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[2013] ZAGPPHC 96
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Johannesburg Roads Agency (Pty) Ltd v Midnight Moon Trading 105 (Pty) Ltd and Another (26704/2011) [2013] ZAGPPHC 96 (11 April 2013)
NOT
REPORTABLE
IN
THE NORTH GAUTENG HIGH COURT,
PRETORIA
[REPUBLIC OF SOUTH AFRICA]
CASE
NUMBER: 26704/2011
DATE:11/04/2013
In
the matter between:
JOHANNESBURG
ROADS AGENCY (PTY)
LTD
..............................
APPLICANT/DEFENDANT
and
MIDNIGHT
MOON TRADING 105 (PTY)LTD
…..................................
1st
RESPONDENT/PLAINTIFF
SHERRIF
JOHANNESBURG CENTRAL
….........................................
2nd
RESPONDENT
JUDGMENT
MABENA
AJ:
[1]
This is an application for rescission of default judgment granted by
the Registrar of this Court on the 14 June 2011.
[2]
The Applicant in this application, also seeks the following ancillary
reliefs:
2.1
Setting aside the Warrant of Execution issued subsequent to the
aforesaid judgment;
2.2
Ordering the Second Respondent to realise from attachment the
Defendant’s movable property attached on 4 July 2011 in
execution of the judgment;
2.3
The costs of suit.
[3]
BACKGROUND
3.1
The Applicant alleged that on the 14th of June 2011, a default
judgment in the amount of R 3, 870 167.09 plus interest a tempora
morae at the rate of 15.5 percent was granted against it by the
Registrar of this Court.
3.2
The default judgment was based on an alleged written agreement
entered into between the Applicant and the First Respondent.
3.3
The summons was served on the Applicant on the 11th May 2011. The
Applicant failed to deliver a Notice of Intention to Defend.
The
Respondent proceeded to apply for default judgment, which default
judgment was granted 14th June 2011.
[4]
Clearly the Applicant failed to enter appearance to defend within the
time frame provided by the Rules of this Court.
[5]
The Applicant raises the following grounds as a basis of this
application:
5.1
The Applicant alleged that the Respondent snatched the judgment amids
an agreement; alternatively
5.2
Amids an agreement between the parties that the matter will be held
in abeyance pending investigations of the matter leading
to be
institution of the action by the Applicant.
5.3
Furthermore, the Applicant contends that the First Respondent failed
to comply with the Uniform Rules of Court in regard to
the combined
summons.
5.4
Finally, the Applicant contends that it has good prospects of success
on the merits of the claim.
[6]
For an Applicant to succeed in an application of this nature, it must
show “good cause” for the setting aside of
the judgment.
6.1
It must set out reasons for it’s failure to deliver a Notice of
Intention to Defend or the reasons for it’s failure
to deliver
a Plea, whichever is applicable.
6.2
Secondly, it must demonstrate that it’s application for
rescission is bona fide by setting out the grounds for it’s
defends.
[7]
In order to determine whether or not the failure on the part of the
Applicant was not of its own making, it is necessary to
consider the
chronology of events starting from when the summons was served upon
the Applicant.
7.1
According to the return of service, the summons were served upon the
Respondent on the 11 May2011;
7.2
The application for default judgment was allegedly applied for on 8
June 2011;
7.3
The default judgment was granted against the Applicant for the
payment of R 3, 870 167.09;
7.4
The Warrant of Execution was issued by this Court on 4 July 2011.
[8]
The Applicant contends that:
8.1
It received summons on the 26 May 2011. However, the First Respondent
makes an averment that the summons was served on the Applicant
on 11
May 2011. In support of this averment, the First Respondent referred
this Court to Annexure “JR7”, a return of
service
attached to the Applicant’s founding affidavit.
8.2
The Applicant alleged that upon delivery of the summons, it’s
Legal Advisor Mr. Benedict Moshoeshoe dispatched a letter
to the
First Respondent’s attorneys of record confirming a telephonic
discourse with one Mr Louw an attorney in the aforesaid
law firm;
8.3
The substance of the conversation was that the matter be held in
abeyance pending an internal process by the Applicants to verify
the
invoices submitted;
8.4
It was a further term of their agreement, it is alleged, that no
appearance to defend would then be noted.
