Basadi Peniel Trading CC V ABSA Bank Limited and Another (3244/2020) [2023] ZAMPMHC 2 (20 January 2023)

IN THE HIGH COURT OF SOUTH AFRICA

MPUMALANGA DIVISION (MIDDELBURG LOCAL SEAT)

CASE NO: 3244/2020

REPORTABLE: NO

OF INTEREST TO OTHER JUDGES:NO

REVISED

DATE: 20/01/2023

In the matter between:

BASADI PENIEL TRADING CC APPLICCANT

And

ABSA BANK LIMITED FIRST

RESPONDENT

SHERIFF OF THE HIGH COURT, EMALAHLENI SECOND RESPONDENT

JUDGMENT

LANGA J:

[1] This is an application for the rescission of a summary judgment which was granted by this court on 28 May 2021. The matter arises out of some instalment sale agreements between the applicant and the first respondent in terms of which the applicant purchased 2 tractors and 8 tippers from the first respondent.

[2] On 28 October 2020 the first respondent, plaintiff in the main action, issued summons against the applicant as the first defendant, together with three other defendants, claiming breach of the agreement in that the defendants failed to punctually pay the instalment amounts in respect of the assets purchased in terms of the agreements. The first respondent cancelled all the agreements in respect of these assets and claimed certain amounts owing based on the valuation of the assets. The applicant filed a notice of intention to defend and subsequent a plea. When the first respondent filed an application for summary judgment the applicant did not file any opposing papers to resist the summary judgment.

[3] However, when the matter was heard on 28 May 2021, the applicant, who was represented, made an unsuccessful application for the postponement of the matter. The court, after refusing the application for a postponement, granted the application for summary judgment. This prompted the applicant to apply for leave to appeal which was followed by this application on 15 November 2021. On 22 November 2021 the first respondent served a notice to oppose and thereafter filed the answering affidavit on 24 March 2022. The applicant, however, did not file any replying affidavit and did not prosecute the application for rescission until the first respondent enrolled the matter for hearing.

[4] The first respondent in the meantime also applied for the condonation of the late filing of its answering affidavit. The reasons advanced by the first respondent in respect of the late filing of the answering affidavit is that the process of obtaining the transcribed record of the proceedings in respect of the summary judgment application as well as the leave to appeal caused the delay in this matter. It further stated that the festive holidays also added to the delay in the filing of the answering affidavit and that it could therefore only obtain the record on 26 January 2022 although it was still incomplete. The full transcribed record was only obtained on 01 March 2022. The explanation advanced by the first respondent in the circumstances appears to be reasonable and acceptable to justify the granting of the condonation as prayed for and it is accordingly granted.

[5] I now revert to the application for rescission which was brought in terms of Uniform Rule 42 (1) (a), alternatively, Rule 31 (2) (b) of the Uniform Rules of Court. I will first deal with Rule 31 (2) which provides for the following:

(a) Whenever in an action the claim or, if there is more than one claim, any of the claims is not for a debt or liquidated demand and a defendant is in default of delivery of notice of intention to defend or of a plea, the plaintiff may set the action down as provided in sub-rule (4) for default judgment and the court may, after hearing evidence, grant judgment against the defendant or make such order as it deems fit.

(b) A defendant may within 20 days after acquiring knowledge of such judgment apply to court upon notice to the plaintiff to set aside such judgment and the court may, upon good cause shown, set aside the default judgment on such terms as it deems fit.

[6] It is clear from the simple interpretation of this rule that it envisages a situation where the respondent would have been in default in which case he would have to give a reasonable explanation for the default. He must also prove that he has a bona fide defence which has prospects of success. Rule 31 therefore deals with instances where the application for default judgment was granted in the absence of the respondent. It is thus a requirement for the purposes of Rule 31 (2) (b) that the respondent be absent when the default judgment is granted.

[7] It is common cause that in this case the applicant, who was the respondent in the summary judgment, was not absent from court as it was represented by an attorney and counsel who were present when the matter was argued. The applicant was therefore not in default and is accordingly not entitled to rely on Rule 31 (2) as it cannot be said that it was absent. The applicant’s contention based on this rule therefore has to fail.

[8] So on the aspect of his alleged default, it is clear that the applicant was at all times, and in particular when the summary judgment was granted, legally represented and the court granted the summary judgment after dismissing the applicant’s arguemnts. Instead of filing the necessary papers resisting the summary judgment, the applicant attempted to have the application postponed. Although it is common cause that the applicant failed to file an affidavit resisting the summary judgment, this does not mean that it was in default. The applicant would have been considered to be in default if it had not been served with the notice of hearing and had no knowledge of the hearing date or was not legally represented at the hearing. It should be noted that the applicant did not even attempt to seek leave to adduce oral evidence as is provided for in Rule 32 (3) despite having been legally represented.

[9] As regards the applicant’s reliance on the common law, it is trite that in order to succeed, the applicant must show sufficient cause for the granting of the application for rescission. The applicant must therefore show inter alia that there is a reasonable explanation for the default, that the application is made bona fide and that it has a bona fide defence which prima facie has some prospects of success. As in the case of Rule 31 (2) (b), under the common law the applicant must also demonstrate that it was absent when the judgment was granted in order to succeed with the rescission of the judgment. As stated above, the applicant in this matter was not absent or in default as he was legally represented when the judgment was granted. The applicant has therefore essentially failed to prove that it was in default or absent when the judgment was granted and therefore cannot rely on the common law. However, the applicant has further failed to show that it has prospects of success in this matter.

