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2024
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[2024] ZAFSHC 178
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Moemedi Enterprises (Pty) Ltd and All Occupiers of ERF 21 Bloemdal Small Holdings, District Bloemfontein, Free State Province, Mangaung Metropolitan Municipality v Hartzenberg N.O and Another (4374/2023) [2024] ZAFSHC 178 (31 May 2024)
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IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Reportable:
YES/NO
Of
Interest to other Judge: YES/NO
Circulate
to Magistrates: YES/NO
Case
No. 4374/2023
In
the matter between:
MOEMEDI
ENTERPRISES(PTY) LTD
APPLICANT
AND
ALL OCCUPIERS OF ERF 21 BLOEMDAL
SMALL
HOLDINGS, DISTRICT BLOEMFONTEIN,
FREE
STATE
PROVINCE,
MANGAUNG
METROPOLITAN
MUNICIPALITY
And
CHARL
MAURITZ HARTZENBERG N.O.
1
ST
RESPONDENT
(In
his capacity as the joint liquidator in the
insolvent
Estate of Moemedi Enterprises (Pty)
Ltd
with registration Number 2019[…])
and
Master's reference number
:
G 00[…])
ANA
PAULA DE OLIVIERA
2
ND
RESPONDENT
(In
her capacity as the joint liquidator in
the
insolvent Estate of Moemedi Enterprises
(Pty)Ltd
with registration Number 2019[…])
and
Master's reference number: G 00[…])
In
Re:
CHARL
MAURITZ HARTZENBERG N.O.
1
st
APPLICANT
(In
his capacity as the joint liquidator in
the
insolvent Estate of Moemedi Enterprises
(Pty)Ltd
with registration Number 2019[…])
and
Master's reference number: G 001[…])
ANA
PAULA DE OLIVIERA
2
nd
APPLICANT
(In
her capacity as the joint liquidator in
the
insolvent Estate of Moemedi Enterprises
(Pty)Ltd
with registration Number 2019[…])
and
Master's reference number: G 00[…])
AND
MOEMEDI
ENTERPRISES(PTY) LTD
1
st
RESPONDENT
AND
ALL OCCUPIERS OF ERF 21 BLOEMDAL
SMALL
HOLDINGS, DISTRICT BLOEMFONTEIN,
FREE
STATE
PROVINCE,
MANGAUNG
METROPOLITAN
MUNICIPALITY
MANGAUNG
MUNICIPALITY
2
nd
RESPONDENT
CORAM:
MAJOSI, AJ
HEARD
ON:
02 MAY 2024
DELIVERED
ON:
31 MAY 2024
I
INTRODUCTION
[1]
The applicant herein
seeks rescission of an eviction order which was granted by default by
a judge of this division on the 23 of
November 2023. The application
is opposed and the applicant's
locus standi
is contested.
II
PARTIES
[2]
Mr. Moemedi is
an adult male businessman and director of the applicant currently
residing in Gordon's Bay, Cape Town, Western Cape
Province.
[3]
The first and
second respondents are joint liquidators in the insolvent estate
Moemedi Enterprises (Pty) Ltd, a private company
which was placed in
final liquidation on the 10
th
of
March 2022. Their certificates of appointment reflect that they were
appointed the 14
th
of
March 2023.
Ill
BACKGROUND
[4]
In the main
application which was filed in August 2023, the now respondents in
their official capacities as joint liquidators of
the insolvent
estate, approached this
court
for an order
for eviction of Moemedi Enterprises and all unlawful occupiers of Erf
21, Bloemdal Small Holdings, District Bloemfontein
and cited the
relevant local authority, Mangaung Municipality in its application.
[5]
Prior to the
hearing of the matter, a court order was obtained which authorized
service of a notice in terms of section 4(2) of
the Prevention of
Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998
(PIE) as prescribed. An order for eviction
was granted by default on
the 23
rd
of
November 2023 as there was no appearance by the private company, the
unlawful occupiers of the property or the local authority
.
[6]
Mr.
Moemedi, his official capacity as the director of Moemedi
Enterprises, deposed to an affidavit wherein he alleged that the
order for eviction was provided to his attorneys of record on the 23
of November 2023 and once it came to his attention, he gave
an
instruction to launch a rescission of judgment application. A
resolution of the company
[1]
was
passed to that effect and same was filed annexed to the founding
affidavit.
[7]
He further
alleged that the application for eviction was indeed served via
sheriff. Although the said property is owned by the company,
it is
occupied by Mr. Kotu who informed him of the court date of the 23
November
2023.
He stated that he is aware of the liquidation order which was granted
by Johannesburg High Court under case number 20942/2022
and that he
has also filed a rescission of judgment application in that regard
and such application is still pending.
