Fenceit Manufacturers v Woodcity Express Witbank (Pty) Ltd (2336/2019) [2023] ZAMPMHC 29 (11 September 2023)

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

THE HIGH COURT OF SOUTH AFRICA

MPUMALANGA DIVISION, MIDDELBURG LOCAL SEAT

CASE NO: 2336 / 2019

(1) REPORTABLE: NO

(2) OF INTEREST TO OTHER JUDGES: NO

(3) REVISED.

DATE: 11 September 2023

SIGNATURE

In the matter between:

FENCEIT MANUFACTURERS

APPLICANT/

Registration No. 1992/025562/23

RESPONDENT

And

WOODCITY EXPRESS WITBANK (PTY) LTD RESPONDENT/

Registration No. 2014/101626/07)

APPLICANT

IN RE

WOODCITY EXPRESS WITBANK (PTY) LTD APPLICANT

Registration No. 2014/101626/07)

FENCEIT MANUFACTURERS

RESPONDENT

Registration No. 1992/025562/23

JUDGMENT

RATSHIBVUMO ADJP:

Delivered: This judgment was handed down electronically by circulation to the parties' representatives by email. The date and time for hand-down is deemed to be 10H00 on 11 September 2023.

[1] Introduction.

This is an application for rescission of a judgment that was granted by this court on 07 May 2021. In terms of that judgment, an order was granted against Fenceit Manufacturers, the Applicant in this application (the Respondent in the main application, hereafter, the Applicant), confirming the cancellation of a lease agreement between the Applicant and Woodcity Express Witbank (PTY) LTD, the Respondent in this application and the Applicant in the main application (hereafter, the Respondent). It also ejected the Applicant from the leased property and ordered it to pay the costs on attorney and client scale. That order was granted by default as the Applicant was not present in court.

[2] The Law.

This application is premised on the provisions of Rule 42 of the Uniform Rules of the High Court and/or common law, alternatively, in terms of the provisions of Rule 31(2)(b) of the same rules. Rule 42 provides,

“42 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;

(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.”

Rule 31(2)(b) on the other hand provides,

“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.”

[3] Background

Common facts that led to this application are as follows. The main application was issued on 10 March 2021 and served by the Sheriff on 13 April 2021, at no. [...] D[...] Street, Emalahleni, Mpumalanga, which was the registered address of the Applicant according to the Companies and Intellectual Property Commission (the CIPC). It was served upon a certain Ms. Cindy Moisane, an adult person occupying and in control of the office. The Sheriff also noted in the return of service that the Applicant was unknown in the given address. This must have been with reference to Ms. Moisane who indicated that she did not know the Applicant. It therefore comes as no surprise that the application never reached the attention of the Applicant until after a default judgment was granted.

[4] The explanation by the Applicant as to why it was unknown at the given address is that the address found at the CIPC was once, its

registered address. This had however changed at the time of the service of the application, and should have been altered with the

CPIC too. The Applicant takes full responsibility for not effecting this change, saying it was an error on its part.[1]

[5] The Applicant’s submission which is premised on Rule 42, is to the effect that there was no service conducted in line with Rule 4. The relevant parts of Rule 4 provide,

“4 Service

(1)(a) Service of any process of the court directed to the sheriff and subject to the provisions of paragraph (aA) any document initiating application proceedings shall be effected by the sheriff in one or other of the following manners:

(iv) if the person so to be served has chosen a domicilium citandi, by delivering or leaving a copy thereof at the domicilium so chosen;

(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 court’s 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;"

[6] The first contention by the Applicant regarding the service of the main application is to the effect that the service does not comply with Rule 4(1)(a)(iv) which provides that “if the person so to be served has chosen a domicilium citandi, [service shall be] by delivering or leaving a copy thereof at the domicilium so chosen. The Applicant’s chosen domicilium citandi according to the agreement entered between the parties is PO Box 1[...], L[...], 1038.[2] The Respondent also chose a postal address as its domicilium citandi. Failure to serve the application at the chosen domicilium citandi, so argues the Applicant, makes the whole service to be non-compliant with Rule 4 and on that basis alone, the rescission application

should be granted.

