IN THE HIGH COURT OF SOUTH AFRICA
KWAZULU -NATAL LOCAL DIVISION, DURBAN
CASE NO: D11077/2023
In the matter between:
REDINK RENTALS (RF) LIMITED FIRST APPLICANT
TOWER INVESTMENTS (P TY) LTD SECOND APPLICANT
REDINK RENTALS SECUR ITY (SPV) RF (PTY) L TD THIRD APPLICANT
and
EDUCOR HOLDINGS (PTY ) LTD FIRST RESPONDENT
A1 CAPITAL (PTY) LTD SECOND RESPONDENT
DAMELIN (PTY) LTD THIRD RESPONDENT
INTEC COLLEGE (PTY) LTD FOURTH RESPONDENT
LYCEUM COLLEGE (PTY) LTD FIFTH RESPONDENT
___________________________________________________________________
ORDER
___________________________________________________________________
In the premises the following order is made:
1. The respondents’ application is dismissed.
2. Each party to bear its own cost s.
___________________________________________________________________
JUDGMENT
___________________________________________________________________
Mathenjwa J
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[1] The first and second applicants instituted application s for the winding -up of the
first and second respondents under case number s D9850/2021 and D10495/2021
respectively. The winding -up application s were argued and judgment reserved. The
first, second and third respondents subsequently concluded a settlement agreement
with the applicants on 2 May 2023 prior to the handing down of the judgment. On 4
May 2023 the winding -up applications were withdrawn by the first and second
applicants by consent in terms of the settlement agreement.
[2] After the withdrawal of the winding -up applications the respondents defaulted
on payment in terms of the settlement agreement. The applicants issued notices
informing the respondents that they were in default with payment in terms of the
settlement agreement and calling upon the respondents to make payment within five
days.
[3] On 6 October 2023 the applicants launched the main application for monetary
judgment against the respondents. On 20 October 2023 the res pondents delivered a
notice to oppose the main application and on 8 November 2023 the y delivered their
notice in terms of rule 30(2) (b) informing the applicants that the application for default
judgment was irregular and afforded them an opportunity to rem edy the irregularity .
After the applicants had failed to remedy the irregularity the respondent s launched this
application (the interlocutory application) which is opposed by the applicants.
[4] Both the main application and the interlocutory application was en rolled for
hearing before me on 28 February 2025 . At the commencement of the hearing I was
advised by counsel for both parties that the first and fourth respondents were in a state
of deregistration. Kasvan Kannigan who was a director of the first respondent prior to
its deregistration deposed to a supplementary affidavit in which he state d that he learnt
on 5 February 2025 that the first respondent was in a state of deregistration and on 25
February 2025 he applied for the re-registration of the first respondent. Melvin
Munsami who was the director of the fo urth respondent prior to its deregistration
deposed to an affidavit wherein he state d that he recently bec ame aware after this
matter had already been set down for hearin g that the f ourth respondent is presently
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in a state of deregistration and on 27 February 2025 he made an application for the
re-registration of the fo urth respondent.
[5] Both counsel agreed that the main application should be adjourned . Counsel
for the respondents Mr Harpur SC conten ds that the interlocutory application also
should be adjourned but the applicants counsel Mr Troskie SC opposed the
adjournment of the interlocutory application. At the end of the parties’ argument I made
the following order:
‘1. The main application is adjourned sine die.
2. The application for adjournment of the interlocutory application is refused.
3. Reasons for refusal of the adjournment will be given in the judgment ’.
[6] I refused the application for adjournment for the following reasons. The
respondents request for an adjournment was based on the fact that the first and fourth
respondents were deregistered and no longer exist , therefore no order can be made
against the non-existing respondents. In my view the matter before me is
distinguishable from an application where a party is seeking substantive relief against
the respondent s jointly and several. This is a joint application by all five respondent s
in terms of which they seek an order to set aside the main application on the basis that
it is an irregular step. None of the respondents deposed to the founding affidavit in
support of th e application ; their attorney deposed to such affidavit and that attorney
is still alive. The attorney who deposed to the affidavit ought to be familiar with all the
facts of the case, he may supplement or amend the application should the need arise
regardless of whether the first and fourth res pondents were before court or not, save
that a costs order may not be given against the two non-existing respondents.
Furthermore , the applicant s are not seeking a substantive order or the performance of
any action by the first and fourth respondent s, but an order that the application on a
procedural issue be dismissed.
