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[2012] ZAKZDHC 32
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Ascon Trading CC v Anix Trading 401 CC t/a She Sand And Others (7309/2011) [2012] ZAKZDHC 32 (8 June 2012)
IN THE KWAZULU-NATAL HIGH COURT,
DURBAN
REPUBLIC OF SOUTH AFRICA
Case
No. 7309/2011
In
the matter between:
ASCON TRADING CC
(REGISTRATION NUMBER: 2006/067185/23)
….........................................
Applicant
And
ANIX TRADING 401 CC T/A SHE SAND
(REGISTRATION NUMBER: 2002/015876/23)
…............................
First
Respondent
THE SHERIFF OF THE HIGH COURT,
SCOTTSBURGH
….....................................................................
Second
Respondent
UMDONI MUNICIPALITY
…............................................................
Third
Respondent
JUDGMENT
MNGUNI J
[1] This is an application for
rescission of a default judgment in the sum of R298 253.65 granted by
the Registrar of this Court
against the applicant on 4 August 2011.
The application is brought in terms of Rule 31(2) (b) of the Uniform
Rules of Court.
[2] The first respondent (the
plaintiff in the action), is a close corporation apparently carrying
on business as a supplier of
sand having its principal place of
business at Southern Home, Old Main Road, Mtwalume KwaZulu-Natal. As
at July 2010 and at the
request of the applicant, (the defendant in
the action) the first respondent would from time to time supply sand
to the applicant
on account and would then render the account to the
applicant.
[3] The applicant’s account was
not properly serviced and fell into arrears, resulting in the first
respondent issuing summons
against the applicant claiming an amount
of R298 253.65. It would appear and it is not disputed by the first
respondent that the
summons was served upon the applicant at its
registered address on 5 July 2011 by affixing a copy thereof to the
front door. In
its founding affidavit, filed in support of the
present application, the applicant denies having received the
summons. It avers
that it became aware of the action for the first
time on 12 August 2011 when the third respondent contacted it to
enquire about
the payment to be made to the second respondent. It
would appear that the second respondent had attached the applicant’s
property on 5 August 2011.
[4] When the applicant failed to enter
an appearance to defend within the prescribed period, the matter was
placed before the Registrar
who, on 4 August 2011, granted a default
judgment for the amount of R298 253.65 plus interest and costs.
[5] Rule 31(2)(b) provides:
‘
[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 judgment and the court may, upon good cause shown, set aside the
default judgment on such terms as to it seems meet.’
[6] It therefore follows that this
court will be entitled to exercise its discretion to rescind a
judgment against the applicant
provided that sufficient cause has
been shown. Miller JA defined the term ‘sufficient cause’
in
Chetty v Law Society, Transvaal
1985 (2) SA 756
at 765A-C
as follows:
‘
The
term “sufficient cause” (or “good cause”)
defies precise or comprehensive definition, for many and various
factors require to be considered. (see
Cairn’s
Executors v Gaarn
1912 AD 181
at 186
per
INNES JA). But it is clear that in principle and in the long-standing
practice of our Courts two essential elements of “sufficient
cause” for rescission of a judgment by default are:
(i)
that the party seeking relief must present a reasonable and
acceptable explanation for his default; and
(ii)
that on the merits such party has a
bona fide
defence which,
prima facie
, carries some prospect of success. (
De Wet’s
case
supra
at 1042;
PE Bosman Transport Works Committee and
others v Pieter Bosman Transport (Pty) Ltd
1980 (4) SA 794
(A);
Smith NO v Brummer NO and Another
;
Smith NO v Brummer
1954
(3) SA 352
(O) at 357 – 8.)
[7] It is not sufficient if only one
of these two requirements is met; for obvious reasons a party showing
no prospect of success
on the merits will fail in an application for
rescission of a default judgment against him, no matter how
reasonable and convincing
the explanation of his default. And ordered
judicial process would be negated if, on the other hand, a party who
could offer no
explanation of his default other than his disdain of
the Rules was nevertheless permitted to have judgment against him
rescinded
on the ground that he had reasonable prospects of success
on the merits. (see
Chetty
supra
)
[8] I have already stated that it is
not disputed that the summons was never received by the applicant,
and that it only learnt
of its existence after the default judgment
had been granted. The first respondent’s contention is that the
applicant failed
in its founding affidavit to give explanation why it
did not receive the summons despite the fact that it was served at
its registered
address. The applicant’s counsel conceded that
the service of the summons in
casu
, complies with Rule 4 of
the Uniform Rules of this Court. He, however, submitted that the
proper service of a summons is not a
bar to an application for
rescission of a default judgment.
