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[2011] ZANCHC 2
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Leungo Construction Enterprise CC v Ga- Segonyane Municipality (862/2010) [2011] ZANCHC 2 (25 February 2011)
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5
Reportable
YES / NO
Circulate to Judges YES / NO
Circulate to Magistrates:
YES / NO
Circulate to Regional Magistrates: YES / NO
IN
THE HIGH COURT OF SOUTH AFRICA
(Northern Cape
High Court, Kimberley)
Case Nr: 826/2010
Date heard: 2011/02/18
Date delivered: 2011/02/25
LEUNGO CONSTRUCTION ENTERPRISE CC
….........................................
PLAINTIFF
and
GA SEGONYANE MUNICIPALITY
….........................................................
DEFENDANT
JUDGMENT
BESTER-TREURNICHT AJ
In
this matter the applicant applies for the rescission of a default
judgment granted against him on 01/07/2010 to the following
effect:
Payment of the sum of R1 040 570,79
Interest a tempore morae
Costs of suit
Further
and/or alternative relief
I will refer to the applicant as the Municipality and to
the respondent as Leungo for ease of reference.
The Municipality applies for condonation for the late
filing of the application which should have been brought twenty days
after
gaining knowledge of the judgment In terms of Rule 31(2)(b).
The
requirements for a successful application for rescission are the
following, as set out in
Grant v Plumbers 1949(2) SA 470 (TPD)
at 476:
“
(a)
He must give a reasonable explanation of his default. If it appears
that his default was wilful or that it was due to gross
negligence
the Court should not come to his assistance.
(b) His application must be
bona fide
and not made with the intention of merely delaying
plaintiff's claim.
(c) He must show that he has
a
bona fide
defence to plaintiff's claim. 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.”
See also
Colyn v Tiger Food Industries Ltd t/a Meadow
Feed Mills (Cape)
2003 (6) SA 1
(SCA)
at 9 C-F
.
I deal firstly with the explanation provided by the
Municipality for the default. The reasons for the Municipality’s
absence
or default must be set out fully because it is relevant to
the question whether or not the default was wilful. In
Silber v
Ozen Wholesalers (Pty) Ltd 1954(2) SA 345 (A)
at 353 A it
was held that the applicant should at least furnish an explanation
of his default sufficiently full to enable
the Court to understand
how it really came about and to assess his conduct and motives.
Mr. Kgarane, the Technical Manager of the Municipality
deposed to the founding affdavit on its behalf. He admits that the
summons
had been properly served on the Municipality by serving a
copy thereof on 24 May 2010 on Miss Von Brandis, an employee
of the Municipality in charge of the business premises and that the
nature and contents hereof had been explained to her.
The Municipality, being a state organ, had twenty days
to file its Notice of Opposition in terms of Rule 19(2), being 5
August
2010. Mr. Kgarane avers that the Municipality only gained
knowledge of the default judgment on 8 July 2010, which averment is
not explained in light of the admission of proper service on Miss
Von Brandis.
Mr. Kgarane then explains that the Municipality
instructed counsel, who was allegedly available for consultation
only on 31
July 2010. During consultation at the time it became
apparent that further “relevant documents” were not
available
for scrutiny and only came to hand on 5 August 2010. This
application was lodged on 16 August 2010. When considering the
reasons
provided for the non-compliance with the Rules, the
Municipality is not entitled to use the non-availability of counsel
as
an excuse for not filing the application timeously. Surely the
Municipality could instruct any other available counsel to timely
assist in preparing the application. The nature of the documents
which were allegedly not available are not explained, nor
the
importance thereof.
The reasons advanced by the applicant for condonation
are terse and a far cry from being fully explained. The vagueness
thereof
does not serve to enable me to establish whether the
conduct of the Municipality was wilful. Condonation is not for the
mere
asking. A full, detailed and accurate account of the causes of
delay and their effects must be furnished. See
Uitenhage
Transitional Local Council v South African Revenue Service 2004(1)
SA 292 (SCA)
at 297 I-J. I am therefore of the
opinion that the application for condonation is not proper.
For the sake of completeness and to be able to give a
full overview of whether good cause has been shown, I proceed to
determine
whether the Municipality has produced
prima facie
evidence of a substantial defence. See in this regard
Galp v
Tansley NO and Another 1966(4) SA 555 (CPD)
at 560 A-B.