[7] This then brings me to the application for condonation. It appears from the
applicants main application that they have referred to default judgment, confession in
terms of rule 31(1) (c) and judgment in terms of rule 41 (4) whereas in their heads of
argument their application is an ordinary application for a money judgment.
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The respondents application is premised on the alleged fragrant disregard of the rules
by the applicants. Given the ambiguity surrounding the grounds of the application ,
the respondents may suffer serious prejudice if the applicants were to be permitted to
pursue the relief in the main application notwithstanding the unresolved complaint. The
respondents applicatio n is out of time by 13 court days. Considering the short period
of delay and the importance of the issues raised in the interlocutory application, it is in
the interest s of justice to condone the respondents late launching of the application
for proper ventilation of the alleged irregular step . Therefore , the application is
condoned .
[8] The respondents in their founding affidavit con tend that the judgment sought by
the applicants in terms of rule 31(1) (c) is irregular since the application for winding -up
of the respondents were actions in rem whereas the main application is an action in
personam . Further more, the judgment sought in terms of rule 41(4) is irregular since
the winding -up proceedings against the respondents were withdrawn. The
respondents conten d that it is irregular for a party to apply for judgment in terms of a
settlement agreement where the proceedings in respect of which the settlement was
concluded ha d been withdrawn.
[9] The applicants in their answering affidavit dispute that they have taken an
irregular step and state that it is the express terms of the settlement agreement itself
that provides :
(a) in the event of the respondent s breaching any term of the settlement
agreement, the ap plicant s shall be entitled to lodge the confession to
judgment with the registrar ; and
(b) in the event of the respondents defaulting on the repayment terms recorded
in the settlement agreement, the applicants shall be entitled to lodge the
written confess ion to judgment with the registrar as provided for by rule 41(4)
and that the withdrawal of applications under case numbers D9850/2021 and
D10495/2021 shall not be an impediment to judgment.
[10] In address before Court Mr Trotsk ie submit ted that the main application was
neither brought in terms of rule 3 1(1)(c) nor rule 41(4) instead it is a monetary
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application brought in terms of rule 6(1). Mr Harpur submit ted that the denial by the
applicants that their application was brought in terms of rule 3 1(1)(c) read with rule
41(4) thereby contradicting their version in the founding affidavit shows that the
application is defective and should be set aside.
[11] The issues for determination in this application are: firstly, whether rule 41(4)
prevents a party relying on a settlement agreement from applying to court for
enforcement of the terms of the agreement where the proceedings preceding the
conclusion of such agreement has been withdrawn and secondly , whethe r when a
party applies to court for enforcement of the terms of the settlement agreement
where the proceedings preceding the conclusion of the agreement has been
withdrawn that amounts to an irregular ste p.
[12] In their notice of motion in the main application the applicants seek a monetary
judgment for a fixed amount of money. There is no reference to a default judgment
or judgment in terms of rules 31(1)(c) and 41(4) in the applicants ’ notice of motion.
However , in paragraph 2 of their founding affidavit the applicants state that the
affidavit is in support of the relief sought for default judgment pursuant to a settlement
agreement as provided for in rule 31(1)(c) read with rule 41(4) . It is instructive that
although the applicants referred to rule 31(1)(c) which makes provision for a
defendant to furnish a confession to the plaintiff, ‘whereupon the plaintiff may apply
in writing through the registrar to a judge for judgment accordin g to such confession’ .
The main applcation was not brought in terms of th at provision, in that no confession
was submitted by the applicants to the registrar for judgment .
[13] It is clear from the relief sought that the applicants do not seek judgment in
terms of the settlement agreement . The applicant s have referred to the terms of the
settlement agreement throughout their founding affidavit and in the answering affid avit
to the interlocutory application. For example, when explaining the material terms of
the settlement agreement in paragraph 14 of the founding affidavit the applicants relied
heavily on rule 41(4). In paragraph 14.1 1 the applicants state that in the event of the
respondents defaulting on the payment in terms of the agreement they shall be entitled
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to lodge the confession to judgment with the registrar in terms of rule 41(4). In
paragraph 55.4 the applicants state that they were p lacing reliance on a notice served
to the respondents in terms of rule 41(4 ) in launching these proceedings. The parties ’
settlement agreement refers to rule 41(4) and servi ce of notice in terms of rule 41(4)
and providing the respondents with notice in accordance with rule 41(4) in the event
that they fail to make payments as stipulated in the settlement agreement. Because
these things represent provisions of the settlement agreement, it is therefore inevitabl e
to refer to rule 31(1)(c) and rule 41(4) , confession to judgement and default judgement
while discussing the terms of the agreement.