[9] In
Kajee and Others v G and G
Investments and Finance Corporation (Pty) Ltd
1962 (1) SA 575
(N)
at 577E-G Fannin J pronounced:
‘
It
seems to me that what is required in a case such as this is that the
applicant must explain his default. He cannot simply claim
the
Court’s indulgence without giving an explanation. The
explanation must be reasonable in the sense that phrase was used
in
Naidoo’s
case and
Grant’s
case, supra, namely that it must not show that his default was wilful
or was due to gross negligence on his part. If explanation
passes
that test, then the Court will consider all the circumstances of the
case, including the explanation, and will then decide
whether it is a
proper case for the grant of indulgence.’
[8] Having carefully considered the
matter, I accept that the applicant has presented an acceptable
explanation for its default
in the circumstances of this particular
case.
[9] I now turn to deal with the
requirement of a
bona fide
defence. In its founding affidavit,
the applicant sets out its defence as follows:
‘
25.
Applicant
denies its indebtedness to the First Respondent in the amount
claimed. Applicant denies that the amount owed was the agreed
price
or First Respondent’s usual price for the goods sold and
delivered.
26.
Applicant
and First Respondent reached agreement for the sale of goods in the
amount of R 66 766, 00. Applicant however denies this
amount to be
due, owing and payable. Neither was applicant placed on terms for
payment of that amount.’
[10] The first respondent, declared as
follows in its answering affidavit in relation to the applicant’s
defence:
‘
7.
Annexure
“A” hereto is the first respondent’s statement
rendered to the applicant (incorrectly dated 29 February
2012 and
which should read 28 February 2011.)
8.
Annexure
“A” records:-
(a)
the particulars of invoices rendered by the first respondent to the
applicant on 30 October 2010, 9 November 2010 and 25 November
2010
all of which were paid by the applicant;
(b)
particulars of a tax invoice rendered by the first respondent to the
applicant on 30 November 2010 (INA 11279) in the amount
of R268,
435.80.
9.
Annexure
“B” hereto is a letter dated 3 December 2010 addressed by
the applicant to the first respondent explaining
why payment had not
been made of the first respondent’s account and claiming that
payment is awaited from the Umdoni Municipality.
10.
On
24 December 2010 the applicant paid R74, 457.95 (evident from
annexure “A”).
11.
It
deserves mention that the applicant’s invoice for R268, 435.80
was not disputed (that much is apparent from annexure “B”)
nor was it disputed when payment was made on the 24
th
December 2010.
12.
On
7 December 2010 the first respondent rendered to the applicant an
invoice for sand delivered in the amount of R 100, 901.40.
Further
invoices were rendered on the 1
st
January 2011. These
invoices too were not disputed. No payment was however made by the
applicant in regard those invoices.
13.
When
payment of the first respondent’s account was raised with the
applicant the letter dated 22 February 2011 (annexure “C”
hereto) was received from the applicant. It confirms that the
applicant awaits payment from the Umdoni Municipality and that the
applicant will advise the first respondent when payment can be made.
No dispute is raised in regard the amount which was then payable
by
the applicant to the first respondent.
14.
The
first respondent had by then (22 February 2011) rendered a further
invoice (on 10 February 2011) for an amount of R3, 390.02
which
amount was paid on the same day. Further invoices were also raised on
17 February 2011 (R2, 052.00) and 28 February 2011
(R3, 390.02). The
latter amount was paid on 23 February 2011.
15.
15.1
Subsequent to the purchases in February 2011, the first Respondent
informed the Applicant that the credit facility afforded
to the
Applicant had terminated due to non-payment of the balance of R298
253.65. The Applicant, however, required more sand and
made cash
purchases from the First Respondent during the period March 2011
until 26
th
May 2011 (Annexures D, E & F are First
Respondent’s monthly statements account dated 31
st
March 2011, 30
th
April 2011 and 31
st
May 2011).
