Whiteleys Construction v Carlos Nunes CC (2924/09) [2009] ZAFSHC 128 (10 December 2009)

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[2009] ZAFSHC 128
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Whiteleys Construction v Carlos Nunes CC (2924/09) [2009] ZAFSHC 128 (10 December 2009)

FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Case No. : 2924/09
In the
matter
between:-
WHITELEYS
CONSTRUCTION
Plaintiff
and
CARLOS
NUNES CC
Defendant
_____________________________________________________
HEARD
ON:
3
DECEMBER 2009
_____________________________________________________
JUDGMENT
BY:
VAN
DER MERWE, J
_____________________________________________________
DELIVERED
ON:
10
DECEMBER 2009
_____________________________________________________
[1] This
is an application for the rescission of
the
provisional sentence granted by default by Jordaan J on 16 July 2009
in this court under the abovementioned case number against
the
defendant in the amount of R1 020 395,46 plus interest thereon as set
out in the order.
[2] On
18 March 2008 the parties hereto entered into a written
building
contract in terms of which the plaintiff undertook to erect new town
houses for the defendant on property owned by the
defendant. The
building contract thus entered into was the standard principal
building agreement JBCC Series 2000 Edition 5.0
Code 2101 © July
2007 and is referred to herein simply as the building contract.
[3] Mr.
Jose Carlos da Cruz Nunes is the sole member of the defendant. Mr.
Sergio Nunes, the son of the said sole member of the
defendant, was
appointed as the principal agent in terms with the building contract.
At all times relevant hereto he therefore
acted in that capacity as
the agent of the defendant.
[4] The
building contract in terms of clause 31 thereof provides that the
principal agent shall issue monthly interim payment certificates

until the issue of the final payment certificate in terms of the
building contract. A payment certificate is defined in the building

contract as a document issued monthly by the principal agent
certifying the amount due and payable by the employer to the
contractor
or
vice
versa
in terms of the JBCC Payment Certificate form. The building contract
therefore also provides for payment certificates indicating
the
amount due by the plaintiff (the contractor) to the defendant (the
employer).
[5] In
obtaining the aforesaid provisional sentence, the plaintiff relied on
interim payment certificate no. 14 issued by the principal
agent in
favour of the plaintiff in the prescribed form on 24 May 2009. In
terms of interim payment certificate no. 14 the amount
certified in
respect of value of work executed and materials on site amounted to
R6 300 583,74. From this amount was deducted,
as the previous gross
amount certified, R5 405 500,00. In the result the amount of R1 020
395,46, inclusive of value added tax,
was certified as due for
payment by the defendant to the plaintiff.
[6] On
1 June 2009 the principal agent issued an interim payment certificate
purporting to be a revised version of interim payment
certificate no.
14. In terms hereof the previous gross amount certified was
purported to be varied to the amount R6 065 750,00,
resulting in an
amount certified due for payment to the plaintiff of R267 710,46. It
appears from the documentation before me
that the gross amount
certified in terms of interim payment certificate no. 13 was indeed
the amount of R6 065 750,00 and that
the aforesaid amount of R5 405
500,00 was the gross amount certified in terms of interim payment
certificate no. 11.
[7] On
11 June 2009 the plaintiff issued the provisional sentence summons in
the present case no. 2924/2009 for provisional sentence
in the amount
of R1 020 395,46 in terms of interim payment certificate no. 14.
This summons was served by a deputy sheriff of
Bloemfontein. His
return of service reads as follows:
“On
this 12
th
day of June 2009 at 15:20 I properly served this PROVISIONAL SENTENCE
SUMMONS WITH ANNEXURES “A” & “B” by affixing
a copy
thereof to the outer door of the REGISTERED ADDRESS OF CARLOS NUNES
CC, Defendant, at 81 ZASTRON STREET, BLOEMFONTEIN, which
is kept
locked and thus prevents alternative service.”
