Enoch Mgijima Local Municipality v Milowo Trading Enteprise (528/2018) [2018] ZAECGHC 48 (12 June 2018)

IN THE HIGH COURT OF SOUTH AFRICA

EASTERN CAPE DIVISION, GRAHAMSTOWN

CASE NO: 528/2018

Date Heard: 29 May 2018

Date Delivered: 12 June 2018

In the matter between:

ENOCH MGIJIMA LOCAL MUNICIPALITY

Applicant

and

MILOWO TRADING ENTERPRISE

Respondent

JUDGMENT

JAJI J:

[1] This is an opposed application brought on urgency for the suspension of execution pending the outcome of the application for rescission of judgment by default obtained on 20 March 2018.

[2] The application for rescission is set down to be heard on the same day as the application for the suspension of the writ of execution.

BACKGROUND

[3] (i) On 13 October 2017, a settlement agreement marked “POC2” of the

papers was signed between representatives of the respective parties. The amount as per the settlement was R21 050 763.05 to be settled in instalments over three (3) months i.e. 20 October 2017, 30 November 2017 and 15 December 2017

(ii) Applicant failed/refused or neglected to pay;

(iii) Demand was sent by respondent and finally summons were served;

(iv) Ultimately, judgment by default was obtained and granted on 20 March

2018;

(v) Writ of execution was issued followed by a notice of sale in execution;

(vi) Simultaneously or to be heard on the same day, applicant brought a Rule

42(1) and application for suspension in terms of Rule 45(a), pending the Outcome of the rescission application;

(vii) Respondent filed opposition to the Rule 45(a) on 22 May 2018;

(viii) Appellants in the rescission application contended that Grahamstown

High Court had no jurisdiction to hear the matter. In terms of the Superior Courts Act in respect of time allowed for entering appearance was one (1)

month if summons were served at a place more than 150km from the court out of which it was issued;

(ix) Because of the above, respondent / plaintiff ought to have allowed applicant/defendant

one month to enter appearance to defend; this was basically the nub

of the application in terms of Rule 42(1)(a).

[4] On the same day of the hearing at 10h05 (29 May 2018) the Rule 45(A) which was supposedly to proceed simultaneously with Rule 42(1)(a) was withdrawn with a normal tender for costs as taxed or otherwise.

[5] Interestingly, respondent had filed heads of argument in respect of the Rule 45(A) application at 09h50 on 28 May 2018, a day before the notice to withdraw Rule 45(A) praying for both applications (Rule 45A and Rule 42(1)(a)) to be dismissed on a punitive costs order because of waste of court time and abuse of court process.

[6] The Rule 45(A) was brought on urgent basis pursuant to a certificate of urgency dated 21 May 2018. Various grounds of urgency are raised especially paragraphs 5, 6, 7 and 8 of the certificate of urgency.

[7] Matter was argued on 29 May 2018 on the following grounds:

APPLICANT

(i) It contended that it had filed the notice of withdrawing the Rule 45(A) application with a tender for costs;

(ii) It referred to Rule 19(2) of the Uniform Rules and contended that applicant was an organ of state and ought to have been given ten (10) days more for compliance with dies. Judgment was granted on 20 March 2018. It claimed that it should have been twenty (20) days and accordingly judgment was erroneously

granted;

[8] (i) The respondent filed heads of argument as well as supplementary heads

of Argument;

(ii) It submitted that the case advanced by the applicant was that this court had no jurisdiction. That is the case of the applicant in the rescission application;

(iii) The applicant was erroneously advised that Queenstown falls under jurisdiction of Bhisho. This court has jurisdiction to hear matter

arising in any part of the Eastern Cape. It relied on section 24 of the Superior Courts Act. The respondent submitted that once the Grahamstown Court is found to have jurisdiction as it is the case, to hear this matter, the provisions of section 24 of the Superior Courts Act as relied by applicant do not apply. It contended that Queenstown falls and always has fallen within the original jurisdiction of this court;

(iv) It reiterated that the application for the interdict must fall once the application for rescission fails. It contended that the applications were an attempt to delay what is lawfully owing to the respondent and cannot be bona fide;