15.2
After the last payment the balance outstanding, due and payable by
the applicant to the first respondent was the amount of
R298, 253.65.
16.
When
a further demand was made of the applicant to pay the account
(annexure “G”) the applicant responded in writing
on the
31
st
May 2011 (annexure “H” hereto).
17.
Although
the applicant’s letter raises certain issues relating to
deliveries, it ends with the author stating: “At this
stage we
unfortunately still await payment, and will advise shortly on a date
for payment”. Again there is no dispute of
the amount owing to
the first respondent, recorded in the statement which the applicant
received with annexure “G”.
18.
The
first respondent’s response (through its attorney) is annexure
“I” hereto). Its contents are self-explanatory
and it
deals in detail with the allegations made by the applicant in
relation to delivery.
19.
When
further negotiations between the applicant’s attorney and the
respondent’s attorney as to settlement of the first
respondent’s account broke down, action was instituted by the
first respondent against the applicant on 30 June 2011 in which
the
amount of R298, 253.65 is claimed.’
The first respondent attached the
correspondence exchanged between it and the applicant together with
the statements of account
sent to the applicant.
[11] Pausing here for the moment, it
is to be observed that the applicant had merely made a bald averment
lacking in detail concerning
its defence. Confronted with the first
respondent’s evidence aforesaid, and in an attempt to overcome
the problem it faced,
the applicant filed a replying affidavit in
which it proffered the following defence:
(a) The applicant does not have order
numbers for the deliveries made relating to the tax invoice of 30
November 2010 in the amount
of R 268 435.80,
(b) The applicant did not order the
sand for the invoice dated 7 December 2010 in the amount of R 100
901.40; and
(c) The applicant did not order
additional materially set out in paragraph 14 of the first
respondent’s answering affidavit.
[12] These defences referred to in
paragraph 11 above were not disclosed in the founding affidavit.
Because of the change of tack,
the first respondent filed and served
an application on 10 May 2012, in which it notified the applicant of
its intention to seek
an order on 15 May 2012 granting it leave to
deliver a further affidavit and that the applicant pay the costs of
the application.
When the matter came before me for argument, counsel
for the applicant informed me that he did not oppose the granting of
the order
authorizing the first respondent to deliver a further
affidavit, but only opposed to the aspect of the costs of
application. I
granted the order and directed that costs be costs in
the cause.
[13] It is clear that the defences
raised in the founding affidavit relate only to the issue of the
first respondent’s price
in respect of the goods sold and
delivered and that the sale and delivery of the goods are not in
issue. Whereas the defences raised
in the replying affidavit place in
dispute the subject matter of the sale between the parties, the
applicant contending that it
ordered much less sand than what the
first respondent delivered.
[14]
I am mindful
of the fact that it is trite that an applicant must make out a case
in its founding affidavit and not in reply (see
Kleynhans v Van der
Westhuizen NO
1970 (1) SA 565
(0) at 568E). As was stated by Nestadt
J in Shephard v Tuckers Land and Development Corporation (Pty) Ltd
1978 (1) SA 173
(W) at 177H – 178:
“
This
is not however an absolute rule. It is not a law of the Medes and
Persians. The Court has a discretion to allow new matter
to remain in
a replying affidavit, giving the respondent the opportunity to deal
with it in a second set of answering affidavits.
This indulgence,
however, will only be allowed in special or exceptional
circumstances.”
[15] The exercise of such discretion
calls for the taking into account of the variety of factors, bearing
in mind the underlying
principle that the applicant should not be
permitted to make a case in the replying affidavit when no case at
all was made out
in the original application (see Poseidon Ships
Agencies (Pty) Ltd v African Coaling and Exporting Co (Durban) (Pty)
Ltd And Another
1980 (1) SA 313
(D) at 315H – 316A).
[16] The explanation advanced by the
applicant for its failure to disclose in its founding affidavit the
defences which now appear
in its replying affidavit is that the first
respondent instituted its action on simple summons which, it alleged,
lacked in particularity.
One of the factors which are usually found
to be compelling in exercising the discretion in applicant’s
favour in these matters
is lack of prejudice. I have already granted
the first respondent leave to deliver a further affidavit to deal
with new matters
raised in the applicant’s replying affidavit,
thus eliminating the existence of prejudice.
