Eskom Holdings SOC (Pty) Ltd v Isilungo Business Enterprises CC and Another (M229/2017) [2021] ZANWHC 54 (7 June 2021)

SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

IN THE HIGH COURT OF SOUTH AFRICA

NORTH WEST PROVINCIAL DIVISION, MAHIKENG

Reportable: YES / NO

Circulate to Judges: YES / NO

Circulate to Magistrates: YES / NO

Circulate to Regional Magistrates: YES / NO

CASE NUMBER: M229/2017

In the matter between:

ESKOM HOLDINGS SOC (PTY) LTD

Applicant

AND

ISILUNGO BUSINESS ENTERPRISES CC

First Respondent

MAFIKENG LOCAL MUNICIPALITY

Second Respondent

JUDGMENT

DJAJE J

[1] The applicant brought an application for rescission in terms of Rule 42(1) (a) of the Uniform Rules of Court. The order sought to be rescinded was granted against the applicant on 5 December 2019. Condonation for the late filing of the applicant’s heads of argument was granted.

[2] The first and second respondents had concluded a contract of sale of business premises known as Erf [....], Mafikeng Industrial Site. The first respondent applied to be supplied with electricity at the premises and when such was not supplied, there was a complaint lodged with the applicant. The applicant informed the first respondent that it was not able to connect electricity due to the inferior quality of the network in the area of the premises which was owned by the second respondent. Further that they were working on the defects on the line to hasten the hand over from the second respondent to the applicant. This was in April 2015. In September 2015 the first respondent applied again for the supply of electricity. The applicant then informed the first respondent that it will be required to pay for the installation of a new network that was compliant with the standard of the applicant. The first respondent was opposed to paying the quotation as provided by the applicant.

[3] The issue remained unresolved between the applicant and the respondents as the second respondent was not prepared to pay for the costs of a new network and similarly the first respondent was also not prepared to pay for such costs. Meanwhile in January 2018 the first respondent sold the business premises to another company known as Del Catto. The said company after negotiations with the applicant, paid for the connection fees and the network infrastructure and electricity were supplied to the business premises

in November 2018 now under the new owner.

[4] The first respondent in May 2017 had initiated an application against the applicant and the second respondent for the supply of electricity to its business premises. The applicant filed a notice of intention to oppose the application and no answering affidavit was filed by the applicant. The second respondent filed opposing papers. On 5 December 2019 the matter was heard on the opposed roll and the following order was granted:

“1. THAT: The Second Respondent (applicant herein) by and through its relevant employees/functionaries be ordered supply electricity to the property known as Erf [....] Extension [....] Mahikeng situated at [....] Bessemer Street Mahikeng within 20 days from service of this order;

2. THAT: Second Respondent pays the Applicants and First Respondent’s costs.”

[5] The second respondent had raised a point in limine of non-joinder of the company that bought business premises from the first respondent. At the commencement of the hearing the point in limine was abandoned and not dealt with.

[6] It is the applicant’s case that this application is in terms of Rule 42(1) (a) of the Uniform Rules in that the judgment was erroneously sought and granted. The basis for such being that on the date of the main application the matter was moot as electricity was already connected to the premises and the first respondent was no longer the owner of the said premises. The applicant argued that the First respondent failed to inform the Court on 05 December 2019 of such developments and as such, the court would not have granted the order as stated in paragraph [4] above. Consequently, there would have been no cost order against the applicant.

[7] It has been argued by the applicant that the order was granted in its absence as no notice of set down was served. All that the applicant had filed was a notice of intention to oppose.

[8] Applicant submitted that the first part of the order is ineffective as the electricity was already connected when the application was heard. As far as the issue of costs is concerned, the applicant argued that it has been adversely affected. Firstly that in the main application the second respondent had not asked for costs against the applicant and were only successful in opposing the application by the first respondent. The second issue raised was that the applicant did

not oppose the main application as no opposing affidavits were filed and the first respondent had only asked for costs against any party opposing the application.

