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[2015] ZAKZPHC 30
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Mathie v Ruijter Stevens Properties (Pty) Ltd (AR352/14) [2015] ZAKZPHC 30 (11 June 2015)
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
CASE
NO: AR352/14
DATE:
11 JUNE 2015
In
the matter between:
Hugh
William
Mathie
...............................................................................................................
Appellant
And
Ruijter
Stevens Properties (Pty)
Ltd
....................................................................................
Respondent
ORDER
The
appeal is dismissed with costs.
JUDGMENT
SEEGOBIN
J:
[1]
This is an appeal against the refusal by the additional magistrate,
Mr T. Govender, of the Magistrate’s Court, Stanger, to
rescind a judgment by default obtained by the respondent against the
appellant on 28 August 2012
[1]
.
The appellant is the applicant in the rescission application and the
defendant in the action instituted against him by the plaintiff.
I
shall for convenience refer to the parties as plaintiff and
defendant.
FACTUAL
BACKGROUND
[2]
The plaintiff is a company. In terms of a written agreement of lease
which was concluded in April 2009, the plaintiff leased
certain
premises to the defendant at the Ballito Business Park. The
defendants chosen
domicilium
address
for purposes of the lease agreement was Shop 1, The Circle, Douglas
Crow Drive, Ballito
[2]
. On
23 April 2012 and out of the Magistrate’s Court, Stanger, the
plaintiff sued the defendant for certain arrear rental
in an amount
of R68 172,32
[3]
.
[3]
The summons was served on 2 May 2012 at an address referred to in the
return as “Liquor City, Ballito”. The
return of
service records that the defendant was no longer at the given
address, namely Shop 1A, The Circle
[4]
.
This is the
domicilium
address
referred to above.
[4]
With no appearance to defend being filed by the defendant, the
plaintiff applied for and was granted judgment by default on
28
August 2012
[5]
. On 26
November 2012 there was a failed attempt to serve a writ of execution
on the defendant’s premises. It
is common cause that the
execution of the writ was not pursued with. Despite this the
defendant launched an urgent
ex
parte
application on 11 December 2012 for an order staying the execution of
the writ pending an application for rescission to be instituted.
The
application was opposed by the plaintiff
[6]
.
The reason proffered by the defendant for not instituting an
application for rescission was that he was experiencing difficulty
in
uplifting his file from the offices of his former attorneys.
[5]
It is common cause that the rescission application was only
instituted on 21 January 2013
[7]
.
This was well out of the 20 day period prescribed by Rule 49(1) and
(2) of the Magistrate’s Court Rules. It
is also common
cause that the application was not accompanied by an application for
condonation. When the matter was initially
argued on 17 May
2013, the defendant’s attorney sought to rely on a so-called
moratorium and/or practice directive of that
court which precluded
practitioners (in that court) from filing any processes between 16
December and 15 January. From the
record it is not precisely
clear what this moratorium entailed. It was accepted however,
that in terms of Rule 13(1) of the
Magistrate’s Court Rules,
the days between 16 December and 15 January should not be counted for
the purpose of delivery of
an appearance to defend only. This did not
include other processes. The effect of this was that the
defendant was out of
time for the filing of his rescission
application and as such an application for condonation was required.
The matter was
then adjourned to enable the defendant to bring such
an application which was duly done. The plaintiff no doubt
opposed that
application as well
[8]
.
[6]
The rescission application as well as the application for condonation
were fully argued before the learned magistrate.
Needless to
say in terms of a written judgment delivered on 25 March 2014, the
learned magistrate refused the application for rescission
with
costs. It is against that decision which the defendant appeals.
BASIC
LEGAL PRINCIPLES
[7]
Before considering whether the learned magistrate was correct in
finding that the defendant had failed to make out a proper
case for
rescission, it is perhaps convenient to remind practitioners of
certain basic legal principles that govern rescission
applications as
well as applications for condonation.
RECISSION
[8]
I deal firstly with applications for recission. Jones J in
De
Witts Auto Body Repairs (Pty) Ltd v Fedgen Insurance Co. Ltd
[9]
set
out the position as follows:
“
Applications
for rescission of judgment are governed by
s 36(1)
of the
Magistrates' Courts Act 32 of 1944
, which provides that
'
(t)
he
court may, upon application by any person affected thereby . . .
rescind or vary any judgment granted by it in the absence
of the
person against whom that judgment was granted'.