[7] In Amcoal Collieries Ltd v Truter,[3] the Appellate Division (as it was then known) held,

“It is a matter of frequent occurrence that a domicilium citandi et executandi is chosen in a contract by one or more of the parties to it. Translated, this expression means a home for the purpose of serving

summons and levying execution. (If a man chooses domicilium citandi the domicilium he chooses is taken to be his place of abode: see Pretoria Hypotheck Maatschappy v Groenewald 1915 TPD 170.) It is a well-established practice (which is recognized 15by rule 4(1)(a)(iv) of the Uniform Rules of Court) that if a defendant has chosen a domicilium citandi, service of process at such place will be good, even though it be a vacant piece of ground, or the defendant is known to be resident

abroad, or has abandoned the property, or cannot be found (Herbstein & Van Winsen, The Civil Practice of the Superior Courts of South Africa 3rd ed., p 210. See Muller v Mulbarton Gardens (Pty) Ltd. 1972(1) SA 328 (W) at 331 H-333 A, Loryan (Pty) Ltd v Solarsh Tea& Coffee (Pty) Ltd 1984 (3) SA 834 (W) at 847 D-F.) It is generally accepted in our practice that the choice without more of a domicilium citandi is applicable only to the service of process in legal proceedings. (Ficksburg Transport (Edms) Bpk v Rautenbach & Ander (supra)333 C-D). Parties to a contract may, however, choose an address for the service of notices under the contract. The consequences of such a choice must in principle be the same as the choice of a domicilium citandi et executandi (Cf the Ficksburg Transport case ubi cit.), namely that service at the address chosen is good service, whether or not the addressee is present at the time.”

[8] The Applicant further contends that even if the Respondent had a choice on where to effect the service of the application between the chosen domicilium citandi and the company’s registered address, Rule 4 prescribes that service at the registered address should be effected on a responsible

employee. The Applicant argues that service of the application on a person who even professed not to be an employee of the Applicant

makes the whole service non-compliant with Rule 4. For this reason, the Applicant submits that the judgment was erroneously sought and granted and should be rescinded as such.

[9] The Respondent on the other hand argues that failure by the Applicant to receive the main application can only be blamed on itself as it failed to update records held by the CIPC. If further contends that the court should not consider whether the main application reached the Applicant’s attention, but whether the service was in line with Rule 4.

[10] There are three bases on which the service of documents initiating application proceedings could have been served on the Applicant in compliance with Rule 4. The first one is at a chosen domicilum citandi. The second is at the registered address and the third one is at the principal place of business of the Applicant. The Respondent chose not to serve the application at the chosen domicilium citandi although it had it in the contract entered between it and the Applicant. The fact that the chosen address is a postal address could

not have been a hindrance as it is possible to serve application papers at a postal address per registered mail.[4] The Respondent does not even raise issues on a postal address being chosen for that purpose. For some unexplained reasons, the Respondent decided not to serve the papers at the Applicant’s chosen address.

[11] Through the return of service, the Respondent became aware that the service of the application papers on the Applicant was ineffective as it was unknown at the address. The Respondent however chose not to serve them by any other means. The Respondent was also aware as per Annexure LLW4[5] that the Applicant was conducting principal business at a different address which was well-known to it as it was its property from which it wanted it to be evicted. It however chose not to serve the court papers at this address. This conduct on the part of the Respondent, gives credence to the argument by the Applicant to the effect that it looks like the Respondent did not want the Applicant to be aware of the application.

[12] One is tempted to agree with this notion when one learns that at the time the application was launched, the parties were negotiating the contract through their legal representatives. The Respondent again chose not to notify the Applicant’s legal representatives of the application. The contract between the parties also contains the email addresses of both parties at the section for the domicilium citandi. The Respondent chose not to forward the notice of application to that email address.

