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[2014] ZAWCHC 116
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Scholtz and Another v Merryweather and Others (7965/2009) [2014] ZAWCHC 116; 2014 (6) SA 90 (WCC) (1 August 2014)
IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
REPORTABLE
Case
No.:7965/2009
And
Case No.:
13710/2009
In the matter between:
OLIVER BRADLEY
SCHOLTZ
.................................................
First
Applicant
GERARD DAVID PETER
SCHOLTZ
.....................................
Second
Applicant
And
ANDREW
MERRYWEATHER
...............................................
First
Respondent
NICHOLAS
MERRYWEATHER
........................................
Second
Respondent
JOEL
THACKWRAY
.............................................................
Third
Respondent
LIAM
HECHTER
................................................................
Fourth
Respondent
JUDGMENT: 1 AUGUST 2014
GAMBLE
J
INTRODUCTION
1.
In the early morning hours of Saturday, 9
September 2006, the first respondent (hereinafter “
Merryweather
”)
was involved in an incident which changed his life forever. As
a consequence of an altercation with a number of other
young men at
an all-night service station in Newlands, Cape Town, Merryweather was
left in a state of permanent paralysis from
the chest downwards and
is now confined to a wheelchair.
2.
Arising from his injuries and the
sequelae
thereof sustained in this incident, Merryweather instituted a damages
action on 20 April 2009 in this Court against the first applicant
(“
Scholtz
”),
the third respondent (“
Thackwray
”)
and the fourth respondent (“
Hechter
”)
claiming some R15,5 m in respect of general damages, loss of earnings
and medical expenses. It was alleged that Scholtz,
Thackwray
and Hechter were jointly and severally responsible for Merryweather’s
injuries.
3.
For reasons which I shall set out more
fully hereunder, Scholtz did not enter an appearance to defend the
claim and on 25 March
2010 an order was granted separating the action
against Scholtz from that against Thackwray and Hechter. The
Court (per Madima
AJ) directed that the action against Scholtz was to
continue by way of default proceedings.
4.
On 18 May 2010 default judgment was granted
in terms of Rule 31(2) (by Olivier AJ) pursuant whereto Scholtz was
directed to pay
to Merryweather such damages as were later to be
proved.
5.
On 14 June 2013 Smit AJ determined the
quantum
of
Merryweather’s claim and ordered Scholtz to pay the sum of
R10 291 100,00, together with interest, costs and
the
qualifying expenses of a number of expert witnesses.
6.
On 10 September 2013 Scholtz launched this
application to rescind the judgments of Olivier and Smit AJJ.
Besides Merryweather
being cited as the first respondent, his
brother, Nicholas Merryweather (“
Nicholas
”),
Thackwray and Hechter were cited as second to fourth respondents
respectively.
7.
Nicholas was cited as the second respondent
in this application because he was the second plaintiff in
Merryweather’s action
against Scholtz, Thackwray and Hechter,
the allegation being that he too had suffered injuries in the
incident which left his brother
a paraplegic. It appears that
after the separation of trials was ordered by Madima AJ on 25 March
2010, no judgment was taken
by Nicholas against Scholtz and that the
proceedings against him have not progressed any further.
8.
Nicholas has not opposed the relief now
sought by Scholtz and it is common cause that if rescission is
granted, Scholtz will have
to answer Nicholas’ claim too.
Thackwray and Hechter were joined in these proceedings by virtue of
their potential
interest therein, but no relief is sought against
them.
9.
Shortly before the application was first
heard in March 2014, Merryweather sought the joinder of Scholtz’s
father (“
Scholtz snr
”)
as a co-applicant on the basis that he was the person funding
Scholtz’s litigation and, for that reason, a costs
order was
sought against father and son, jointly and severally, in the event
that the application for rescission failed. This application
for
joinder was not opposed and so the matter proceeded with Scholtz snr
as the second applicant.
10.
The Scholtzs’ were represented by
Advv. B D J Gassner SC and A Heese and Merryweather by Advv. J R
Whitehead SC and E Benade.
The Court is indebted to the
parties’ legal representatives for the preparation and
presentation of the matter and for the
assistance in argument, which
has facilitated preparation of this judgment.
RESCISSION UNDER THE
COMMON LAW
11.
Scholtz’s application is brought, not
in terms of Rule 31(2)(b), but under the common law. This Court
has inherent powers
of rescission under the common law provided that
“
good
”
or “
sufficient
”
cause therefor has been shown by an applicant.
[1]
12.
Our Courts have often said that the phrase
“
good cause
”
defies comprehensive definition: since it involves the exercise
of a judicial discretion, it requires a flexible approach
involving
broad principles of justice and fairness, and a consideration of all
the relevant facts and circumstances of the case
as a whole.
[2]
13.
In practice, however, there have
traditionally been two requirements which an applicant is generally
expected to establish to succeed
in a rescission application,
viz.
a reasonable explanation by the applicant for the default, and a
bona
fide
defence which has some prospects
of success.
[3]
14.
The cases referred to above pre-date our
constitutional jurisprudence. More recently, in considering the
approach to be taken,
the Constitutional Court in
Fick
[4]
confirmed the traditional approach adopted, for instance, in
Chetty
at 765D-F -
“
It is not
sufficient if only one of these two requires 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. An 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. The reason for
my saying that the appellant’s application
for rescission fails
on its own demerits is that I am unable to find in his lengthy
founding affidavit, or elsewhere in the papers,
any reasonable or
satisfactory explanation of his default and total failure to offer
any opposition whatever to the confirmation
on 16 September 1980 of
the rule nisi issued on 22 April 1980.”
15.
Jaftha J accepted in
Fick
[5]
the approach adopted by the Supreme Court of Appeal in
Colyn
[6]
that in appropriate cases “an unsatisfactory explanation
furnished by an applicant for rescission may be compensated for
by
good prospects of success on the merits”. Jaftha J
accepted too the summation by Jones AJA in
Colyn
[7]
of the common law approach to which I have already referred.
Consideration of that passage, however, reveals a third factor:
“
With that
as the underlying approach the Courts generally expect an applicant
to show good cause (a) by giving a reasonable explanation
of his
default; (b) by showing that his application is made bona fide;
and (c) by showing that he has a bona fide defence
to the plaintiff’s
claim which prima facie has some prospect of success (Grant v
Plumbers (Pty) Limited
1949 (2) SA 470
(O) at 476, HDS Construction
(Pty) Limited v Wait
1979 (2) SA 298
(E) at 300F-301C, Chetty v Law
Society, Transvaal
1985 (2) SA 756
(A) at 764I-765F).”
So, in this matter,
Scholtz must also prove that his application is
bona fide
.
16.
A further consideration which has arisen
more recently is the question of “
wilful
default
”. In
Harris
[8]
Moseneke J (as he then was) observed at 529E para [6], with reference
to
Silber
that the phrases “
sufficient
cause
” (which embraces the common
law approach to rescission) and “
good
cause
” (which is what Rule
31(2)(b) requires) are synonymous.He went on to discuss wilful
default as follows:
“
The
absence of ‘wilful default’ does not appear to be an
express requirement under Rule 31(2)(b) or under the common
law.
It is, however, clear law that an enquiry whether sufficient cause
has been shown is inextricably linked to or dependent
upon whether
the applicant acted in wilful disregard of Court rules, processes and
time limits. While wilful default may
not be an absolute or
independent ground for refusal of a rescission application, a display
of wilful neglect or deliberate default
in preventing judgment being
entered would sorely co-exist with sufficient cause.”
17.