[14] When the matter was argued before me I asked counsel for both parties
whether they can refer to any authority in s upport of the contention that once the
proceedings has been withdrawn in respect of which a settlemt agreement was
concluded the terms of the agreement is no longer enforceable in law , or alternatively
in support of the contention that the terms of the settlement agreement are
enforceable even though the proceedings preceding such agreement has been
withdrawn. Counsel s were unable to refer to such authority however counsel for the
respondents contended that the plain meaning of rule 4 1 (4) is that a par ty may not
rely on a settlement agreement if the pr oceedings in respect of which it was
concluded has been withdrawn.
[15] Rule 41(4) provides that:
‘Unless such proceedings have been withdrawn, any party to a settlement which has been
reduced to writing and signed by the parties or their legal representatives but which has not
been carried out, may apply for judgment in terms thereof on at least five days' notice to all
interested parties .’
A settlement agreement is a contract between the parties which is handled in terms
of the law of contract.1 The purpose of an agreement to settle a matter in dispute
between the parties , is to put an end to existing litigation and to avoid litigation.2 The
importance of settlement of dispute s has been reinforced by the introduction of rule
1 Thutha v Thutha 2008 (3) SA 494 (T kH).
2 Gollach & Gomperts (1967) v Universal Mills & Produce Co (Pty) Ltd and Others 1978 (1) SA 914 (A)
at 921C .
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41A on 9 March 2020 which encourages parties to settle their disputes rather than
engaging in costly and protracted litigation . Settlement agreement s have benefits to
the litigants by avoiding a costly and acrimonio us trial , and to the administration of
justice by reducing overcrowded court rolls.3
[16] It is trite that a settlement agreement may be made an order of the court in
terms of rule 41(4) if;
(a) it relates directly or indirectly to an issue or lis between the parties ;
(b) its terms must accord with the Constitution and the law ; and
(c) it holds some practical and legitimate advantage.4
If other terms of the settlement agreement were not i ncorporated by court in the
settlement agreement order th ey can still be enforced by means of a fresh suit.5
Thus, in instances were a settlement agreement is not made an order of the court a
party may still institute an application separate from the previous proceedings based
on the contractual terms of the settlement agreement. In the event a party seeks to
make a settlement agreement an order of court the application should be brought
before the proceeding s preceding the settlement agreement has been withdrawn.
However, where the party seeks an order enforcing the terms of the settlement
agreement, he or she may apply to court for enforcement of the terms of the
settlement agreement even though t he proceedings preceding the settlement
agreement ha ve been withdrawn. The reason being that a settlement agreement can
be a novation in terms of which the parties may replace an old contract with a new
contrac t.
[17] Rule 30 (1) entitles a party against whom an irregular step has been taken by
any other party to apply to court to set it aside. It is correct that the applicants
referred to rule 31(1) (c) in their founding affidavit, where as they have not applied for
a confession to judgment throu gh the registrar. It is not in dispute that the main
application arose from the respondents’ breach of the terms of the settlement
agreement. In the settlement agreement reference is made to rule 41(1) . Although
3 Eke v Parsons 2016 (3) SA 37 (CC) para 23 .
4 Eke above fn 2 paras 25- 26.
5 Ibid para 24 .
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the applicants have referred to rule 41 (4) and default judgment which are terms of
the settlement agreement , they do not seek an order for default judgment nor any
order for enforcement of the settlement agreement in terms of rule 41(4). The
applicants have referred to these rules as they are cont ained in the settlement
agreement and ha ve launched a monetary application based on breach of the
settlement agreement. Therefore, the applicants have not taken any irregular step
by launching the application for monetary judgment based on the respondents’
breach of the settlement agreement , even though the proceedings preceding the
settlement agreement had been withdrawn.
[18] The general principle that costs follow the event does not find application in
this matter because the respondents succeeded on the condonation application and
the applicants succeeded on the interlocutory application. Therefore, each party
should bear its own cost s.
Order
[19] In the premises the following order is made:
1. The respondents’ application is d ismissed .
2. Each party to bear its own cost s.
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Mathenjwa J
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Date of hearing: 28 February 2025
Date of judgment: 27 March 2025
Appearances:
Applicant s counsel: A J Troskie SC assisted by D W Eades
Instructed by: Larson Falconer Hassan Parsee Inc.
Durban
Respondents ’ counsel : G D Harpur SC
Instructed by: Cox Yeats Attorneys
Durban