“
As
was pointed out in Silber's case, supra , at p. 352 G, the
requirement introduced by the expression 'good cause', as used in
Rule 46 (5), includes
but
is not limited to
the
existence of a substantial defence. And if there is one thing which -
to my mind - appears to be absolutely axiomatic it is
this, viz.,
that the requirement of 'good cause' cannot be held to be satisfied
unless there is evidence not only of the existence
of a substantial
defence but, in addition, of a
bona
fide
,
presently-held desire on the part of applicant for relief actually to
raise the defence concerned in the event of the default
judgment
being rescinded.
”
Leungo’s claim as set out in the Particulars of
Claim is based on services rendered to the Municipality as per
agreement
between the parties. The services entailed the
preparation of a business plan for the development of 235 (
in
situ
) low cost houses for the area of Bankara-Bodulong, within
the managerial district of the Municipality. The Municipality would
pay Leungo in accordance with provisions of the Guideline Scope of
Services and Tariff of Fees for Registered Persons promulgated
from
time to time pursuant to the provisions of Sec 34(2) of the
Engineering Professions Act, 46 of 2000. Leungo attached
a schedule
to the Particulars of Claim as annexure “P0C2”
depicting how the claim was computed.
The defence of the Municipality is summarized in
par 39 of the founding affdavit which reads as follows:
“
The
plaintiff never submitted the completed business plans, or the
Geotech Report or the Environmental Impact Assessment Report
(EIA) as
per the agreement. Nor has the plaintiff submitted any supporting
documentation to enable the plaintiff to satisfy itself
whether or
not the professional services allegedly rendered by the defendant as
per the agreement were value for money or cost
effective.”
These broadly stated allegations lack the
particularity and forthrightness expected from the Municipality to
disclose a
bona fide
defence. There is no averment in the
founding affdavit that it was a term of the agreement between the
parties that Leungo also
had to submit a Geotech Report or
Environmental Impact Assessment Report (EIA). This is furthermore
not portrayed in the letter
of appointment, Annexure KK2.
Leungo denies the averment that the business plan as
submitted was not complete. It refers in the opposing affdavit to
an application
between the same parties in this Division under case
no 1075/2010. In the affdavit on behalf of the Municipality in that
application
Mr Gabarone, the Municipal Manager, admits the averment
by Leungo that the appointment to prepare a business plan for the
Bankara-Bodulong
project was satisfied in its final form when the
business plan was submitted to the Municipality and accepted by it.
This concession
does away with the allegation that the business
report was not submitted in completed form or that it lacked a
Geotech or EIA
Report. No replying affidavit was filed and
therefore no denial or explanation for the concession by Mr.
Gabarone.
The allegation by the Municipality that no supporting
documentation was submitted of how the claim was computed, does not
deal
at all with the supporting documentation annexed to the
Particulars of Claim. Leungo annexed the documentation concerned to
substantiate how the claim was computed. Mr. Kgarane does not refer
to the amounts reflected therein and does not deny the
applicability or the correctness of the charges levied for the
services rendered. Although this aspect was raised in the opposing
affdavit, no replying affdavit was filed to deal with that
allegation.
The Municipality furthermore contends that the summons
is excipiable in that it lacks an averment of prior demand In terms
of
sec 3(1) of the Institution of Legal Proceedings Against Organs
of State Act, no 40 of 2002. That factual averment is, however,
not
correct as paragraph 9 of the Particulars of Claim provides
that “
notwithstanding due demand, the Defendant fails
and/or refuses and/or neglects to pay the Plaintiff the amount of
R1 040 570,79
”. There is therefore no merit in
this technical contention by the Municipality.
I am of the opinion that the Municipality has failed
to produce
prima facie
evidence of a
bona fide
defence.
In view furthermore of the lack of proper reasons advanced for the
condonation application as discussed above, the
Municipality has
not shown good cause as contemplated in Rule 31(1)(b). Due to
the decision I have made in regard hereto,
I do not deem it
necessary to address the other issues raised in the application.
I
therefore make the following order:
THE APPLICATION FOR RECISSION OF THE DEFAULT JUDGMENT
ON GRANTED 01/07/2010 IS DISMISSED WITH COSTS.
_________________________
A
BESTER-TREURNICHT
ACTING JUDGE
NORTHERN CAPE DIVISION
APPEARANCE FOR THE PLAINTIFF/RESPONDENT
Adv
Van Rooyen instructed by Haarhoffs Incorporated, Kimberley
APPEARANCE FOR THE DEFENDANT/APPLICANT
Adv
Nxumalo instructed by Madisha Legodi Attorneys, Kimberley