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[2014] ZAFSHC 21
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Main Street 421 (Pty) Ltd v Goldfields Development (Pty) Ltd (A187/2013) [2014] ZAFSHC 21 (27 February 2014)
IN THE HIGH COURT OF SOUTH AFRICA
FREE STATE DIVISION, BLOEMFONTEIN
Appeal No.: A187/2013
In the appeal between:
MAIN STREET 421 (PTY)
LTD
...................................................................
Appellant
and
GOLDFIELDS DEVELOPMENT
(PTY) LTD
.........................................
Respondent
CORAM:
DAFFUE, J
et
MOTLOUNG, AJ
JUDGMENT BY:
DAFFUE, J
HEARD ON:
3
FEBRUARY 2014
DELIVERED ON:
27 FEBRUARY 2014
INTRODUCTION
[1] This is
an appeal against the judgment of the Regional Court, Bethlehem (the
court
a quo
) dismissing an application for rescission of
judgment.
THE
PARTIES
[2]
Appellant is Main Street 421 (Pty) Ltd, the owner of the Vrede Hotel
in the town of Vrede, Free State Province. It, being
the
defendant in the court
a quo
, unsuccessfully applied for
rescission of a judgment by default obtained against it.
[3]
Respondent is Goldfields Development (Pty) Ltd. It instituted
action as plaintiff against appellant for payment of the
amount of
R250 000.00 together with interest and costs and obtained
judgment by default as indicated above.
[4]
The parties shall be referred to in this judgment as appellant and
respondent respectively.
FACTUAL
BACKGROUND
[5]
The parties entered into a JBCC series 2000 building contract in
terms whereof respondent undertook to do certain construction
work at
the Vrede Hotel for and on behalf of appellant.
[6]
Appellant appointed CSKO Architects as principal agent.
[7]
The principal agent issued several payment certificates as the
construction work progressed and in this regard a total amount
of
R7 503 899.92 have been paid in respect of the first eight
payment certificates. Payment certificate number
9 dated 19 May
2011 for the amount of R732 720.15 was not paid within the
stipulated period. This certificate plays
a role in the dispute
between the parties. Appellant sought and obtained an extension
of payment on the basis that the amount
together with interest as
agreed, totalling R750 000.00, be paid in three instalments of
R250 000.00 each, payable at
the end of July, August and
September respectively.
[8]
The principal agent through its representative, Mr Johan Coetzee,
confirmed appellant’s undertaking under his signature
in a
letter dated 4 July 2011 addressed to respondent. He also
confirmed on behalf of his client that final completion of
the
project would only be undertaken once the final instalment of
R250 000.00 is made. Also on 4 July 2011 a certificate
of
practical completion was issued by the principal agent.
[9]
Having made the first two instalments, appellant neglected to settle
the final instalment and consequently respondent caused
summons to be
issued out of the Regional Court, Bethlehem.
[10]
On receipt of the summons Ms FJ Nell of appellant contacted Ms
Belinda Nel, a senior typist in the employ of respondent’s
Bethlehem attorneys telephonically, complaining about alleged defects
in the construction work executed by respondent. She
was
requested to forward a written complaint to the attorneys which she
did in an e mail. The two ladies are in dispute as
to what the
arrangement was in this regard. Ms Belinda Nel stated under oath that
she did not give any undertaking to hold further
action in abeyance,
but fact of the matter is that she invited appellant’s
representative to forward the complaints in writing
whereupon same
would be sent to respondent’s Welkom attorneys for their
instructions. Surely any client in the shoes of Ms
FJ Nell would have
taken it for granted that her complaints would be considered, that
she would be informed of the outcome and
pending this, that no
further steps would be taken. We know now that she was not
shown the courtesy of a response and that
respondent’s
attorneys proceeded to apply for judgment by default. This
telephonic conversation and appellant’s
written response
thereafter are relevant merely to establish whether appellant gave a
sufficient explanation for the failure to
defend the action which
resulted in judgment by default being granted. The court
a
quo
correctly found in appellant’s favour and it is not
necessary to deal in any further detail with this aspect.
