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[2008] ZANCHC 49
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Molehane v Tuzi Trade CC and Another (59/2008) [2008] ZANCHC 49 (6 June 2008)
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IN THE HIGH COURT OF
SOUTH AFRICA
(Northern Cape
Division)
Case
Nr:
59/2008
Case
Heard:
30/05/2008
Date
delivered:
06/06/2008
In
the matter between:
Mosimanegape
Enoch Molehane APPLICANT
and
Tuzi
Trade CC
1
ST
RESPONDENT
Reuben
Thami Geco 2
ND
RESPONDENT
JUDGMENT
Olivier J:
The
applicant, mr Mosimanegape Enoch Molehane, has applied for the stay
of a
writ
of execution, apparently pending an application for the setting
aside of a default judgment obtained by the first respondent,
Tuzi
Trade CC, against him in the amount of R808 034.07.
After
the applicant’s replying affidavit was filed, the respondents
lodged an application for leave to file a duplicating
affidavit. At
the hearing mr Haddad, the attorney who appeared on behalf of the
respondents, abandoned the application for leave
to duplicate, in my
view wisely to, and no more need be said in this regard.
In
the summons it was alleged, basically, that the applicant had
received and misappropriated the amount and that it had actually
been owing to the first respondent. It appeared that the first
respondent had done work for a third party, Raubex Construction
(Pty) Ltd (“
Raubex
”),
and that the allegation was that the money had been intended to be
payment by Raubex to the first respondent.
The
applicant joined mr Reuben Thami Geco, one of the members of the
first respondent, as the second respondent. It appears that
the
applicant himself is also a member of the first respondent, as well
as four other persons (“
the
other members
”).
As
far as the prospects of a successful application for the setting
aside of the default judgment are concerned the applicant
would have
to give a reasonable explanation of his default and make out at
least a
prima
facie
case that he has a
bona
fide
defence to the claim. The application must also be
bona
fide
and not for the sole purpose of delaying the claim (see
Erasmus:
Superior Court Practice
,
B1-201).
EXPLANATION
OF
DEFAULT
The summons was served
on the applicant personally on 9 April 2002 and the default judgment
was granted shortly thereafter.
The
applicant says that he never defended the action because he had been
assured by the other members of the first respondent
“
that
this matter would be resolved outside the Court and the action
proceedings against me would withdrawn
”.
It would appear as though the applicant’s case is that it was
only at a later stage (sometime during 2007) that
he became aware of
the fact that default judgment had been granted against him, and
that the writ of execution had been issued,
when the sheriff arrived
at his house with the writ.
The
applicant annexed to his affidavit a document dated 19 March
2007, addressed to the respondents’ attorneys and
containing a
statement by the applicant and the other members:
that the second
respondent had not been mandated to take legal steps against the
applicant on behalf of the first respondent;
that
they distanced themselves from the writ of execution; and
that
it was not possible and did not “
make
any business sense
”
that an amount of R808 043,07 could in any event have been owing by
Raubex to the first respondent.
The
respondents never objected to the admissibility of this document.
In fact, it is common cause that
it
had been signed and forwarded to the attorneys.
The
averments in the second respondent’s answering affidavit in
this regard are the following:
He denies that the
applicant received any such assurance from the other members at the
time that the summons was issued.
He
admits that “
at
a much later stage
”
the other members accused him of acting “
unilaterally
”.
Finally
he alleges that the other members “
have
since changed their minds and have now agreed that execution
against the property of the applicant take place
”.
The
second respondent has annexed four identical affidavits to his
answering affidavit,
purporting to be deposed to by the other members and in which the
following is stated:
“
2.
I can quite
categorically state that the members of the First Respondent have now
agreed that the judgement taken against the Applicant
in favour of
the First Respondent be executed.
3.
I
confirm and ratify all the action taken by the second respondent in
this matter and I respectfully request that the application
of the
Applicant be dismissed with costs.
”
I
must say that I agree with the applicant that this sudden change of
heart is strange. One of these affidavits was purportedly
signed by
one Joseph Smit. The document dated 19 March 2007 contains a list
of the members of the first respondent (with the
exclusion of the
second respondent) and th
is
deponent’s name does not appear in that list. There is,
though, the name of one “
M
Smit
”
in that list, and it is interesting to note that the signature of
the person who had at the time signed that document
on behalf of “
M
Smit
”
looks a lot like the signature of the person who signed the
particular affidavit.
Be
that as it may, what is of more importance for present purposes is
that not one of the other members have denied the applicant’s
averment that they ha
d
given him the assurance that the action would not be proceeded with.
The second respondent’s denial of this averment
is therefore
unsubstantiated hearsay.
In fact, the second
respondent’s admission that the other members had accused him
of acting unilaterally, would fit in perfectly
with the applicant’s
case in this regard.
In
view of the above, and in view of the nature of the relief now
sought, I have no hesitation in accepting the application’s
version in this regard. He has therefore given a reasonable
explanation for not defending the action.
The
respondents blame the applicant for not having taken steps to apply
for the setting aside of the default judgment at an earlier
stage.
