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[2024] ZAFSHC 153
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Matjhabeng Local Municipality v Pakampho Electrical and Others (911/2023) [2024] ZAFSHC 153 (6 June 2024)
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Reportable:
YES/NO
Of
Interest to other Judges: YES/NO
Circulate
to Magistrates: YES/NO
Case
no: 911/2023
In
the matter between:
MATJHABENG
LOCAL MUNICIPALITY
Applicant
and
PAKAMPHO
ELECTRICAL
First
Respondent
THE
SHERIFF, WELKOM
Second
Respondent
ABSA
BANK LTD
Third
Respondent
CORAM:
HEFERAJ
HEARD
ON:
14 MARCH 2024
DELIVERED
ON:
6 JUNE 2024
[1]
The Applicant, the Matjhabeng Local
Municipality, is applying for rescission of judgment in terms of Rule
42(1)(a) of the Uniform
Rules of Court; in the alternatively for the
rescission on the ground that the order was erroneously sought and
granted in the
absence of the Applicant in terms of the common law
ground of
"substantial cause",
in that:
(a)
There is a reasonable explanation for
default of appearance; and
(b)
There are
bona
fide
defences which the Applicant
intends to raise at the hearing of the action instituted by the First
Respondent against the Applicant.
[2]
The rescission sought is against
a default judgment
granted by the Registrar of this division
on 3 May 2005. The Applicant also seeks rescission in respect of a
writ of execution as
well as a garnishee order issued in terms of the
Rule 45(12)(a).
[3]
The default judgment originates from a
simple summons issued on behalf of the First Respondent for services
rendered to the Applicant
together with interest as well as costs of
suit.
[4]
After service of the summons and the
Applicant failing to enter appearance to defend, First Respondent
applied for default judgment
headed as
"Default
Judgment in terms of Rule 31(4)"
subsequent
to which default judgment was granted by the Registrar.
[5]
Prior to the application for rescission of
judgment serving before me now, the Applicant has obtained, on an
urgent basis, an interdict
restraining Respondents from paying the
amount for which default judgment has been granted, currently being
held by the Second
and Third Respondents on behalf of the First
Respondent.
[6]
The Applicant relies on several grounds in
support of its application for a rescission of judgment which can be
summarised as follows:
(i)
Breach of lawful procurement in terms of
Section 217 of the Constitution, 1996;
(ii)
That the Supply Chain Management (SCM
processes) were
deliberately
flaunted and therefore
prima facie
defrauded the Municipality;
(iii)
The procurement
processes
of
the Applicant
and
the invoices
issued
by and payments made to the First Respondent are the subject of
investigations by
inter alia
the
Hawks.
(The Applicant indicating
that the above are directly in dispute in the rescission relief and
will be raised as defences in the
main action.)
(iv)
No peremptory prior notice had been given
to the Applicant prior to the institution of legal proceedings
against the Municipality
as required in the Institution
of Legal
Proceedings
against
Certain
Organs
of
State Act 40 of 2002;
(v)
No proper service on the Municipality as
provi ed for in
Section 115
of the
Local Government Municipal Systems
Act 32 of 2000
which stipulates that service be effected on the
municipal manager or a
person
in attendance at the offices of the municipal manager;
(vi)
The default
judgment by the Registrar was issued
lacking jurisdiction
on
the part of the Registrar in that the order on its face was issued in
terms of
Rule 31(4)
, which is a procedure only available to a judge
and not the Registrar; more in particular the Applicant alleging that
the reason
for First Respondent relying on
Rule 31(4)
is the same
reason no proper
service
was effected on the municipal manager
as
required by the statute namely to deprive the Municipality of
knowledge of the proceedings, thus depriving the Municipality of
its
right to access to Court protected by Section 34 of the Constitution
of 1996;
(vii)
The prerequisite for a default judgment
issued by the Registrar was
that
the Registrar has jurisdiction "...
that
there is
a
debt
or liquidated demand:";
according
to the Applicant no such cause of action was apparent from the simple
summons. Furthermore
"the order
should be set aside as
a
nullity,
alternatively upon rescission",
the
bona fide
defence
will be raised at the hearing of the main action that there is no
valid contract and that there is no lawful authority for
a
"certificate of balance" to
be
issued;
(viii)
The warrant of execution should be set
aside as invalid and a nullity principally because it purports to
execute an order the Registrar
lacked jurisdiction to make; and
(ix)
The warrant of execution is a warrant to
execute against movable goods;
it
is not a garnishee
order
nor does it purport
to be such an order and the Sheriff issued
a garnishee order against emoluments without judicial supervision and
is therefore unlawful.
[7]
I
now
turn
to
consideration
of
the
various
grounds
relied
upon
by
the Applicant.
