Etindziweni Communal Property Association v Carfarm Close Corporation (65590/11) [2013] ZAGPPHC 459 (3 December 2013)

IN THE NORTH GAUTENG HIGH COURT, PRETORIA

(REPUBLIC OF SOUTH AFRICA)

Case Number. 65590/11

Date: 03 December 2013

Not Reportable

Not of interest to other judges

In the matter between:

ETINDZIWENI COMMUNAL

APPLICANT

PROPERTY ASSOCIATION

and

CARFARM CLOSE CORPORATION

RESPONDENT

JUDGMENT

MOLEFE, J:

[1] This is an application for rescission of a default judgment granted in favour of the respondent on 3 October 2012 in an amount of R586 357,17 and consequently that the Writ of Execution dated 23 October 2012 and the Notice of Attachment dated 15 November 2012 be set aside.

[2] The applicant brings this application for rescission of the order of the said date in terms of the provisions of rule 42(1) of the Uniform Rules of Court by reason of the fact that the said order was, in the applicant’s view, granted in its absence and furthermore that it had been erroneously granted.

The said rule provides in sub-rule (1) that:

“The Court may, in addition to any other powers that it may have mero motu or upon the application of any party affected, rescind or vary-

1(a) an order or judgment erroneously sought or erroneously granted in the absence of any party affected thereby”

[3] The applicant’s secondary ground for rescission is in terms of Rule 31 of the Uniform Rules of Court by reason of the fact that good cause has been shown. The said rule 31(2) (b) provides that;

“A defendant may within 20 days after he or she has 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 to it seems meet.”

[4] The application for rescission of judgment is opposed by the respondent. Factual

Background

[5] The applicant, a Communal Property Association became the owner of portions 0 and 6 of the Farm Sunnymead, after the Land Claims Court adjudicated a land claim in the applicant’s favour. Portion 6 is adjacent and shares a boundary to the respondent’s farm.

[6] On 2 September 2011 a fire started, according to the respondent, next to a homestead situated on portion 6, Sunnymead, the applicant’s

property. As a result of high winds, the fire crossed over into the respondent's property known as portion 2 White Hills.

[7] The fire could not be contained on the respondent's fire breaks and spread onto the respondent’s nursery and a nut tree compartment. There was a fire break in place on the respondent’s property but no firebreak on the applicant's portion 6 property.

[8] The fire caused excessive and substantial damages to the respondent’s structural improvements, agricultural equipment and macadamia orchards. Summons was issued by the respondent for damages in the amount of R758 095. 00 and default judgment in the amount of R586 357, 17 was granted.

Common cause facts

[9] The following facts are common cause as appears from the papers filed on record:

9.1 The applicant is an incorporated entity registered in terms of section 8 of Communal Property Association Act No 28 of 1996, and thus a juristic person duly incorporated in terms of the above mentioned Act. The applicant's registered office is situated at portion 6 Sunnymead Farm, JT, 600, Registration Division District Barberton, Mpumalanga {“portion 6”)[i].

9.2 The applicant is the owner of portion 6.

9.3 The summons was issued against the applicant and the address of the applicant is reflected on the summons. Summons was not served at the applicant’s registered office but personally on the chairperson of the applicant at his residence on 29 December 2011. Default judgment was granted against and in the absence of the applicant and not against the applicant’s chairperson.

9.4 A Writ of Execution and a Notice of Attachment were effected at the applicant’s chairperson’s house and his personal movable assets were attached, notwithstanding that judgment had been granted against the applicant[ii].

[10] Applicant’s counsel[iii] submitted that the service of the summons was not properly served due to the fact that the applicant is a statutorily incorporated entity and consequently service of the summons had to be effected in accordance with Rule 4(1) (a) (v).

