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[2011] ZAKZPHC 59
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Trapel Farms CC and Others v Rodel Financial Services (Pty) Ltd (2855/2010) [2011] ZAKZPHC 59 (20 October 2011)
IN
THE KWAZULU-NATAL HIGH COURT, PIETERMARITZBURG
REPUBLIC
OF SOUTH AFRICA
CASE
NO 2855/2010
In the matter between:
TRAPEL FARMS CC
….........................................................................
FIRST
APPLICANT
SANDRA LE PART
….......................................................................
SECOND
APPLICANT
PIERRE HYLTON LE
PART
….............................................................
THIRD
APPLICANT
and
RODEL FINANCIAL
SERVICES (PTY) LTD
…...........................................
RESPONDENT
JUDGMENT
Date: 20 October 2011
PLOOS VAN AMSTEL, J
[1] On 19 August 2010 judgment was granted against the three
applicants, without opposition, for payment of the sum of R3 708 757
together with interest and costs. They now apply for a rescission of
that judgment.
[2] The claim which gave rise to the judgment arose out of a written
agreement in terms of which the respondent lent an amount
of R1 350
000 to the first applicant on or about 6 July 2007, and deeds of
suretyship executed by the second and third applicants.
The loan was
repayable after a period of six months. Nothing has been repaid by
the applicants, neither in respect of the capital
nor in respect of
interest.
[3] The proceedings which resulted in the judgment were brought on
notice of motion. The application papers were served on the
first
applicant at its registered office (a firm of accountants) on 20
April 2010. The second applicant is the sole member of the
first
applicant. The papers were served on the same day at the third
applicant’s chosen domicilium citandi et executandi
at 8
Daljeith Road, Ashburton, Pietermaritzburg, which, according to the
founding affidavit in those proceedings, was his place
of residence.
A return of service indicates that the papers were served on the
second applicant personally on 4 August 2010, but
she denies this.
The deputy sheriff who signed the return of service insists in his
affidavit that he had served the papers on
her personally.
[4] In addition a notice of set down was served on the first
applicant at its registered office on 28 July 2010 and at the third
applicant’s domicilium citandi on 31 July 2010. The return of
service which evidences the service of a notice of set down
on the
second applicant is also disputed by her.
[5] The second applicant does not say in her affidavit that the
accountants at the registered office of the first applicant failed
to
bring the application papers to her notice. Nor is there an affidavit
from anyone at the registered office to this effect.
[6] The court file indicates that on 17 May 2010, which was the date
specified in the notice of motion, the application was adjourned
to
26 May 2010, with costs reserved. On 26 May 2010 the application was
adjourned sine die, by consent, with costs reserved. The
fact that
the adjournment was by consent is not only endorsed on the court
file, but also appears from the order made by Koen,
J on that day.
[7] Counsel for the respondent informed me from the bar, without
objection from counsel for the applicants, that according to her
attorney the reason for the adjournment by consent was that the
parties were trying to settle the matter. Their efforts were
unsuccessful.
[8] The matter was thereafter set down on the motion court roll and
the order was granted unopposed.
[9] Against this background the second applicant’s statement
that she and the third applicant cannot recall whether or not
they
became aware of the respondent’s application before or after
the judgment was granted on 19 August 2010 rings hollow.
In any
event, her evidence falls short of saying that they were not aware of
the application before the judgment was granted. She
does say that
according to their recollection they became aware of the application
before the writ of execution was served. There
is no suggestion that
upon becoming aware of the application they took any steps to oppose
the matter.
[10] It seems clear to me, on the evidence and the probabilities,
that the applicants received the application papers, entered
into
negotiations with the respondent and, when these failed, decided not
to oppose the application. They obviously did not think
they had a
defence. It is worth noting that in 2008 already the applicants were
represented by an attorney in their negotiations
for an extension of
the loan period.
[11] According to the second applicant the efforts to settle the
matter continued after the writ was issued and only broke down
finally in April 2011. The applicants apparently terminated the
services of the attorney who had been representing them until then
and consulted a new attorney, who arranged for them to consult with
counsel. It was only then that they were advised of the existence
of
the in duplum rule and that the judgment appeared to have been
granted in contravention of the rule. The application for the
rescission of the judgment was issued on 11 May 2011.
[12] The applicants base the application for rescission on rule
42(1)(a) of the Uniform Rules, alternatively rule 31(2)(b) and
in the
further alternative on the common law.
[13] Rule 31(2)(b) does not apply as the default judgment was not
granted in an action where the defendant was in default of delivery
of a notice of intention to defend or a plea.
1
[14] Counsel for the applicants submitted that the judgment was
erroneously sought and granted as contemplated in rule 42(1)(a).
He
argued that the judgment was granted in contravention of the in
duplum rule, which is based on public policy, and that therefore
the
judgment was wrong in law and without any legal foundation.
[15] The fact that a default judgment is wrong on the merits of the
matter does not mean that it was erroneously sought or granted.
2
The judgment was not granted because the applicants had no defence to
the claim. It was granted because they did not oppose the
application
and the judge was satisfied on the papers before him that the
respondent was entitled to the order. There was no irregularity
or
mistake in the proceedings.