The
provisions of Section 3 of Act 40 of 2002:
[8]
In the First Respondent's answering
affidavit, the deponent, Mr Kruger, the First Respondent's attorney
of record, stated as follows:
"As a result of this
claim not being delictual in nature no service in terms of Act 40 of
2002 is necessary."
[9]
Mr
Snijders,
appearing for the Applicant, is correct
in his submission that this defence is wrong in law. However his
reasons for this contention
are not correct. According to him, the
notice requirement in Section 3(1) applies to a debt which means
"any
debt arising from the cause of action
-
which arises from delictual, contractual
or any other liability".
[10]
In
the matter of
Vhembe
District Municipality v Stewarts & Lloyds Trading (Pty) Ltd and
Another
[1]
referred
to by Mr
Grobler,
appearing
on behalf of the First Respondent, the Supreme Court of Appeal has
confirmed that when a litigant's claim against an organ
of state is
not a damages claim, the Act does not apply.
[11]
The
claim by the First Respondent against the Applicant is not a claim
for damages. In
International
Harvester
v
Ferreira
[2]
,
it
was held that a claim for work done and material delivered is one for
a debt or liquidated demand.
[12]
In the present matter the claim by the
First Respondent
against
the Applicant is also a claim for a debt or
liquidated demand arid the notice in terms of Section 3 of Act 40 of
2002 was therefore
not a prerequisite.
Rescission
in terms of Rule 31:
[13]
Mr
Snijders'
first submission in this regard is that
the Plaintiff has failed to set out its cause of action in such terms
to enable the Defendant
to
know the cause
against
him
and
to satisfy
the
court
that the
Plaintiff
has a
valid cause of action entitling it to judgment.
[14]
The wording of the simple summons in the
present matter reads as follows:
"Payment of the
due and outstanding amount of R844 100.00 in respect of goods sold
and delivered and services rendered to the
Defendant by the Plaintiff
on Defendant's special instance and request."
[15]
In
Fatti's
Engineering Co Ltd v Vendick Spares Ltd
[3]
it
was held that in a claim, based on a summons which contained similar
wording as the present, the Plaintiff's case is to be regarded
as a
debt or liquidated demand within the meaning of the rules and that
the Plaintiff is entitled to default judgment.
[16]
In
Western
Bank Bpk v De Beer en 1 Ander
[4]
it
was held that the simple summons need not set out the cause of action
in full particularity as long as it contains a general
indication of
the cause of action.
"Dit
moet alleen 'n aanduiding gee van die saak wat die Eiser van
voornemens
is
om in die deklarasie uit te maak."
[5]
[17]
I am therefore satisfied that the First
Respondent was entitled to apply for default judgment in terms of the
simple summons as
it stands.
[18]
The second stage of enquiry which needs
consideration in this regard, is whether the Registrar was entitled
to grant default judgment
in terms of Rule 31(4).
[19]
As already indicated, the notice of
application for default judgment in fact referred to Rule 31(4)
instead of 31(5).
[20]
Rule 31(4) deals with default judgment in
respect of claims not for a debt or liquidated demand and a Defendant
is in default of
delivery of a notice of intention to defend.
Rule 31(5) on the other hand deals with
claims in respect of a debt or liquidated demand.
[21]
Whereas Rule 31(4) expressly and Rule 31(5)
by implication, provide that no notice of default
judgment
shall
be given of the application
for
default judgment
where
no intention to defend had been
delivered
and
the Applicant in the present matter has failed to deliver such notice
prior to the default judgment being granted, notice of
such
application need not be given in terms of either one of these rules.
The submission
by
Mr
Snijders
to
the effect that the First Respondent relied on Rule 31(4) instead of
Rule 31(5) to deprive the Municipality of knowledge of the
proceedings, can therefore not be accepted. Notice of the application
for default judgment was not a prerequisite.
[22]
Whereas the claim was indeed for a debt or
liquidated demand, the Registrar was entitled to grant default
judgment in terms of Rule
31(5). I agree in this regard with Mr
Grobler’s
submission
that it does not matter -
given
the substance of such an application -
if
there is an error in the heading between the tramlines.
[23]
In
Standard
Bank of SA Ltd v Ngobeni
[6]
Le
Roux J stated as follows:
"...
to
the Registrar the right (and duty) to grant or refuse judgment in
uncomplicated default matters where he simply checks that all
administrative and formal steps have been taken to justify a
judgment."
[7]
This
brings me to the next point for consideration.
Service:
[24]
In terms of Section 115(3) of the Local
Government Systems Act 32 of 2000, any legal processes is effectively
and sufficiently served
on a Municipality when it is delivered to the
municipal manager or a person in attendance at the offices of the
municipal manager.