But Moseneke J was of the view that the
existence of wilful default did not place a complete bar on an
application for rescission:
“
[9] A
decision freely taken to refrain from filing a notice to defend or a
plea or from appearing, ordinarily will weigh heavily
against an
applicant required to establish sufficient cause. However, I do not
agree that once wilful default is shown the applicant
is barred;
that he or she is then never entitled to relief by way of rescission
as he or she as acquiesced. The Court’s
discretion in deciding
whether sufficient cause has been established must not be unduly
restricted. In my view, the mental
element of the default,
whatever description in bears, should be one of the several elements
which the Court must weigh in determining
whether sufficient or good
cause has been shown to exist. In the words of Jones J in De Witts
Auto Body Repairs (Pty) Limited v
Fedgen Insurance Co. Limited
1994
(4) SA 705
(E) at 708G, ‘… the wilful or negligent or
blameless nature of the defendant’s default now becomes one of
the
various considerations which the courts will take into account in
the exercise of their discretion to determine whether or not good
cause is shown’.”
18.
Rather, Moseneke J found that the court is
enjoined to consider the various criteria conjointly and effectively
perform a balancing
exercise in coming to a decision that is just and
fair in the circumstances. He concluded thus:
“
[10] A
steady body of judicial authorities has held that a court seized with
an application for rescission of judgment should not,
in determining
whether good or sufficient cause has been proven, look at the
adequacy or otherwise of the explanation of the default
or failure in
isolation.
‘
Instead,
the explanation, be it good, bad or indifferent, must be considered
in the light of the nature of the defence, which is
an important
consideration, and in the light of all the facts and circumstances of
the case as a whole.’
De Witts Auto
Body Repairs (Pty) Limited v Fedgen Insurance Co. Limited (supra) at
711D.
[11] In
amplifying the nature of the preferable approach in an application
for rescission of judgment, I can do no better than quote
Jones J
with whose dicta I am respectfully in agreement:
‘
An
application for rescission is never simply an enquiry whether or not
to penalise a party for failure to follow the rules and
procedures
laid down for civil proceeding in our courts. The question is,
rather, whether or not the explanation for the
default and any
accompanying conduct by the defaulter, be it wilful or negligent or
otherwise, gives rise to the probable inference
that there is no bona
fide defence and hence that the application for rescission is not
bona fide. The magistrate’s
discretion to rescind the
judgments of his court is therefore primarily designed to enable him
to do justice between the parties.
He should exercise that
discretion by balancing the interests of the parties ….
He should also do his best to advance
the good administration of
justice. In the present context this involves weighing the
need, on the one hand, to uphold the
judgments of the courts which
are properly taken in accordance with accepted procedures and, on the
other hand, the need to prevent
the possible injustice of a judgment
being executed where it should never have been taken in the first
place, particularly where
it is taken in a party’s absence
without evidence and without his defence having been raised and
heard.’”
19.
Harris
was
referred to with approval in general terms by Jaftha J in his
judgment in
Fick
in which he disagreed with the majority of the Court on the merits of
that matter. There is nothing in either his judgment
or that of
the Chief Justice for the majority to suggest that Moseneke J’s
approach in
Harris
was wrong
[9]
and, given that counsel on both sides in this matter relied
unreservedly on
Harris
,
I do not know of any reason not to follow the approach suggested by
Moseneke J in paragraph [11] thereof.
PROSPECTS OF SUCCESS
– THE MERITS
Available evidential
material
20.
The evaluation of this leg of the approach
on rescission is aided by a fairly solid body of evidence. This
is because after
the incident, Merryweather laid criminal charges
with the police. Eventually, eight young men, including Scholtz
Thackwray
and Hechter, were charged in the Regional Court, Wynberg
with the attempted murder of Merryweather and assault with intent to
do
grievous bodily harm to Nicholas.
21.
The trial (at which all of the accused were
represented by a prominent local criminal lawyer, Mr William Booth)
was protracted and
enjoyed considerable publicity in the local
media. At the conclusion of the State case, a number of the
accused were discharged.
Scholtz was acquitted at the end of
the case, along with the remaining accused, of the attempted murder
of Merryweather.
With the exception of Thackwray, all were
acquitted of the assault on Nicholas. Thackwray’s
conviction of assault on
Nicholas was later set aside on appeal to
this Court.
22.
At the criminal proceedings both
Merryweather and Nicholas gave evidence on behalf of the prosecution,
along with a number of other
lay witnesses who witnessed the event,
including a friend of the Merryweather’s, Progress Mpanda.
Scholtz was the only
person amongst the accused who gave evidence in
his defence.
23.
The State also adduced the evidence of Dr
David Welsh, a neurosurgeon, who testified about Merryweather’s
pre-existing medical
condition to which I shall refer shortly.
Substantial passages from the record in the criminal proceedings were
thus included
in both the founding affidavit and the answering
affidavit in these proceedings.
24.
In addition, Merryweather, Nicholas and
Mpanda testified in the proceedings before Olivier AJ and the
transcript in that regard
was also included in the founding
affidavit. At the hearing before Smit AJ, expert evidence was
adduced by way of affidavit
and those affidavits form part of the
pleadings in the main file in this matter which was made available to
the Court at the hearing.
The background facts
relevant to the merits of the claim
25.
As I have already noted, the incident
occurred sometime after midnight on a Friday night. The service
station in question
is located close to a number of nightclubs in the
Claremont CBD which are apparently frequented by youthful nocturnal
revellers.
There is evidently a fast food take-away facility at
the service station where those in need of late night sustenance can
recharge
their batteries, as it were. It seems as if both
Scholtz and Merryweather went to the shop for that purpose.
26.
The versions of the facts giving rise to
the injury are quite divergent. Merryweather said in the
criminal trial (and before
Olivier AJ) that he, Nicholas and Mpanda
were walking towards the take-away shop. He was mildly inebriated and
sought physical
support from Mpanda. Merryweather said that a
group of younger men (later identified as the eight accused in the
criminal
proceedings) had directed insulting slurs at him and Mpanda
– certainly homophoebic, and potentially racist.
Merryweather
took umbrage thereat and an altercation ensued which led
to various acts of bravado and ultimately confrontation and
scuffling.
27.
Merryweather described how a person whom he
later identified as Scholtz had aggressively run at him and tackled
him rugby-style.
The tackle was described as a “spear
tackle”
[10]
and Merryweather said that he was flung head-first into a nearby
parked car. He immediately experienced a lack of sensation
in
his lower body and realised that he was very seriously injured.
28.
Scholtz’s explanation is completely
different. In the founding affidavit he said that Merryweather had
been verbally abusive
to him and some of his friends, and adopted an
aggressive and condescending attitude to Scholtz, then aged 18 years
and in his
matric year at school. When Merryweather came
charging towards him, Scholtz claims that he stepped to one side to
avoid Merryweather,
while fending him off at the same time. He
claims that in the process Merryweather staggered back, lost his
balance and knocked
the back of his head against a nearby car.
29.
Scholtz accordingly claims that he acted in
self-defence in response to an unlawful attack on him by
Merryweather. He goes
on to suggest, with reference to the
opinion of Dr Welsh, that Merryweather suffered from a pre-existing
condition (osteoporosis)
which rendered his spine more brittle than
an average person of his age (24 years old at the time of the
incident), and that this
may have contributed to the devastating
sequelae
of his injuries.
30.
During argument Ms Gassner SC accepted that
Scholtz was the last person to make contact with Merryweather before
his head collided
with the motor vehicle. Adopting the most
neutral of language, it is then fair to say that it is common cause
that Scholtz
caused Merryweather to fall against the car. The
issue is whether this was an intentional attack on Merryweather, or
an act
of self-defence. If permitted to file a plea, Scholtz intends
to plead the latter.
31.
Ms Gassner SC argued that to succeed in
this application, Scholtz was required to establish, on a balance of
probabilities, that
he was capable of putting up a defence of
self-defence in the main proceedings. He is not required to prove
conclusively at this
stage that he has such a defence. In the
passage from
Colyn
cited in para 15 above, the Court noted that the articulated defence
had to have
prima facie
prospects of success. In
Grant
[11]
,
cited with approval in
Colyn
,
Brink J said that:
“
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.”
