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[2013] ZAGPPHC 462
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Adam v Botma N.O (71646/13) [2013] ZAGPPHC 462 (15 November 2013)
IN
THE NORTH GAUTENG HIGH COURT. PRETORIA
(REPUBLIC
OF SOUTH AFRICAN)
CASE NO:
7164.6/2011
DATE: 15 NOVEMBER 2013
NOT REPORTABLE
NOT OF INTEREST TO OTHER JUDGES
In the
matter between:
DR
MOHAMED
ADAM
Applicant
and
ERNST
JOHANN BOTMA
N.O.
Respondent
In
re:
RESCISSION OF JUDGMENT IN THE
MATTER BETWEEN:
ERNST
JOHANN BOTMA
N.O. Plaintiff
and
DR MOHAMED
ADAM
Defendant
JUDGMENT
JANSEN
AJ
Nature
of Application:
[1]
The application is explicitly stated to
be an application for
rescission in
terms of the Uniform Rules of Court Rule 42(i)(a) to the effect that
"... the order or judgment in question was
erroneously sought or
erroneously granted in my absence ...” as stated by the
applicant.
[2]
The order, which the applicant
(hereafter referred to as Dr
Adam)
wishes to set aside, is a default judgment granted on 26 January
2012. The notice of enrolment indicates that the matter was
set down
on 26 January 2012, and that no notice of opposition was filed.
[3]
“Irregularity” in the sense
envisaged by Rule 42(1) entails an
irregularity
in the proceedings or if the court was unaware of facts, if known to
it, which would have precluded it, from a procedural
point of view,
from making the order.
[i]
[4]
A warrant of execution in respect of
movable property was
obtained pursuant
to the court order and Dr Adam’s six bank accounts with First
National Bank, Pretoria Central, were attached.
From these the Deputy
Sheriff was enjoined to realize
the sum
of R.2 059 734.36 together with payment of legal costs in the amount
of R1o 000.00 plus interest plus further costs incurred.
The bank
accounts were duly attached. (In the answering affidavit Botma N.O.
states that the attachment of the bank accounts was
lifted prior to
the application being brought by the Applicant in this matter”
which allegation is admitted by Dr Adam in
reply.) Why this was done
is unclear to the court.
[5]
In what follows the applicant/defendant
is referred to as Dr
Adam and the
respondent/plaintiff as Botma N.O.
[6]
Dr Adam contended that a consideration
of the whole summons
reveals that it is,
in fact, a provisional sentence summons. This appears, it was argued,
from page 3 thereof where it is stated
that “provisional
sentence may forthwith be granted ’. From the court order,
however, it is clear that a final order
was granted against VIADOR SA
Limited and that Dr Adam had not been cited as a defendant.
[7]
Dr Adam had bound himself as a surety
and co-principal debtor for VIADOR SA Limited for any amount due to
Botma N.O.
in terms of a purchase
agreement. In terms of the said court order VIADOR SA Limited had
been ordered to pay an amount of R.2 059
754.36 to Botma N.O. as
follows:
“
ORDER
By
agreement between the parties it is order that:
1.
The
Defendant pays to the Plaintiff the sum of R2 059 754-36 which shall
be paid by the Defendant as follows:
1.1
An
amount of R138 922.41 on or before 30 November 2011;
1.2
An
amount of R138 922.41 on or before 30 December 2011;
1.3
An
amount of R50 000.00 on or before 7 December 2011 and monthly
thereafter on or before the 7
th
day of each subsequent month until the full amount has been settled.
2.
Should
one instalment not be paid on due date, the whole outstanding amount
will become immediately due and payable.
3.
The Defendant shall pay interest on
the amount of R1 850 000.00 at a rate of 17% per year from 1 December
2011 until date of settlement.
4.
The
Defendant shall pay the legal costs of the Plaintiff in the amount of
R1o ooo.oo.
REGISTRAR”
[8]
It
was sought to be argued by Botma N.O. that the suretyship
signed by Dr Adam was a liquid document in that
it should be read with the court order referred to above. It bears
mention that
the suretyship clause, clause 2 in the purchase
agreement of 29 January 2009, is for an unlimited amount and reads as
follows:
—
“
I,
Dr Mohamed Adam hei'ehy bind myself as surety and co-principal
debtor, jointly and severally, to and in favour of Paragon for
any
amount due to Paragon by Viador in respect of this agreement. I
hereby waive and renounce the exceptions of excussion, from
my
division and session of action[emphasis added]
[9]
The court order was annexed to the
provisional summons as
annex “X”.
