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[2011] ZAFSHC 156
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Thakanagoaha Investments v Thabo Mofutsanyana District Municipality (2744/2010) [2011] ZAFSHC 156 (15 September 2011)
FREE
STATE HIGH COURT, BLOEMFONTEIN
REPUBLIC
OF SOUTH AFRICA
Case No.: 2744/2010
In
the matter between:
THAKANAGOAHA
INVESTMENTS
…......................
Respondent/Plaintiff
and
THABO
MOFUTSANYANA DISTRICT
MUNICIPALITY
…......................................................
Applicant/Defendant
HEARD ON
:
25 AUGUST 2011
JUDGEMENT BY:
MATHEBULA AJ
DELIVERED ON:
15 SEPTEMBER 2011
[1] This is an
application for rescission of judgement in terms of the Uniform Rules
of Court. The judgment sought to be rescinded
was obtained by the
respondent on the 8
th
December 2010 in the sum of R513
000,00 and R2 052 000,00 respectively together with interest at the
rate of 15.5% per annum calculated
from the 8
th
August
2008 and 5
th
December 2009.
[2] The chronology of the
events is briefly as follows: The respondent issued summons on the
2
nd
June 2010 against the applicant. The summons was duly
served by the sheriff upon the applicant on the 11
th
June
2010. It was served upon Me. Nomvula Malantjie in her capacity as the
Acting Manager: Corporate Services. There is no dispute
regarding the
proper service of the summons.
[3] The applicant failed
to defend the matter and the respondent obtained default judgment. On
the 2
nd
March 2011 a warrant of execution was issued
against the applicant and served by the sheriff on the 13
th
March 2011. This is the day that the default judgment came to the
attention of the applicant.
[4] As a result of the
fluidity of the situation, the application for rescission of judgment
triggered among others the application
to stay the sale in execution
and the suspension of the warrant of execution. The order to stay the
sale and suspend the warrant
of execution was granted by Cillié
J on the 5
th
May 2011. There is also an application for
condonation of the late filing of the opposing affidavits by the
respondent. These are
not the main applications.
[5] At the outset it was
conceded that it will not prejudice any party if condonation is
granted to the respondent. Accordingly,
I granted condonation in this
respect. This enabled the parties to proceed with their submissions
on the main application.
[6] The party seeking
relief rescinding the judgment must firstly show good cause in order
to succeed. In discharging the
onus
that party must place good
and sufficient facts before the court. In essence, there must be a
reasonable and acceptable explanation
of the default. Secondly, that
party must show a
bona fide
defence with prospects of success
if such averments are established at the trial.
[7] The first question to
be answered is: Whether there is a reasonable explanation proffered
by the applicant for the default?
The relevant parts of the
explanation appear in paragraphs 8 – 10 of the founding
affidavit deposed by Mmoledi Petrus Moloi
who was the Municipal
Manager at the time when respondent commenced legal proceedings.
Further, other people cited by him in his
affidavit have also deposed
confirmatory affidavits.
[8] Second question to be
answered is: Whether there is a
bona fide
defence? The
respondent is suing the applicant for payment having rendered certain
services. The claim is based on a written agreement
attached to the
summons. The applicant on the other hand denies that the respondent
rendered services as per agreement or alleged.
There is also a
dispute with the exact number of files handled by the respondent.
Further, the applicant is alleging having suffered
damages as a
result of the breach committed by the respondent. There is a counter
claim which is explained in paragraphs 11 –
19 in the amount of
±R1,8 million. I will not repeat all these paragraphs because
they are part of the record.
[9] In
DE WITTS
AUTO BODY REPAIRS (PTY) LTD v FEDGEN INSURANCE CO LTD
1984
(4) SA 705
(E) at 711 E – G the test was set as follows:
“
An
application for rescission is never simply an enquiry or not to
penalise a party for his failure to follow the rules and procedures
laid down for civil proceedings in our courts. The question is,
rather, whether or not the explanation for the default and any
accompanying conduct by the defaulter, be it wilful or otherwise
gives rise to the probable inference that there is no bona fide
defence, and hence that the application for rescission is not bona
fide. The magistrate’s discretion to rescind the judgments
of
this court is therefore primarily designed to enable him to do
justice between the parties. He should exercise that discretion
by
balancing the interest of the parties, bearing in mind the
considerations referred to in
Grant
v Plumbers (Pty) Ltd
,
1949 (2) SA 470
(O) and
HDS
Construction (Pty) Ltd v Wait
,
1979 (2) SA 298
(E) and also any prejudice which might be occasioned
by the outcome of the application.”