32.
As Ms Gassner SC correctly pointed out,
this case is most unusual in the sense that much of the material
evidence has already been
placed before this Court in the form of the
transcripts of the earlier criminal and civil proceedings, together
with a fair degree
of detail in the affidavits filed of record.
33.
Mr Whitehead SC proceeded to analyse
Scholtz’s current version of events with a fair degree of
interrogation. He sought
to demonstrate that there were
significant discrepancies between the facts raised by Mr Booth in his
cross-examination of the State
witnesses in the Regional Court,
Scholtz’s testimony in that Court and his version as set out in
the founding affidavit in
these proceedings. The discrepancies
are undoubtedly material particularly when the dissonance between Mr
Booth’s cross-examination
of the State witnesses (based as it
would have been on instructions from his client) and Scholtz’s
evidence under oath in
that Court are considered. Importantly,
counsel pointed out, self-defence was never put up as a defence in
the criminal trial
and it is inconsistent with the cross-examination
which sought to demonstrate that Merryweather had fallen accidentally
in a scuffle
with Scholtz.
34.
I do not believe, however, that it is the
function of this Court in this application to apply too detailed an
analysis of the earlier
evidence. This Court must primarily
consider the version put up by Scholtz in the founding affidavit and
determine whether
that makes out a
prima
facie
defence to Merryweather’s
claim for damages. Mr Whitehead SC correctly in my view
conceded that the version put up
in the founding affidavit did make
out such a defence.
35.
The veracity of that version will be
capable of evaluation at a prospective civil trial with reference,
inter alia
,
to the earlier evidence in the criminal trial and all the other
testimony and evidential material which may be presented before
that
Court. But it does not seem to me that the application for
rescission should fail,
per se
,
because of such obvious inconsistencies in the versions put up by
Scholtz. At best I would think that at this stage the
inconsistencies in the evidence are a factor to be considered when
this Court exercises its general discretion in relation to the
relief
now claimed, and in particular, in determining whether the
bona
fides
of the applicant in bringing this
application has been established.
THE QUANTUM
36.
Ms Gassner SC dealt briefly with the
quantum and submitted that were Scholtz to be given an opportunity to
defend that aspect of
the claim, he may well persuade a trial Court
to look at the quantum afresh. On that score she argued that
the issue of Merryweather’s
pre-existing medical condition was
relevant because it may be that the condition would have deteriorated
naturally and resulted
in pain, loss of amenities of life and
disability in any event.
37.
Very little is said in the application in
relation to the quantum. The highwater mark of Scholtz’s
case in this regard
is the following paragraph contained in the
founding affidavit:
“
34. I
point out that in the limited time available, my legal
representatives were unable to investigate and fully consider the
views expressed in the numerous expert reports filed in the main
action in support of [Merryweather’s] damages claim and the
accuracy and correctness of the facts on which these opinions were
based. The quantum of damages awarded is high and I wish
to
appoint experts to investigate and consider this aspect, particularly
in the light of the fact that the first respondent suffered
from a
pre-existing bone disease of which he was well aware. I do not
admit the quantum of damages awarded in favour of the
first
respondent and also wish to pursue this aspect of my defence.”
38.
In the answering affidavit Merryweather
denies that there is any merit in relation to his pre-existing
medical condition which he
says was as a consequence of earlier drug
abuse and, in the replying affidavit Scholtz simply restates what he
said in the founding
affidavit, namely, that his attorneys have not
had an opportunity to explore the question of the quantum and that
they should be
given an opportunity to do so.
39.
At the end of the day, all that can be said
is that the quantum is substantial and although Scholtz has filed no
expert reports
dealing with this part of the claim, it may be that
once other experts have considered the reports put up by Merryweather
before
Smit AJ, the quantum may ultimately be reduced. Certainly,
Scholtz has not alluded to any obvious misdirections or incorrect
assumptions in relation to the evidence before Smit AJ which
was explained by Merryweather’s attorney in an explanatory
affidavit filed after the hearing at the request of the Court.
THE
EXPLANATION FOR THE FAILURE TO ENTER AN APPEARANCE TO DEFEND
Personal details
40.
The criminal proceedings dragged on until
17 March 2008 when Scholtz was acquitted. Throughout that time
Scholtz lived with his
father in Constantia, one of Cape Town’s
affluent southern suburbs. His parents are divorced and his mother
lives and works
in the United Kingdom.
41.
Scholtz claimed that during his matric
year, and prior to the incident in which Merryweather was injured, he
had planned on taking
a so-called “
gap
year
” in Europe in 2007. Given
that he had to remain in Cape Town to attend the criminal trial,
Scholtz decided to enrol for an
engineering degree at the University
of Cape Town in 2007. This did not turn out to be a success (no doubt
the criminal proceedings
were a weighty consideration) and Scholtz
did not re-enrol at the university in 2008. He decided to take
his gap year once
the criminal proceedings had ultimately been
concluded.
42.
In August 2008 (i.e. about five months
after his acquittal in the Regional Court), Scholtz left for
England. He says his departure
was delayed by the necessity to
procure a so-called “
ancestral
visa
” but throughout this time he
continued to reside with his father in Constantia.
43.
It is not in dispute that in October 2008
Scholtz took up employment with an engineering company in the UK
known as Hayes Control
where he remained until January 2010.
During this time Scholtz stayed continuously at 30 Elizabeth Road,
Henley-on-Thames
in the county of Oxfordshire.
Issue and service of
summons
44.
After the issue of summons on 20 April 2009
(i.e. some 31 months after the incident in which Merryweather was
injured), the Sheriff
attempted to serve it at 13 Zomerlust Avenue,
Constantia at 12h45 on 13 May 2009. The return of non-service
records that:
“
I
ascertained that the party has left the given address, as informed by
Mr G Scholtz, Father.
Present
whereabouts are: DEFENDANT HAS BEEN RESIDING IN THE UK SINCE AUGUST
2008”.
45.
Scholtz says that his father told him in
mid-May 2009 during a Skype conversation that the Sheriff had
attempted to serve the summons
as aforesaid. He says that his
father told him that he had taken informal advice at that time from
the late Adv. Gerrit van
Schalkwyk SC. It appears that the late
Van Schalkwyk SC (a highly experienced and respected former Senior
Counsel at the
Cape Bar who retired from practice at the end of 2009
on account of, and subsequently succumbed in August 2010 to, poor
health)
had advised Scholtz snr in relation to the criminal trial,
had thereafter retained a personal interest in Scholtz’s future
and was generally supportive of the family.
46.
In his confirmatory affidavit accompanying
the founding papers Scholtz snr says that the late Van Schalkwyk SC
(who at that stage
had been informed of the personal circumstances of
Scholtz’s residence in the UK) told him informally that he held
the view
that:
46.1.
Scholtz snr was under no legal duty to
accept the summons on behalf of his son;
46.2.
Scholtz snr should advise the Sheriff that
Scholtz no longer lived in the Republic and that he had been living
in the UK since August
2008;
46.3.
neither Scholtz snr nor his son were under
any legal duty to take active steps to notify Merryweather of
Scholtz’s address
in the UK;
46.4.
Merryweather’s attorneys would have
to obtain the leave of the High Court to sue Scholtz in the UK; and
46.5.
a solicitor in the UK would have to serve
the papers on Scholtz there.
47.
Scholtz snr says that he acted in
accordance with this informal advice and told his son that he had
done so, hence the recordal
of the Sheriff on the return of
non-service to which I have already referred. Scholtz snr
points out that during the attempt
at service in May 2009, the
Sheriff did not ask for his son’s address in the UK.
48.
Merryweather’s attorneys responded to
the return of non-service by appointing a firm of tracing agents to
locate Scholtz.