[8] It is common cause
that the registered address of the defendant is situated at Taxco
Accountants at 81 Zastron Street, Bloemfontein.
It is not disputed
on behalf of the defendant that service as indicated by the deputy
sheriff, constituted proper service of the
summons on the defendant
in terms of the Rules of Court.
[9] By
letter dated 15 June 2009, the plaintiff notified the defendant that
the plaintiff cancels the building contract. The defendant
in turn
gave notice of its cancellation of the building contract to the
plaintiff by letter of its attorneys dated 18 June 2009.
[10] On
30 June 2009 the plaintiff issued a further provisional sentence
summons under case no. 3251/2009, claiming payment from
the defendant
in the amount of R378 035,02, based on an interim payment certificate
no. 15 purportedly issued by Greyling Quantity
Surveyors in terms of
the building contract. On 6 July 2009 the same deputy sheriff served
this provisional sentence summons with
annexures upon Ms M. Visser, a
receptionist employed by Taxco Accountants at the defendant’s
registered address. On 16 July
2009 provisional sentence was granted
against the defendant as mentioned above. On 24 July 2009 the
defendant filed opposing papers
in case no. 3251/2009. The answering
affidavit by Mr. Nunes was dated 22 July 2009. No replying
affidavits were filed by the
plaintiff and on 26 November 2009 the
plaintiff withdrew the proceedings instituted by it under case no.
3251/2009 and tendered
payment of the defendant’s party and party
costs.
[11] The
defendant incorporated its answering affidavit and annexures thereto
filed in case no. 3251/2009 in its founding affidavit
in the
application for rescission of the provisional sentence granted on 16
July 2009. This application for rescission was issued
on 13 August
2009.
[12] A
period of more than two months has passed since 16 July 2009.
Therefore the provisional sentence of 16 July 2009 became
a final
judgment in terms of Rule 8(11). I am satisfied, however, that the
provisional sentence remains a judgment granted by
default for
purposes of rescission thereof in terms of the common law. See
SANTOS
EREC v CHEQUE DISCOUNTING CO (PTY) LTD
1986 (4) SA 752
(W) at 755 H. See also
MAHABRO
INVESTMENTS (PTY) LTD v KARA
1980 (2) SA 772
(D) and
VAN
DER MERWE v BONAERO PARK (EDMS) BPK
2000 (4) SA 329
(SCA) p. 336 para [16].
[13] The
requirements for rescission of a default judgment in terms of the
common law are set out authoritively in
CHETTY
v LAW SOCIETY, TRANSVAAL
1985 (2) SA 756
(AD) at 765 B – D as follows:
“But
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:
(i) that the party seeking relief
must present a reasonable and acceptable explanation for his default;
and
(ii) that
on the merits such party has a
bona
fide
defence which,
prima
facie
,
carries some prospect of success. (
De
Wet's
case
supra
at 1042;
PE
Bosman Transport Works Committee and Others v Piet Bosman Transport
(Pty) Ltd
1980 (4) SA 794
(A);
Smith
NO v Brummer NO and Another
;
Smith
NO v Brummer
1954 (3) SA 352
(O) at 357 - 8.)
It
is not sufficient if only one of these two requirements is met; for
obvious reasons a party showing no prospect of success on
the merits
will fail in an application for rescission of a default judgment
against him, no matter how reasonable and convincing
the explanation
of his default. And ordered judicial process would be negated if, on
the other hand, a party who could offer no
explanation of his default
other than his disdain of the Rules was nevertheless permitted to
have a judgment against him rescinded
on the ground that he had
reasonable prospects of success on the merits.”
[14] In
respect of the explanation for the
defendant’s
default, the aforesaid Ms M. Visser in an affidavit in support of the
present application stated that the provisional
sentence summons in
question never came to her knowledge or to the knowledge of any
member of the staff of Taxco Accountants.
