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2012
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[2012] ZAGPPHC 352
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Payne NO and Others v Island Estate Property Development Company (Pty) Ltd (65862/2011) [2012] ZAGPPHC 352 (6 December 2012)
NOT
REPORTABLE
IN THE HIGH OF SOUTH AFRICA
(NORTH
GAUTENG HIGH COURT, PRETORIA)
CASE
No: 65862/2011
DATE:06/12/2012
In
the matter between:
CHARLES
JOSEPH PAYNE N.O
...................................
FIRST
RESPONDENT/ PLAINTIFF
AND
LOURENSTIA
GERDA PAYNE N.O
...............................
SECOND
RESPONDENT/ PLAINTIFF
AND
WILLEM
NEZAR
................................................................
THIRD
RESPONDENT/ PLAINTIFF
THE
ISLAND ESTATE
PROPERTY
................................
APPLICANT/DEFENDANT
DEVELOPMENT
COMPANY (PTY) LTD
JUDGMENT
RANCHOD
J
[1]
The applicant applies for rescission of the default judgement granted
by the registrar of this court on 8 December 2011 against
the
applicant and in favour of the respondents.
[2]
The applicant says that it applies for the rescission of judgement
under Uniform Rules of Court 31(2), alternatively, the common
law,
for the setting aside of the judgement. Rule 31 (2) provides:
“
(a)
whenever in an action the claim or if there is more than one claim,
any of the claims is not for a debt or liquidated demand
and a
defendant is in default of delivery of notice of intention to defend
or of a pea, the plaintiff may set the action down as
provided in
subrule (4) for default judgement and the court may, after hearing
evidence, grant judgement against the defendant
or make such order as
to it seems meet.
(b)
A defendant may within 20 days after he or she has knowledge of such
judgment apply to court upon notice to the plaintiff to
set aside
such judgement and the court may, upon good cause shown, set aside
the default judgment on such terms as to it seems
meet."
[3]
The general principles for the rescission of judgement at common law
have been restated a number of times. The oft quoted authority
is De
Wet and Others v Western Bank Ltd
1979 (2) SA 1031
(A). The courts
have a wide discretionary power to rescind default judgements. From
the authorities it is clear that the courts
have gone no further than
to state that judgements can be rescinded on “good cause”
or “sufficient cause”
or on “sufficient cause
shown”. (De Wet and Others (supra)). See also Colyn v Tiger
Food Industries Ltd t/a Meadow
Seeds Mills
2003 6 SA 1
(SCA).
[4]
To establish good cause an applicant must accordingly show the
following:
1.
Give a reasonable explanation of his default;
2.
The application is made bona fide\ and
3.
He has a bona fide defence to the plaintiff’s claim which,
prima facie, has some prospect of success.
[1]
The respondents, as plaintiffs, issued summons out of this court in
their capacities as trustees of the Charles Joseph Payne
Development
Trust. They sought the re-payment of R250,000 paid in advance to the
applicant as a deposit pursuant to an oral agreement
for the purchase
of certain immovable property. As I said judgement was granted by
default.
[2]
The applicant for rescission of judgement is a company involved in a
larger residential development known as “The Highland
Estates
Development” at Hartebeespoort Dam.
[3]
The main dispute between the parties stems from the proposed purchase
of the immovable property known as erf 196, The Highlands
Estate
Extension 2 by the respondents.
[4]
It is common cause that a meeting was held on 6 May 2009, at which an
oral agreement was concluded for the payment of a R250.000
deposit
which was paid by the Charles Joseph Payne Development Trust to the
applicant. It is alleged that a written agreement in
compliance with
s2(1)
of the
Alienation of Land Act 68 of 1981
would later be
concluded. At the time of the oral agreement for the deposit a
further agreement still needed to be reached concerning
the
shareholding, directorships, and appropriate corporate agreements in
a holding company that would own the property under consideration.
[9]
I will deal firstly with whether there has been any inordinate delay
in the bringing of the application for rescission. Having
read the
papers, I am satisfied that there has not been any inordinate delay
in bringing the application.
[10]
The applicant states that it has, inter alia, the following valid
defences against the respondents:
1.
The respondents have no locus standi in judicio in respect of the
cause of action that they are relying on for the claim;
2.
A special plea of non-joinder by the respondents of a Mr De Kock as a
co-defendant in the action, alternatively the applicant’s
right
to Institute third party procedure in accordance with Uniform Rule of
Court 13;
3.
Should it be found that the respondents do have standing, which the
applicant denies, the respondents forfeited the claim amount
in terms
of their written agreement with the applicant;
4.