[8]
As
he was dealing with two separate rescission applications in different
divisions of the High Court, his notice of intention to
oppose was to
filed on the 30th of October 2023 in casu and there was a delay of 1
-
2
days in filing an opposing affidavit. When an indulgence was sought
from the respondents to condone late filing of his affidavit,
it was
refused. He was then surprised and shocked how that matter was then
enrolled after a notice to oppose was filed. In the
same breath, he
blamed his instructing attorney for not actually serving and filing
the notice of intention to defend with Free
State High Court.
[2]
[9]
He
further alleged that the judgment must be rescinded as he has a
reasonable prospect of success and that he must be granted an
opportunity to place his issues and submissions before the court
makes a final ruling. Also, the property is not vacant as the
current
occupants (Kotu) of the property are paying money towards his bonded
property.
[3]
[10]
The
first and second respondents allege that the Mr. Moemedi does not
have the
necessary
capacity
to
act
on
behalf
of
the
applicant.
This
was
primarily
based
on the fact a final winding up order was granted on 10
th
November 2022 by the Gauteng Division of the High Court under the
case number 20942/2022 and the applicant was placed under final
liquidation and its affairs was placed in the hands of the Master of
the High Court, who in turn, appointed them as joint liquidators
of
the insolvent estate.
[4]
[11]
The respondents
further alleged that the special resolution attached to the founding
affidavit which was passed on the 18 of December
2023 has no force or
effect as Mr. Moemedi ceased to be a director once the company went
into final liquidation and is no longer
in control of the affairs of
the company. To that end, a rule 7 notice was filed on the attorneys
of the applicant challenging
their mandate on that basis.
[12]
The
respondents also averred that after their appointments as joint final
liquidators of the applicant, their earlier investigation
led them to
the encumbered property mortgaged with ABSA bank. On the 15
th
of February 2023, a letter was sent to Mr. Moemedi informing him of
the court order and that the property would be sold in order
to
settle debts of all creditors claims in the insolvent estate. In his
response ,he indicated that he was unaware of the final
court order
and at that stage already disclosed that the house was being occupied
by Kotu.
[13]
After further
communication, Moemedi was informed that the property would be sold
and an eviction order would be obtained for the
unlawful occupiers to
vacate the property. In March 2023 a letter was directed at Kotu that
he is to vacate the property or, a
formal eviction order would be
sought from court.
[14]
In the very
same month, a response was received from Kotu refusing to vacate and
indicated that they will oppose an application
for eviction an
application to rescind the final winding up order would be brought.
The respondents received correspondence from
Morwasehla Attorneys
that they hold instructions echoing that all proceedings should be
held in abeyance in that regard.
[15]
Parties
continued to exchange written correspondence with the firm of
attorneys from the month of March 2023 until June 2023
in
lieu
of
settlement but same failed.
On the 23
rd
of June 2023, another notice to vacate the property was served on
Moemedi and all occupants of the immovable property and same
was
appropriately served via sheriff.
[16]
Moemedi and
the occupants of the property refused to vacate, and the main
application for eviction was then launched in August 2023
and the
appropriate section 4(2) PIE notice served leading to the order being
granted by default no real notice to oppose or no
answering affidavit
was filed in opposition of the application at the requisite date.
IV
DISCUSSION
Contentions
of the parties
[17]
The now applicant contents that a miscarriage of justice has occurred
and he ought to be given an opportunity to place
his grounds for
opposition before court and that he does have a reasonable prospect
of success in the main action and a rescission
of the final winding
up of the company is likely to be set aside which will having a
direct bearing on this case.
[18]
It was
advanced by their in their heads of argument that the respondents
failed to set down the matter as required by rule 6(5)
(f) (i) of the
Uniform Rules of Court in that the respondents ought to have waited a
period of 5 days after opposition was filed
and only on the expiry
date thereof, apply to the registrar for the allocation of a date.
[19]
Moemedi
also states that whilst the rescission application of the final
liquidation order is pending, he is within his rights to
bring an
application to rescind the eviction order as he still has the
requisite authority to act on behalf of the company and
also, he can
be considered to be an interested party as envisioned
in
Rule 42. To that end, I was referred to HR Computek
(Pty)
Ltd v Dr WWA Gouws (Pty)(Johannesburg) Ltd and Others
[5]
-
a
case wherein rescission of judgment was granted of a provisional
liquidation order after it was found that the application could
be
brought without the co-operation of the liquidators.
