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[2013] ZAKZPHC 49
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Cecil Bonga Hlophe t/a Thabizolo Services v Ithala Development Finance Corporation Ltd (7749/10) [2013] ZAKZPHC 49 (9 October 2013)
9
IN THE KWAZULU-NATAL HIGH COURT,
PIETERMARITZBURG
REPUBLIC OF SOUTH AFRICA
CASE NO. 7749/10
In the matter between:
CECIL
BONGA HLOPHE
t/a
THABIZOLO SERVICES
..............................................................................
Applicant
and
ITHALA
DEVELOPMENT FINANCE
CORPORATION
LTD.
...................................................................................
Respondent
________________________________________________________________
JUDGMENT
delivered
on 09 October 2013
________________________________________________________________
STRETCH AJ:
[1] The applicant has brought an
application for the rescission of default judgment granted against
him by the registrar in terms
of rule 31(5) on 20 December 2010 in
favour of the respondent, for payment in the sum of R142 316,76
together with interest and
attorney and client costs.
[2] Pursuant to the judgment having
been granted, this court on 2 August 2012 also granted an order
declaring certain immovable
property belonging to the applicant,
specially executable.
[3] In terms of rule 31(5)(d), any
party dissatisfied with a judgment granted by the registrar, may,
within 20 days after he has
acquired knowledge of such judgment, set
the matter down for reconsideration by this court.
[4] In order to succeed, the applicant
must show good cause. This means that he must:
(a) give a reasonable explanation for
his default which excludes wilfulness or gross negligence on his
part;
(b) be
bona fide
in making the
application, and not merely bring it to delay the plaintiff’s
claim;
(c) show that he has a
bona fide
defence to the plaintiff’s claim (a
prima facie
defence
is sufficient).
The explanation:
[5] The applicant avers that he became
aware of the default judgment when his attorneys told him about it on
8 November 2012. I
digress to mention that the judgment was granted
in respect of summons which the respondent had issued against the
applicant, trading
as Thabizolo Service Station, for arrears water
charges due to the local municipality, which liability the applicant
had apparently
incurred during the period 1999 to 2004 when he was
leasing the premises from the respondent. To his founding affidavit
is annexed
an email from attorneys Tomlinson Mnguni James dated 1
October 2012 wherein the applicant is advised that his application
for bonds
had been rejected by the deeds office as an interdict had
been registered against him (interdict I2554/2012AT) by this court in
a matter between the respondent and Thabizolo Service Station in the
sum of R142 316,76 with interest.
[6] The applicant says that he
forwarded this mail to his attorneys to investigate. They did so, and
furnished him with copies of
the court file illustrating the history
of this matter. It appears from the registrar’s receipt of
payment, that these documents
were only uplifted on 7 November 2012.
[7] Having sold the business which he
had operated from the service station in 2004, the applicant avers
that when the summons in
this matter was served at these premises, he
was no longer there, and the summons was never brought to his
attention.
[8] It was been argued on the
respondent’s behalf that summons was served on the applicant’s
domicilium a
ddress (being the garage premises) as reflected in
the lease agreement between it and the applicant. According to the
lease agreement
(as amended):
(a) the lease was for a two year
period (1 December 1999 to 30 November 2001);
(b) the renewal period was for a
period of four years and two months (1 December 2001 to 30 November
2006).
[9] I must assume, in the absence of
any indications to the contrary, that at the time the applicant sold
his business, the lease
had been renewed, and in terms of the
amendment thereto, the renewal period only expired on 30 November
2006.
[10] Rule 4(1)(a)(iv) which provided
for service of any process of this court by delivering or leaving a
copy thereof at a chosen
domicilium citandi
, was in my view,
complied with, and the applicant’s failure to change his
address with the respondent when he was no longer
operating from
these premises; alternatively, his failure to collect documents
delivered to these premises up until the lease had
expired in terms
of the written lease agreement, was at best, grossly negligent.
Accordingly, and his explanation for not having
had sight of the
summons earlier, is rejected.