The
procedure is regulated by Magistrates' Courts Rules 49(1) and (2),
which provide as follows:
'(1)
A party to proceedings in which a default judgment has been given
may within 20 days after the judgment has come to his
knowledge
apply to court upon notice to the other party to set aside such
judgment and the court may upon good cause shown and,
save where
leave has been given to defend as a
pro deo
litigant in terms
of Rule 53, provided the applicant has furnished to the respondent
security for the costs of the default judgment
plus an amount of R200
as security for the costs of the application, set aside the
default judgment on such terms as it may
deem fit: Provided that the
respondent may by consent in writing lodged with the clerk of the
court waive compliance with the requirement
of security.
(2)
Such application shall be on affidavit which shall briefly set forth
the reasons for his absence or default of delivery of a
notice of
intention to defend or of a plea, and the grounds of defence to
the action or proceedings in which the judgment
was given.'
Rule
49(7) has been repealed. This was the Rule restricting the
magistrate's discretion by laying down that a judgment cannot be
rescinded if the defendant against whom it was taken was in wilful
default
(Silber v Ozen Wholesalers (Pty)
Ltd
1954 (2) SA 345
(A)). In view of the
repeal, the wilful or negligent or blameless nature of the
defendant's default now becomes one of the
various considerations
which the courts will take into account in the exercise of their
discretion to determine whether or not
good cause is shown.
The
general approach of the courts to applications for rescission was
restated by Smalberger J, as he then was, in the case of
HDS
Construction (Pty) Ltd v Wait
1979 (2) SA 298
(E) at
300F-301C in the following terms:
'In
Grant v Plumbers (Pty) Ltd
1949
(2) SA 470
(O) Brink J, in dealing with a similar provision, held (at
476) that in order to show good cause an applicant should comply with
the following requirements:
(a)
He must give a reasonable explanation of his default;
(b)
his application must be made
bona fide
;
(c)
he must show that he has a
bona fide
defence to the plaintiff's claim.
It
is not disputed that the defendant's application is
bona fide
and that he has shown that he has a
bona fide
defence to the
plaintiff's claim. What is in issue is whether he has given a
reasonable explanation for his default.
In
determining whether or not good cause has been shown, and more
particularly in the present matter, whether the defendant has
given
a reasonable explanation for his default, the Court is given a
wide discretion in terms of Rule 31(2)
(b)
.
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
(Cairns'
Executors v Gaarn
1912 AD 181
at 186;
Silber v Ozen Wholesalers (Pty) Ltd
1954
(2) SA 345
(A) at 352-3). The Court's discretion must be
exercised after a proper consideration of all the relevant
circumstances. While
it was said in
Grant's
case that a Court should not come to the assistance of a defendant
whose default was wilful or due to gross negligence, I agree
with the
view of Howard J in the case of
Saraiva
Construction (Pty) Ltd v Zululand Electrical and Engineering
Wholesalers (Pty) Ltd
1975 (1) SA 612
(D) at 615, that while a Court may well decline to grant relief where
the default has been wilful or due to gross negligence it
cannot be
accepted
‘
that
the absence of gross negligence in relation to the default is an
essential criterion, or an absolute prerequisite, for the
granting of
relief under Rule 31(2)
(b)
’.
It
is but a factor to be considered in the overall determination of
whether good cause has been shown although it will obviously
weigh
heavily against the applicant for relief. The above does not in my
view detract in any way from the decision in this
Court in
Vincolette v Calvert
1974
(4) SA 275
(E).'
In
Zealand v Milborough
1991 (4) SA 836
(SE), I cited and applied
the above passage at 837H-838D, and added the comment that
'a
measure of flexibility is required in the exercise of the Court's
discretion. An apparently good defence may compensate for a
poor explanation (Harms
Civil
Procedure in the Supreme Court
313
(K6)), and
vice versa
.'”