[25]
This provision is also mirrored in the
current Rule 4(1)(a)(viii).
[26]
The return of service by the Deputy Sheriff
in regards to the summons in the present matter, reads as follows:
"On the 29
th
day of March 2023 at 08:55 I properly served a copy of the
SUMMONS:
IN RESPECT OF DEBT OR
LIQUIDATED DEMAND on MRS BIANCA VAN DER SPUY - PA LEGAL DEPARTMENT a
responsible person in the employ of the
MUNICIPALITY OF WELKOM, at
the place of business of the MUNICIPALITY OF WELKOM, after explaining
the nature and contents thereof
to the said person."
This service was
apparently effected by
"Deputy-Sheriff: J van Zyl".
[27]
According to the notice of attachment, the
same person also executed the warrant of execution on 11 May 2023,
pursuant to the warrant
of execution being issued on 3 May 2023.
[28]
It does not appear from any of the
documents provided by any of the parties, when the court order
pursuant to the default judgment
have been served on the Applicant.
[29]
In respect of the warrant of execution and
notice in terms of Rule 45(12)(a), there are two returns of service,
the first
of
which reads as follows:
"On this 23
rd
day of January 2024 at 10:30 I served the WARRANT OF EXECUTION AND
NOTICE IN TERMS OF RULE 45(12)(a) upon MRS CLAUDIA MOUSE - CBOR,
a
person at the offices of the garnishee and apparently not less than
16 years of age, after the nature and content had been properly
explained to her: Rule 45(12)(a)."
The
second in this regard reads as follows:
"On the 23
rd
day of January 2024 at 10:35 I served this WARRANT OF EXECUTION AND
NOTICE IN TERMS OF RULE 45(12)(a) upon MS A NOHOLOZA –
PA
MUNICIPAL MANAGER, ostensibly a responsible employee and not less
than 16 years of age of and in control of and apparently in
authority
at the place of employment of Respondent at 19 Stateway Welkom, the
last-mentioned being temporary absent and by handing
to the
first-mentioned a copy thereof after explaining the nature and
content of the said process. Rule 4(1)(a)(iii)."
[30]
Both these latter returns of service were
then signed by Mr Victor Mbambo, Deputy Sheriff. It is clear from the
contents of these
returns of service that Mr Mbambo did not even have
the provisions of Rule 4(1)(viii) in mind when effecting service
I
or when compiling his returns of
service.
[31]
In a supplementary affidavit on behalf of
the First Respondent deposed to again by Mr Kruger, pursuant
to the interim
order
being
granted by Van Zyl J, it was
inter alia
stated that Mr Kruger has spoken to the
Deputy Sheriff of Welkom, Mr Mbambo on the 14
th
of February 2024 during which conversation he was informed that:
"On each occasion he
was called upon to serve legal process upon the Municipality, the
municipal manager or his or her secretary
would instruct that the
process must be served upon Ms Van der Spuy, Mr Vanga (the head of
the legal department of the Municipality)
or someone at the legal
department at the Municipality.
The instruction was
changed at the end of January 2024, whereby the deponent (to this
application) had asked that all legal process
henceforth be served on
his office."
[32]
This same supplementary affidavit further
refers to a similar matter in which it was ascertained that the
Municipality also alleged
defective service of an application because
it was not served upon the municipal manager
or his office.
[33]
In the Applicant's further supplementary
affidavit, the municipal manager denies that he authorised Ms Van der
Spuy to accept service
of legal processes and maintained that he did
not receive the summons at any stage, more in particular before the
default judgment
had been granted.
[34]
Section 43(2)
of
the
Superior
Courts
Act 1O of 2013
stipulates that the return of the Sheriff
or a Deputy
Sheriff of what has been
done upon any process of a Court,
shall
be
prima
facie
evidence
of the
matters
therein
stated.
The return of service of the summons on the
29
th
of March 2023 merely shows that service had been effected on the said
Ms Van der Spuy. It is not evident from this return of service
that
this person was authorised to accept service on behalf of the
Applicant nor the municipal manager. Even if the hearsay evidence
as
contained in the Applicant's supplementary affidavit is to be
accepted,
no
evidence was presented by the First Respondent
in respect of the service by J van Zyl on
the 29
th
of March 2023.
There
is also no explanation from the First Respondent why such information
was not provided by J van Zyl. The evidence now produced
by the
present Deputy Sheriff, Mr Mbambo does not assist in rectifying the
apparent defective service.
[35]
The onus of proving proper service in
accordance
with
the legislation as well as the Rules of Court,
is on the First Respondent.
The First Respondent
did not succeed in proving that proper
service had indeed been effected
prior
to the default judgment being granted.