The
bona fides
of
the application:
[11] Having said this, the wilful or
negligent nature of the applicant’s default is only one of the
considerations which I
am constrained to take into account in the
exercise of my discretion in determining whether or not good cause
has been shown (see
Saraiva Construction (Pty) Ltd v Zululand
Electrical and Engineering Wholesalers (Pty) Ltd
1975 (1) SA 612
(D)
at 614C)
.
[12] It seems to me, after having
scrutinised these application papers, that the applicant has
nevertheless demonstrated a
bona fide
presently held desire
for relief in order to actually raise a defence in the event of the
judgement being rescinded. In
RGS Properties (Pty) Ltd v
Ethekwini Municipality
2010 (6) SA 572
(KZD) at 575G-576C
Ngwenya AJ (as he then was) said the following:
“
I
may add to this principle that judgment by default is inherently
contrary to the provisions of s34 of the Constitution. The section
provides that everyone has the right to have any dispute that can be
resolved by the application of law decided in a fair and public
hearing before a court, or, where appropriate, another independent
and impartial tribunal or forum. Therefore, in my view, in weighing
up facts for decision, the court must on one hand balance the need of
an individual who is entitled to have access to court, and
to have
his or her dispute resolved in a fair public hearing, against those
facts which led to the default judgment being granted
in the first
instance. In its deliberation the court will no doubt be mindful,
especially when assessing the requirement of reasonable
cause being
shown, that while among others this requirement incorporates showing
the existence of a bona fide defence, the court
is not seized with
the duty to evaluate the merits of such defence. The fact that the
court may be in doubt about the prospects
of the defence to be
advanced, is not a good reason why the application should not be
granted. That said, however, the nature of
the defence advanced must
not be such that it prima facie amounts to nothing more than a
delaying tactic on the part of the applicant.”
A
bona fide
defence:
[13] The applicant has raised the
following defences:
Prescription
[14] The respondent, in its summons
issued on 28 September 2010 alleges that the applicant had failed to
pay the Msunduzi Municipality
for water charges for the period ending
31 July 2004 and that the municipality was
now
(my
emphasis) looking to the respondent for payment of such outstanding
charges. Again, I must assume (for lack of clarity of which
both
parties are guilty), that the respondent would not have had
locus
standi
to apply for judgment against the applicant if it had not
settled this debt with the municipality. I cannot, at this stage
dismiss
the respondent’s explanation that it only became aware
of the fact that the applicant had sold the business to Khumalo in
2007 when Khumalo offered to buy the service station from the
respondent, and thereafter, that it only became aware of the
outstanding
water bill in 2010 when it tried to secure a rates
clearance certificate for the purpose of selling the service station
to Khumalo.
Prima facie
then prescription (with respect to the
alleged debt owed by the applicant to the respondent) would have
commenced running at the
earliest in 2007, and at the latest during
2010 when summons was issued.
[15] The applicant has argued that
prescription commenced running on 31 July 2004. In support of this
contention the applicant relies
on the respondent’s summons,
where it informs the applicant that he was in breach of the terms of
his lease agreement with
the respondent, in that he had “failed
to pay for water charges in the period ending 31
st
July
2004 due to the Msunduzi Municipality”.
[16] However it is clear from the
papers that the respondent, after Khumalo had approached it with a
view to purchasing the service
station during 2007, had acted in
terms of clause 20 of its lease agreement with the applicant by
absorbing the applicant’s
alleged debt to the municipality, and
now seeks to recover what it had paid over from the applicant. Clause
20 reads as follows:
“…
if
the Lessee fails to carry out any of its obligations provided for in
this agreement, then the Lessor shall be entitled, at its
discretion,
to enforce or
to
carry out the same on behalf of the Lessee
(my
emphasis), both during the currency of this agreement and after the
termination thereof, and to recover the cost and expenses
of doing so
from the Lessee.”
[17] In my view then, the defence of
prescription is unlikely to succeed at the trial.
Denial of liability
[18] In terms of the sale agr
e
ement
between the applicant and Khumalo, Khumalo would, as from 1 February
2004 have been in full and direct control and supervision
of the
business which was being conducted from the premises of the service
station. In terms of clause 11 of the agreement, this
would have
included taking over “leases” which the applicant had on
the premises of the business. It seems to me then
(in the absence of
any averments to the contrary) that Khumalo may well have taken
physical occupation of the premises as early
as 1 February 2004.