[9] In contention, the first respondent argued that the applicant does not dispute that they had received the application and filed a notice of intention to oppose. Further that, the said notice to oppose was not withdrawn. In relying on Rule 6(5) (d) of the Uniform Rules of Court, the first respondent argued that the applicant had opposed the main application as the Rule provides that a party opposing the grant of an order sought in the notice of motion shall give a notice in writing. It is for that reason that the first respondent submitted that the applicant was opposing the main application and the court properly exercised its discretion in granting a costs order on an opposed basis.

[10] The first respondent’s submissions were that in the main application it had locus standi to bring the application as the owner of the premises. Secondly, the applicant having a duty to supply electricity, would have done so had the first respondent made the required payment to the applicant. However, the applicant does not explain why it did not participate in the main application proceedings and disclose to the court hearing the main application why it could not supply electricity to the first respondent’s premises. It is the first respondent’s case that the applicant has not met the requirements to have the judgment of 5 December 2019 rescinded on the basis that it was erroneously sought and granted.

[11] The second respondent opposes the rescission application as well. It was argued that the applicant had knowledge prior to the hearing of the main application that electricity had been supplied to the premises under the ownership of a new entity but failed to participate and inform the court of such developments. The submission by the second respondent was to the effect that failure by the applicant to inform the court in the main application about the developments does not amount to a mistake and therefore rescission in terms of Rule 42(1)(a) is not applicable. The applicant wilfully decided not to participate in the main application and cannot now claim that there was an error by the court or that the order was sought erroneously.

[12] The other issue argued by the second respondent was that the applicant delayed in bringing this rescission application. It was submitted that the applicant has not furnished a reasonable explanation why the rescission application was not launched timeously. According to the second respondent, the applicant claimed to have gained knowledge of the order in May 2020 when they were served with a notice of taxation but took three months to bring this application.

[13] On the issue of costs the second respondent argued that they successfully opposed the main application and therefore entitled to costs. Further that the applicant knew that it had entered into an agreement with the new owner to supply electricity to the premises but failed to file and affidavit informing the second respondent of such an agreement. Second respondent contended that the main application could not have proceeded if the applicant had brought such information to the attention of the Court.

[14] Rule 42(1) (a) of the Uniform Rules of Court provides that:

“Variation and Rescission of Orders

(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;

[15] In order for an applicant to succeed with this application three requirements should be satisfied. Firstly that the judgment must have been erroneously sought or erroneously granted, secondly that such judgment must have been granted in the absence of the applicant and that the applicant’s rights or interest must be affected by the judgment.

[16] In dealing with the meaning of erroneously granted the following was stated in the case of Bakoven Ltd v GJ Howes (Pty) Ltd 1990 (2) SA 446 at page 471E to H:

“An order or judgment is 'erroneously granted' when the Court commits an 'error' in the sense of 'a mistake in a matter of law appearing on the proceedings of a Court of record' (The Shorter Oxford Dictionary). It follows that a Court in deciding whether a judgment

was 'erroneously granted' is, like a Court of Appeal, confined to the record of proceedings. In contradistinction to relief in terms of Rule 31(2)(b) or under the common law, the applicant need not show 'good cause' in the sense of an explanation for his default and a bona fide defence (Hardroad (Pty) Ltd v Oribi Motors (Pty) Ltd (supra) at 578F-G; De Wet (2) at 777F-G; Tshabalala and Another v Pierre 1979 (4) SA 27 (T) at 30C-D). Once the applicant can point to an error in the proceedings, he is without further ado entitled to rescission."

[17] In the case of Lohdi 2 Property Investments CC & Another v Bonder Development (Pty) Ltd 2007 (6) SA 87 (SCA) dealing with a Rule 42(1)(a) application, Streicher JA remarked as follows:

“Similarly, in a case where a plaintiff is entitled to judgment in the absence of the defendant the judgment if granted cannot be said to have been granted erroneously in the light of a subsequently disclosed defence. A court which grants judgment by defaults like the judgments we are presently concerned with, does not grant judgment on the basis that the defendant does not have a defence. It grants judgment on the basis that the defendant has been notified of the plaintiff claim as required by the rules, that the defendant not having given notice of intention to defend, is not defending the matter and that the plaintiff is in terms of the rules entitled to the order sought. The existence or non-existence of a defence on the merits is an irrelevant consideration and, if subsequently disclosed, cannot transform a validly obtained judgment in an erroneous judgment.”

