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[2010] ZAFSHC 112
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Mare v Myburgh & Jordaan Attorneys and Another (4140/09) [2010] ZAFSHC 112 (28 May 2010)
FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Case No.: 4140/09
In
the matter between:
MARIUS MARE
….......................................................................
Applicant/Plaintiff
and
MYBURGH & JORDAAN ATTORNEYS
…........
First
Respondent/First Plaintiff
ALWYN ABRAHAM MYBURGH
…........
Second
Respondent/Second Plaintiff
_____________________________________________________
JUDGEMENT:
J.P.
DAFFUE, AJ
HEARD ON:
27
MAY 2010
_____________________________________________________
DELIVERED ON:
28
MAY 2010
_____________________________________________________
[1]
INTRODUCTION
This is an application
for an order in the following terms:
1.1 that condonation be
granted to the applicant for the non-compliance of the court rules
relating to service and process;
1.2 that the bar
constituted by respondents’ notice of bar dated 9 March 2010 be
uplifted;
1.3 that applicant be
granted leave to file his plea within 5 (five) days from date of this
order;
1.4 that, in the event of
them opposing this application, the respondents be ordered to pay the
costs of this application, jointly
and severally, the one paying the
other to be absolved;
1.5 further and
alternative relief.
[2]
THE
PARTIES
2.1 Applicant is Marius
Mare, a chartered accountant, cited as defendant in the main action
under case no. 4140/2009.
2.2 The respondents are
Myburgh & Jordaan Attorneys and Alwyn Abraham Myburgh, being
first and second respondents respectively.
They instituted action
under case no. 4140/2009 as first and second plaintiffs respectively.
[3]
REPRESENTATION
OF PARTIES
3.1 For the sake of
convenience the parties will be referred to herein as cited in this
application.
3.2 Mr. M.C. Louw
appeared for the applicant and Mr. D.M. Grewar for the respondents.
[4]
BACKGROUND
The salient facts can be
summarised as follows:
4.1 Respondents issued
summons against applicant, claiming damages allegedly caused by
applicant due to
inter
alia his breach of contract insofar as
he acted recklessly or negligently and not as could have expected of
a qualified auditor.
4.2 Respondents claim
so-called direct damages (direkte skade), being the amounts paid by
first respondent to the South African
Revenue Services pertaining to
penalties in the amount of R166 714,00. This amount is claimed by
both respondents, although second
respondent personally has not been
penalised
ex facie
the particulars of claim.
4.3 The respondents also
claim R200 000,00 in respect of so-called non-patrimonial damages
insofar as their status and goodwill
have been affected negatively.
There is no indication which amount is claimed in respect of which
respondent.
4.4 On 1 December 2009
the combined summons was served on applicant. Notice of intention to
defend was given on 17 December 2009.
The date of the notice is 15
December 2009 but the document was only served on 17 December 2009,
the 16
th
of December being a Public Holiday.
4.5 A notice of bar was
served on applicant’s Bloemfontein attorneys on 11 March 2010
at 15h27 and filed at court on 12 March
2010.
4.6 No plea was filed and
consequently as on 19 March 2010 applicant was
ipso facto
barred in accordance with the provisions of rule 26.
4.7 On 24 March 2010 an
application for default judgment was served on applicant’s
Bloemfontein attorneys.
4.8 On 25 March 2010
applicant’s Bloemfontein attorney, Mr. D.A. Honiball, informed
respondents in writing of applicant’s
intention to launch an
application for condonation for the late filing of the plea. It was
foreseen that the application would
be delivered by 26 March 2010.
4.9 When informed by the
Registrar that the application for default judgment had to be set
down for hearing in open court, respondents
proceeded to set the
matter down for hearing on 29 April 2010.
4.10 On 23 April 2010 the
application
in casu
was
served and filed. This necessitated a postponement on 29 April 2010
to 27 May 2010 by agreement, costs of the postponement to
stand over.