Should the respondents attack on the validity of the oral contract
succeed, which remains denied, the oral contract would in
any event
have been superseded by the written contract;
5.
The applicant's counterclaim against the first respondent, in his
personal capacity, for a declaratory order and specific performance.
[11]
At this point I should mention that the respondents’ answering
affidavit has been couched in a manner as if this was
the forum in
which the merits of the applicant’s defences were to be
decided. It would appear that the respondents have overlooked
the
fact that this is an application for rescission in which the test,
inter alia, is whether he has a bona fide defence to the
plaintiff’s
claim which prima facie has some prospects of success. As an example,
I quote from the respondents' answering
affidavit at paragraph 30
which is in answer to paragraph 10.2 of the applicant’s
founding affidavit:
“
There
is no proof that purchasers, dealing with the applicant, were as a
rule required to pay a non-refundable deposit.”
The
respondents seem to miss the point that the proof is not required at
the stage of the application for rescission. It is something
that
will be dealt with on the merits at a later stage if rescission is
granted.
[5]
The applicant contends that the oral agreement for the payment of a
non- refundable deposit has been superseded by the written
contract.
The respondents, on the other hand, contend that the oral agreement
is separate from the eventual written agreement for
the purchase and
sale of the immovable property. These arguments are in the context of
the
Alienation of Land Act 68 of 1981
, which provides that any
agreement relating to alienation of land must be in writing.
[6]
In its founding affidavit deposed to by Mr Andre Johannes Burger the
applicant says:
“
10.5
Since the outset I, personally, made it clear to Messrs Payne and De
Kock that, the purchase price for Erf 196 being R19,280,000.00,
the
Applicant would before the negotiation and conclusion of an agreement
in respect of the purchase of the erf insist on the payment
of a
non-refundable deposit in the amount of R500,000.00 by Messrs Payne
and De Kock (as partners or through whatever entity they
elected to
act) to the applicant.”
[14]
After further negotiations the amount of R500,000.00 was reduced to
R250.000.00 which is the amount that was paid by the first
respondent
at a meeting between the deponent to the founding affidavit and a Mr
Pretorius on the one hand and Messrs Payne and
De Kock on the other.
[15]
The applicant says, at paragraph 10.2 of the founding affidavit that:
“
during
or about the period 2004 to 2009 the immovable property market was so
thriving that genuine as well as spurious interest
by potential
buyers of portions in the development was so overwhelming that the
Applicant was compelled to protect itself against
exploitation by
insisting on interested purchasers to pay a 10% portion of the
envisaged purchase price as a non- refundable deposit.
The
requirement of the payment of a non-refundable deposit was, at the
time, the norm in the market and Mrs Steyn (who, at the
time, acted
as the conveyancing attorney of the Applicant) advises that:-
10.2.1
in respect of the Island Estates Development in excess of 200
transactions, with inter alia the condition of payment of a
non-refundable deposit, were effected;
10.2.2.
even the banks, such as Absa Bank and Standard Bank, insisted on the
payment of a non-refundable deposit as a term, before
they would
grant a development loan secured by a mortgage bond in respect of the
immovable property so sold to potential purchasers
and, even, from
time to time, conducted audits at her offices in order to ascertain
that the underlying written agreements indeed
contained such clauses;
These,
together with a number of other issues raised in the application, if
resolved in applicant’s favour would mean that
the applicant
would succeed in its defence, inter alia:
Whether
the first respondent and De Kock were partners and that therefore he
had the requisite authority to sign the agreement;
Whether
the respondents have locus standit'
The
non-joinder of De Kock;
That
the plaintiffs’ claim to have “abandoned" the
proposed purchase of the property rather than having the agreement
repudiated, resulted in no cause of action on the part of the
plaintiffs; and
Whether
the written agreement superseded the oral agreement.
[16]
In my view, the applicant has placed sufficient facts before this
court to show that it has a bona fide defence to the plaintiff’s
claim which has some prospect of success.
[17]
In the circumstances I need not consider all the other issues raised
in this voluminous application.
[18]
I accordingly make the following order:
1.
The default judgment granted by the Registrar of this Court on 8
December 2011 against the applicant is rescinded.
2.
The applicant is to file its plea to the respondent’ claim
within fifteen days of date of this order.
3.
The respondents are to pay the costs of this application.
N
RANCHOD
JUDGE
OF THE HIGH COURT.
Appearances:
Counsel
for the Applicant: Adv P Sieberhagen.
Attorney
for the Applicant: Geyser Van Rooyen Attorneys, Pretoria.
Counsel
for the Respondent: Adv J Vorster
Attorney
for the Respondent: Erasmus- Scheepers, Pretoria.