[10] As stated in the preceding paragraphs, the applicant relies in the alternative on Rule 42 of the Uniform Rules. Having jettisoned the applicant’s argument in so far as it based on Rule 32, what remains to be determined is whether the applicant was entitled to rely on Rule 42. Rule 42, which deals with the variation and rescission of orders, provides 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.

[11] This rule clearly envisages the rescission of orders or judgments where the judgment or order was erroneously sought or erroneously granted; or in which there is an ambiguity, omission or patent error as well as orders granted as a result of a mistake common to the parties. These jurisdictional requirements of the section have not been satisfied in this case. The applicant has failed to show that the judgment in this matter was sought or granted erroneously, nor did it prove that that it contains an ambiguity, omission or patent error. It is also clear that the judgment did not result from a common mistake between the parties. Accordingly Rule 42 (1) does not find application in this matter and therefore the application, in so far as it relies on this rule, also fall to be dismissed.

[12] The following paragraphs from Joob Joob Investments (Pty) Ltd v Stocks Mavundla ZZEK Joint Venture 2009 (5) SA 1 (SCA) are relevant to applications of this nature.

[31] So too in South Africa, the summary judgment procedure was not intended to 'shut (a defendant) out from defending', unless it was very clear indeed that he had no case in the action. It was intended to prevent sham defences from defeating the rights of parties by delay, and at the same time causing great loss to plaintiffs who were endeavouring to enforce their rights.

[32] The rationale for summary judgment proceedings is impeccable. The procedure is not intended to deprive a defendant with a triable

issue or a sustainable defence of her/his day in court. After almost a century of successful application in our courts, summary

judgment proceedings can hardly continue to be described as extraordinary. Our courts, both of first instance and at appellate

level, have during that time rightly been trusted to ensure that a defendant with a triable issue is not shut out. In the Maharaj case at 425G - 426E, Corbett JA was keen to ensure, first, an examination of whether there has been sufficient disclosure by a defendant of the nature and grounds of his defence and the facts upon which it is founded. The second consideration is that the defence so disclosed must be both bona fide and good in law. A court which is satisfied that this threshold has been crossed is then bound to refuse summary judgment. Corbett JA also warned against requiring of a defendant the precision apposite to pleadings. However, the learned judge was equally astute to ensure that recalcitrant debtors pay what is due to a creditor.

[13] In this case the court, correctly found in my view, that the defences raised by the applicant in its plea were not only bad in law but were a deliberate ploy to delay and frustrate the first respondent from obtaining judgment. The one defence raised by the applicant is that it was not given sufficient time to save the agreements by rectifying the breaches thereof. The applicant in effect did not deny the breach in the sense of defaulting to make payments as per agreement but argued that the first respondent was obliged to reinstate the agreements as if the provisions of the National Credit Act were applicable to this matter. It is, however, clear that in terms of the agreements the first respondent was entitled to immediately cancel the agreements in the case of default which is not denied by the applicant.

[14] It is further clear from the founding affidavit filed in support of the application for the rescission of the summary judgment that the applicant sought the rescission in order to be able to settle the arrears. In addition, it should be noted that the applicant alleges in its plea that there was an agreement between the parties to pay and settle the arrears. The latter defence is, however, not consistent with the defence raised in the application, namely, that the first respondent was obliged to first grant the applicant a remedy period within which it could rectify the breach. As the breach was not disputed by the applicant, this defence was correctly dismissed by court.

[15] The second defence raised by the applicant is that the first respondent closed the accounts and by so doing made it impossible for the applicant to pay its monthly instalments in terms of the agreements. While this could constitute a good defence if established, it is very surprising that the applicant did not raise it in its plea and only raised it in the application for rescission. Despite this claim, the applicant has not averred how it was prevented from paying by the closure of the accounts as well as what steps, if any, it took in order to address this situation.

[16] Additionally, no averment was made by the applicant that it attempted any alternative means to make payment and what these means are. From the papers it can safely be concluded that the reason for non-payment is that the applicant did not have sufficient funds to comply with its contractual obligations as some of the payments were rejected due to insufficient funds in the accounts of the applicant. It is accordingly clear that this defence is also not bona fide and was also correctly dismissed by court.

[17] Furthermore, the suggestion by the applicant that it was prejudiced cannot assist it in this application as prejudice is not per se a requirement in an application for rescission. Furthermore, although the applicant now argued that the application should be granted and that it will provide security Rule 32 (2) (a), it is however clear that when it had the opportunity to do so, the applicant did not resort to Rule 32 (2) (a) and provide such security. The court was therefore in my opinion correct in concluding that the summary judgment should be refused.

[18] In conlusion this court is satisfied that the applicant has not made out a case for the granting of the application for the rescission of the judgment granted on 28 May 2021. The application should accordingly be dismissed with costs. However, what the court has to determine is the type of costs. The first respondent has submitted that costs on a punitive scale ought to be awarded. I am not satisfied with the argument advanced by the first respondent in this regard. I am of the view that the first respondent has not made out a case for the awarding of costs on attorney and client scale. The costs will therefore be awarded on a party and party scale.

Order

[17] In the result I make the following order.

The application for the rescission of judgment is dismissed with costs.

__________________________

MBG LANGA

JUDGE OF THE HIGH COURT

Appearances:

For the Applicant/Defendant: Advocate Z Marx

This judgment was handed down electronically by circulation to the parties’ representatives by email. The date for hand-down is deemed to be the 20 January 2023 at 10h00.