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[2013] ZAGPPHC 21
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Naspoti Construction CC v Pienaarâs Air-Conditioning and Refrigeration (Pty) Ltd (27483/2010) [2013] ZAGPPHC 21 (5 February 2013)
NOT
REPORTABLE
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTH
GAUTENG HIGH COURT, PRETORIA)
CASE
NO: 27483/2010
DATE:05/02/2013
In
the matter between:
NASPOTI
CONSTRUCTION
CC
….........................................................................................
Applicant
and
PIENAAR’S
AIR-CONDITIONING AND REFRIGERATION (PTY)
Ltd
..............................
Respondent
JUDGMENT
MNGQIBISA-THUSI
J
[1]
The applicant is seeking relief on the following terms:
1.1
condonation for the late filing of this application;
1.2
rescission of a default judgment granted on 21 June 2011;
[2]
The applicant is basing its application for rescission on the
provisions of rule 31 (2)(b) of the uniform rules of court.
[3]
The Rule 31(2)(b) provides that a defendant may within 20 days after
he has knowledge of a judgment against him by default apply
to court
upon notice to the plaintiff to set aside such judgment, and the
court may, upon good cause shown, set aside the default
judgment on
such terms as to it seems meet. This means that the applicant has to
give a reasonable explanation for the default,
must show that his
application is bona fide, and be able to show that he has a bona fide
defence to the respondent’s claim
which prima facie has some
prospect of success. Grant v Plumbers (Pty) Ltd
1949 (2) SA 470
(O);
Chetty v Law Society, Transvaal
1985 (2) SA 756
(A).
[4]
The respondent is opposing the application for rescission.
[5]
The applicant has conceded that summons was served at its chosen
domicilium address. However, it is the applicant’s submission
that the summons did not come to its attention as at the time of
service, it had
relocated
and was conducting business at another place. Further, the applicant
submits that it only became aware of the default
judgment on 18
August 2011 when the sheriff attempted to execute a writ of
execution. The applicant had instructed its attorneys
to file an
application for the rescission of the judgment. The applicant’s
attorneys had on the same day written a letter
to the respondent’s
attorneys informing them about the applicant’s intention to
apply for the rescission of the default
judgment and requesting the
documentation relating to the case. It appears from the papers that
the parties did attempt to reach
settlement but during September 2011
the respondent’s attorneys had rejected the applicant’s
proposal. However, papers
in these proceedings were only served on
the respondent on 9 March 2012.
[6]
It is the respondent’s contention that the applicant has not
given a proper explanation for its lateness in filing its
papers in
this application.
[7]
It -is common cause that the application was filed way beyond the
period prescribed by Rule 31(2) (b). Further there was service
which
was effected at the applicant’s chosen domicilium address. Rule
4(1 )(a) provides that service on a company or a close
corporation
can be effected at its registered address or principal place of
business. The section is peremptory and not obligatory.
The applicant
has moreover chosen the address at which process should be served on
it.
[8]
Although the applicant has not given a proper explanation for the
delay in the filing of this application, given the fact that
it was
clear to it from September 2011 that it would be necessary to file
the rescission application, I am satisfied that the applicant
was not
in wilful default. The summons never came to his attention.
[9]
On the issue of whether the applicant has a bona fide defence to the
respondent’s claim, it is the applicant’s contention
that, inasmuch as he does not dispute the respondents claim, he has a
counter- claim against the respondent which should be dealt
with at
the same time as the respondent’s claim.
[10]
The parties concluded two agreements, the Riverpark contract and the
Coffee Break contract. The respondent instituted actions
against the
applicant with regard to both contracts. In the Coffee Break matter
(under case number 76963/09) the parties reached
a settlement which
was made an order of court and which in part reads as follows:
“
3.
The defendant reserves its right to institute arbitration proceedings
against the plaintiff (if so advised) for any damages or
losses which
the defendant may have suffered arising from the nominated
subcontract agreement concluded between the parties on
6 November
2008 and/or the principal building agreement concluded between the
defendant and Coffee Break investments (Pty) Ltd
on 20 May 2008.”
[11]
It was submitted on behalf of the applicant that in terms of the
Coffee Break agreement, the respondent was supposed to have
completed
the work it was doing on behalf of the applicant on 15 March 2009.
Due to some unforeseen circumstances it appeared that
the respondent
would not be able to complete the work on due date. The respondent
was given an extension to complete the work and
a new date for
completion was set for 5 May 2009. However, the respondent only
completed the work on 27 July 2009. In view of the
non-completion of
the work by due date, being 5 May 2009, the agreement provided for
penalties at R10 000.00 per day for the late
completion. As a result
the penalties which the applicant was entitled to recover from the
respondent amounted to R616 000.00 but
that it had levied
penalties
of only R249 000.00 against the respondent. This is the amount the
applicant is intending to launch proceedings against
the respondent
as a counterclaim to the respondent’s claim which it could have
pursued if necessary through arbitration as
provided for in paragraph
3 of the order of 1 November 2011. In this regard the applicant is
relying on Rule 22(4) of the Uniform
Rules of Court which reads as
follows:
“
22(4)
If by reason of any claim in reconvention, the defendant claims that
on the giving of judgment on such claim, the plaintiffs
claim will be
extinguished either in whole or in part, the defendant may in his
plea refer to the fact of such claim in reconvention
and request that
judgment in respect of the claim or any portion thereof which would
be extinguished by such claim in reconvention,
be postponed until
judgment on the claim in reconvention. Judgment on the claim shall,
either in whole or in part, thereupon be
so postponed unless the
court, upon the application of any person interested, otherwise
orders, but the court, if no other defence
has been raised, may give
judgment for such part of the claim as would not be extinguished, as
if the defendant were in default
of filing a plea in respect thereof,
or may, on the application of either party, make such order as to it
seems meet.”
[12]
The respondent is opposing the application on the ground that the
applicant does not have a bona fide defence to its claim.
It was
contended on behalf of the respondent that the issues pertaining to
the Coffee Break agreement were finally settled when
the order was
made and that if the applicant had intentions to claim the penalties
resulting from the delay in the completion of
the contract by way of
damages, it was bound by the court order which provides that it could
do so through arbitration. Further,
it was contended that, in terms
of the contract, the penalties could only be claimed within 14 days
of the issue of the payment
certificate and the applicant had not
done so.
[13]
I am of the view that the respondent is not correct in asserting that
because the court order of 1 November 2011 stated that
any damages
the applicant sought to claim would be through arbitration and
nothing else. The fact that there is agreement that
the applicant
would, if necessary, pursue any claim though arbitration, is no bar
to the applicant seeking redress in court. Further,
I am also
satisfied that the applicant has shown that it has a prima facie
counterclaim against the respondent which, in the interest
of justice
and in fairness to both parties it should be allowed to pursue its
claim.
[14]
With regard to the issue of costs, I am of the view that it was not
necessary for the respondent to have opposed this application
particularly as it was aware that the summons had not come to the
attention of the applicant and bearing in mind that at the time
it
instituted its claim, it could be liable for penalties for late
completion of the contract.
[15]
Accordingly the following order is made:
1.
The plaintiff is granted condonation for the late filing of its
application.
2.
The default judgment granted on 21 June 2011 is hereby rescinded.
3.
The respondent to pay the costs of this application.
NP
MNQIBISA-THUSI
Judge
of the North Gauteng High court