Rule 4(1) (a) (v) provides;

“(v) in the case of a corporation or company, by delivering a copy to a responsible employee thereof at its registered office or its principal place of business within the courts jurisdiction, or if there be no such employee willing to accept service, by affixing a copy to the main door of such office or place of business, or in any manner provided by law"

[11] Counsel for the applicant contends that the summons should have been served at portion 6 Sunnymead Farm, which is the registered office or business of the applicant, to a responsible employee at such address or by affixing it to the main door of the house. Summons could not be served on the chairperson of the applicant in accordance with Rule 4 (1) (a) (vii) of the Uniform Rules of Court as the applicant is a statutorily incorporated entity and not a voluntary association. The service of the summons therefore, had to be effected in accordance with Rule 4 (1) (a) (v), It was counsel’s submission that service on the applicant’s chairperson is not good service and the default judgment should be set aside.

[12] Counsel further contends that the subsequent Writ of Execution and the Notice of Attachment are irregular as they were effected at the applicant’s chairpersons private house and his personal assets attached.

[13] Applicant’s counsel argued that where it is found that judgment has been erroneously sought and/or granted, it is not necessary to show good cause. In this respect, counsel relied on the case of Mutebwa v Mutebwa and Another 2001 (2) SA 193 (TKH) at paras [18] and [23].

[14] The respondent’s opposing affidavit deals comprehensively with the merits of the case; the fire that caused damage to the respondent’s farm on 2 September 2011. A detailed analysis of what happened on the day, together with photographs to illustrate where the fire came from is conveyed in the opposing affidavit.

[15] Respondent’s counsel [iv]argued that the applicant has not shown a bona fide defence to the plaintiff’s claim and was in wilful default. The applicant’s

chairperson with full knowledge of the action being taken against the applicant, failed to enter an appearance to defend to oppose the action. In this regard counsel referred the court to the cases of Neuman Private Ltd v Marx[v] and Morkel v Absa Bank[vi].

[16] It was the submission of the respondent’s counsel that there was no irregularity in the proceedings, that the order was competently

made by the above honourable court and that judgment was not erroneously granted.

The Law

[17] The applicant’s case for rescission of judgment is based on Rule 42 (1) (a) that due to the summons having been served on the applicant's chairperson at his private home and not at the applicant’s registered address, the judgment was erroneously granted in the absence of the applicant. An order or judgment is erroneously granted in the absence of a party, if irrespective of whether or not such judgment or order is otherwise correct, the absent party was not notified or did not know of the date of hearing.

[18] Rule 42 (1) (a) is a procedural step designed to correct expeditiously a wrong judgment or order. These are the circumstances in which the relief, under rule 42 (1) (a) may be granted namely 1) if there was an irregularity in the proceedings; 2) if the court lacked competence; 3) if at the time it made the order complained of the court was unaware of the existence of factors that could have influenced it to decide differently or against the making of such an order. In the absence of these factors, which are jurisdictional in nature, the court lacks the necessary discretion either to rescind or even to perfect the order.

[19] As I have pointed out earlier, the applicant’s basis of the application for rescission is that there was an irregularity in the proceedings due to the service of the summons on the applicant’s chairperson, which according to the applicant, is not good service. In general, process must be brought to the notice of the party against whom legal proceedings are instituted. This is done by serving a copy of the process in the manner directed by the rules[vii] and by explaining its nature and contents to the person upon whom service is effected[viii].

[20] Rule 4 (1) (a) (v) permits service on a corporation or company to be effected in the alternative (a) at its registered office, b) at its principal place of business within the jurisdiction or c) in any manner provided by law.

It has long been the practice that service upon an agent who has been authorized and is willing to accept service will be good provided that the authority of the agent can clearly be proved[ix]. An authority to accept service either in express terms or by implication will be sufficient.