A representative of the firm called Scholtz
snr’s telephone number in the Cape Town directory and spoke to
a young woman
called Anthea (apparently Scholtz’s younger
sister). She informed the tracing agents that Scholtz had been
in the UK
since the end of 2008 and that he was working there.
She told them that she did not have his telephone number in the UK
and
said that Scholtz did have a work e-mail address, but that she
was unable to provide it. Anthea suggested that the tracing
agents make use of the Facebook computer-based social networking
site, or contact Scholtz’s friends in Cape Town.
49.
In light of the information conveyed to the
tracing agents, Merryweather’s attorneys considered it prudent
to make application
to this Court for an order for substituted
service of the summons on Scholtz. Pursuant thereto Zondi J
gave an order on 14
July 2009 authroising service on Scholtz as
follows:
49.1.
by personal service on Scholtz snr at the
aforementioned Constantia address; and
49.2.
by effecting one publication in the
Independent Newspaper in the UK.
50.
Publication as aforesaid took place on 24
July 2009 and on 3 August 2009 the Sheriff returned to Scholtz snr’s
home in Constantia
and effected personal service of the papers on
him.
51.
Scholtz snr stresses in his confirmatory
affidavit that he was at no stage asked by Merryweather’s
attorneys or the tracing
agents for his son’s address in the
UK. He now claims that had this simple question been posed to
him in 2009 “openly
and properly” by Merryweather’s
attorneys, he would have readily provided them with Scholtz’s
physical address
or work address in the UK. He somewhat piously takes
the attorneys to task for allegedly misleading Zondi J as to the true
state
of affairs claiming that the Court was not told of this failure
on the part of Merryweather’s agents.
52.
Scholtz snr’s claim now that he would
readily have furnished his son’s residential address had he
been asked therefore
does not sit comfortably with the attitude
seemingly adopted in the Scholtz household at that stage. Scholtz snr
clearly felt no
moral obligation to come to the aid of a badly hurt
young man who had suffered injuries at the hands of his son. His
daughter,
too, seems to have been forewarned to protect the
whereabouts of her brother. Indeed, as will appear hereunder, Scholtz
snr was
more concerned about the state of his son’s mental
health and, I have little doubt, was well advised at that stage about
the looming issue of prescription which would arise just a few months
hence.
53.
Be that as it may, after service of the
summons and the order of Zondi J on him, Scholtz snr reverted to the
late Van Schalkwyk
SC for further informal advice. He says that
the late Van Schalkwyk SC was “flabbergasted” at what he
perceived
to be an irregularity, since he thought that it was
incumbent on Merryweather to sue by way of edictal citation for
service outside
of the Republic. Scholtz snr was however
advised to formally seek legal advice, which he says he did.
That advice was
different to the late Van Schalkwyk SC’s advice
and Scholtz snr says that he chose to ignore it.
54.
Scholtz snr says he never told his son
about the legal advice to the contrary (he had told him of the late
Van Schalkwyk SC’s
views) or of the fact that the order for
substituted service had been served on him. He claims that all
that he told his
son during another Skype conversation in August 2009
was that the papers had been served on him, but that Scholtz had no
reason
to be concerned since he (Scholtz snr) was content to follow
the advice of the late Van Schalkwyk SC.
55.
The position then is that as a matter of
fact, Scholtz knew sometime in early August 2009 that the summons
claiming some R15,5m
from him had formally been served on his
father. There could have been little doubt in his mind what the
basis for the claim
was or that Merryweather was serious about
recovering damages for his injuries. The reason put up by
Scholtz snr for intentionally
withholding the true state of affairs
from his son and thereby purportedly misleading him is that he felt
that he did not want
to further distress Scholtz, who had just
managed to settle into a new life in the UK.
56.
Scholtz says that he visited Cape Town in
October 2009 for a two week holiday. In the founding affidavit
he said nothing about
having had sight of the summons, just that he
remained of the view that the summons was not effective because it
had not been served
on him in the UK. It was only when
Merryweather raised the point in the answering affidavit (that it was
beyond comprehension
that Scholtz could claim to only “recently
[have] had sight” of the summons) that Scholtz suggested in
reply that he
had not seen the papers during October 2009.
57.
The order against Scholtz on the merits
granted by Olivier AJ was reported widely in the local press and
Scholtz says that when
his mother returned to the UK “
sometime
in May/June 2010
”, she gave him a
copy of a local newspaper circulating in the southern suburbs in
which it was reported that judgment had
been granted against him, and
that Merryweather’s attorneys were in the process of
calculating their client’s damages.
58.
Scholtz was undeterred by this and appears
to have doggedly believed that the order could not be effective
against him since he
had not been served in the fashion allegedly
suggested to his father by the late Van Schalkwyk SC. Scholtz
says that it was
only in the second half of 2013, when he eventually
consulted his current attorneys, that he was advised that a judgment
remained
valid and enforceable until set aside by a subsequent court
order.
59.
Scholtz says that he stayed in the UK until
October 2011 when he returned to live permanently in South Africa.
At the beginning
of 2012 he enrolled at the University of
Stellenbosch for a Bachelor of Arts degree in music technology.
60.
The judgment of Smit AJ of 14 June 2013 in
the sum of R10 291 100,00 came to Scholtz’s attention
almost immediately:
on 15 June 2013 an article was published in
the Weekend Argus newspaper in Cape Town and his attention was drawn
thereto by a friend.
Scholtz snr then told his son that he
(Scholtz snr) would see an attorney regarding the implications and
validity of the
judgment.
61.
Scholtz snr says that he saw the attorneys
who currently represent him and his son on 21 June 2013 – just
a week after the
order had been granted by Smit AJ. Scholtz did
not attend this consultation, nor a follow-up meeting on 2 July
2013.
At that stage, says Scholtz snr, he was advised that the
judgment could not automatically be regarded as invalid and that an
application
for rescission was necessary.
62.
Scholtz left for England on 3 July 2013 to
visit his mother on a trip which he says had been planned long before
the judgment of
Smit AJ was handed down. He returned to the
Republic on 25 July 2013 and consulted with Mr Booth on 5 August
2013.
Scholtz says that he had, in the meantime, been told by
his father that a formal application for rescission was required and
on
30 July 2013 his attorneys of record were instructed to take the
necessary steps to prepare such an application. He does not
explain why he consulted first with Mr Booth rather than seeing Mr
Williams of his attorneys of record herein.
63.
There was a delay of some five to six weeks
while consultations were held with counsel and the transcript of the
criminal proceedings
procured. Affidavits were speedily drawn
and settled by 6 September 2013, signed on 9 September 2013 and the
application
formally launched on 10 September 2013.
DELAY
64.
Mr Whitehead SC accepted that the
application for rescission was lodged within a reasonable time after
the judgment on the quantum
was handed down by Smit AJ. It goes
without saying that the focus of the argument on behalf of
Merryweather was the inordinate
delay between the issue of the
summons in April 2009 and the judgment on the quantum more than four
years later.
65.
The explanation put up by Scholtz is a
fairly simple one. As a young man in his early 20s he says he
relied throughout on
the advice of his father who had assumed
effective control of his son’s affairs in relation to the
litigation. Scholtz
contends that he had no reason to doubt the
advice given to him by his father based as it was in turn on the
advice of Senior Counsel
and other lawyers. Given that both men
knew unequivocally in May 2009 that the summons had been issued and
that attempts
were being made to effect service thereon on Scholtz,
his failure thereafter to enter an appearance to defend the matter
was manifestly
intentional. To that extent, his conduct can be
correctly described as “wilful”.
[12]
66.
In
Maujean
[13]
King J described the act of wilfulness thus:
“
More
specifically in the context of a default judgment ‘wilful’
connotes deliberateness in the sense of knowledge of
the action and
of the consequences, its legal consequences and a conscious and
freely taken decision to refrain from giving notice
of intention to
defend, whatever the motivation for this conduct might be”.