[11]
On all probabilities as a result of the aforesaid communication
appellant failed to deliver a notice of intention to defend.
On
or about 2 July 2012 respondent’s attorneys presented to the
office of the registrar of the court
a quo
a request for
default judgment in the prescribed form and a warrant of execution.
[12]
Whoever inspected the request for default judgment was apparently
satisfied as to the correctness of each and every item contained
in
the document as these were ticked off, particularly the judgment
costs. However this person neither affixed his/her signature
on
the document, nor recorded in writing that he/she had in fact granted
judgment and if so, when and in what terms.
[13]
As mentioned, the request for default judgment does not contain any
indication that judgment has been granted, and furthermore,
there is
also no indication on the court file to that effect. The only
indication that judgment was apparently granted, appears
from the
warrant of execution which contains the signature of the assistant
registrar as well as the official stamp and the judgment
date
inserted in handwriting. The relevant part of the warrant of
execution reads as follows:
“
Whereas
in this action the said Plaintiff obtained judgment in the above
mentioned court against the said Main Street 421 (Pty)
Ltd of Vrede
Hotel, 53 Church Street, Vrede, Free State on
02.07.12
for the several sums set out in the margin hereof amounting in all to
the sum of R251 165.08 (excluding interest still to be added
to the
Capital Amount) of which Nil has since been paid…”
(emphasis added – the date is inserted in pen).
Respondent
obtained an affidavit from the assistant registrar in support of its
opposition of the application for rescission of
judgment and I quote
the following from paragraphs 4 and 5 thereof:
“
4.
I duly checked each and every item on the Judgment including the
costs claimed by the Plaintiff and I, as is the practice, ticked
each
relevant item as correct. I there upon issued the Writ of
Execution and I filled in on that Writ the date of Judgment
when I
granted it namely 2
nd
July 2012.
5.
It has now been brought to my attention that the Judgment which I
granted was not actually signed by me and I confirm that the
Judgment
was in fact in my own mind granted and I somehow merely neglected or
forgot to sign the actual document to confirm the
granting but I
would not have issued the Writ of Execution without the Judgment
having been granted by me.”
[14]
Some two months later, in September 2012, the sheriff served the
warrant of execution and attached certain movable assets.
This
triggered appellant’s application for rescission of judgment.
[15]
Appellant dealt with the reasons for the delay and its defence on the
merits in detail in the founding affidavit in support
of the
application for rescission of judgment, but did not at that stage
deal with any possible deficiency pertaining to the procedural
aspect
of the judgment by default allegedly granted.
Ex facie
the
application papers appellant’s attorney inspected the court
file after filing of the application and found that, although
the
warrant of execution had been issued, it was not recorded that
judgment had been granted. Correspondence in this regard led
to
reaction from respondent’s attorneys and the decision to obtain
an affidavit from the assistant registrar which was filed
in support
of the opposition to appellant’s application.
[16]
In reply appellant relied on the information obtained by its
attorneys when perusing the court file and made it clear that
it was
going to take the point that judgment by default was not granted as
there was no compliance with rule 12(9) of the Magistrates’
Court Rules.
[17]
The matter was eventually argued. The court
a quo
not only
dismissed the point of law taken on behalf of appellant to the effect
that judgment by default was not granted in accordance
with the
aforesaid rule, but appellant’s application was dismissed as
well. The court
a quo
remarked as follows in its judgment in
this regard:
“
Die
aansoek is volgens die betrokke dokument op 02/07/2012 deur die
Assistent Griffier ontvang en gestempel. Op dieselfde
dag het
die Assistent Griffier ‘n Lasbrief vir Eksekusie uitgereik.