[9]
A further factor to be borne in mind is that a magistrate’s
decision not to rescind lies within the discretion of that
magistrate. A court of appeal is accordingly not at liberty to
upset such a decision merely because it thinks that it would
have
probably come to a different conclusion on the facts. It should
be pointed out, however, that a magistrate is bound
to exercise his
discretion judicially in light of the considerations set out above,
and any other considerations which might be
relevant.
CONDONATION
[10]
In
Darries
v Sheriff, Magistrate’s Court, Wynberg and Another
[10]
Plewman
JA observed that the number of petitions for condonation of failure
to comply with the rules of that court (SCA) was a matter
of grave
concern. Regrettably, that trend continues both in the High
Courts and the Magistrate’s Courts as evidenced
by the number
of reported decisions in which the issue has been dealt with.
In my view, many practitioners continue to believe
that condonation
is a mere formality. There is a growing trend, particularly
with appeals in this court, for practitioners
to apply for
condonation on the most flimsy of grounds. What is even more
concerning is that in most cases such applications
are made at the
very last minute. In most cases as well, the non-compliance
with the rules or directions of a court occur
as a result of
tardiness on the part of practitioners and not the litigants
themselves.
[11]
It is trite that condonation of the non-observance of the rules of
court is not a mere formality. In
Darries, supra,
Plewman JA set out the applicable principles as follows:
“
I
will content myself with referring, for present purposes, only to
factors which the circumstances of this case suggest should
be
repeated. Condonation of the non-observance of the Rules of this
Court is not a mere formality (see Meintjies v H D Combrinck
(Edms) Bpk
1961 (1) SA 262
(A) at 263H--264B; Saloojee and Another
NNO v Minister of Community Development
1965 (2) SA 135
(A) at
138E--F). In all cases some acceptable explanation, not only of, for
example, the delay in noting an appeal, but also, where
this is the
case, any delay in seeking condonation, must be given. An appellant
should whenever he realises that he has not complied
with a Rule of
Court apply for condonation as soon as possible. See
Commissioner
for Inland Revenue v Burger
1956
(4) SA 446
(A) at 449F--H;
Meintjies's
case
supra
at 264B;
Saloojee's
case
supra
at 138H. Nor should it simply be assumed that, where non-compliance
was due entirely to the neglect of the appellant's attorney,
condonation will be granted. See
Saloojee's
case
supra
at 141B--G. In applications of this sort the appellant's
prospects of success are in general an important though not decisive
consideration. When application is made for condonation it is
advisable that the petition should set forth briefly and succinctly
such essential information as may enable the Court to assess the
appellant's prospects of success. See
Meintjies's
case
supra
at 265C--E;
Rennie
v Kamby Farms (Pty) Ltd
1989
(2) SA 124
(A) at 131E--F;
Moraliswani
v Mamili
1989
(4) SA 1
(A) at 10E. But appellant's prospect of success is but one
of the factors relevant to the exercise of the Court's discretion,
unless
the cumulative effect of the other relevant factors in the
case is such as to render the application for condonation obviously
unworthy of consideration. Where non-observance of the Rules has been
flagrant and gross an application for condonation should
not be
granted, whatever the prospects of success might be. See
Ferreira
v Ntshingila
1990
(4) SA 271
(A) at 281J--282A;
Moraliswani
v Mamili (supra
at 10F);
Rennie
v Kamby Farms (Pty) Ltd (supra
at 131H);
Blumenthal
and Another v Thomson NO and Another
[1993] ZASCA 190
;
1994
(2) SA 118
(A) at 121I--122B.”
[12]
The non –observance of court rules is not confined to the lower
courts and High Courts. It is a problem that rears
its head
every so often even in the Constitutional Court. However, in
addition to the factors referred to above, the test
in that court for
determining whether condonation should be granted or refused is the
interests of justice. The factors generally
considered by that
court were restated recently by Madlanga J in
Turnbull-Jackson
v Hibiscus Coast Municipality
[11]
as
follows:
“
[23]
In this Court the test for determining whether condonation should be
granted or refused is the interests of justice. Factors
that the
Court weighs in that enquiry include: the length of the delay;
the explanation for, or cause of, the delay;
the prospects of
success for the party seeking condonation; the importance of the
issues that
the
matter
raises;
the
prejudice
to
the
other
party
or
parties;
and
the
effect
of
the
delay
on
the
administration of justice.