67.
Ms Gassner SC readily accepted this and
relied heavily on
Harris
for the submission that wilfulness
per
se
did not constitute an absolute bar
to rescission. She argued that the intentional conduct had to
be considered and evaluated
in the context in which it occurred.
68
It was argued that the younger man,
evidently less experienced in the ways of the world than his father,
cannot be faulted for following
the advice of the older man.
After all, it was said, Scholtz was impecunious and working overseas
and for him to have
taken independent legal advice from afar,
would have been costly and difficult. I did not understand Mr
Whitehead SC to seriously
take issue with the suggestion that the
father was really protecting his son and shielding him from the
ultimate consequences of
the litigation – a massive damages
award against an impecunious young man who is not likely to be able
to settle the debt
for many, many years to come.
69.
The issue in such circumstances seems to be
whether the proverbial sins of the father should be visited upon the
son. In entering
upon this enquiry one cannot loose sight,
however, of the fact that Scholtz was, at all material times, aware
of what the claim
was against him and what steps were being taken to
thwart it. Whatever the overbearing influence of his
father’s
conduct might have been on him, he clearly acquiesced
in the effort being taken to protect his interests. And, while
he may
have deferred to his father’s influence, he is
obvioulsly an intelligent and independent young adult who was clearly
capable
of looking after his own affairs: his overseas jaunt bears
testimony to this.
70.
The question that arises is whether the
father should have conducted himself differently. It appears
that his casual sounding
out of the late Van Schalkwyk SC (whom he
had come to know socially) was just that, rather than a formal
instruction to a lawyer
for advice on how to proceed. One would
have thought that Scholtz snr would have considered a claim for
R15,5m having been
initiated by a severely disabled young man as a
serious step and one which warranted an earnest and immediate
response, whatever
the legal niceties thereof may have been.
His response (seemingly aimed at later reliance on a strict
application of the
law) carried with it grave risks. Scholtz snr must
have been alive to those risks and he must bear the consequences
(both morally
and legally) of his decision.
71.
Ms Gassner SC (accepting that the Court was
being asked to consider hearsay evidence incapable of being verified)
submitted that
the alleged advice to Scholtz snr had the ring of
truth to it. Referring to a number of authorities on the
interpretation
of Rule 5 (Edictal Citation) read in conjunction with
Rule 4(2) (Substituted Service)
[14]
,
Ms Gassner SC argued that an application for leave to sue by way of
edictal citation was a necessary preliminary procedural step
preceding the institution of proceedings against a person who was
living (not necessarily domiciled) outside of the Republic.
She
said that the failure to follow Rule 5 was not a mere technical
formality which could be dispensed with.
72.
Counsel went on to argue that Zondi J had
been misled during the unopposed proceedings before him in the motion
Court when, in response
to a query from the Bench as to whether it
was not necessary to apply for leave to sue by way of edictal
citation, His Lordship
had been assured by counsel for Merryweather
that this was not necessary since Scholtz was still domiciled in
South Africa.
Ms Gassner SC pointed out that this was an
incorrect proposition of the law since the incidence of domicile is
irrelevant for purposes
of determining whether leave to sue by way of
edictal citation was necessary: it is simply a question of the
defendant’s
physical whereabouts at the time of service.
73.
Mr Whitehead SC accepted in argument that
he may have erred before Zondi J in moving for substituted service
when the law seems
to require an application for leave to sue by way
of edict. But given the fact that Scholtz no longer seeks to
set aside
the order of Zondi J, it is not necessary to decide the
point or whether condonation could and/or should have been granted.
However, in light of the cases referred to by Ms Gassner SC, it seems
possible that the late Van Schalkwyk SC may have given advice
consistent with Scholtz’s interpretation of the common law and
Rule 5 put forward by Ms Gassner SC and I consider it churlish
of
Merryweather to contend that advice in that regard was not given to
Scholtz snr. In the absence of any allegation that
this is a
statement of Machiaevellian proportions devised for purposes of
defeating this litigation, one has to ask where Scholtz
snr came upon
such evidence.
74.
As a consequence of this alleged
irregularity in the proceedings, Scholtz sought, as part of the
relief initially claimed, to set
aside the order of Zondi J as well.
The prayer for that relief was formally abandoned by Scholtz in March
2014 with the filing
of his heads of argument. As I understood
it, he accepted the advice of his legal representatives to do so to
avoid the potential
for any argument on prescription.
75.
What is important, however, is the
allegation that in August 2009 Scholtz snr was advised by the late
Van Schalkwyk SC to seek independent
legal advice in regard to the
irregularity around substituted service. When he did so,
Scholtz snr says he was informed that
the substituted service order
was not automatically invalid by virtue of the irregularity in the
obtaining thereof. He thereafter
consciously chose to ignore
this advice preferring the informal opinion of the late Van Schalkwyk
SC. Scholtz snr offers
the Court no explanation for this
decision: after all his informal advisor had specifically
suggest that he take such steps.
76.
Equally strange is Scholtz snr’s
averment that he did not tell his son of the receipt of the papers in
the substituted service
application, the order of Zondi J or the
formal advice furnished to him by the lawyer, who remains unnamed.
Having told his
son that the summons had now been formally served
upon him, it beggars belief that Scholtz snr would not have told him
that there
was now a Court order which authorised service on him.
His feeble excuse that he did not want to further distress an already
upset child is not worthy of serious consideration. Rather, one
must bear in mind that the claim would have prescribed within
a month
or so of service on Scholtz snr and that it would have been expedient
not to have taken any steps at that stage which may
have compromised
a later claim by Scholtz that the claim had prescribed.
77.
And, finally, Scholtz snr’s assertion
that, having come to hear of the fact that Thackwray and Hechter had
entered appearances
to defend and were intent on filing pleas, he
considered there to be no risk that a default judgment could be taken
against his
son, is similarly illogical and disingenuous. One
is left then with the abiding impression that Scholtz snr and his son
must
have discussed the matter in August 2009 and, conscious of the
fact that prescription was looming, the pair took a conscious
decision,
in the full knowledge of the consequences thereof, not to
oppose the claim.
78.
An attitude displaying a complete lack of
interest on the part of Scholtz and his father in opposing the
proceedings is further
borne out by the response to the order of
Olivier AJ in May 2010. Scholtz heard of the order from his
mother who showed him
a newspaper clipping in May/June 2010, but he
appears to have blissfully assumed that it did not apply to him
because of what his
father had told him a year before: that he
had heard informally from a lawyer-friend that the summons had to be
served on
his son personally in the UK. Scholtz, curiously it
must be said, did not revert to his father at that stage and ask him
what was going on, nor did he seek independent legal advice or ask
his father to do so on his behalf.
79.
Scholtz snr says that he too learnt about
the judgment on the merits from a media article when an
attorney-friend mentioned to him
that he had read about the case in a
local newspaper. Scholtz snr claims he did not seek out a copy
of the article, nor did
he discuss it with his son and, says he was
unaware of the fact that Scholtz was in the know. Scholtz snr
claims to have
thereafter discussed the matter with the same
attorney-friend (whom he again fails to name) and who is alleged to
have told him
to wait and see whether there would be any mention of a
judgment on the quantum since he was of the view that a judgment
without
any quantum could hardly be regarded as a judgment at all.
It would seem that the said attorney-friend was not familiar with
the
provisions of Rule 33(4) and the common practice in damages claims to
separate merits and quantum.
80.
The fact that Scholtz snr decided to adopt
a “
wait and see
”
approach, combined with his alleged failure to discuss the matter
with his son in the face of a judgment of this Court validly
granted,
is once again demonstrative of an attitude of disdain, evincing a
complete lack of interest in resisting the claim.