3
In Lodhi
4
the court said that a judgment granted against a party in his absence
cannot be considered to have been granted erroneously because
of the
existence of a defence on the merits which had not been disclosed to
the judge who granted the judgment. Streicher JA said
at 95 F that
the existence or non-existence of a defence on the merits is an
irrelevant consideration and, if subsequently disclosed,
cannot
transform a validly obtained judgment into an erroneous judgment.
[16] Counsel submitted that although there was no error in the
proceedings, the judgment was without legal foundation and therefore
it was erroneously granted for the purposes of rule 42(1)(a). As
authority for this proposition he relied on Athmaram v Singh,
5
where Nienaber J dealt with an application for the rescission of an
order striking out a defendant’s defence and granting
judgment
against him. He said that if the order had been ‘legally
incompetent’ it would have been erroneously granted
for the
purposes of rule 42 (1)(a).
[17] The judgment against the applicants was not legally incompetent,
even if the interest was in contravention of the in duplum
rule.
6
In F & I Advisors (Edms) Bpk v Eerste Nasionale Bank van SA Bpk
7
Harms JA said :’ Natuurlik sal ‘n Hof nie rente in stryd
met die in duplum-reël gelas as die feite duidelik is
nie, net
so min as wat ‘n Hof betaling van woekerrente in sulke
omstandighede sal beveel. Dit beteken egter nie dat die Hof
op eie
houtjie ‘n soektog op tou moet sit om vas te stel of so ‘n
reël oortree is nie. Ook handel die Hof nie
op grond van ‘n
blote suspisie nie.’ Further on in the judgment he said
8
:’
‘n Eis om betaling van rente of die betaling daarvan in stryd
met die in duplum-reël is nie onwettig (“illegal”)
nie.’ This is therefore not a basis for finding that the
judgment was erroneously granted for the purposes of rule 42(1)(a).
[18] It remains to consider whether the judgment should be rescinded
in terms of the common law. Here, as Nienaber J said in Athmaram
v
Singh,
9
the focus is on the conduct of the applicant rather than on the
methods employed by the respondent or the propriety of the earlier
order of the court. In Chetty v Law Society, Transvaal
10
the court said: ‘… 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:
that the party seeking relief
must present a reasonable and acceptable explanation for his
default; and
that on the merits such party
has a bona fide defence which, prima facie, carries some prospect of
success.’
[19] With regard to the defence that the in duplum rule has been
contravened it must be borne in mind that the applicants do not
have
to show a probability of success in the main application. It is
enough to show that the defence raises an issue which is deserving
of
being tried.
11
I shall assume in their favour that this has been established. There
is no reason to believe that the defence is not bona fide.
[20] The remaining question relates to the reason why the applicants
did not oppose the application which led to the judgment against
them. I have already found that they knew about the application,
received the papers, entered into negotiations with the respondent
and, when these failed, took a conscious decision not to oppose the
application. This is a case of wilful default.
12
Mr Morkel, the deponent to the respondent’s answering
affidavit, says that after the writ was issued the applicants
requested
the respondent not to execute on it and tried to negotiate
repayment terms favourable to them. In doing so they acquiesced in
the
judgment, at a time when they were represented by an attorney. In
Schmidlin v Multisound (Pty) Ltd
13
Van den Heever J (as she then was) said that acquiessense in the
execution of a judgment must surely in logic normally bar success
in
an application to rescind on the same basis as acquiessence in the
very granting of the judgment itself.
[21] The fact that the applicants were told for the first time some
nine months after the judgment had been granted that they appeared
to
have had a defence to a part of the claim does not seem to me in the
circumstances of this case to constitute sufficient cause
to rescind
the judgment. It is important and in the interests of the
administration of justice that finality should be reached
in
litigation.
14
It would be unfair and prejudicial to the respondent to allow the
applicants to reopen the case in circumstances where, when they
had
the opportunity to oppose it, they chose not to do so.
[22] The application is dismissed with costs.
____________________
PLOOS VAN AMSTEL J
1
See
rule 31(2) and, by way of comparison, Athmaram v Singh
1989 (3) SA
953
(D) at 954 E.
2
Seal
v Van Rooyen NO and others; Provincial Government, Northwest
province v Van Rooyen NO and others 2008(4) SA 43 (SCA) para
18.
3
Colyn
v Tiger Food Industries Ltd t/a Meadow Feed Mills (Cape)
2003 (6) SA
1
(SCA); Bakoven Ltd v GJ Howes (Pty) Ltd
1992 (2) SA 466
(ECD) at
471 G-H; Lodhi 2 Properties Investments CC and another v Bondev
Developments (Pty) Ltd
2007 (6) SA 87
(SCA).
4
Ibid,
at 91 H.
5
Supra,
fn 1, at 957 A.
6
F
& I Advisors (Edms) Bpk v Eerste Nasionale Bank van SA Bpk
[1998] ZASCA 65
;
1999
(1) SA 515
(SCA) at 526 B.
7
Ibid,
525 E.
8
At
526 A.
9
Supra,
fn 1, at 957 B.
10
1985
(2) SA 756
(A) at 765
11
Riddles
v Standard Bank of South Africa Ltd
2009 (3) SA 463
(T) at para 9.
12
Maujean
t/a Audio Video Agencies v Standard Bank of South Africa Ltd
1994
(3) SA 801
(C)
13
1991
(2) SA 151
(C) at 156 B
14
Firestone
South Africa (Pty)Ltd v Genticuro A.G.
1977 (4) SA 298
(AD) at 309
A.