[5]
THE
NEGLECT OF THE APPLICANT
5.1 No affidavit was
filed by applicant who relies on the version of his Johannesburg
attorney, Mr. Kevin Gordon Cross (Mr. Cross)
as confirmed by the
Bloemfontein attorney, Mr. Honiball.
5.2 The allegations
contained in paragraphs 10 to 13 of the founding affidavit are vague.
Much more detail could have been provided.
However it is clear that
defendant stays in Cape Town whilst his attorney is based in
Johannesburg. His legal representatives requested
him to prepare
certain documentation to enable them to prepare a plea on his behalf.
5.3 Apparently little, if
anything, was done by applicant between November 2009 to March 2010
and consequently no plea was filed.
5.4 During the period 17
March 2010 to 22 March 2010 Mr. Cross was away on leave for the long
weekend. On his return to office on
23 March 2010 he for the first
time became aware of a fax dated 16 March 2010 and sent the same date
to him by his Bloemfontein
correspondent. The notice of bar
accompanied the faxed letter.
5.5 The notice of bar was
served on 11 March 2010 and the Bloemfontein correspondent took three
days to inform the office of Mr.
Cross of this important notice.
5.6 There is no
indication that defendant was aware of the notice of bar and/or the
possible consequences thereof.
5.7 I also take
cognisance of the allegation that the notice of bar was not preceded
by any letter in accordance with the so-called
collegial practice
that has developed in the Gauteng. I may pause to add that I
personally was always under the impression that
attorneys in
Bloemfontein have been following such collegial practice for many
years. Mr. Cross alleges in par. 16 of the founding
affidavit that no
letter(s) requesting the plea preceded the notice of bar. This has
not been denied by second respondent. However,
I do have to point out
that second respondent alleged in par. 8 of the answering affidavit
that various requests were made to applicant’s
attorneys to
file a plea. However no letters are attached to the answering
affidavit in support of this allegation.
5.8 On 24 March 2010 Mr.
Honiball requested second respondent, a practising attorney of this
court, for an extension of the time
allowed to file the plea, but to
no avail. A letter was also sent by Mr. Honiball to plaintiffs dated
25 March 2010 upon receipt
of the application for judgment by
default. There was no response to this letter.
5.9 Mr. Cross and counsel
consulted with applicant on 29 March 2010 when it appeared that
counsel still needed further documentation,
whereupon a second
consultation was arranged for 1 April 2010.
5.10 Counsel was, on the
version of Mr. Cross, involved in an intricate Supreme Court of
Appeal matter at the time, but he promised
to give his attention and
prepare the plea over the Easter weekend. The plea was eventually
drafted, discussed and thereafter forwarded
to Bloemfontein for
service on 13 April 2010.
5.11 Hereafter the
present application was prepared, filed and served on plaintiffs. The
application was to be heard on 29 April
2010, the same day as the
application for default judgment enrolled by respondents for hearing
in open court.
5.12 The last day for
filing of the plea in order to prevent an automatic bar, was 18 March
2010. The plea was served and filed
15 court days late.
[6]
RESPONDENTS’
CRITICISM OF THE CONDUCT/OMISSIONS OF APPLICANT AND/OR APPLICANT’S
ATTORNEYS
6.1 Respondents are
severe in their criticism of not only the conduct or the lack thereof
of applicant, but also and especially
the Johannesburg attorney, Mr.
Cross.
6.2 Mr. Cross is accused
of recklessness and intentional and flagrant disregard of the rules
of court.
6.3 I fully appreciate
the frustration of respondents who believe that applicant not only
negligently failed to comply with his
contractual obligations and
thereby causing them damages, but continued to show no sign of
responsibility to ensure that his legal
team was put in a position to
file a plea on his behalf.
6.4 I accept that the
respondents, an incorporated firm of attorneys and a practising
attorney respectively, would like to see that
colleagues act
promptly, without negligence and complying with the rules of court at
all times.
[7]
APPLICATION
OF THE APPLICABLE PRINCIPLES
7.1 An applicant applying
for condonation, extension of time or removal of bar must comply with
two main requirements, i.e.
