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[2011] ZAKZDHC 9
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Pansolutions Holdings Ltd v P & G General Dealer & Repairers CC (3624/2010) [2011] ZAKZDHC 9; 2011 (5) SA 608 (KZD) (16 February 2011)
REPORTABLE
IN THE KWAZULU-NATAL
HIGH COURT, DURBAN
REPUBLIC OF SOUTH
AFRICA
CASE NO. 3624/2010
In the matter between:
PANSOLUTIONS HOLDINGS
LIMITED
…............................
APPLICANT
and
P & G GENERAL
DEALERS & REPAIRERS CC
….........
RESPONDENT
In re:
P & G GENERAL
DEALERS & REPAIRERS CC
…...............
PLAINTIFF
and
PANSOLUTIONS HOLDINGS
LIMITED FIRST
…...............
DEFENDANT
DRIVE CONTROL
CORPORATION (PTY) LTD
SECOND
…............................
DEFENDANT
JUDGMENT
Delivered
on 16 February 2011
SWAIN J
[1] The applicant seeks
the rescission of a default judgment, granted in favour of the
respondent against the applicant on 06 May
2010, for payment of an
amount R969,570.00 together with interest and costs.
[2] Also before me is an
application brought by the applicant to interdict the respondent,
together with the Sheriff from executing
on the default judgment and
from proceeding with a sale in execution on 30 July 2010. The only
issue to be decided in this application
is payment of the costs of
the application. The respondent contends that the launch of this
application was unnecessary, whereas
the applicant contends that a
request addressed to the respondent’s attorneys by the
applicant’s attorneys to stay
execution, pending the outcome of
the rescission application, was ignored.
[3] In regard to the
application for rescission, before dealing with the merits of the
application, it is necessary to deal with
an application by the
applicant for condonation for its failure to apply to this Court,
within twenty days of acquiring knowledge
of the judgment, as is
required in terms of Rule 31 (5) (d).
[4] I am satisfied that
the applicant has adequately explained the delay in bringing the
present proceedings and this issue need
not detain me any further.
[5] As regards the merits
of the application for a rescission of the default judgment granted
by the Registrar in terms of Rule
31 (5) (b), both parties approached
the matter on the basis that the applicant was obliged to establish
“good cause”
, for the rescission of
the judgment, as is required by Rule 31 (2) (b). The latter rule is
however applicable where the judgment
sought to be rescinded is one
granted by
“the Court”
in terms of
Rule 31 (2) (b).
[6] The distinction is
one of substance, for whereas an applicant for the rescission of a
judgment granted by the Court is required
to show
“good
cause”
, an applicant is entitled to have a
judgment granted by the Registrar, set down for
“reconsideration”
in terms of Rule 31 (5) (d).
[7] In the case of
Bloemfontein Board
Nominees Ltd. v Benbrook
1996 (1) SA 631
(O)
at 633 H – I
Hancke J held that a
“reconsideration”
of a default
judgment granted by the Registrar, in terms of Rule 31 (5) does not
mean that the Court substitutes its discretion
for that of the
Registrar, but that the Court will interfere with the judgment or
direction given by the Registrar, only if it
is of the opinion that
the Registrar has erred.
[8] With respect to the
learned Judge, it seems to me that the ambit of the Court’s
discretion in terms of Rule 31 (5) (d)
to reconsider a judgment
granted by the Registrar, has been defined too narrowly.
[9] In seeking to
determine what is meant by a
“reconsideration”
of
the matter, I believe that useful guidance may be gleaned from those
decisions dealing with the ambit of this Court’s discretion,
to
reconsider an order granted as a matter of urgency against a person
“in his absence”
in terms of Rule 6
(12) (c). In both instances, whether it be a default judgment granted
by the Registrar, or an urgent order granted
by the Court, the relief
is granted in the absence of the aggrieved party.
[9.1] It is clear that
the
“underlying pivot”
for the
exercise of the power in terms of Rule 6 (12) (c) is the absence of
the aggrieved party, at the time of the grant of the
order
I S D N Solutions
(Pty) Ltd. v C S D N Solutions cc & others
1996 (4) SA 484
W
at 486 H
[9.2] The dominant
purpose of Rule 6 (12) (c) is to afford to an aggrieved party a
mechanism designed to redress imbalances in,
and injustices and
oppression flowing from, an order granted as a matter of urgency in
his absence.