[36]
The facts show that in applying for default
judgment, the First Respondent's attorney relied upon a return of
service from which
it appears that service has not
been
effected
in
terms
of
the
rules
nor
the
applicable
legislation.
Only
after the interim relief in favour of the
Applicant had been granted, the First Respondent's
attorney attempted to rectify the return of
service
and the
service effected in terms thereof. This should have been done prior
to the application for default judgment being lodged.
[37]
More importantly, all indications are that
the Registrar when granting default judgment also relied on the
return of service in
terms of which proper service had been not been
effected. The
ex post facto
evidence
now being placed before Court does not resolve the problem. It
appears that the Registrar in granting default judgment,
has failed
to establish that all administrative and formal steps have been taken
to justify default judgment.
[39]
Judgments
have been rescinded under
Rule 42
where the summons had not been
served on a Defendant.
[8]
The
same should apply where proper service had not been effected .
In
Interactive
Trading v SA Securitisation Program
[9]
Mangena AJ said as follows:
"The Court relies on
the office of the Sheriff as one mechanism in the administration of
justice to ensure that the process
leading up to the granting of a
judgment is fair and that the legal proceedings have been brought to
the attention of the other
party."
The
purpose of the provisions of Section 3 of the Municipal Systems Act
are clearly to ensure that all legal processes come to the
attention
of the municipal manager. If proper service had not been affected the
process leading to the granting of default judgment
can not be
regarded to be fair .
[40]
Whereas in the present matter, I am
not satisfied that proper service had been effected both in terms of
the applicable
legislation
as well as the Rules of Court
and
that
the
summons
did
not
come
to
the
attention
of
the
municipal
manager
prior
to
the
application
for
default
judgment
being
granted,
the
default judgment is accordingly to be set aside.
[41]
It follows that both the warrant of
execution as well as the attachment
by
the Second Respondent of the Applicant's bank accounts in terms of
Rule 45(12)(a) are also to be set aside.
Costs:
[42]
The Applicant
seeks a punitive cost order against the
First Respondent that the First Respondent
is ordered to pay the Applicant's costs on
an attorney and client scale. Among the substantive reasons for such
a punitive cost
order Mr
Snijders
referred to the complete absence of
compliance with the peremptory provisions of Section 34 of the
Constitution, Section 3 of the
Institution of Legal Proceedings
against Certain Organs of State Act, Section 115(2) of the Local
Government: Municipal Systems
Act, Rule 17, Rule 35(1) and Uniform
Rule 45(12)(a).
[43]
The only reason for the Applicant
being successful in this application,
is
the defective service in respect of the summons and upon which
default judgment was granted. I do not however consider this as
a
substantial reason to grant a punitive cost order against the First
Respondent. Although the First Respondent's attorney had
the
obligation and duty to ensure that proper service had
been
effected
prior
to the
default
judgment
being
granted,
both the relevant Deputy Sheriff as well as
the Registrar also had a hand in the defective default judgment being
granted.
Therefore,
I make the following order:
Order:
1.
The default judgment granted by the
Registrar of the High Court, Free State Division on 3 May 2023 under
case number 911/2023 is
rescinded and set aside.
2.
The warrant of execution under case
number 911/2023 by the Registrar of the Free State Division of the
High Court on 3 May 2023
is set aside.
3.
The attachment by Second Respondent
of the Applicant's bank accounts with the Third Respondent by way of
Notice of Motion in terms
of Rule 45(12)(a) issued during January
2024 is set aside.
4.
In the event of the amount already
being paid by the Third Respondent, First Respondent is to pay the
amount of R844,100.00 in the
Applicant's bank account with the Third
Respondent within 1 (one) business day of this order.
5.
First Respondent is to pay the costs
of the application on a party-and-party scale including the costs in
respect of Part A of the
application.
HEFER
AJ
Appearances:
Adv
JP Snijders
On
behalf of the Applicant:
Botes
Mahlobogoane Van Heerden Attorneys
Instructed
by:
c/o
Pieter Skein Attorneys
Bloemfontein
On
behalf of First Respondent:
Adv S
Grobler SC
Instructed
by:
Kruger
Venter Attorneys Inc.
Bloemfontein
[1]
(397/13)
[2014] ZASCA 93
[2]
1975
(3) SA 831 (SE).
[3]
1962
(1) SA 737 (TPD).
[4]
1975
(3) SA 772
(TPA).
[5]
atp.
277 A-B.
[6]
1995
(3) SA 235 (TKGD)
[7]
p.235C-D.
[8]
Custom
Credit Corporation (Pty) Ltd v Bruwer
1969 (4) SA 564
(D);
Fraind
v Tonhmann
1991 (3) SA 837
(W);
Thomani
v Seboka NO 2017 (1) SA 51 (GP).
[9]
2019
(5) SA 174
(LP)