[10] Mr Van Amstel made
no further submission except that the summons was lost in the offices
of the applicant. The circumstances
that prevailed is that the normal
running of the municipality was not in the hands of its officials. Mr
Motloung submitted that
there was no plausible explanation as to what
happened to such an important document. The fact that the official
concerned was
acting in his capacity should be inconsequential and
disregarded. His view was that the purpose of placing the
municipality under
administration was not to weaken it but instead to
boost it. However, he did not refer to any case law to substantiate
his submission
as to why the explanation must be rejected.
[11] On the issue of the
bona fide
defence I was referred by Mr Van Amstel to the
alleged breach and discrepancy in the number of files which is
central to the dispute
between the parties. This submission was also
opposed by Mr Motloung that the applicant had no
bona fide
defence. The Memorandum of Agreement determined the relations between
the parties and the steps to be taken in case of breach.
The
applicant had not acted in accordance with the agreement and
therefore the contract had not been cancelled. Proper steps had
not
been taken at all. Therefore, there is no
bona fide
defence.
[12] The refusal of an
application of this nature is a stringent one. It effectively closes
the doors of the court to the applicant.
The court should not lightly
deny a litigant access to justice. However, it must be emphasised
that such access will be denied
to a litigant who fail to adhere to
the rules of court. Each matter will depend on its own facts.
[13] In this matter, the
Municipality concerned has been stripped off its authority to act as
an independent entity. The authority
was vested with the
Administrator who reported to the relevant Provincial Department in
Bloemfontein. The Municipalities under
administration are those that
are in distress. The summons had to be handed to the Administrator
who had to transmit the same to
a Mr Venter at the Provincial
Offices. It is conceivable that summons would have gone missing in
that process. This is not a condonation
of such behaviour but
realisation that such an entity in distress one can expect the
possibility of summons being lost arising
in the circumstances. I
could not find any wilful or gross negligent conduct on the part of
the officials of the respondent in
not defending this matter. Instead
I could find that because of the unusual circumstances prevailing at
the time it could have
led to this particular situation arising. I am
of the view that the respondent had no knowledge of the action being
brought and
did not act in any deliberate manner in refraining from
entering an appearance to defend. I am of the view that the
explanation
is acceptable and the applicant is entitled to the relief
sought.
[14] The action is based
on a Memorandum of Agreement concluded between the parties. The
central dispute between the parties is
services that is alleged to
have been rendered and refusal to pay thereof. Further, there is a
dispute on the quantity of delivery
of such services. The long
standing dispute between the parties is clearly documented in the
correspondence exchanged between them.
I refer to the attachments
annexed to the opposing affidavit. In addition, there is the
allegation of breach resulting in the applicant
suffering damages.
These averments if established at the trial, the applicant will be
entitled to the relief sought. In the exercise
of my discretion, I am
of the view that the application measure up to the test as laid down
by the court. I accordingly conclude
that the applicant has a
bona
fide
defence. There is a sufficient cause to set aside the
judgment.
[15] There were other
applications that I referred to in paragraph [4] namely the stay of
the sale in execution, suspension of the
warrant of execution and
condonation of the late filing of the opposing affidavit. The
granting of the application for rescission
of judgment means that all
these applications will fall by the wayside.
[16] The principle is
that the costs follow the result. It was necessary to grant the
application for condonation in order to hear
the main application. I
am of the view that the respondent had a reasonable explanation on
the late filing of the necessary documents.
On the main application,
I am of the view that the respondent did not act unreasonably in
opposing the application.
[17] Accordingly, I make
the following order:
17.1 The application for
rescission of judgment is granted.
17.2 Costs in all
applications will be costs in the cause.
_____________________
M.A. MATHEBULA, AJ
On
behalf of the respondent/
plaintiff:
Mr. I. Motloung
Instructed
by:
Mabalane
Seobe Attorneys BLOEMFONTEIN
On
behalf of the applicant/
defendant:
Adv. C. Ploos van Amstel SC
with:
Adv.
C. Coetzer
Instructed
by:
Honey
Attorneys
BLOEMFONTEIN
/eb