(v) The respondent submitted that case argued in court by applicant and subsequent referral to Rule 19(2) was a new case. It submitted that the case ought to have been placed before court not in argument. In the supplementary heads of argument, it stated that the issue of twenty (20) days which was entitlement for organs of state after service of summons to enter appearance to defend and that applicant had been afforded ten (10) days was never the case for the applicant;

(vi) The respondent averred that in any event the submission by the applicant was without merit. Rule 19(2) expressly mentions those state defendants entitled to twenty (20) days for entering appearance to defend and there is no reference to local authorities. In any event, applicant’s case had to be made on founding papers. There was no point in postponing the application and the court was referred to the matter of Ex Parte SAIGA Properties (Pty) Ltd 1997 (4) SA 716 E where it was held that a defective application had to be dismissed. At page 718, he stated “. . . When it was called again, Mr Nettelton conceded that the applicant had infact failed to make out a case for the relief sought and suggested that the matter should be postponed so as to enable it to die a natural death.” Further, at page 721, the court held “As a result the application is fatally defective. Mr Nettelton’s suggestion that the matter be postponed so as to enable it to die a natural death has nothing in logic to commend it. If an application is fatally defective, it should be dismissed as no useful purpose would be served by prolonging its life by a postponement.” The court proceeded to say “Bearing that in mind, the best course would seem to be to refuse relief and dismiss the application.”

(vii) It is on those basis that applicant argued that both applications fall to be dismissed with costs.

[9] In reply, the applicant contended that it was entitled to raise a point of law. It claimed that judgment was granted erroneously. The prejudice to be suffered by the applicant was significant.

CONCLUSION

[10] Clearly, the applicant was wrong to contend that this court had no jurisdiction to hear the matter. That ground of rescission had to fall away. It is trite that a party makes his own case on founding papers. Hence, the applicant, under the guise of raising a point of law sought to seek refugee under Rule 19(2). This, clearly, was designed to raise a new defence in argument. Be that is it may, Rule 19(2) states “In action against any Minister, Deputy Minister, Administrator, Officer or Servant of the state, in his official capacity, the state or the administration of province, time allowed for delivery notice of intention to defend shall not be less that twenty (20) days after service of summons, unless the court has especially authorised a shorter period.”

[11] Now, the applicant claims that the local authorities as organ of state are mentioned under this rule which is not correct. This ground as well as the contention that judgment was erroneously granted falls away.

[12] What is the applicant left with: Rule 45(A) application is withdrawn and Rule 42(1)(a) must fail as well. Once the Rule 42(1)(a) application fail, automatically Rule 45(A) application falls away.

[13] Clearly, on the facts, it will not assist the applicant to postpone the Rule 42(1) application if one has regard to what the court held in the Ex Parte SAIGA matter.

[14] Defences raised by applicant given the history of the matter are dilatory and delaying tactics. This type of state of affairs is regrettable and unacceptable that after a lapse of period of three (3) months, the legal team of applicant did not find it meet and right to challenge respondent’s case instead raised dilatory defences and unwarranted points of law.

[15] The applicant, if he was genuine to raise a point of law, should have referred to Rule 6(5)(d)(iii) “if he intends to raise any question of law only shall deliver his intention to do so within the time stated and setting forth such

question.”

[16] The inescapable conclusion in this matter is that both applications are dismissed with costs on attorney and client scale. The court has to show its displeasure with this kind of litigation. It is an abuse of court’s process and a waste of court’s time. The applicant has massive resources, could afford the best legal minds and if it wanted to defend the matter, at least it could have provided better defence.

[17] Where it is clear that the other party is being vindictive and has defended the matter to annoy or to force the other to incur unnecessary costs which it would normally not have incurred, the punitive costs order would be justifiable in the circumstances.

[18] Accordingly, I make the following order:

(i) Both applications, Rule 45(A) and Rule 42(1)(a) are dismissed with costs on an attorney and client scale.

N.P JAJI

JUDGE OF THE HIGH COURT

Appearances

For the applicant : Mr Nettelton

Instructed by

: MESSRS NETTELTONS

118 A High Street

GRAHAMSTOWN

(REF: MR NETTELTON)

For the respondent : Adv Smuts SC

Instructed by

: WHEELDON RUSHMERE AND COLE INC.

119 High Street

(MR BRODY/Glyn/S20905)