7.1.1 He must file an
affidavit satisfactorily explaining the delay. The court must be put
in a position to understand how and/or
why the delay came about in
order to assess the conduct or lack thereof.
7.1.2 Secondly, an
applicant must satisfy the court that he has a
bona fide
defence. The defence should be shown not to be patently unfounded.
See:
DU PLOOY v
ANWES MOTORS (EDMS) BPK
1983 (4) SA 212
(O) at 216F –
219E.
7.2 It is apposite to
refer also to the approach adopted in
SMITH,
NO v BRUMMER, NO AND ANOTHER
1954 (3) SA 352
(O) at 357H – 358B in which decision the
requirements for removal of bar were set out. My English translation
of the dictum
of Brink J is as follows:
“
The
tendency is to grant applications for removal of bar where
a reasonable
explanation for the delay has been given;
the application
is
bona fide
and not made with the object of delaying the
respondent’s claim;
there is no
indication of reckless or intentional disregard of the rules of
court;
the applicant’s
case is clearly not ill-founded; and
any prejudice
caused to the other party could be compensated for by an appropriate
order as to costs.”
7.3 It is also important
to emphasise that condonation for the non-observance of rules of
court is not a mere formality, but having
said that, any
consideration of an application for condonation must have regard to
the merits of the matter seen as a whole.
See
GUMEDE
v ROAD ACCIDENT FUND
2007 (6) SA
304
(C) at 307C – 308A.
7.4
Another aspect which cannot be disregarded although not mentioned in
the case law normally quoted in applications for condonation,
is
section 34 of the Constitution of the Republic of South Africa, 108
of 1996, which reads as follows:
“
34
Access to courts -
Everyone
has the right to have any dispute that can be resolved by the
application of law decided in a fair public hearing before
a court
or, where appropriate, another independent and impartial tribunal or
forum.”
There
is little doubt that a more comprehensive explanation could have
been given. The apparent lack lustre approach adopted
by applicant
since the receipt of the summons cannot be ignored. To a certain
extent applicant and his attorney, Mr. Cross,
can be accused of
disorganisation and slackness. However insofar as the focus at this
stage should be on the period after receipt
of the notice of bar, I
have been presented with a reasonable explanation as indicated
infra.
Applicant
could not have been aware that the Bloemfontein attorney did not
inform Mr. Cross per telephone, telefax or e-mail
on the very same
date the notice of bar was received, i.e. 11 March 2010. Three
court days lapsed by the time that the fax
was sent on 16 March
2010. Applicant could also not be aware of the further neglect of
Mr. Cross or his staff who did not respond
to the fax immediately,
but only after the long weekend.
From
23 March 2010 onwards Mr. Cross started to act more expediently
which led to the consultations with counsel, the eventual
drafting
of the plea and the filing thereof on 13 April 2010. It must also
be taken into consideration that there was another
long weekend in
this period.
The
explanation since receipt of the notice of bar by Mr. Cross is
reasonable, although only just.
I
cannot find that there was a reckless disregard of the rules of
court.
7.10
A
bona fide
defence has been raised. With reference to the
defence raised, the following averments are made which, taken in
conjunction or
on their own, may well prevent respondents from
obtaining judgment on the particulars of claim as it presently
stands:
Respondents’
claim is based on an alleged oral agreement in terms whereof
applicant undertook to perform certain auditing
functions in
respect of first respondent’s trust account. Respondents’
income tax returns for 2005 and 2006 financial
years were
submitted on the basis of nil returns. This had to do with the
first respondent’s business and not its trust
account.
Applicant cannot be held responsible for these nil returns. These
returns were prepared by first respondent’s
financial
manager, Hugo, and signed by second respondent. Applicant did not
feature at all. After investigation by the South
African Revenue
Service it appeared that first respondent had in fact generated a
profit of R108 268,00 for the 2005 financial
year and R300 301,00
for the 2006 financial year. Furthermore a profit of R405 000,00
in respect of the sale of an immovable
property was not declared.