That it was a provisional summons is clear from paragraphs (2) and
(3) of the summons which read as follows:
—
‘
(2)
That failing such payment, he or she is hereby called upon to appear
before this Court personally or by an advocate or by an
attorney who,
under section 4(2) of the Right of Appearance in Courts Act, 1995
(Act No. 62 of 1995),has the right of appearance
in the High Court,
at CNR. PAUL KRUGER AND VERMEULEN STREETS, PRETORIA, GAUTENG on 26
th
January 2012 at 9h30 in the forenoon (or as soon thereafter as the
matter can be heard) to admit or deny his or her liability for
the
said claim, and to state why the mortgaged property should not be
declared executable.
(3)
That if he denies liability for the same, he
shall not later than noon on the 24
th
of January 2012, file an affidavit with the registrar of this court
and serve a copy thereof on plaintiffs’ attorney, which
affidavit shall set forth the grounds of his defense (sic) to the
said claim, and in particular state whether he admits or denies
his
signature to the said Addendum Agreement or whether he admits or
denies the signature or authority of his agent.”
[emphasis
added]
[10] It bears
mention that paragraph 2 is incorrect as no mortgage
bond was ever registered in respect of
the property which was purchased in terms of the purchase agreement.
To call upon
Dr Adam
inter alia to state”...
why the
mortgaged property should not be declared executable
”
was simply inaccurate.
[11]
There was also annexed to the
provisional summons a Purchase Agreement dated 29 January 2009
(including, as a paragraph, the suretyship
by
Dr
Adam
) and an addendum agreement
dated 6 October 2011. The said addendum agreement attached to the
summons contains a restricted payment
schedule given the fact that
VIADOR SA Limited
had
not made payment on time.
Dr Adam
is not a party to this agreement and did not sign it. (This agreement
refers to a purchase agreement dated 11 May 2005, and yet
a further
agreement dated 4 August 2010, amending the agreement of 29 January
2009. The purchase agreement of 11 May 2005 and the
amendment
agreement of 4 August 2010 have not been appended to the summons.)
[12]
The summons was not served at the chosen
domicilium citandi et executandi for
VIADOR
SA Limited
and the surety -
Dr
Adam
- in the purchase agreement.
The return of service specifically states that on the third attempt
at Dr Adam’s place of residence,
namely 4 Krona Place, Eldo
Glen, Centurion, service was effected upon a housekeeper Mrs S.L.
Mashepo whereas the domicilium citandi
et executandi set out in the
purchase agreement was 4
th
Floor, West Wing, Louis
Pasteur Building, 374 Schoeman Street,
Pretoria.
[13]
Dr Adam’s
counsel, in his heads of argument, stated “...
(t)hat
a claim based on a Deed of Surety does not meet the requirement of
liquidity for purposes of provisional sentence proceedings
as it has
evolved in practice over a long period of time, in terms of which
requirement of liquidity, the existence and extent
of the debt must
appear from the written instrument. (See: Wollach v Barclays National
Bank Ltd
1983 (2) SA 543
at 552G-H read against the background of p.
552D-F.)
” However, Botma
N.O.’s counsel argued that read with a court order the
suretyship clause was a liquid document.
[14]
However, it is trite that in order to
qualify as a liquid document
the
instrument upon which a plaintiff relies must, 011 its face, reflect
an acknowledgment of indebtedness or an undertaking to
pay.
[ii]
A covering bond that provides for future advances and a certificate
certifying the amount due at any given stage, does not comply
with
this requirement. In the instant case, as stated, there is a reliance
011 a court order against
VIADOR SA
Limited read in conjunction with a suretyship.
It is pointed out that the suretyship is contained in a clause within
the purchase
agreement dated 20 January 2009, which refers to an
amount of R7 250 000.00. This amount was later amended by an addendum
agreement.