It should be noted that although the
existence of prospects of success in favour of the party seeking
condonation is not decisive,
it is a weighty factor in favour of
granting condonation.
[24]
This
Court
has
in
the
past
cautioned
against
non-compliance
with
its
rules
and
directions.
The
words
of
Bosielo AJ bear repetition:
“
I
need
to
remind
practitioners
and
litigants
that
the
rules
and
courts
’
directions
serve
a
necessary
purpose.
Their
primary aim is to ensure that the business of our
courts is run effectively and efficiently. Invariably this will lead
to the orderly
management of our courts’ rolls, which in turn
will bring about the expeditious disposal of cases in the most
cost-effective
manner. This is particularly important given the
ever-increasing costs of litigation, which if left unchecked will
make access
to justice too expensive.”
[25]
The explanation given by the applicant’s Counsel is
unsatisfactory. Where non-compliance with the rules or directions
is
as a result of the fault of a litigant’s legal representative,
certain considerations come into the equation. Before I
deal with
them, let me emphasise that an application for condonation is not a
mere formality.
This
is true whether it is the litigant, the legal representative or both
who are at fault. The test remains the same: is it in
the interests
of justice to grant condonation?”
[13]
In deciding whether condonation should be granted or not, courts have
a wide discretion which must be exercised judicially
having regard to
the facts of each case. In each case the question is whether
good or sufficient cause has been shown for
the relief sought.
Good cause requires that the application must be
bona
fide
[12]
.
Wilful default or gross negligence will often preclude a finding of
good cause. Good cause also includes but is not
limited to the
existence of a substantial defence
[13]
.
THE
APPEAL
[14]
The essential issue in this appeal is whether the learned magistrate
exercised his discretion correctly in refusing the rescission
application. The judgment of the learned magistrate was
attacked on three (3) levels. The
first
was
that he erred in finding that the defendant had conceded that he
brought the rescission application out of time and that a moratorium
relating to the
dies
non
was not available to the defendant. The
second
was that the learned magistrate erred in finding that the defendant
had failed to establish a
prima
facie
case with a
bona
fide
defence which disclosed a triable issue. The
third
was that the court
a
quo
in the exercise of its discretion, failed to take into account all
three factors namely, the period of the delay, the explanation
for
the delay and good cause
[14]
.
[15]
As far as the issue of the so-called moratorium is concerned, the
defendant failed to put up any cogent evidence to satisfy
the learned
magistrate that such a moratorium was in existence and that it went
beyond the
dies non
referred to in Rule 13(1) of the Magistrate’s Court Rules.
Had such a moratorium been in place, I have no doubt that
the learned
magistrate, who presides in those courts, would have agreed with the
defendant’s attorneys when the issue was
first raised on 17 May
2013. Mr Pillay who appeared on behalf of the plaintiff in the
court
a quo
and on appeal, assured us that no such moratorium was in place at the
time. In any event, whatever the ‘misunderstanding’
or ‘confusion’ in the mind of the defendant’s
attorney insofar as this moratorium is concerned, the defendant
nonetheless accepted that he was out of time for the filing of his
rescission application.
[16]
Since the second and third grounds advanced by the defendant are
inter-related, I intend dealing with them as one. In
considering whether the defendant was entitled to an order rescinding
the judgment, the learned magistrate was duty bound to have
regard to
all the information that was placed before him. He considered
correctly, in my view, that the application for condonation
could not
be determined in isolation without the defense of the defendant being
considered simultaneously. This was no doubt
necessary to
decide whether the application was
bona
fide
and whether a
bona
fide
defence had been disclosed.
[17]
Bearing in mind that the relationship between the plaintiff and
defendant was governed by a written agreement of lease which
contained a non-variation clause, the defence put up by the defendant
involved an oral arrangement which the defendant allegedly
had with a
third party by the name of one Du Preez. He averred that during
the first quarter of 2007 he and Du Preez shared
equally in the
profits of a business trading as ‘Hugh Mathie Beds’ which
conducted business from the Ballito Business
Park. However, in
view of the fact that the defendant’s credit rating was bad,
there was an oral arrangement between
him and Du Preez that the
latter would employ him but that between them it was understood that
they would share in the profits.