[21] In casu, the Sheriff’s return of service clearly stated that: “After several attempts to serve the Combined Summons at Sunnymead Farm, we could not find anybody to serve the document on”. “Please note: Mr Zulu was adamant that nobody resides on Portion 6 of Sunnymead Farm”. It is clear from the return of service that unsuccessful attempts were made by the Sheriff to serve the summons at the applicant’s principal place of business and registered office prior to the service upon the applicant’s chairman, who accepted the service. When the Sheriff attempted to serve the summons at the applicant’s registered office, he could not find anybody to serve the document on. He was also informed by Mr Zulu that nobody resided at the applicant’s registered address. The Sheriff also stated that it was also impossible for him to make assumptions as to portion numbers of the farm.

[23] On 29 December 2012: the Sheriff served the summons personally upon the chairperson of the applicant at his residence. There is no explanation from the applicant why the chairperson on receipt of the summons, failed to enter an appearance to defend the action or to appoint an attorney to defend the action on behalf of the applicant. There is no sufficiently full explanation of the applicant’s default to enable the court to understand how it really came about and to assess his conduct and motive.

[24] In Saraiva Construction (Ptv) Ltd v Zululand Electrical and Engineering Wholesalers (Pty) Ltd 1975 (1) SA 612D at 615, Howard J stated that a Court may decline to grant relief where the default has been wilful or due to gross negligence. See also Zealand v Mil borough 1991 (4) SA 836 at 838 (E).

[25] The purpose for which service is required is that the defendant should come to know of the action against him. The purpose of rule 4 is to provide a mechanism by which relative certainty can be obtained that service has been affected upon the defendant. In casu, service upon the applicant’s chairperson is in my view, sufficient to reach the applicant’s attention. The applicant’s chairperson’s failure to take steps is not due to the fact that the applicant did not have knowledge of the summons.

[26] In United Reflective Converters (Ptv) Ltd v Levine 1988 (4) SA 460 (W),

Roux J pointed out that the rules set out procedural steps and do not create substantive law. In so far as substantive law is concerned, the requirement is that a person who is being sued should receive notice of the fact that he is being sued by way of delivery to him of the relevant document initiating legal proceedings. If this purpose is achieved, albeit service was not in terms of the rules, there has been proper service. The non-compliance with the rules does not result in prejudice to the applicant since the purpose of the substantive law has been fulfilled, namely that he was given notice of the process.

[27] The applicant’s chairperson has a fiduciary duty towards the applicant and the community. In terms of Section 8 (7) of the

Communal Property Act 28 of 1996 a person appointed to a committee of an association shall stand in a fiduciary relationship to the members of the association. In my view, the chairperson, holds a position of trust with respect to the community as a head of the committee elected by the members of the association to manage the affairs of that association.

[28] I am of the view that there was no irregularity in the proceedings when judgment was granted. The applicant’s chairperson acted in a negligent and careless manner and the default has been wilful or due to gross negligence. I would accordingly dismiss the application with costs.

[29] The Writ of Execution and the Notice of Attachment are, in my view irregular as they were effected at the applicant’s chairperson's private residence and his personal movable assets attached whereas judgment was granted against the applicant.

[30] The order which I make is:

a) the application for rescission of judgment is dismissed with cost:

b) the Writ of Execution dated 23 October 2012 and the Notice of Attachment dated 15 November 2012 to be set aside.

D.S. MOLEFE

JUDGE OF THE HIGH COURT

APPEARANCES:

Counsel on behalf of Applicant

: Adv. D T Skosana

Instructed by

: S. Ngomane Inc.

Counsel on behalf of Respondent

: Adv. J De Beer

Instructed by

: Van Zyl Le Roux Inc.

Date Heard

: 06 November 2013

Date Delivered

: 03 December 2013

[i] Founding affidavit p 7 para 2.2

[ii] Answering affidavit p 82 para 40; replying affidavit p 140 para 2

[iii] Adv. D T Skosana

[iv] Adv J. De Beer

[v] I960 (2) SA 170 (SR) at 173 A

[vi] 1996 (1) SA 899 (C) at 905 C-D

[vii] See generally, rule 4

[viii] Rule 4 (1) (d)

[ix] Stone v Wright & Abbot (1885) 3 SC 263