In support of this
contention she said that she was at the office on the Friday
afternoon 16 July 2009 until close of business
at 16h30. She said
that from her desk she has a view of the entrance door of Taxco
Accountants, which has a glass window. She
also said that she never
leaves her desk without asking someone to take her place. She said
that when she left her workplace on
16h30 on 12 June 2009 there was
no process affixed to this door.
[15] In
reply hereto the deputy sheriff under oath reiterated that he
properly served the summons by affixing it to the main door
of Taxco
Accountants at 81 Zastron Street, Bloemfontein. As this is motion
proceedings, the evidence of the deputy sheriff must
be accepted, for
purposes of decision of the application. In any event the return of
service of the deputy sheriff constitutes
prima
facie
proof of the correctness of the contents thereof. A person who
wishes to impeach the facts mentioned in a return of service, bears

the onus to show that by clear evidence. See section 36(2) of the
Supreme Court Act, No. 59 of 1959 and
SUSSMAN
& CO (PTY) LTD v SCHWARZER
1960 (3) SA 94
(O) at 96 G – H.
[16] Mr.
Nunes, the sole member of defendant, said that he became aware of the
provisional sentence proceedings in case no. 2924/2009
for the first
time on 23 July 2009 when he was informed by the defendant’s
attorney that provisional sentence had already been
granted in favour
of the plaintiff against the defendant on 16 July 2009. In my
judgment, the real question is whether in the
light of the above, the
aforesaid evidence of Mr. Nunes should be questioned. I do not think
so. The aforesaid evidence of Mr.
Nunes is not disputed by the
plaintiff. There are also several factors pointing on the
probabilities to the truth of this evidence.
Already on 1 June 2009
the principal agent acting on behalf of the defendant purported to
issue a revised interim payment certificate
no. 14 stating a much
reduced amount payable to the plaintiff. On 3 June 2009 the
principal agent issued interim payment certificate
no. 15 in terms of
the building contract, certifying an amount payable by the plaintiff
to the defendant. On 18 June 2009 the
defendant gave notice of its
cancellation of the building contract. The defendant immediately
took steps to defend the provisional
sentence in the amount of R378
035,02 claimed in case no. 3251/2009 and already on 22 July 2009 Mr.
Nunes signed his answering
affidavit in that case. These steps taken
by and on behalf of the defendant, make it most probable that the
defendant failed to
defend the provisional sentence proceedings under
case no. 2924/2009 because it was unaware thereof. I conclude
therefore that
a reasonable explanation for the defendant’s default
was shown.
[17] In
respect of the merits the defendant relies on a wide variety of
defences. These include the following averments:
(i) Interim
payment certificate no. 14 contains a patent error in that the gross
amount previously certified was incorrectly stated
as R5 405 500,00
in stead of R6 065 750,00.
(ii) The
building contract was validly cancelled by the defendant and as a
result of the principle of reciprocity of contractual
obligations,
the plaintiff may no longer rely on an interim payment certificate
issued before the cancellation of the building
contract.
(iii) A
substituting interim payment certificate was issued on 1 June 2009
and interim payment certificate no. 15 reflecting an
amount of R278
416,83 due and payable by the plaintiff to the defendant was issued
on 3 June 2009.
[18] I believe that the
defendant has shown a defence as set out hereunder. In the light
thereof and of the order that I propose
to make, it is unnecessary
and undesirable for me to express any opinion on the aforesaid
matters raised as defences.
[19] Interim
payment certificate no. 14 is in terms of the provisions of the
building contract one of the kind described by Nienaber
J in
THOMAS
CONSTRUCTION (PTY) LTD (IN LIQUIDATION) v GRAFTON FURNITURE
MANUFACTURERS (PTY) LTD
1986 (4) SA 510
(N) at 514 I – 515 D and in
LAWSA
,
2
nd
Edition, Volume 2, Part 1, p. 263 - 264 para 498. Whilst the interim
certificate therefore creates a self-contained debt due,
the interim
payment certificate constitutes a progress payment that is not
regarded as compensation for a completed segment of
work, nor does it
in any way constitute proof of the sufficiency of the work. In the
result it would appear that in respect of
an interim payment
certificate, in principle and subject to the terms of the specific
contract
“.....
the employer will generally be entitled to set up defective work or
any other breach of contract as a defence when sued
upon them,
whether or not an overriding arbitration clause is available, though
no doubt he will be bound by the certificate to
the extent that he
will not be able to dispute the valuation element in it.”
