium address in the contract which
coincided with the applicant’s registered office address
as
well. The summons was served on this address and the sheriff’s
return of service indicates that the summons was affixed
to the
principal door of the address for service. It is common cause that
this address is also the address of the controlling shareholder
in
and to the applicant company.
5.
The
applicant alleges that at the time of the service of the summons,
namely 21 May 2014, the applicant had already moved its business
operations from the said address and consequently did not receive the
summons on the date of service thereof. The applicant says
that it
only became aware of the summons and default judgment on when the
sheriff attached the applicant’s banking account
and upon the
applicant’s bank manager contacting the applicant’s
representative.
6.
The
applicant alleges that it had given instructions to its attorneys to
change the registered office address during August or September
2013
but this had been delayed. The respondent on the other hand argued
that the applicant had chosen its domicilium address in
the contract
and it was bound to this address and nothing more could be expected
of the respondent to do, when serving the summons.
7.
Whilst
this may be true the summons issued by the respondent does not rely
on a domicilium address but rather the registered office
address of
the applicant. The mere fact that both these addresses are the same
does not necessarily mean the same thing. The respondent
says that
because this address was the domicilium address the respondent acted
properly and if the applicant did not receive the
summons it is not
the fault of the respondent. This argument is rather misplaced under
the circumstances. In order for the applicant
to succeed with the
rescission it must overcome two hurdles, namely to give a reasonable
explanation for not having reacted to
the summons and secondly to set
out a
bona
fide
defence to the respondent’s claim.
8.
On
the facts before me and with due regard to the learned author Harms –
Civil Procedure in the Civil Superior Courts at paragraph
B31.11 and
the case of Saraiva Construction (Pty) Ltd v Zululand Electrical and
Engineering Wholesalers (Pty) Ltd
1975 (1) SA 612
D & CLD I
cannot find that the applicant was in wilful default. In the latter
case it was held that despite gross negligence
by the party’s
legal representatives, this was not fatal to the application.
9.
In
my view it is frankly irrelevant whether the summons was served at
the correct address. The issue is really whether the applicant
received the summons or not and if so, what the applicant did about
the summons. The respondent was not able show that the applicant
had
indeed known of the service of the summons. The respondent argued
that because the controlling shareholder occupied the same
building
at the same address as the applicant’s registered office
address and domicilium address, I must accept that such
shareholder
would have received the summons and drawn the applicant’s
attention to the summons. This argument is also with
respect,
misplaced.
10.
The
applicant argued that it was common cause on the papers that the
respondent was aware that the applicant’s operations
had moved
from the said address at the time of service of the summons, and this
being the case, I do not believe that there is
any merit to further
delve into whether there was wilful default on the part of the
applicant. I am satisfied that the applicant
has overcome this hurdle
on the facts before me.
11.
The
second requirement for the applicant to show that it has a bona fide
defence to the respondent’s claim.
12.
The
applicant alleges that the contract was concluded on the premise that
the respondent’s principal “
is
in the business of providing project management consulting services
to the mining industry
”
and ”
has
all the necessary expertise to provide such services
…..”.
The responsibilities, duties and the like are detailed in the
contract. The parties submitted that it was common
cause that the
respondent’s principal member would, in the course of rendering
services to the applicant, also undergo certain
training in the
particular industry.
13.
The
applicant submitted that the contract and the conclusion thereof is
suspect because, as it turned out, the respondent’s
principal
member had no experience in the particular industry and the applicant
suspects that it was fraudulently concluded alternatively
inappropriately. In either event the applicant is of the view that it
could cancel the contract, which it did in terms of a letter
dated 31
March 2014 whilst relying on clauses 1.2 and 9.2 of the contract.
14.
The
respondent submitted that because the applicant had in fact paid the
respondent for services rendered from the date of conclusion
of the
contract to the date of cancellation, the applicant should be
estopped from relying on the absence of expertise on the part
of the
respondent’s principal member. At this stage of the proceedings
there can be no mention of estoppel. This is something
the respondent
would have to canvass at trial stage and of course, plead estoppel.
15.
On
the facts before me and having had sight of the default judgment
application it is firstly inconceivable how the registrar could
have
arrived at the claim amount without any supporting documentation to
show calculation thereof, and secondly the default judgment
so
granted by the registrar goes further than to merely grant default
judgment. The remaining prayers of the judgment are declaratory
in
nature and the registrar does not possess the authority to have made
such an order.
16.
In
the circumstances I am satisfied that the applicant has set out a
bona
defence
and has made out a case for rescission the default judgment. I was
advised by counsel for both parties that when the sheriff attached
the applicant’s banking account, the applicant had set security
in order to prevent the sheriff from continuing with the
execution
steps. Such security was set by paying the whole claim amount into
the trust account of the respondent’s attorneys
of record and
Mr Engelbrecht SC confirmed that such amount has been invested in
accordance with the provision of section 78 2 A
of the Attorneys
Act.
17.
On
the question of costs the applicant submitted that the opposition of
the application was frivolous and unreasonable. Again on
the facts
before me, and in particular having regard to the allegations made by
the respondent regarding the alleged wilful default
and the absence
of a
bona
fide
defence, I am of the view that the opposition of the application was
indeed unreasonable.
18.
I
accordingly make the following order:
18.1
The default judgment granted against the applicant under case number
32806/2014 on 6 August 2014 is hereby rescinded.
8.2
All warrants/writs of execution issued pursuant to the default
judgment
are hereby set aside.
18.3
The security set by the applicant in the sum of R4 621 140.07 plus
all
accrued interest on the investment in terms of section 78 2 A of
the Attorneys Act shall be repaid by the respondent and/or its
attorneys of record to the applicant within 7 days of the date of
this judgment.
18.4
The applicant is ordered to file its plea within 10 days of the date
of this order.
18.5
The respondent is ordered to pay the costs of this application.
________________________________
AVVAKOUMIDES, AJ
JUDGE OF THE HIGH COURT
GAUTENG
DIVISION, PRETORIA
Representation for Applicant:
Counsel
Adv: J. D. Maritz
Instructed by:
Nelson Borman Attorneys
Representation for the Respondent:
Counsel
Adv: J. Engelbrecht SC
Adv S. S. Green
Instructed by
Van Antwerp Attorneys