[15] I have alluded to the fact that
the applicant should demonstrate the existence of a
bona fide
defence. Brink J in
Grant v Plumbers (Pty) Ltd
1949 (2) SA 470
(0) at 476 – 7 formulated the requirement as follows:
‘
It
is sufficient if he makes out a
prima
facie
defence
in the sense of setting out averments which, if established at the
trial, would entitle him to the relief asked for. He
need not deal
fully with the merits of the case and produce evidence that the
probabilities are actually in his favour.’
In
Colyn v Tiger Food Industries
Ltd t/a Meadow Feed Mills (Cape)
2003 (6) SA 1
(SCA) at 9 Jones
AJA added the following:
‘
With
that as the underlying approach the courts generally expect an
applicant to show good cause …(c) by showing that he
has a
bona
fide
defence
to the plaintiff’s claim which
prima
facie
has
some prospect of success.’
[15] In
Standard Bank of SA Ltd v E
L–Naddaf and Another
1999 (4) SA 779
WLD at 785J –
786A Marais J concluded that:
‘
The
authority of the judgment of Colman J (and common sense) indicate
that
bona
fides
cannot be demonstrated by merely making a bald averment lacking in
any detail. To hold that such bald averment is sufficient to
demonstrate
bona
fides
is a classic oxymoron. It effectively negates the requirement that
the Court be
satisfied
that the applicant has a
bona
fide
defence.’
[16] It accordingly follows that the
prospects of success of the applicant’s defence must be
measured against the above exposition
of the law. The first
respondent has, set out in detail how it arrived at the amount which
is owed by the applicant. The applicant
dispatched a letter dated 3
December 2010 to the first respondent and because of the importance
of the letter, I quote its contents
in full:
‘
Re:
PAYMENT
DELAY
We
would like to inform you that our payment certificate is being
processed by Umdoni Municipality and will possible be paid out
to us
on the 10
th
of December. We will then make payment to She
Sands. We are sorry for any inconvenience caused.
We
trust and hope you will find the above in order, if you have any
queries please don’t hesitate to contact us.’
Again, the applicant dispatched
another letter to the first respondent dated 22 February 2011 which
reads thus:
‘
Re:
OUTSTANDING
ACCOUNT
As
per our previous telecom, we currently await payment from the Umdoni
Municipality for work carried out on our Malangeni site.
We
will advise shortly on the tentative day for payment to us and
thereafter your payment.
Hope
you find the above in order, if you have any queries please don’t
hesitate in contacting me on the above number.’
The first respondent dispatched a
letter to the applicant dated 27 May 2011 which reads:
‘
Re:
Payment of outstanding account
We
have been advised by Umdoni Municipality that your payment is set for
today. We hereby request full payment of all outstanding
balances due
to us, as agreed on your previous letter. Attached is a copy of our
statement and your previous correspondence.’
It is to be observed that in both the
letters of 3 December 2010 and 22 February 2011, the applicant did
not deny that it was indebted
to the first respondent but only gave
the reasons for the delay in payment of the account.
[16] The applicant does not deny that
the invoices which form annexures to the first respondent’s
answering affidavit were
furnished to it. Importantly, it does not
explain what happened to the sand that the first respondent delivered
to it, and which
the applicant had not ordered. Also, it does not
tender the return thereof to the first respondent.
[17] Counsel for the applicant sought
to argue that the first respondent did not account for the payment of
R233 611.00 made on
24 December 2010. Therefore, he submitted, the
default judgment ought to have been granted in the sum of R64 642.65.
I have considered
this submission, and it seems to me that it
overlooks the evidence contained in annexure “A” to the
first respondent’s
answering affidavit. This submission is
therefore unsustainable.
I am accordingly not able to find that
the applicant has shown any defence to the first respondent’s
claim, let alone the
one carrying a prospect of success.
In the result, the following order
shall issue,
The application for the rescission
of the judgment granted against the applicant on 4 August 2011 is
dismissed with costs.
Date of Hearing : 15 May 2012
Date of Judgment : 08 June 2012
Counsel for the Applicant : Adv. W. J.
Pietersen
Instructed by : Venn Nemeth & Hart
Counsel for the First Defendant : Adv.
P.J. Combrink
Instructed by : G.H. Ismail &
Associates