Op die Lasbrief vir Eksekusie dui die Griffier
spesifiek aan dat
vonnis gegee is op dieselfde dag, naamlik 02/07/2012. Die
Griffier het egter hierbenewens nie op die kantoorlêer
aangeteken dat vonnis wel verleen is nie. Tydens die
geopponeerde aansoek om tersydestelling van vonnis het die
Verweerder/Applikant
dit as ‘n punt
in
limine
geopper dat daar in werklikheid
geen vonnis was nie, aangesien die Assistent Griffier dit nooit op
die lêer aangeteken het
nie. Hierdie punt
in
limine
is na aanhoor van argumente
afgewys.”
NOTICE OF APPEAL
[18] Appellant filed a notice of appeal, alleging that the court
a
quo
mistakenly dismissed the point
in limine
in that it is
clear from the record that the assistant registrar did not record in
accordance with rule 12(9) that judgment had
been granted.
Several further grounds of appeal have been raised pertaining to the
merits of the application for rescission
of judgment, but in view of
the conclusion to which I arrive herein, it is not necessary to deal
with those, save to say that I
am
prima facie
of the view that
these grounds are without any substance.
THE
APPLICABLE RULE AND RELEVANT LEGAL PRINCIPLES
[19]
Rule 12 of the Magistrates’ Court Rules deals with judgment by
default. If a defendant fails to deliver a notice
of intention
to defend within the time stated in the summons, the plaintiff may
lodge with the clerk of the Magistrates’
Court /registrar of
the Regional Court, (depending in which court action has been
instituted), a request in writing similar to
form 5 of annexure 1 to
the Rules in duplicate for judgment against the defendant for any sum
not exceeding the sum claimed in
the summons, or the other relief so
claimed, together with costs and interest, together with the original
summons and the return
of service,. See rule 12(1)(a).
[20]
The clerk / registrar shall process the request in terms of the
provisions of the relevant sub-rules of rule 12 “and
notify the
plaintiff of the outcome of the request by returning the duplicate
copy
duly endorsed as to the result and the date thereof
.”
(emphasis added) See Rule 12(1)(c).
[21]
Rule 12(9) reads as follows:
“
Judgment
shall be entered by making a minute of record thereof.”
[22]
The only reported judgment on the point in issue is
Civil
and General Contractors CC v Civil Magistrate for the District for
Albany
[2000] 3 ALL SA 9
(E) at 14c
– f, referred to with approval by Van Loggerenberg,
Jones
and Buckle: The Civil Practice of the Magistrates’ Courts in
South Africa
, loose leaf edition, vol 2
at 12-17. The particular magistrate merely informally indicated
to the plaintiff’s attorney
that she “will not grant”
or “had refused” the request for default judgment.
The court found in that
instance that an order dismissing a request
for default judgment is just as much a judgment as is an order
granting the request
and consequently a minute of record thereof must
be made. The record of proceedings in the Magistrates’
Court has been
furnished to the High Court, but no record therein
could be found of any judgment or order having been made.
However
the court did not explain in precisely which form
the dismissal should be minuted and/or recorded.
[23]
In terms of section 58A of the Magistrates’ Court Act, 32 of
1944, any judgment by default entered in terms of that Act
by the
clerk (or registrar) of the court shall be deemed to be a judgment of
the court. Although not directly in point, the following
judgments
are instructive insofar as they are authority that a writ of
execution may be set aside on application as incompetent
if the
judgment was not definite and certain.
See:
De Crespigny v De Crespigny
1959 (1) SA 149
(NPD)
at 152 A – B;
Le
Roux v Yskor Landgoed (Edms) Bpk
1984
(4) SA 252
(TPD) at 257F – G;
Du
Preez v Du Preez
1977 (2) SA 400
(CPD) at 402 G – 403 C;
Van
Dyk v Du Toit
1993 (2) SA 781
(OPD)
at 783 C - D.
[24] A
judgment or order (except in the case of orders by agreement between
the parties) of the court must be delivered in open
court although
not necessarily by the judge or magistrate who prepared it.