Further,
Scholtz snr’s reluctance to identify his sources of informal
legal advice, other than one who is now incapable of
deposing to an
affidavit to confirm the discussions and advice given, casts serious
doubt over the nature and extent of advice
purportedly received.
81.
When judgment on the quantum was finally
delivered three years later, Scholtz snr seems to have been impelled
to take action on
account only of the magnitude of the award.Once
again, no convincing explanation is forthcoming from either father or
son why they
then decided to contest an order which they had believed
all along was of no force and effect. After all, the claim was large
from
the outset (R15,5 million) and an award exceeding R10 million
could hardly have come to them as a bolt out of the blue.
82.
I agree with Mr Whitehead SC’s
submission that it is probable that both Scholtz snr and Scholtz knew
at all material times
after issue of the summons what was taking
place in relation to Merryweather’s claim. Indeed, even
at the stage of
the criminal proceedings, a casual (if not callous)
remark was made by Mr Booth to Merryweather during cross-examination
regarding
the prospect of an ensuing damages claim. Both
Scholtz snr and Scholtz are educated people and it is truly difficult
to believe
that they did not appreciate the seriousness of the
situation in light of the devastating consequences for Merryweather
of his
injury. Their behaviour, both collectively and
individually, is, to use the words of Miller JA in
Chetty
at 787H:
“
Indicative
of a high degree of indifference or unconcern … and is of a
piece with [their] apathetic and ineffectual approach
to the question
of putting up opposition … [to Merryweather’s claim]”.
83.
Ms Gassner SC urged the Court to exercise
its discretion in favour of Scholtz and to grant him the indulgence
now so eagerly sought.
She assured the Court that no technical
points or defences would be put up and alluded to the abandonment of
the relief sought
to set aside the order of Zondi J as a
demonstration of his
bona fides
.
Further, Counsel pointed to Section 34 of the Constitution and said
that all that Scholtz really wanted at this stage was
to exercise his
right to a fair public hearing. He seems to forget that he was
given that right in May and August 2009, and
he would have been
reminded thereof again in May/June 2010. On each occasion he
spurned it and his assertion of the right
now that a substantial
award has been made following upon Merryweather having exercised his
same right, seems to me to be rather
cynical.
PREJUDICE
84.
Undoubtedly, a Court exercising a
discretion in response to an application for rescission of judgment
will look at issues of prejudice.
[15]
To this end, on the resumption of argument on 15 April 2014, after
the two week Easter recess, Ms Gassner SC handed up a
draft order
which she asked the Court to adopt. The draft incorporated a
tender by Scholtz in respect of certain of Merryweather’s
costs
as follows:
84.1.
a tender to pay Merryweather’s costs
in the rescission application up to the date of the filing of
Scholtz’s heads of
argument on 6 March 2014. The choice
of this date was based on the intimation in the heads of argument
that Scholtz would
no longer rely on the relief sought to rescind the
judgment of Zondi J;
84.2.
a tender to pay Merryweather’s costs
in respect of the hearings on the merits and quantum, the latter to
exclude the qualifying
fees of the experts;
84.3.
all costs were to be payable on the party
and party scale.
85.
Scholtz’s tender was supported by a
suretyship put up by his father in which Scholtz snr bound himself as
surety and co-principal
debtor with his son in respect of the
latter’s tender of costs. The suretyship, however, goes a
little further than Scholtz’s
tender and includes an
undertaking to pay any party and party costs arising out of an order
of Court in respect of costs incurred
by Merryweather in the
rescission application after 6 March 2014. The suretyship is,
however, limited to the extent that it can
only be relied upon by
Merryweather in the event that rescission of the judgments of both
Olivier AJ and Smit AJ is granted.
Ms Gassner SC then argued
that the tender and suretyship alleviated any financial prejudice
that might accrue to Merryweather as
a consequence of the granting of
rescission.
86.
The tender certainly provides more solace
for Merryweather than prayer 6 in the notice of motion which asks
that such respondents
as oppose the application for rescission be
ordered to bear the costs of suit thereof jointly and severally.
Mr Whitehead
SC accepted that the tender removed a degree of
prejudice in relation to a re-trial of the case. He went on to
confirm that there
was no concern that any of the eyewitnesses, who
had already testified on the merits, would not be available at a
further hearing.
Similarly, all of the experts who had examined
Merryweather and/or prepared medico-legal and actuarial reports were
available to
testify, subject to their reports being updated.
87.
However, he pointed out that Merryweather
had been assisted by Counsel and attorneys who were acting in terms
of a contingency fee
arrangement and the ability of these
professionals to continue to hold themselves available was a source
of concern.
88.
The issues of contingency fees and
medico-legal expenses were dealt with in a supplementary affidavit
filed by Merryweather’s
attorneys at the request of the Court.
In that affidavit, (filed after judgment had been reserved and to
which Scholtz elected
not to reply), Ms Solomons explains how the
matter proceeded before Smit AJ and how the claim was reduced and the
particulars of
claim amended before the hearing after the Court had
informally indicated a preference for a particular scenario sketched
in an
actuarial report put up by Merryweather.
89.
Ms Solomons goes on to explain that on 19
November 2008 her firm concluded a contingence fee arrangement with
Merryweather under
the
Contingency Fees Act, 66 of 1997
. The
agreement specified the hourly rates to be charged by the senior and
junior attorneys handling the matter and records that
such hourly
rate would increase in accordance with any increase in the Law
Society tariff. Similarly, a daily fee and an
hourly rate were
agreed in respect of Mr Whitehead SC, which fees were also capable of
increase. A separate contingency fee arrangement
is yet to be entered
into in respect of the services rendered by junior counsel to Mr
Merryweather.
90.
Finally, Ms Solomons points out that 10
experts were consulted by Merryweather in respect of the quantum and
that their combined
costs to date amount to R158720,35. Save for two
experts who have jointly been paid R12 825,00, and in respect of
one of whom
R8 420,00 is still outstanding, the remaining
experts have also agreed to act on a contingency basis. The position
is therefore
that a sizeable sum of professional fees have been
incurred by Merryweather. The bulk of these fees, certainly the
medico-legal
experts, were incurred after the order of Olivier AJ and
would have been saved had Scholtz reacted to the news of that order
and
moved for a rescission at that stage. His failure to do so is
directly linked to the incurring of further costs.
91.
The amounts payable to counsel and the
attorneys are not set out in the affidavit of Ms Solomons but must be
assumed to be substantial
given that the matter has been on-going for
almost six years now. No doubt a substantial portion of those
legal fees have
been incurred in response to the application for
rescission, and an order for payment of those costs by Scholtz
(underwritten by
his father) will go some way towards reducing
Merryweather’s costs burden. However, the tender is only
made for costs
on the party and party scale and the suretyship is
similarly limited. Merryweather will therefore be saddled with
an attorney
client bill in respect of the rescission application and
this portion (the extent whereof is not known) will in all likelihood
be irrecoverable given Scholtz’s impecuniosity and the fact
that they are not covered by the terms of the suretyship.
92.
As I have already said, the limitation in
the tender to pay the fees up to the date of filing of the heads of
argument was based,
so Ms Gassner SC said, on the fact that
Merryweather and his legal team would then have known of the decision
not to apply to set
aside the order of Zondi J, and there was thus an
assurance that prescription would not be raised by way of a special
plea.
But the tender misses the point: there was no
concession in the heads that Merryweather’s costs up to the
date of filing
thereof would be covered by Scholtz and/or his
father. Merryweather therefore had no choice but to battle on
and incur the
substantial costs associated with three days’
argument, the tender only coming on the resumption of argument on the
third
day, after the recess.
93.
Further, and notwithstanding the terms of
the tender, the undertaking in respect of payment of the wasted costs
of the hearings
before Olivier AJ and Smit AJ will only realistically
be capable of quantification at the end of the matter when the extent
of
that which is wasted and that which is not, is known.
94.