It is, however, on their own papers clear that there had been more
than one meeting, during 2003, where the subject of
discussion was
the calculation of the amount owing to the first respondent by
Raubex.
It
is also not disputed that, apart from obtaining the writ, no
execution steps were taken until fairly recently, when the sheriff
arrived at the applicant’s house with the writ.
The
minutes of one of the meetings, the letter of the respondents’
attorneys dated 23 July 2003 (annexure G5 to the answering
affidavit), and even the second respondent’s own affidavit, do
not contain a single indication of the applicant having
been aware,
at that stage, of the default judgment or the writ of execution.
BONA FIDE DEFENCE
What
remains to be considered is the question whether the applicant has a
bona
fide
defence to the first respondent’s claim and whether his
application is therefore
bona
fide
and not intended merely to delay (see
Kouligas
& Spanoudis v Boland Bank
1987 (2) SA 414
(OPD) at 417). In my view this issue can be very
easily disposed of.
The
applicant’s case is clearly that he never received the money
form Raubex. The
allegations
in the second respondent’s answering affidavit in this regard
are:
that,
when summons was issued by the first respondent against Raubex for
the outstanding money, Raubex “
advised
that their defence was that all monies had been paid directly to
the Applicant
”;
and
that
at a later meeting, the applicant admitted having received the
monies from Raubex but “
stated
that he had used the monies to pay salaries
”.
The
allegation regarding what Raubex “
advised
”
is clearly hearsay and inadmissible.
The
allegation that the applicant admitted having received money from
Raubex is difficult to reconcile with,
inter
alia
,
the minutes of the first meeting in July 2007, which was attended
by,
inter
alia
,
the applicant, the second respondent and the respondents’
attorney, and where it was resolved that the “
full
amount
”
owing by Raubex would be calculated and that the respondents’
attorney would then demand “
full
payment
”;
obviously from Raubex.
Apart
f
rom
this it is on the respondents’ own papers very clear that,
long after the default judgment had been granted against
the
applicant, there was so much uncertainty about the extent of the
work done by the first respondent for Raubex and therefore
about the
amount owing to the first respondent by Raubex, that it was decided
that further steps should be taken to “
calculate
the full amount owing
”.
On
this basis alone there is in my view a clear case that the applicant
would at the very least have a
bona
fide
defence as far as the
quantum
of the default judgment is concerned (see
Morkel
v Absa Bank Bpk en ‘n Ander
1996 (1) SA 899
(CPD) at 903E).
In
view of this conclusion it is unnecessary to consider the effect of
the alleged ratification by the four other members (see,
however,
Smith
v Kwanonqubela Town Council
1999 (4) SA 947
(SCA)).
In
my view there is therefore no indication that the sole purpose of
the application for the stay of execution is to delay execution
of
the first respondent’s claim.
The
balance of convenience clearly favours the applicant and it would be
senseless to allow the execution of a judgment which
might be set
aside. There is also no other remedy available to the applicant.
I
therefore intend granting an order staying or suspending the
execution of the writ of execution, but also to make it subject
to
the applicant applying for the setting aside of the default judgment
within a specified period, failing which the suspension
will lapse
and the first respondent will be free to proceed with execution
steps.
COSTS
I
can see no reason why the costs of this application should not
follow the result.
Mr Haddad, the attorney who appeared on behalf of the respondents,
suggested that, should a stay of execution be granted, the
costs of
this application should be ordered to be costs in the application
for rescission. I can see no reason for such an order.
It is quite
clear that the respondents would not have agreed to a stay of
execution pending an application for rescission.
Although
it might be so that the issues regarding the explanation and the
defence will again be addressed in the application for
rescission,
they also had to be ventilated in this application and, where this
Court has come to certain conclusions in this
regard, there would be
no reason why the costs of this application should in effect be
subjected to what happens in the application
for rescission.
The
fact that the Court in that application might come to a different
conclusion on these issues is immaterial, because it will
then be
doing so on different papers and possibly on different evidence and
grounds.
Mr
Haddad also submitted, in the alternative, that because the
applicant is in fact seeking an indulgency, no costs order should
be
made and that each party should therefore pay its own costs if a
stay of execution is ordered. Again I do not agree. The
respondents have left the applicant with no other option than to
apply for rescission and have opposed the application to the
bitter
end.
ORDERS
In the premises I make
the following orders:
The
execution of the writ of execution issued in case number 286/02 is
stayed and suspended pending an application by the applicant
to have
the default judgment granted in that case set aside.
The
applicant must lodge the application to set aside the default
judgment within 30 days of the date of these orders, failing
which
the order in paragraph 1 will lapse and the first respondent will be
free to proceed with execution.
The
respondents are ordered to pay the costs of this application,
jointly and severally, the one to pay the other to be absolved
pro
tanto.
_______________________
C J OLIVIER
JUDGE
NORTHERN CAPE
DIVISION
For the
Plaintiff:
Adv
J J Schreuder
Instructed
by:
Matshidiso
Attorneys, KIMBERLEY
For the
Respondent: Mr V W Haddad
Elliot
Maris Wilmans & Hay , KIMBERLEY