One therefore has to lead aluinde evidence not only of one
document, but several. It is akin to a covering bond that has to be
read with a certificate stipulating the amount owing. It w
ould,
of course, have been different if the court order had been granted
against VIADOR SA Limited and Dr Adam. Hence, it cannot
be stated
that the court order which was granted on 6 December 2011 constitutes
a liquid document. Neither can one argue that the
suretyship clause
to be found in the purchase agreement referring to R7 250 OOO.OO,
constitutes a liquid document.
[15]
The delay in launching the application
for rescission is explained fully. The judgment was granted by
default because the summons
was served on Dr Adam’s housekeeper
during his absence. Dr Adam did not receive the summons and it came
to his attention,
for the first time, after his attorney, Mr Stolp,
obtained a copy from the court file and when his bank accounts were
attached.
When the summons was served as aforesaid on 9 January 2012,
Dr Adam was overseas. An extract from Dr Adam’s passport was
attached to this affidavit confirming the latter fact. It is also
emphasised that the application for rescission was launched on
5
April 2012. However, no explanation is given as to why the index to
the application was only prepared on 15 February 2013 and
served on
the Botma N.O. on 20 August 2013. This delay, and lack of any
explanation therefore, is disconcerting. However, nothing
was said
about this delay in argument or in an)' further affidavit(s) by Botma
N.O.. Hence, the court is not in a position to take
this delay into
account. There must be a reasonable explanation for the delay because
had it been otherwise, the respondent, no
doubt, would have made much
of the delay.
[16]
In the matter of Twee
Jonge Gezellen (Pty) Ltd and Another v Land and Agricultural
Development Bank of South Africa t/a The Land
Bank, and Another
2011
(3)
SA 1
(CC) the following is stated: —
“
The primary element of provisional
sentence, which was inherent to the institution from the start, is
that it is only available
to a plaintiff who is armed is armed liquid
document
.
[iii]
Over the centuries, the issue whether a particular document can be
described as ‘liquid’ for purposes of provisional
sentence has given rise
to
much debate in litigation
.
[iv]
In principle, however, a document is liquid if it demonstrates, by
its terms, an unconditional acknowledgment of indebtedness in
a fixed
or ascertainable amount of money due to the plaintiffs.
[v]
Many different sorts of documents have been found to qualify as
‘liquid’ in terms of this definition, and therefore
sufficient to found provisional sentence. They include
acknowledgments of debt, mortgage bonds, covering bonds, negotiable
instruments,
foreign court orders and architects' progress
certificates.
[vi]
[17] A provisional sentence has a further
inherent characteristic in that it only leads to an interlocutory
order. Final judgment
is still to be considered in the principal
case. Furthermore, although a plaintiff may seek payment of the
judgment debt immediately,
before entering into the principal case,
the defendant has the right to insist on security for repayment
pending the final outcome.
The court has no discretion to dispense
with the requirement that a defendant is entitled to security for
repayment of the debt,
as held by Grosskopf J in CGE Rhoode
Construction Co (Pty) Ltd v Provincial Administration, Cape, and
Another 1976 (4) SA 925
(C).
[vii]
[18] It is also trite that security has to be
provided against payment, in
other words
simultaneous with payment.
[viii]
[19]
It is clear to the court that the proceedings were irregular. Once a
court holds that an order was “erroneously”
sought or erroneously granted, it should without further enquiry
rescind
or vary the order, and it is unnecessary for a party to show
good cause for the subrule to apply.
[ix]
[20]
It bears mention that, ex facie the court order annexed to the
provisional summons, a final order was granted by agreement
between
the parties on 25 November 2011 in the terms set out above. As
stated, this court order was used as a liquid document in
order to
obtain a second court order on 26 January 2012 against
Dr
Adam
as surety for
VIADOR
SA
Limited
in the following terms: —
“
IT IS ORDERED
1.
THAT the defendant (Dr Adam) pay the
plaintiff the balance outstanding as on 25 November 2011, amounting
to R2 059 754.36 as per
the Court order annexed hereto marked “X”,
together with interest on the amount of Ri 850 000.00 at the rate of
17%
per annum per annum (sic) as from 1 December 2011, payable to the
plaintiff by Viador S.A. Limited in terms of the Annexed Court
order.
2.
THAT the defendant (Dr Adam) pay the
costs of this action.
REGISTRAR”
[21] This
order was not obtained by agreement.