I S D N
supra
at 486 I
[9.3] A wide discretion
is intended and factors relating to the reasons for the absence, the
nature of the order granted and the
period during which it has
remained operative, will invariably fall to be considered in
determining whether a discretion should
be exercised in favour of the
aggrieved party. In addition, questions relating to whether an
imbalance, oppression or injustice
has resulted, and if so, the
nature and extent thereof, and whether redress is open to attainment,
by virtue of the existence of
other or alternative remedies, will
have to be considered
I S D N at 487 B –
C
[9.4] Rule 6 (12) (c) is
very widely framed and the word
“reconsideration”
must bear its widest meaning
Lourenco &
others v Ferela (Pty) Ltd & others (No. 1)
1998 (3) SA 281
(T)
at 290 D
In Lourenco Southwood J
(at 290 D – E) quoted the definition of
“reconsider”
in the Shorter Oxford English Dictionary as follows
“
1. To
consider (a matter or thing) again; (b) to consider (a decision, etc)
a second time with a view to changing or amending it;
to rescind,
alter.
2. To reflect on one’s conduct
with a view to …. amendment”
[10] When a rescission of
a default judgment granted by the Registrar is to be reconsidered in
terms of Rule 31 (5) (d), the underlying
need for the grant of such a
power is equally the absence of the aggrieved party, at the time the
judgment was granted. The object
is equally to obtain redress against
an injustice, or an imbalance created by the judgment. Of importance
will also be factors
relating to the reasons for the absence of the
aggrieved party, as well as the period the judgment has been in
existence, without
challenge.
[11] I therefore, with
respect, disagree with the views of Hancke J in Benbrook
supra,
that a
“reconsideration”
of
a default judgment granted by the Registrar in terms of Rule 31(5),
does not mean that the Court substitutes its discretion for
that of
the Registrar and will only interfere with the judgment, if it is of
the opinion that the Registrar has erred. In my view,
the power
accorded to the Court is precisely that of substituting its
discretion for that of the Registrar. I am fortified in this
view by
the self-evident fact that at the stage when the Court is asked to
reconsider a default judgment granted by the Registrar,
it will have
before it the contentions of the aggrieved party, which in the nature
of things, the Registrar will have been ignorant
of. The Registrar
may not have erred in granting judgment, on the information available
to him at the time, but in the light of
the further information
available to the Court at the time of reconsideration of the
judgment, it may be apparent that the judgment
cannot stand.
[12] The anomalous
position therefore arises on the clear wording of the relevant Rules,
that a different standard applies when
a default judgment granted by
the Court is sought to be set aside, as opposed to a default judgment
granted by the Registrar.
[13] It seems to me
however that the conflict is more apparent than real, for the
following reasons:
[13.1] It is clear that a
court, in evaluating
“good cause”,
has
a wide discretion in order to ensure that justice is done
Wahl v Prinsivil
Beletgings (Edms) Bpk
1984 (1) SA 457
(T)
[13.2] The courts have
declined to frame
“an exhaustive definition of what
would constitute sufficient cause to justify the grant of an
indulgence”
per Innes J in
Cairn’s
Executors v Gaarn
1912 AD 181
at 186
[13.3] The enquiry in
both instances is directed at establishing the reasons for the
aggrieved parties’ absence. In the case
of Rule 31 (2) (b) it
is incumbent upon the applicant to show that the default was not
wilful.
[13.4] That an applicant
is
bona fide
in
bringing the application and has a
bona fide
defence to the claim, as required as part of the
obligation to show
“good cause”
in
terms of Rule 31 (2) (b) is equally embraced by the concept of
determining whether an imbalance, oppression or injustice has
resulted from the judgment granted by the Registrar in terms of Rule
31 (5) (d).
[14] In my view, a court
in deciding whether to reconsider, in terms of Rule 31 (5) (d), a
default judgment granted by the Registrar,
would cause no affront to
the provisions of this Rule, if it applied the criteria enunciated by
the courts over many years, in
determining whether an applicant has
established
“good cause”
for the
rescission of a judgment granted by the Court. Such an approach has
the merit of removing any unwarranted distinction, between
the
criteria which are to be satisfied, to achieve success in either
instance.