See
Hudson’s
BUILDING
AND ENGINEERING CONTRACTS
,
Tenth Edition, p. 494. See also the
THOMAS
CONSTRUCTION
-case,
supra
,
at 516 D – E. It is not necessary to further discuss the defences
available to a claim based on an interim payment certificate
such as
the one in question, as it goes without saying that payment of the
interim payment certificate, either specifically or
as a result of
overpayment, must be a complete defence to an action on the interim
payment certificate. See
LAWSA
,
supra
,
para 498.
[20] In
its answering affidavit and annexures thereto in case no. 3251/2009,
incorporated in the founding affidavit in the present
application,
the defendant set out in detail and with supporting documentation in
all instances except for one, that the defendant
before 24 May 2009
had paid to the plaintiff in respect of the building contract the
total amount of R6 362 233,48 including value
added tax where
applicable. The one payment for which supporting documentation is
not available, is a payment in the amount of
R61 140,00, made
according to the defendant, to the plaintiff in cash on 24 October
2008 at the urgent request of the plaintiff
in order to enable the
plaintiff to make payment of wages. The defendant in the same manner
also set out that before 24 May 2009
it made payment in respect of
the building contract on behalf of the plaintiff in the amount of R1
047 496,16, including value
added tax. Supporting documentation for
all these payments are supplied, except in respect of a payment in
the amount of R665,00
made on 21 October 2008. The defendant says
that it is unable to retrieve this invoice. The total amount so paid
amounts to R7
409 729,64. This amount exceeds the gross amount
certified in terms of interim payment certificate no. 14 namely R6
300 583,74
plus value added tax thereon.
[21] The
only response of the plaintiff hereto is a sentence generally denying
everything stated by the defendant that is contrary
to the
plaintiff’s case. This is ambiguous and at best a bare denial on
the part of the plaintiff of very detailed evidence.
In the
circumstances, in my judgment, the defendant has shown in these
proceedings that it will probably show that payment was
made by the
defendant to the plaintiff in an amount exceeding the gross amount
plus value added tax certified in interim payment
certificate no. 14.
This would constitute a complete defence to the provisional sentence
summons in this case.
[22] It
follows that the provisional sentence as it exists today must be set
aside and that leave should be granted to the defendant
to file an
answering affidavit, if so required.
[23] Costs
remain to be decided. In my view, the decisive factor is that an
indulgence is sought by the defendant as a result of
its failure to
respond to a summons that was properly served on the defendant at its
registered address. The question therefore
is whether the opposition
of the plaintiff was unreasonable. In my judgment that is not the
case, especially in the light thereof
that even in the replying
affidavit the defendant relied on the provisions of Rule 42, which
reliance was not proceeded with before
me, and rightly so. I am also
not convinced that the plaintiff acted
mala
fide
In my judgment, in the exercise of my discretion in respect of
costs, the defendant should pay the costs of the application
including
the costs of the opposition thereto.
[24] In the result the
following orders are made:
1. The
provisional sentence granted under case no. 2924/ 2009 is set aside.
2. The
defendant is granted leave to file answering affidavits in the said
proceedings on or before 15 January 2010.
3. The
defendant is ordered to pay the costs of the application for
rescission of provisional sentence, including the costs of
opposition
thereto.
___________
____________
C.H.G. VAN DER MERWE,
J
On
behalf of the
plaintiff: Adv.
L. Le R. Pohl
Instructed
by:
McIntyre
& Van der Post
BLOEMFONTEIN
On
behalf of the
defendant: Adv.
D.J. van der Walt
Instructed
by:
Naudes
BLOEMFONTEIN
/sp