[22] Although a
costs order was sought on an attorney and client basis
the
court is not persuaded that it is justified. In particular, it was
argued that the opposition to the application for rescission
consisted mostly of bald denials. Given the fact that there is no
necessity to set out legal arguments in an affidavit, the bald
denials do not warrant a special costs order.
[23] In the
instant case, the main irregularities lie in the grant of a final
order on an illiquid document,
which was not
competent.
Dr
Adam
was deprived of the right to put forward a defence.
[24]
In the
premises,
Dr Adam
has satisfied the requirements of
Rule
42(1).
Order
In
the event, the following order is made: —
1.
The
judgment granted in favour of the plaintiff (Botma N.O.) against the
defendant (Dr Adam) on 26 January 2012, is set aside.
2.
The
warrant of execution in the above matter dated 13 February 2012, is
set aside.
3.
The
attachment in execution of the bank accounts of the defendant (Dr
Adam) dated 13 February 2012, is set aside.
4.
The
plaintiff (Botma N.O.) is ordered to pay the costs of this
application.
MM
JANSEN AJ
ACTING
JUDGE OF THE HIGH COURT
ATTORNEYS
FOR THE APPLICANT
FRIEDLAND
HART SOLOMON & NICHOLSON
Monuifient Office
Park 4-301 79 Steenbok Avenue
MONUMENT PARK
•Pretoria
Tel:
(012) 424 0200
REF: MR
STOLP/CATHY/Z.8653
COUNSEL
FOR THE APPLICANT
ADVOCATE
C.A.C KORF
Tel:
(012) 452 8730
ATTORNEYS FOR
THE RESPONDENT
WALTER
NIEDINGER & ASSOCIATES
477
Falda Street
Cnr.
Windsor & Falda Streets
GARSFONTEIN
Pretoria
Tel:
(0861) 008 254
Fax:
(012) 993 0122
Mobile:
082 804 1337
Ref: W
NIEDINGER/ea/Po10
COUNSEL FOR
THE RESPONDENT
ADVOCATE CHRIS
PRINSLOO
Mobile: 082 333 7641
[i]
Harms
Civil Procedure in the Superior Courts Procedure in the High Courts
Lexis Nexis
B-42.4 at B-300 (Issue 41)
et.
seq.
and the
cases cited therein.
[ii]
Fraser
<£
Chalmers South Africa (Pty) Ltd
r
Tuckers Land Development
Corporation (Pty) Ltd
J977
(2)
SA 465 (W):
Kopke
v Ship and Tank Services (Pty) Ltd
1972
(4) SA 339
(C).
[iii]
See. for example,
Harirowsmith
v Ceres Flats (Pty) Ltd
1979
(-)
SA 722
(T)
at 727G.
[iv]
See, for example, Menzies
“Prefatory Remarks on Provisional Sentence” 1 Menzies
(1828) 1113 at 7-8.
See
also Malan et al Provisional Sentence on Bills of Exchange, Cheques
and Promissory Notes (Butterworths, Durban 1986) 1113
at
14 - 15; Herbstein & Van Winsen The Civil Practice of the High
Courts and the Supreme Court of Appeal of South Africa 5
ed vol 2
(Cilliers et al) (Juta, Cape Town 2009) mo at 1328 - 74; and Erasmus
Superior Court Practice (Farlam & Van Loggerenberg)
(Juta, Cape
Town 2010) 1114
at B1-63
n 1.
[v]
See, for example,
Joob
Joob Investments (Pty) Ltd v Stocks Mavundlci Zek Joint Venture
200*9
(5) SA 1 (SCA)
at
10C - D and
Rich
and Others v Lagei’ivey
1974
(4)
SA 748
(A)
at
754H.
[vi]
See, for example, Herbstein &
Van Winsen supra
mo at
1328 - 74 and Erasmus above 1114 at Bi-
[vii]
"At 927E, with reference to Van cler Kcessel Praelectiones in
Gonin’s trans vol V at 179.
[viii]
Van
der Mcrwe v Bonaero Park (Edms) Bpk
2000
(4)
SA
329
(SCA) at
para
8
.
[ix]
Erasmus
Superior
Court Practice
Juta at
B1--308A and cases cited in footnote 4 therein.