[15] I therefore intend
to apply to the facts of the present case, the well established
criteria of what constitutes
“good cause”
in
terms of Rule 31 (2) (b) to decide whether the default judgment
granted by the Registrar, should be subject to
“reconsideration”
in terms of Rule 31 (5) (d) and set aside. Such an
approach would not be unfair to either of the parties, the Counsel
for whom,
as pointed out above, approached the matter on the basis
that the applicant had to show
“good cause”.
Indeed, when I brought the apparent anomaly in the Rules
to the attention of Counsel, as well as the proposed solution, they
expressed
themselves in agreement with this approach.
[16] It is clear on the
papers that the applicant did not deliver a notice of intention to
defend, because the applicant did not
receive the summons. From the
correspondence which was exchanged between the parties’
attorneys before summons was issued,
it is quite clear that the
applicant intended to defend any action which may be instituted by
the respondent. I am therefore satisfied
that the applicant has
established that it was not in wilful default.
[17] As regards the
establishment of a
bona fide
defence, what the applicant has
to do is set out a
prima facie
defence, by setting out
averments which, if established at the trial, will entitle the
applicant to the relief asked for. The applicant
is not obliged to
deal fully with the merits of the case and produce evidence, that the
probabilities are actually in his favour
Colyn v Tiger Food
Industries t/a Meadow Feed Mills (Cape)
2003 (6) SA 1
SCA)
at 9 E - F
[18] The respondent sues
the applicant for the purchase price of goods sold and delivered,
pursuant to a partly oral and partly
written contract, which forms
part of the papers, and is a copy of the applicant’s purchase
order. The purchase order states
that
“
Any order in
excess of R20,000.00 is only valid if signed by a Director(s) of this
Company. A list of Directors may be obtained
from the above
addresses”.
[19] It is common cause
that the purchase order was for the sum of R959,570.00 and that the
applicant has alleged on oath that the
individual who signed the
order, was an employee of the applicant but not a Director and not
authorised by the applicant to place
the order.
[20] The reply of the
respondent to this allegation is,
inter alia
, to allege on
various grounds that the applicant is estopped from denying the
authority of the employee, alternatively, the applicant
ratified the
order by its conduct.
[21] In my view this is
not the appropriate stage to finally decide these issues, regard
being had to the fact that all the applicant
is required to set out,
is a
prima facie
defence, which if established at the trial,
will entitle the applicant to avoid payment. To attempt to decide the
issues of estoppel
and ratification, would require the applicant to
deal fully with the merits of the case and produce evidence that the
probabilities
are actually in the applicant’s favour, which the
applicant is not obliged to do.
[22] I am therefore
satisfied that the applicant has
prima facie
established a
bona fide
defence to the respondent’s claim.
[23] The remaining issue
is the costs of the application in which the applicant sought an
interdict, restraining the respondent
from executing upon the default
judgment and from proceeding with a sale in execution on 30 July
2010. On the papers, I am not
satisfied that the need for such an
application was solely caused by a culpable failure on the part of
the respondent’s attorney
to timeously reply by letter dated 26
July 2010, to the applicant’s attorney’s letter dated 21
July 2010. In my view,
the fairest order, as suggested by Mr. de Beer
S C, who appeared for the respondent, would be to order that the
costs of this application
be costs in the cause, in the application
for rescission.
[24] In my view, the
costs of the rescission application should be reserved for decision
by the trial Court, because it will only
be at that stage that the
validity of the applicant’s defence will be determined, which
will be of major significance with
regard to the costs of the
application for rescission.
The order I make is the
following:
The applicant’s
failure to comply with the time limits prescribed by Rule 31 (5) (d)
is condoned.
The judgment granted by
default, by the Registrar on 06 May 2010 in favour of the
respondent, against the applicant in terms of
Rule 31 (5) (b), is
rescinded.
The applicant is granted
leave to file a notice of intention to defend within seven days of
this order.
The costs of this
application are reserved for decision by the trial Court.
The costs of the
application brought by the applicant to restrain the respondent from
executing upon the aforesaid default judgment
are to be costs in the
cause, in respect of the costs order to be made by the trial Court,
in respect of this application.
______________
K. SWAIN J
Appearances /…
Appearances:
For the Applicant :
Mr. P. D. Quinlan
Instructed
by :
N J Grobbelaar Attorney
C/o
Cox Yeats
Durban
For the Defendant
:
Mr. H. A. de Beer S C
Instructed
by :
John Dua Attorneys Durban
Date of Hearing
:
07 February 2011
Date of Filing of
Judgment :
16 February 2011