Finally, the professional fees payable in
respect of the legal representatives under the
Contingency Fees Act
are
recoverable only in the event of success in the litigation. As
matters presently stand, those fees are recoverable by counsel and
the attorneys given the fact that Merryweather has been successful in
the litigation against Scholtz. The tender made by Scholtz
places the
lawyers in the invidious position that they are now expected to
forego their immediate entitlement to fees and to soldier
on in the
hope that something may be recoverable in the future. In light of the
fact that the contingency fee agreement with the
medico-legal experts
has not been placed before the Court, one can only assume that a
similar situation will apply to them.
95.
The consequences therefore of the supremely
indifferent attitude adopted by Scholtz and his father to what was
happening in the
litigation arena are broader than the direct
prejudice to Merryweather. It is not inconceivable, for example, that
the lawyers
and experts may be reluctant to spend more time and money
on the case, thereby prejudicing Merryweather’s prospects of
success
in a re-trial. Mr Whitehead SC in fact intimated as much at
the end of his argument.
96.
As I have already observed, much was made
in argument by Ms Gassner SC of the fact that Zondi J was misled into
granting an order
for substituted service. In light of the
abandonment of the relief sought against that order, I do not need to
finally determine
the point. But even if Scholtz is correct on this
score, the alleged irregularity is actually a red herring: there was
no real
prejudice occasioned to him thereby since he was in fact
informed twice of the issue of summons – first in May and later
in August 2009. Scholtz was given ample opportunity to take proper
legal advice and defend the claim if so advised. In light of
the
aforegoing, I am of the view that the prejudice to Merryweather far
outweighs the prejudice to Scholtz.
PARTIAL
RESCISSION
97.
Both counsel were
ad
idem
that the Court could refuse to set
aside the order of Olivier AJ on the merits, but grant rescission of
Smit AJ’s order on
the quantum.
[16]
I agree. There is manifestly no bar to such an order being made given
the fact that there are two separate judgments issued by
different
Courts years apart. Clearly, the reasons for the failure to enter an
appearance to defend initially may differ materially
from the reasons
for the failure to move immediately for the setting aside of the
merits order once Scholtz had knowledge thereof.
Accordingly, both
counsel suggested in the alternative that the Court may consider
granting rescission of the quantum order only.
98.
In my view, there are two potential
obstacles to this approach. Firstly, no
prima
facie
case has been put up by Scholtz
to show that the order of Smit AJ is excessive. Rather, Scholtz seeks
an opportunity to have the
quantum considered afresh and to attempt
to persuade the Court hearing the evidence on quantum that the
damages should be less
than those awarded by Smit AJ. It is not
difficult to conceive that a reduction in damages of just five or 10
percent would still
be a significant amount of money. There is of
course also the possibility, I would venture to suggest, that the
Court considering
the quantum afresh may be persuaded by Merryweather
to award a higher amount. But in the absence of any allegation that
the award
is excessive or wrong in any respects, I consider that
Scholtz holds no prospects of success in obtaining rescission on the
quantum
order and that the alternative relief should not be granted.
99.
A further obstacle is whether Scholtz has
given an adequate and reasonable explanation for his failure to
attack the Olivier AJ
order before the additional costs of
preparation on the quantum had been incurred.
100.
However, at the end of the day, the
entitlement to a partial rescission order and a reconsideration of
the merits is but one of
the considerations which must be taken into
account when a Court exercises its discretion to do justice to the
two litigants before
it.
CONCLUDING
REMARKS
101.
As the many cases referred to by counsel
show, in matters such as these the Court’s function is to
perform a balancing act
and to evaluate all of the relevant facts
before it in order that justice can be done between the parties. In
my view, the facts
in this case demonstrate, firstly, that Scholtz’s
prospects of succeeding on the merits are not strong. This is not to
say
that there are no such prospects leading one to conclude that
there is no
bona fide
defence to Merryweather’s claim. Rather, in light of the
conflicting versions put up in the criminal case and in this
application,
it seems that Scholtz has a long way to go to persuade a
court that he was not responsible for Merryweather’s injuries –
whether intentionally or negligently. This may account for his
manifest indifference throughout.
102.
Secondly, Merryweather has gone by the book
and with the assistance of committed legal representatives and
medico-legal specialists
who have offered freely of their time thus
far to help a severely disabled young man, has litigated responsibly.
His lawyers saw
to it that the issue of summons came to Scholtz’s
attention timeously before the commencement of prescription. When no
appearance
to defend was entered, Merryweather’s attorneys took
the prudent step of separating the actions and pursuing default
proceedings
against Scholtz, first on the merits to avoid unnecessary
expense, and then ultimately, when the default judgment was
unchallenged
for more than three years, by proceeding on the claim
for quantum.
103.
All the while, the Scholtzs’ knew
what was happening and, it must be said, that if they had had any
doubt as to the status
of the litigation, they knew which attorneys
represented Merryweather and could readily have contacted them. At
the very least,
they would have been in a position to monitor any
developments through their contact with Thackwray and Hechter, there
being no
suggestion that there was any bad blood between the young
men.
104.
Their indifference to Merryweather’s
plight and the refusal on the part of Scholtz to accept
responsibility for Merryweather’s
catastrophe is startling to
say the least. In my view their conduct falls into the category
described by the Court in
De Wet
[17]
:
having divested themselves of collective responsibility, and having
ostensibly relied on conflicting, informal, second-hand legal
advice,
they are really the authors of their own demise. Ultimately, I am not
persuaded that the application for resassia is brought
bona
fide
and in my view it would be
inequitable to visit Merryweather with the prejudice and
inconvenience flowing from such conduct.
In such circumstances,
the interests of justice will not be served by acceding to the
application for rescission, either in respect
of the judgment on the
merits or on the quantum.
COSTS
105.
As pointed out at the beginning of this
judgment, the joinder of Scholtz snr as a co-applicant in these
proceedings and a co-defendant
in the main action at the commencement
of the hearing on 20 March 2014, was intended to place Merryweather
in a position to ask
that Scholtz snr be directed to bear,
inter
alia
, the costs of the application for
rescission in the event that it did not succeed.
106.
In the affidavit supporting the application
for joinder, Merryweather pointed to his own financial circumstances
which he described
as “dire” and which necessitated
pro
bono
legal assistance on a contingency
basis. He went on to deal with Scholtz’s financial position,
which he described as analogous
to that of an insolvent. He directed
the Court’s attention to the fact that Scholtz replied to his
request for security for
costs in the sum of R250000,00 by saying
that he was not insolvent, had minimal debt, but also had minimal
assets. Scholtz claimed
that he was unable to put up security and his
position is no doubt consonant with that of many average young South
African students.
107.
Indeed, in the newspaper article in the
Peoples Post of 25 May 2010, referred to earlier and which Scholtz
said his mother showed
him in the UK, Merryweather is quoted as
having remarked somewhat philosophically in relation to the judgment
on the merits that
it was a win on paper but that it was another
thing to obtain satisfaction of the judgment debt.
108.
Scholtz did not file an affidavit in
response to that filed in support of the application for joinder
while Scholtz snr filed a
notice to abide.
109.
Counsel were in agreement with the approach
in principle to the joinder of Scholtz snr. It is said that as a
person effectively
controlling the litigation, or as Mr Whitehead SC
put it “calling the shots”, he is liable to be mulcted in
the costs
attributable to his impecunious son.
[18]
If on the other hand he was what has been termed a “pure
funder” of the litigation, he is generally immune from such
an
order.
[19]
110.
The judgment of Louw J in
EP
Property
contains a thorough exposition
of the development of our law on this point in line with developments
in the Commonwealth.
[20]
It is a judgment which I intend to follow.
111.