[20]
The
respondents contended that the final winding up order automatically
terminated Mr. Moemedi director's power to conduct any proceedings
on
behalf of the company
[6]
and
that the resolution passed on the 18 of December 2023 as no effect as
he cannot represent Moemedi Enterprises as he is functus
officio. I
was referred to several cases namely, Attorney - General v
Blumenthal,
[7]
Venbor (Pty) Ltd
v Vendaland Development Co (Pty) Ltd t/a Camp Store
[8]
and Timana Properties (Pty Ltd v Nedbank Limited and Another 9683/20
[2021] ZAGPPHC 274(18 March 2021).
[21]
Furthermore, that an
application for rescission of a liquidation order does not
automatically suspend the order and his application
Gauteng is not in
accordance with Rule 45A for a suspension of the court's order.
Accordingly, they contended that the applicant
has not made out a
case for rescission in terms of rule 31 or rule 42 as he did not
provide a reasonable explanation or show good
cause why he was not in
wilful default. It was also indicated that even if the court should
consider the Gauteng application and
the applicant's current reliance
on s354(1) of the Companies Act is misguided as the said section not
even mentioned in that rescission
application.
[22]
For
the purpose of rule 42 they indicated that the application should
also fail as though the judgment was granted in his absence,
he was
given notice of the application and was aware that the matter would
be on the court roll on the 23
rd
of
November 2023 and he opted not to file any answering affidavit,
appear in court or have his attorneys of record appear
and request an
indulgence nor has
he
shown that there was an error in the seeking of the order
.
[9]
They
thus requested that the application be dismissed with costs
.
Rescission
of judgments - Rule 31 and Rule 42 of the Uniform Rules of Court
[23]
Rule
31(2)(b)
states
that
in
an
y
action
a
defendant
ma
y
[10]
within
20
days
of
obtaining
knowledge of such a judgment apply to court to set aside such a
judgment and the court may, on good cause shown, set aside
the
default judgment on such terms as it deems fit.
[24]
For
an applicant to succeed with an application for rescission he must as
stated by Brink Jin
the
case of Grant v Plumbers do the following,
[11]
(a)
He must give a
reasonable explanation of his default. If it appears that his default
was wilful or
that it was
due to
gross
negligence the
Court should
not
come
to his assistance
.
(b)
His
application must be bona fide and not made with the
intention
of merely
delaying plaintiff's claim
.
(c)
He must show that he
has a bona fide defence to plaintiff's claim
.
It is
sufficient if he makes out a prima facie defence in the sense of
setting out averments which, if established at the trial,
would
entitle him to the relief asked for. He need not deal fully with the
merits of the case and produce evidence that the probabilities
are
actually in his favour.
[25]
An applicant
must in an affidavit, fully explain the reason for the default. The
explanation must enable the court to understand
how the default came
about to properly evaluate the conduct and motives of the applicant.
If the
explanation provided is wilful, negligent or otherwise, it may give
rise to the probable inference that there is no bona
fide defence to
the claim, and may be considered as a factor in the overall
determination if good cause has been shown to rescind
the judgment.
[26]
Rule 42
Variation and rescission of orders states as follows:
(1)
The court may,
in addition
to any other
powers it may
have, mero
motu
or
upon
the
application of any party affected, rescind or vary:
(a)
An order or
judgment erroneously
sought or
erroneously
granted in the
absence of any party affected thereby;
(b)
an order or
judgment in which there is an ambiguity, or a patent error or
omission, but only to the extent of such ambiguity, error
or
omission;
(c)
an order or
judgment granted as the result of a mistake common to the parties
.
(2)
Any party desiring
any relief under this rule shall make application therefor upon
notice to all parties whose interests may be
affected by any
variation sought.
(3)
The court
shall not make any order rescinding or varying any order or judgment
unless satisfied that all parties whose interests
may be affected
have notice of the order proposed
.
Evaluation
[27]
The crisp
issue to be determined is if Mr. Moemedi as sole director of the
company, has the necessary locus standi to act on behalf
of the
applicant and has he has shown good cause to rescind the judgment and
that he has a bona fide defence to be ventilated at
trial. Though the
notice of motion is not really clear if the court is approached in
terms of rule 31, rule 42 or the common law,
it is apparent from the
heads of argument that he wants to the court to consider his
application under rule 42. He asserted that
he gave his attorneys an
instruction to oppose the application and they simply never filed the
notice to defend and his opposing
affidavit and that the attorney's
in the main application provided an explanation wherein the court can
conclude that he has shown
good cause, he was not in wilful default.
[28]
Mr. Moemedi
makes mention of the fact that he only became aware of the judgment
by default in this case on the 23rd
of November
2023 after being informed by his attorneys of record and that is when
he gave an instruction for a rescission application
to be launched.
Now this may give the impression that he was not at all aware of the
eviction application or the date on which
it will be
placed
on the roll or in fact what timelines would ensue. This assertion
cannot be accepted for the following reasons.