[18] It seems that an order may be said to have been erroneously granted if at the time of its issuing, there was a procedural irregularity or error made during the proceedings which is patent in the record. See Colyn v Tiger Food Industries Ltd t/a Meadow Feed Mills (Cape) 2003 (6) SA 1 SCA.

[19] In Mutebwa v Mutebwa & Another 2001 (2) SA 193 Tk HC at page 198 F the following was stated:

"Although the language used in rule 42(1) indicates that the Court has a discretion to grant relief, such discretion is narrowly circumscribed. The use of the word 'may' in the opening paragraph of the rule tends to indicate circumstances under which the Court will consider a rescission or variation of judgment, namely that it may act mero motu or upon application by an affected party. The Rulemaker could not have intended to confer upon the Court a power to refuse rescission in spite of it being clearly established that the judgment was erroneously granted. The Rule should, therefore, be construed to mean that once it is established that the judgment was erroneously granted in the absence of a party affected thereby a rescission judgment of the judgment should be granted."

[20] The applicant in this matter as argued by the first respondent does not dispute that it had a legal obligation to supply electricity to the premises that were owned by the first respondent. However there was a dispute in relation to the costs of such installation between the first respondent, the applicant and the second respondent. As a result the first respondent approached this Court for a relief. The applicant was properly served with the main application by the first respondent and filed a notice of intention to oppose. As a result of the notice to oppose the main application was postponed to the opposed roll but the applicant failed to file an answering affidavit. On the date of hearing the matter proceeded on the opposed roll in

the absence of the applicant. The second respondent had filed its answering affidavit in the main application and was before court on the date of hearing. There was no explanation from the applicant why no answering affidavit was filed or a request for any indulgence.

[21] The applicant argued that the first respondent wrongly caused an order to be granted when the matter was moot as the electricity was already connected to the premises under a new owner. Further that the order as granted cannot be effected and should therefore be rescinded. Based on the case law referred to above, the argument by the applicant does not make reference to any procedural irregularity or a mistake in respect of the issuing of the order. The applicant failed to file an answering affidavit explaining its defence or any new developments in the main application to prevent an order being granted against it. As stated in Lohdi 2 (supra) that the existence or non-existence of a defence cannot be a consideration to transform a validly obtained order into one that was erroneously granted. The applicant was aware of the main application and decided not to disclose its defence to the court.

[22] In the notice of motion the applicant is not only seeking an order for rescission, but also seeks an order to participate in the adjudication of the case made by both respondents in their affidavits. However, the applicant in its papers stated that the main application was moot at the time of its hearing as the supply of electricity to the premises was already done. It is unclear why the applicant seeks leave to participate in proceedings that will have no practical effect. This relief sought by the applicant can be described as being academic and of no effect.

[23] The respondents had raised the issue of delay in bringing the rescission by the applicant. This application is brought in terms of Rule 42(1) (a) and the Rule does not stipulate any time period within which to bring the application. However, a party is always expected to act within reasonable time constraints. The applicant explained that it only became aware of the order when a notice of taxation was served and the application was launched within three months there-after. In my view the delay in bringing the rescission application is explained and not unreasonable.

Costs

[24] The order of 5 December 2019 was that the applicant should pay the costs of both the first and second respondents. Both respondents were successful in their claims and were entitled to costs. Costs are in the discretion of the court hearing the matter and I see no reason to interfere with such an order. In this matter the applicant acted unreasonably in bringing an application on a matter that has been extinguished and I am of the view that the applicant should pay the costs for both respondents.

Order

[25] Consequently, the following order is made:

1. Application for rescission of the order granted on 5 December 2019 against the applicant is dismissed;

2. The applicant is ordered to pay the costs of the application for the first and second respondents.

J.T DJAJE

JUDGE OF THE HIGH COURT

NORTH WEST DIVISION, MAHIKENG

APPEARANCES

DATE OF HEARING

: 14 May 2021

DATE OF JUDGMENT

: 07 June 2021

COUNSEL FOR THE APPLICANT

: ADV. G. MOKONOTO

COUNSEL FOR THE 1st RESPONDENT : ADV. P. SMIT

COUNSEL FOR THE 2ND RESPONDENT : ADV T.

MAKGATE