See: Section 16 of the Supreme Court Act, 59 of 1959 and section 5 of
the Magistrates Court Act and
Lawsa
, vol 3, part 1, para 323.
Also in the Supreme Court of Appeal and the Constitutional Court
orders are handed down in open
court and only after the legal
representatives of the parties have been informed of the date and
time to allow them to note judgment.
[25]
There might be uncertainty as to exactly what is meant by the
sentence “(J)udgment shall be entered by making a minute
of
record thereof” contained in rule 12(9).Isabel Ellis is of the
view that rule 12(9) stipulates that judgment by default
is entered
by its written recordal.
See:
Lawsa
,
vol 3, part 2, para 146. She does not indicate the format of
such recordal. In terms of High Court Rule 31(5)(c) the registrar
shall record any judgment granted or direction given by him. How this
should take place is not mentioned.
[26]
When interpreting any legislation every court must promote the
spirit, purport and objects of the Bill of Rights.
See: Section 39(2) of the Constitution.
Section 34 of the Constitution stipulates that
everyone has the right to have any dispute that can be resolved by
the application
of law decided in a fair public hearing before a
court or, where appropriate, another independent tribunal or forum.
It is also
trite that the courts of law in this country are courts of
record.
[27]
It may be instructive to refer to the analogy of High Court Rule 48
pertaining to the
allocatur
of the taxing master. It is vested
law that no ruling of the taxing master in respect of any bill of
costs or any item thereof
can be reviewed by the court unless the
taxing master has affixed his
allocator
to the bill.
See:
Pretorius v
Cohen
1953 (3) SA 639
(OPD).
The
mere fact that the taxing master indicated his satisfaction in
respect of each and every item on the bill of costs by ticking
off
every item is not sufficient.
ARGUMENTS
OF THE PARTIES AND EVALUATION THEREOF
[28]
Mr Pienaar, on behalf of appellant, strenuously argued that the
failure of the assistant registrar to sign on the request for
judgment by default and/or to record in writing that judgment has
been granted, was fatal, but even more so, his affidavit in support
of respondent’s case was not helpful insofar as the court
a
quo
could not consider what he had in
mind when he perused the documents and issued the warrant of
execution. Mr Els, on behalf
of respondent, argued that the
matter should be seen in proper perspective and all relevant
documents and facts should be considered
in order to ascertain
whether judgment by default was granted or not. He argued that
the court
a quo
was
entitled to consider the contents of the warrant of execution and the
fact that the assistant registrar indicated thereon that
he granted
judgment by default on the 2
nd
July 2011.
[29]
It must be remembered that the warrant of execution, once issued, is
lifted by the execution creditor’s attorney and
sent off to the
sheriff with instructions to attach the debtor’s property.
It does not remain in the court file all
the time.
When appellant’s
attorney approached the registrar and perused the court file, (at the
stage when the warrant was with the
sheriff), no indication could be
found that judgment by default had been granted. It is common cause
that it was not recorded on
the court file, or minuted or otherwise
recorded on the request for default judgment or any other document
kept in the file that
judgment had been granted.
[30] I always try to
avoid adjudicating disputes on technicalities as I believe that
parties are entitled to their disputes being
adjudicated upon the
merits. However it cannot be disregarded that judgments and
orders are meant to create certainty and
therefore strict compliance
with the rules of court should be adhered to.
[31] In its founding
affidavit appellant did not allege any facts in support of the legal
point relied upon for the first time in
the replying affidavit and
thereafter during argument in the court
a
quo
. It is trite law that a court
may in particular circumstances
mero
motu
take cognisance of legal points.