[29]
Firstly,
he does not state on which date he was contacted by Kotu after the
eviction application was served at the Bloemdal Small
Holdings
property he just states that he asked Kotu to pick up the application
from the sheriff's office.
[12]
Now this can only said to be an untruth in light of the fact that the
return of service in the main application indicates that
the eviction
application was served on him personally on the 17th of October 2023
at the said property. He was nowhere near Cape
Town on the said date
as alleged in his founding affidavit.
[30]
Though it was
submitted during argument that the notice of motion of the main
application did not comply with rule 6(5) and it was
prescriptive as
did not give the now applicant sufficient time to oppose and file its
answering affidavit. This is incorrect. The
notice of motion clearly
indicated that he had 10 days from service to file his notice to
oppose and 15 days thereafter to file
his answering affidavit failure
which, an application will be made to court on the 23rd
of November
2023 and an appropriate notice of set down was filed.
[31]
The
application was served personally on the 17
th
of October 2023 and the applicant thus had more than enough time to
file his opposing papers. In my view, he was thus aware of
the
relevant dates and when the application would be enrolled as the
sheriff served it on him personally in Bloemfontein. In the
absence
of opposing papers being filed, the absence of Mr
.
Moemedi and
his legal representatives, the court was justified in granting an
order by default and there was no error on its part.
[32]
Secondly Mr.
Moemedi fails to mention in his founding affidavit that the issue of
eviction has long been on the horizon. The respondents
herein
elucidated this fact with various written corresponded annexed to
their affidavit
that already
in March 2023, Kotu was contacted and informed of the liquidators'
intention to sell the property
and that he
should vacate
but, he
refused on the
basis
that proper channels must be followed in that regard and that is when
the applicant's current attorneys of record came on
to the scene,
exchanges of correspondence took place and negotiations commenced and
stalled in June 2023.
[33]
I find it hard to
believe that Kotu did not, contact him at that stage as, how else
would the current attorneys of record have entered
into the fray and
try to settle this in an amicable manner, which eventually was
abandoned in favour of an eviction application
which was then
launched in August 2023.Though he mentions that a decision was taken
to rescind the eviction order once it came
to his knowledge, it is
clear from the resolution that this was only done on the 18
th
of
December 2023, almost a month after the default order came to his
attention.
[34]
Now this
resolution is intrinsically linked to his locus standi to bring the
application for rescission. Now the said resolution
makes it clear
that he is bringing this application for rescission in his capacity
as director of the applicant and this is his
actual interest in the
matter. Ordinarily this would be sufficient to launch such an
application as he would be considered to be
a person affected by the
judgement, but it will not suffice in light of the final liquidation
order conferring power to the respondents
to handle all the affairs
of the company. In my view, this entails that until the final
liquidation order is rescinded or the execution
thereof suspended,
the liquidators will retain their legal power to represent the
company as the director powers has long ceased.
[35]
The rescission
of the final liquidation is still pending in another province but Mr.
Moemedi states that this is a factor that the
court may consider for
the rescission in
casu
and same
speaks to the existence bona fide defence. For the reasons already
alluded to herein above, this cannot be accepted. Now
although Mr.
Moemedi has mentioned that he must be granted an opportunity to
properly oppose the matter, he has not provided a
bona fide defence
which may be considered as a factor in the overall determination
of good cause.
In the absence thereof, hi
application
must fail. It is trite that costs follow the result and there is no
reason to deviate from this established practice.
V
ORDER
Accordingly,
the following order is made;
1.
The
application is dismissed with costs.
MAJOSI
O.R, AJ
Appearances
On
behalf of the Applicant
Adv.
D. Masia
Instructed
by:
C/O
Chauke Attorneys
Bloemfontein
On
behalf of the Respondents
Adv.
C. Swanepoel
Instructed
by:
C/O
Symington De Kok Attorneys
Bloemfontein
[1]
Indexed
bundle p 19, Annexure Resolution of Moemedi Enterprise
Propriety
limited.
[2]
Ibid,
paragraph 6
.
[3]
Ibid,
paragraph 7
.
[4]
Respondents
answering affidavit, Annexure
RM4,
Respondents
Rule 7 notice.
[5]
2023
(6) SA 268 (GJ).
[6]
First
and Second respondents' heads of argument, paragraph 6 -11
[7]
1961(4)
SA 313 (T) at 315.
[8]
1989
(2) SA 619
(V) at 624
.
[9]
Ibid
paragraph 26 -45.
[10]
My
own emphasis.
[11]
Grant
v Plumbers (Pty} Ltd
1949 (2) SA 470
(0)
at
476
[12]
Founding
affidavit
paragraph
8-9.