Louw J summarised the guidelines set out in
Dymocks
thus:
“
1. Such
costs orders are exceptional in the sense that they applied to cases
where the order is considered against a party who does
not fall into
the ordinary run of cases where parties pursue or defend claims for
their benefit and at their own expense. The ultimate
question in any
such ‘exceptional’ case is whether in all the
circumstances it is just to make the order.
2. Generally,
the discretion will not be exercised against ‘pure funders’
(i.e. funders with no personal interest in
the litigation, who do not
stand to benefit from it, are not funding it as a matter of business,
and in no way seek to control
its course). In such cases the usual
approach is to give priority to the public interest in the funded
party getting access to
justice over that of the unsuccessful
unfunded party recovering his costs and so not having to bear the
expense of vindicating
his rights.
3. Where,
however, the non-party not merely funds the proceedings but
substantially also
controls
or at any rate is to benefit from them, justice will ordinarily
require that, if the proceedings fail, he will pay the successful
party’s costs. The non-party in these cases is not so much
facilitating access to justice by the party funded as himself
gaining
access to justice for his own purpose. He himself is ‘the real
party’ to the litigation, the party to the litigation
‘in
all but name’, or, if not the only ‘real party’,
then ‘a real party in … very important
and critical
respects’.”
(Emphasis
added)
112.
In
EP Property
there was an attempt to hold a certain Ms Naidoo responsible for the
opposing party’s costs. In confirming her liability
Louw J said
the following at 163I:
“
[82] In
my view the circumstances relevant to the exercise of the discretion
in this case are, firstly, that Naidoo is the ‘real
party’
to the litigation.She not only funds the whole of the litigation but
is also in full control thereof and stands to
benefit substantially
if the funded party is ultimately successful.”
113.
Ms Gassner SC urged the Court to find that
Scholtz snr fell into the “pure funder” category, while
Mr Whitehead SC argued
to the contrary. The facts of this case are
fairly unambiguous as far as Scholtz snr’s role in the
litigation is concerned.
Firstly, we see him stalling service of the
summons in May 2009, no doubt to protect his son.Then in August 2009
he informally
sought out legal advice and, he says, took it upon
himself to withhold vital information garnered therefrom from his son
in relation
to the application and order for substituted service.
114.
When, in May 2010, the order of Olivier AJ
came to his attention, he once again took informal advice to ensure
that his son was
not exposed to litigation. Immediately after the
judgment on the quantum was handed down, Scholtz snr took the
initiative, consulted
attorneys on the way forward and it was he who
attended the first set of consultations. Manifestly, Scholtz snr had
an interest
in seeing to it that his son was not saddled with a huge
debt at such a young age. The consequences for Scholtz snr from the
perspective
of his common law duty of support towards his son are
obvious.
115.
Ms Gassner SC conceded in argument that the
father, in ignoring the sage advice of Senior Counsel to obtain a
proper opinion, had
behaved negligently and committed an error of
judgment. In so doing it was Scholtz snr, and he alone, who was
responsible for the
protraction of the matter. Had he taken proper
advice it is conceivable that a default judgment may not have been
taken against
his son, but certainly that an award on the quantum
could have been avoided.
116.
I am therefore satisfied that justice
demands that Scholtz snr be held liable, jointly and severally with
his son, for the costs
of this application.
117.
Mr Whitehead SC asked that the costs be
awarded on the scale as between attorney and client. He pointed to
various factors to which
I have already referred, which he said were
demonstrative of a lack of
bona fides
.
He asked the Court to express its displeasure at the way in which
Scholtz snr attempted to subvert the legitimate claims of an
indigent
paraplegic and to grant such a costs award.
118.
I am not persuaded that the conduct of
either father or son, in relation to this litigation, is sufficiently
reprehensible to warrant
a punitive costs order. His earlier
manipulation of the process and the ostensible withholding of
information from his son are
factors which are relevant to the
decision to make a costs order against Scholtz snr in the first
place. His conduct in relation
to the litigation, once he was
properly advised by his current legal team, was not such as to
warrant any rebuke from the Court.
His acceptance ultimately of the
responsibility which this litigation embraces is borne out, for
example, by the instruction to
the legal representatives not to press
for the rescission of the order of Zondi J, which would have opened
the door for a plea
of prescription, as well as the provision of an
extensive suretyship to cover the potential costs attributable to his
son in the
event of success. Costs will therefore be taxed on the
ordinary scale.
ORDER
OF COURT
119.
In the circumstances the application is
dismissed with costs, such costs to be borne by the first and second
applicants jointly
and severally.
GAMBLE, J
[1]
Silber v Ozen Wholesalers (Pty) Limited
1952 (2) SA 345
(A);
De Wet and Others
v Western Bank Limited
1979 (2) SA
1031
(A);
Chetty v Law Society,
Transvaal
1985 (2) SA 756 (A).
[2]
Silber
at
352H-353A;
De Wet
at 1042G-H and
Chetty
at 765A-B.
[3]
Chetty
at
765A-C.
[4]
Government of the Republic of South Africa v
Fick
2013 (5) SA 325
(CC) at 350D.
[5]
351C para [89].
[6]
Colyn v Tiger Food Industries Limited
2003 (6) SA 1
(SCA) at 10A para [12].
[7]
9E para [11].
[8]
Harris v Absa Bank Limited t/a Volkskas
2006 (4) SA 527 (T).
[9]
Moseneke DCJ concurred with the Chief Justice in
Fick
.
[10]
This is evidently a reference to a dangerous type
of rugby tackle in which the tackler lifts his opponent off the
ground and raises
the opponent’s legs above the horizontal so
that he is dumped head-first onto the ground.
[11]
Grant v Plumbers (Pty) Limited
1949
(2) SA 470
(O) at 477.
[12]
The Shorter Oxford English Dictionary defines
“wilful”, in relation to an action as “
done
on purpose; deliberate; intentional …”.
[13]
Maujean t/a Audio Video Agencies v Standard
Bank of SA Limited
1994 (3) SA 801
(C)
at 803H-I.
[14]
Steinberg v Steinberg
1962 (4) SA 321
(E);
Walster v Walster
1971 (4) SA 442
(E);
Erasmus,
Superior Court Practice
, B1-30A.
[15]
De Witts Auto Body Repairs (supra)
at 714D.
[16]
Reference was made to cases such as
GD
Haulage (Pvt) Limited v Mumurgwi Bus Service (Pvt) Limited
1980 (1) SA 729
(ZR AD);
SOS
Kinderdorf International v Effie Lentin Architects
1993 (2) SA 481
(Nm HC);
Silky Touch
International (Pty) Limited and Another v Small Business Development
Corporation Limited
[1997] 3 All SA
439
(W) and
Revelas and Another v
Tobias
1999 (2) SA 440 (W).
[17]
At 1044C-E.
[18]
EP Property Projects (Pty) Ltd v Registrar of
Deeds, Cape Town and Others
2014 (1)
SA 140
(WCC); Confirmed on appeal
vide
Naidoo v EP Property Projects (Pty) Ltd
[2014]
ZASCA 97
(31 July 2014).
[19]
Hamilton v Al Fayed (No. 2)
[2002] EWCA Civ 665
;
[2002] 3 All ER 641
(CA);
Price
Waterhouse Coopers Inc v National Potatoe Co-op Ltd
2004 (6) SA 66
(SCA);
Price
Waterhouse Coopers Inc v IMF (Australia)
2013
(6) SA 216 (GNP).
[20]
See, for example,
Carborundum
Abrasives Ltd v Bank of New Zealand (No. 2)
[1992] 3 NZLR 757
(HC);
Dymocks
Franchise Systems (NSW) Pty Ltd v Todd and Others
[2004] UKPC 39
;
[2005] 4 All ER 195
(PC);
Arkin v
Borchard Lines Ltd
[2005] EWCA Civ
655
;
Jeffrey and Katauskas Pty
Ltd v SST Consulting Pty Ltd
[2009]
HCA 43.