[18]
The defendant went on to aver that despite this arrangement, and when
it came to starting the present business at the Ballito
premises
(which is the subject matter of the lease), Du Preez refused to sign
the lease agreement. The plaintiff overlooked
the defendant’s
negative credit rating and was prepared to have him as a tenant.
He avers that it was as a result of
‘brinkmanship’ on the
part of Du Preez that he was forced into this situation so as to
avoid any delay in opening their
doors at the Ballito branch.
[19]
The defendant goes on to explain that the plaintiff was aware of the
arrangement that existed between him and Du Preez.
He
accordingly avers that the plaintiff is claiming against him
incorrectly when the real culprit is in fact Du Preez. In
support of his contentions in this regard, the defendant states that
he obtained the plaintiff’s written consent to apply
for a
Telkom service line to be installed at the premises, he also applied
for a credit card machine facility and paid the electricity
deposit
in the sum of R2 500.00. This was all done because of the
arrangement he had with Du Preez and of which the
plaintiff was
aware. The upshot of his defence was that the plaintiff had
agreed to release him from the lease agreement
and to look to Du
Preez for the due fulfilment of the obligations flowing therefrom.
The plaintiff’s case on the other
hand was that at all material
times his dealings were with the defendant and not with Du Preez.
[20]
Inasmuch as the defendant seeks to lay blame on Du Preez for the
predicament in which he finds himself, there is nothing on
the record
to show what steps, if any, were taken by him to join Du Preez to the
action. Additionally, none of the documents
put up by the
defendant establish any proof, even at a
prima
facie
level, that Du Preez was part and parcel of the arrangement alleged
by the defendant. In these circumstances it is not surprising,
in my view, that the learned magistrate was not persuaded that a
bona
fide
defence
had been established on the papers. In my view, the learned
magistrate correctly found that the defendant, as a reasonable
businessman, ought to have appreciated the ramifications of
concluding agreements and the concomitant obligations that flow
therefrom.
The defendant clearly failed to do so. The
defense put up was a spurious one in the circumstances. Not
even the documents
put up by the defendant went far enough to support
the allegations he made
[15]
.
The learned magistrate, correctly concluded, that the defendant had
no prospects of success of establishing this defence
if the matter
were to proceed to trial.
[21]
In all the circumstances, I am not persuaded that the reasoning of
the learned magistrate can be faulted in any way.
Nor can I
find that he failed to exercise his discretion judicially. It
follows, in my view, that the appeal cannot succeed
and must be
dismissed.
ORDER
The
order I propose is the following:
The
appeal is dismissed with costs.
I
agree
CHILI
J
Date
of Hearing : 25 May 2015
Date
of Judgment : 11 June 2015
Counsel
for Appellant : Mr AC Escott-Watson
Instructed
by : Laurie C Smith Inc. (Ref: Mr Horton/Gen/R255)
c/o
Venns Attorneys (Ref: LBagley/es/41144743)
Tel:
033 355 3100
Counsel
for Respondent : Mr G Pillay
Instructed
by : Godfrey & Associates (Ref:GN Pillay/LR/R298)
Tel:
032 945 3000
c/o
Shamola Dasrath & Associates
[1]
Record,
page 180.
[2]
Agreement
of Lease, pages 5-17 of record.
[3]
Summons,
pages 1-4 of record.
[4]
Return
of service, page 18 of record.
[5]
Record,
page 22.
[6]
Record,
pages 23-56.
[7]
Record,
pages 57-113.
[8]
Record,
pages 114-159.
[9]
1994(4)
SA 705 ECD.
[10]
1998(3)
SA 34 SCA.
[11]
2014(11)
BCLR 1310 (CC).
[12]
TLE
(Pty) Ltd v The Master of the High Court and Others 2012(2) SA 502
(GSJ) at [12].
[13]
Securiforce
CC v Ruiters 2012(4) SA 252 (NCK) at [12].
[14]
Defendant’s
Heads of Argument.
[15]
Annexures
“HM1”, “HM2”, “HM3”, “HM4”,
“HM5” and “HM11”,
record pages 68-73.