I refer in this regard to the often quoted judgment of
Paddock
Motors (Pty) Ltd v Igesund
1976 (3)
SA 16
AD at 23 D - F where the court found as follows:
“
It
is clear that ‘the duty of an appellate tribunal is to
ascertain whether the court below came to a correct conclusion on
the
case submitted to it.’” (per Innes J, in
Cole
v Government of the Union of South Africa
1910, AD 263
at p 272). For this reason the raising of a new
point of law on appeal is not precluded, provided certain
requirements are
met:
‘
If
the point is covered by the pleadings, and if its consideration on
appeal involves no unfairness to the party against whom it
is
directed, the Court is bound to deal with it. And no such
unfairness can exist if the facts upon which the legal point
depends
are common cause, or if they are clear beyond doubt upon the record,
and there is no ground for thinking that further or
other evidence
would have been produced had the point been raised at the outset.
In presence of these conditions a refusal
by a Court of Appeal to
give effect to a point of law fatal to one or other of the
contentions of the parties would amount to the
confirmation by it of
a decision clearly wrong.’ (per Innes J in
Cole’s
case
supra
at pp 272 – 273.) That it would create an intolerable
position if a Court were to be precluded from giving the right
decision on accepted facts, merely because a party failed to raise a
legal point, as a result of an error of law on his part, has
also
been accepted by this Court in
Van
Rensburg v Van Rensburg en Andere,
1963 (1) SA 505
(AD) at p 510 (A).”
In
casu
the legal point was not raised on appeal for the first time. It
was clearly raised in appellant’s papers and also argued
before
the court
a
quo
.
When I initially prepared for the hearing of the appeal my immediate
reaction was that the legal point taken by appellant
was nothing but
a mere technicality that had been dismissed correctly by the court
a
quo
.
I say this on the basis that, in principle, technical defences should
not be adhered to as the parties are entitled to adjudication
of
their dispute on its merits. Although stated in a different
context, I fully endorse the following
dictum
by Froneman J in
KwaZulu-Natal
Joint Liaison Committee v MEC for Education, KwaZulu-Natal and Others
2013 (4) SA 262
(CC) at par [80], relying on
comments by Prof Cora Hoexter:
“
Formalism
has many meanings, but Professor Cora Hoexter helpfully describes one
of its meanings as ‘a
judicial
tendency to attach undue importance to the pigeonholing of a legal
problem and to its superficial or outward characteristics;
and a
concomitant judicial tendency to rely on technicality rather than
substantive principle or policy, and on conceptualism instead
of
common sense'.
Hoexter is further quoted in the judgment as
follows:
'In
cases displaying formalistic legal reasoning the merits often
seem strangely divorced from the outcome of the case, so
that it
is difficult and perhaps even embarrassing to explain the case to a
layperson.’”
[32] Having said this, it
is necessary to consider the approach adopted in our courts. If
a High Court judge grants judgment
(by default or otherwise), the
order is recorded mechanically, but furthermore, the judge’s
registrar records it on the court
file and the judge minutes it in
his/her bench book. Thereafter the order is typed, captured on
a computer system and signed
by or on behalf of the registrar.
The position should be the same in the magistrates’ and
regional courts although
it is accepted that these presiding officers
may not have their own personal registrars.
[33] There is no reason
why standard norms should not be adopted by magistrate court clerks
and registrars in the regional and high
courts when applications for
default judgments are considered and eventually granted as this will
create certainty. I have
reason to believe that most clerks /
registrars in courts across the country act in accordance with the
following norms which I
suggest should be applied:
1.
It shall
clearly be stipulated in writing on the request for judgment by
default whether judgment has been granted, and if so, in
respect of
which prayers or paragraphs of the request, alternatively the
judgment debt with reference to the capital amount of
the claim, the
interest to be charged as well as the costs, either in a specific
amount as in the magistrates’ and regional
courts, or to be
taxed depending on the circumstances, should be noted.
2.
The official
stamp with an indication of the date on which judgment is granted
shall be affixed on the request for default judgment
together with
the signature of the person who granted judgment.
3.