[19] The following is apparent
ex
facie
the municipality’s tax invoice on which the
respondent has relied to support its claim for payment of R142
316,76:
(a) It is addressed to a service
station and not to a person. Thus the identity of the debtor is not
clear at all.
(b) The invoice is dated 26 June 2004.
This means that Khumalo may well have been in occupation of the
premises for up to five months
when the account was rendered.
(c) It purports to reflect, on the
face of it, that payment of the bulk of what was being claimed (R139
022,62) was only 60 days
in arrears, in other words as from April
2004, which does not encourage this court to come to the assistance
of the respondent,
particularly in the face of the applicant’s
claim that he does not owe the municipality anything.
(d) The account does not specify the
utility in respect of which the monies are outstanding. This vague
and confusing state of affairs
is further aggravated by the somewhat
nonsensical letter of demand which was allegedly forwarded by the
respondent’s attorneys
to the applicant on 11 August 2010,
which purports to suggest to that the respondent’s claim
against the applicant is in
respect of arrears rental.
[20] The respondent, in opposing this
application for rescission, and despite having had ample opportunity
to clarify these inconsistencies,
merely annexes to its affidavit the
very same documents on which the applicant has relied in moving the
application. The most significant
document, being what purports to be
a computer generated tax invoice from the municipality dated 16
February 2010 reflecting a
total due of R321 821,12, bears a single
manuscript entry, the effect of which seems to be that this balance
is apportioned between
the applicant and Khumalo, with Khumalo’s
portion being R179 504,36 and the applicant’s being R142
316,76. There is
no indication as to how these figures were arrived
at.
[21] Finally, it is particularly
significant that the respondent, in resisting this application has,
on its own papers, fortified
the applicant’s contention that he
is not indebted to the municipality (or the respondent for that
matter), in the amount
for which judgment was granted or at all. I
say this because the respondent’s attorney’s letter to
the respondent dated
8 February 2011, and to which there has been no
reply forthcoming from the respondent despite having annexed this
letter to its
own papers, reads as follows:
“
We
advise that we consulted with Mr Hlophe regarding this matter.
He
stated that he paid a total sum of R420 193,87 in 2009 which included
arrears for the water account and outstanding rent. This
amount was
paid from the sale of his shares to our office directors.
The
matter was handled by Mr Diedricks from our office then and Mr Macela
from your offices under your reference 1054094.
Kindly
confirm if that is indeed the correct position.”
[22] The fact that the applicant has
averred in reply that this amount was paid with respect to rent only
(denying any outstanding
debt with respect to utility charges), is in
my view one of the many troublesome aspects of this case which ought
to be ventilated
at a proper hearing.
[23] In the premises, I am of the view
that the applicant has succeeded in demonstrating that he has a
prima
facie
defence at the very least with respect to the issue of the
quantum of the judgment, or whether he is liable at all.
[24] I do not deem it necessary, in
the order which I am about to make, to set aside this court’s
order of 2 August 2012 declaring
the applicant’s immovable
property specially executable. Nor do I deem it necessary to set
aside the warrant of execution
issued on 12 January 2011.
[25] In my view, the warrant of
execution and the order declaring the immovable property specially
executable are consequential
upon the granting of the default
judgment. Once that judgment is set aside, every legal process
consequential thereupon falls away.
I accordingly make the following
order:
ORDER:
The default judgment granted
against the applicant in favour of the respondent by the registrar
of this court on 20 December 2010
under case number 7749/10 is
hereby rescinded.
The respondent is directed to pay
the costs of this application.
____________
STRETCH AJ
Appearances /
Appearances:
For the Applicant
:
Mr
L.M. Nhlabathi
Instructed by
:
L.M.
Nhlabathi Inc.
Tel. 031-5760415 or 0823090933
C/o Mchunu Attorneys
234 Church Street
Pietermaritzburg
Tel. 033 3425598
For the Respondent :
Mr A.R.
Khan
Instructed by
:
Ngcobo
Poyo Diedricks Inc.
190 Hoosen Street
Pietermaritzburg
Date of hearing :
21 May 2013
Judgment handed down on :
09
October 2013