Penalties by way of additional taxes were imposed.
Bearing
in mind the particulars of claim in its present format, there was
no obligation on applicant to draft financial statements
and/or to
submit returns to the South African Revenue Services in respect of
first respondent’s business.
It
appears reasonably possible that the damages suffered as a result
of the penalties levied, cannot be attributed to applicant,
but to
non-disclosure by first and second respondents. That being the
case the second claim is also doubtful at this stage
and it cannot
be found that applicant’s defence is ill-founded.
As
indicated above, any prejudice caused to respondents could be
compensated for by an appropriate order as to costs.
[8]
CONCLUSION
Having
considered the relevant principles, the facts placed on record by the
parties and argument by both counsel, there is sufficient
reason why
applicant should be allowed to file his plea and to contest
respondents’ action in a court of law.
[9]
COSTS
9.1
Applicant seeks an indulgence. The grant of an indulgence is
something
sui generis
. The general rule in such cases is that
costs do not follow the event.
See
Cilliers
Law of Costs
, par. 2.30 and 2.31 and the case law
referred to.
Mr.
Louw conceded that applicant is not entitled to the costs of the
application, but requested that he be ordered to pay respondents’
costs on an unopposed basis only.
Generally
speaking a party seeking an indulgence should pay the costs of the
application including the costs of the other party,
unless it is
found that the opposition was unreasonable.
See
MALONEY'S EYE PROPERTIES BK EN 'N ANDER v BLOEMFONTEIN
BOARD NOMINEES BPK
1995 (3) SA 249
(O) at 257G – H.
Respondents
knew prior to institution of this application what defences were
raised in applicant’s plea. They should have
been advised
that the defences raised were not ill-founded. In fact, they should
have been alerted that the particulars of
claim might have serious
shortcomings.
The
reasons for the delay were set out in the founding affidavit and
instead of accepting the reasonableness thereof, respondents
filed
an answer in which they took an extremely critical approach and
unnecessarily duplicated evidence contained in the annexures
to the
combined summons.
Although
respondents blame applicant for breaching the rules of court
flagrantly, their counsel’s heads of argument were
filed at
15h55 on Tuesday, 25 May 2010 instead of 15h00. This is a
transgression of rule 13.3 of the rules of practice published
in GN
820 of 7 September 2002.
See
Erasmus
Superior Court Practice
, loose-leaf edition, p. C3-21
and further and in particular C3-24B and 24C. Mr. Grewar informed me
that he handed his heads of
argument to the attorney at approximately
13h00, but that he could not explain the delay. Both counsel and
respondents are supposed
to be well aware of this rule.
In
the exercise of my discretion I find that the opposition was
unreasonable. Applicant who seeks an indulgence should pay the
costs of the application. I was initially of the view that the
costs should be paid on an unopposed basis only, but applicant
must
bear the consequences of my dissatisfaction which will be reflected
in my order.
9.7
The costs of 29 April 2010 stood over for later adjudication. There
is no reason to make a different order as the one I propose
to make
in respect of the application as such.
[10]
ORDERS
Therefore
the following orders do issue:
10.1
Condonation is granted to applicant for the non-compliance of the
court rules relating to service and process.
10.2
The bar constituted by respondents’ notice of bar served on 11
March 2010 is uplifted.
10.3
Applicant is granted leave to file his plea within 5 (five) days from
date of this order.
10.4
Applicant is ordered to pay 25% of the costs of this application on
an opposed basis, such costs to include the costs of 29
April 2010.
______________
J.P. DAFFUE, AJ
On behalf of
applicant/plaintiff: Adv. M.C. Louw
Instructed by:
Matsepes
BLOEMFONTEIN
On behalf of first
respondent/first plaintiff
and second
respondent/second plaintiff: Adv. D.M. Grewar
Instructed by:
A.A. Myburgh
BLOEMFONTEIN
/sp