Thereafter the
duplicate copy of the request for judgment by default shall then be
sent back to the plaintiff’s attorney whilst
the original with
the above recordings thereon shall remain in the court file.
4.
It shall be
recorded in writing on the court file when and in what terms judgment
has been granted and the particular official shall
preferably affix
his/her signature next to this inscription as well.
[34] These proposals might be regarded as too
burdensome, but are in my view in conformity with the general
practice in the Magistrates’
and High Courts.
[35] “Minute” is defined in the New
Shorter Oxford English Dictionary as
inter alia
an official
memorandum authorising or recommending a course of action; or a
memorandum relating to matters of procedure or evidence
presented in
a court by a party to a suit.
“
Record”
is
inter alia
defined in the same dictionary as the fact or condition of being or
having been written down as evidence of a legal matter; the
proceedings or verdict of a court of law; evidence recorded in this
way; an authentic or official report entered on the rolls of
the
proceedings, including the judgment in any case coming before a court
of record.
Bearing in mind these definitions and others
similar to these, together with the aforesaid rules of court and
general principles,
there can be no doubt that the assistant
registrar of the court
a quo
failed to endorse the request for default judgment as to the result
and the date thereof as he was required to do in terms of rule
12(1)(c) and furthermore failed to enter the judgment by making a
minute of record thereof as stipulated in rule 12(9). This
is
common cause and the mere fact that the warrant of execution which
was handed to the sheriff to attach appellant’s property
indicated that judgment by default was allegedly granted is
insufficient and cannot be regarded as compliance with rule 12.
[36] The legal point taken on behalf of
appellant in the court
a quo
is good and should have been upheld by that court. Consequently
it is unnecessary to consider the other grounds of appeal
and the
arguments pertaining to the merits of the application for rescission
of judgment. There was no judgment that could
be rescinded.
RELIEF
[37] Mr Pienaar, who also argued the matter in
the court
a quo
on behalf of appellant, submitted that the appeal should succeed and
if it is found that the legal point is good, the judgment
of the
court
a quo
should be set aside and orders made in terms of prayers 2, 3 and 4 of
the Notice of Motion, costs to include a higher fee for counsel
than
provided for in part IV of annexure 2 of the Magistrates’ Court
rules. The proceedings in the court
a
quo
were application proceedings to
which item 21 of part IV of annexure 2 applies and therefore counsel
was not entitled to a higher
fee which could only be allowed if the
parties went on trial. I refer to the note to items 22, 24, 25
and 26 (relating to
trials). I am not prepared to find that
respondent’s opposition in the court
a
quo
was unreasonable and therefore it
should not be burdened with costs in that court. A novel point
was raised by appellant and
bearing in mind my
prima
facie
view about appellant’s
defence in respect of the merits, I deem it fair and reasonable that
each party shall bear its own
costs in the court
a
quo.
Prayer 1 of the notice of
motion, being the prayer for rescission of the default judgment is
irrelevant in the circumstances.
ORDER
[38] Consequently the following orders are made:
1.
The
appeal is upheld with costs.
2.
The
order of the court
a quo
is set aside and substituted with the following orders:
2.1
The purported default judgment granted by
the assistant registrar on 2 July 2012 is null and void for
non-compliance with the provisions
of sub-rules 12(1)(c) and 12(9) of
the Magistrates’ Court rules.
2.2
The warrant of execution issued on 2 July
2012 and all attachments made in accordance therewith are set aside
as null and void.
2.3
Leave is granted to defendant to defend the
action instituted against it under case number 241/2012 and to file
its notice of intention
to defend within 10 days from date of this
order.
2.4
Each party shall be liable for payment of
its own costs.
J. P. DAFFUE, J
I concur.
S. E. MOTLOUNG, AJ
On behalf of applicant: Adv. CD Pienaar
Instructed by:
Honey Attorneys
BLOEMFONTEIN
On behalf of respondent: Adv. J Els
Instructed by:
Lovius Block
BLOEMFONTEIN