[9]
In confirmation of this arrangement this Court was referred to
Annexure “JRA 9”. Annexure “JR9A” is
dated 26
May 2011. This letter states the following:
“
kindly
note as per your telephonically conversation with our Mr B Moshoeshoe
that we here by acknowledge receipt of your summon.
We
are conducting an internal process to verify the submitted invoices
and will advise you of our findings which will guide our
further
action in this regard. We will revert to you as soon as the exercise
is finalised....”
[10]
It was argued on behalf of the Applicant that the reasonable
construction of Annexure “JRA 9” is that the Applicant
was going to investigate the matter and thereafter decide whether to
admit, settle or defend the action and accordingly advice
the
Respondent of it’s election. It is not disputed that the First
Respondent’s attorney of record did not respond
to Annexure
“JRA 9”.
[11]
It was contended by the First Respondent that:
11.1
The agreement that pending an internal process to verify the invoices
is in essence an agreement to hold the matter in abeyance
and is not
borne out by Annexure "JRA 9”.
11.2
That after the First Respondent’s attorney of record advised
the Applicant in a letter dated 15 June 2011 of the default
judgment,
affording the Applicant seven days to effect payment failing which, a
Warrant of Execution would be obtained. The Applicant
responded with
a letter dated 17 June 2011. This letter is marked Annexure “BR2”
(its not the Applicants letter).
11.3
The First Respondent contends that Annexure “BR2” does
not collaborate the Applicant’s version that there
was an
express understanding between the parties that the action be stayed
pending internal investigations aforesaid.
11.4
Therefore it was submitted on behalf of First Respondent that the
probabilities militate against the express agreement. Should
such
agreement have existed,
Annexure
“JRA 9” would record:
11.4.1
The existence of such agreement;
11.4.2
The breach thereof by the First Respondent;
11.4.3
The Applicant’s indignation about the First Respondents
conduct.
[12]
From the contents of Annexure “JRA 9”, it Is clear that
the Applicant sought time to investigate the claim against
it. On the
other hand the First Respondent, for what ever reason omitted to
state it’s intention in regard to the Applicant’s
request. Save for the Applicant to aver and submit in this Court that
Annexure JRA 9” does not record the request advanced
by the
Applicant. The First Respondent does not take this Court into it's
confidence with regard to the position it adopted in
Annexure “JRA
9”.
[13]
The First Respondent after merely approximately 13 Court days from
the date of Annexure “JRA 9”, proceeded to take
default
judgment against Applicant without further notice.
[14]
It is without doubt that it would take an entity like the Applicant
quite a significant number of days to investigate a claim
of this
magnitude. Therefore, the First Respondent by taking default judgment
notwithstanding an undertaking from the Applicant
that it sought to
investigate and would revert to the First Respondent, leaves a bad
taste.
[15]
Therefore, I accept the Applicant’s version that it did not
wilfully and deliberately omit to enter Notice of Intention
to
Defend. I am therefore satisfied that the Applicant advance
sufficient reasons for his failure to enter Notice of Intention
Defend.
[16]
On the question of bona fide defence the Applicant raises various
defences in regard to the claim upon which judgment was taken.
They
are the following:
16.1
The Applicant alleged that the Respondent based it’s claim on
the General Condition of Contract for it’s cause
of action. The
Applicant contends that the agreement ought to have been based on the
principles of FIDIC.
16.2
The Respondent in it’s opposing affidavit points out that the
FIDIC principles referred to by the Applicant in Annexure
“JRA
4” is wrong. I am of the view that these disparities can only
be resolved in the trial court. Therefore there
is substance in the
defence raised by the Applicant.
[17]
The Applicant raises various other defences that it intends to raise
in the trial should this application succeed. However,
I do not deem
it necessary to deal with the rest of the defences in the light of
the issue of wrong cause of action as I have dealt
with in the
preceding paragraph.
[18]
I am of the view that the Applicant has met the requirements of the
bona fide defence.
[19]
Therefore, the Applicant has shown good cause for the setting aside
of the default judgment.
[20]
I make the following order:
1.
The application for rescission of judgment is upheld;
2.
The default judgment granted under case number: 26704/2011 is set
aside;
3.
The First Respondent is ordered to pay the costs of suit.
MH
MABENA ACTING JUDGE
NORTH
GAUTENG HIGH COURT PRETORIA