[13] For the reason that the application was not served at the chosen domicilium citandi of the Applicant, and that when it was served, this was not done on a responsible employee thereof, I find that the service was not in line with Rule 4. I therefore find that the order granted was erroneously sought and granted and stands to be rescinded. In case I am being erroneous in my finding hitherto, the Applicant’s elucidation can still come from its alternative basis of this application.

[14] There are two requirements in terms of an application based on Rule 31(2)(b). The application should be brought within 20 days of the Applicant learning about the order to be rescinded and there must be a good cause. The Applicant acknowledges that the application could be late as it missed the 20 days’ period by three days. For this reason, the Applicant seeks condonation for the late filing of the application for rescission. The reason for the delay is blamed on the Applicant having to first negotiate with the Respondent with a view to secure an undertaking that it will not seek to execute the order pending the rescission application. When the negotiations could not materialise, the Applicant approached the court on urgent basis in order to secure a court order in which the execution is stayed. The Applicant avers therefore that it had to focus on the urgent application first and only thereafter, lodge a rescission application.

[15] I am of a view that this explanation is reasonable as the bundle lodged in this case also includes the urgent application, thereby confirming what the Applicant submitted. Condonation for late filing of the rescission, in as far as it is necessary, is hereby granted.

[16] The question of good cause does not only entail an explanation on why the application could not be brought within the required period, but also, reasonable prospects of success. Thus, in Madinda v Minister of Safety and Security,[6] the Supreme Court of Appeal held,

“The second requirement is a variant of one well known in cases of procedural non-compliance. See Torwood Properties (Pty) Ltd v South African Reserve Bank 1996 (1) SA 215 (W) at 227I - 228F and the cases there cited. 'Good cause' looks at all those factors which bear on the fairness of granting the relief as between the parties and as affecting the proper administration of justice. In any given factual complex it may be that only some of many such possible factors become relevant. These may include prospects of success in the proposed action, the reasons for the delay, the sufficiency of the explanation offered, the bona fides of the applicant, and any contribution by other persons or parties to the delay and the applicant's responsibility therefor.”

[17] As for the defence advanced by the Applicant, it avers that it did not enter into a lease agreement with the Respondent, but a contract of sale. It however appears from the submissions that the contract of sale also contained a lease agreement in it. The Applicant also contends that if the contract was to be considered as a lease agreement, then it does not owe the Respondent a cent as it paid in excess of R450 000 which is way over its rental obligations. According to the Applicant, the agreement can however not be considered as a contract of sale in favour of the Respondent unless the Respondent was to amend its notice of motion to reflect the same. It is as such argued that if the Respondent was to cancel the contract, it should also refund the monies paid towards the purchase of the property, which it did not do.

[18] The Respondent contends that there cannot be any refund to the Applicant because clause 10.4(b) of the agreement provides that the Respondent shall be entitled to retain all payments received in the event of the cancellation of the agreement. The Applicant however submits that this clause constitutes a penalty as defined in the Conventional Penalties Act, No. 15 of 1962. This would however be out of proportion to any prejudice that the Respondent would have suffered and be entitled to claim. Moreover, the Applicant also avers that since it installed electrical fence to the value of R75 000.00 and also improved the interior of the building at a cost of R100 000.00, it was therefore entitled to exercise a lien over the rented property.

[19] To show that there is a bona fide defence does not entail that the Applicant should prove that its defence will be successful. It must however show that it has a defence that if proved, it would constitute a valid defence to the Respondent’s claim. One needs not adjudicate the veracity of the defence and start evaluating it against the Respondent’s assertions. That would be dealt with in the main application. For now, the court assesses if there is a bona fide defence which if it’s established and proved, could constitute a valid defence. I am of the view that if the Applicant was to prove the defence raised to the effect that it paid more that its rental obligations, and that the Respondent has no right to keep all the payments made to it, in case of cancellation; this could constitute a bona fide defence. Rescission of judgment would as such also be successful on this leg too.

[20] The fairness of this outcome lies in the fact that both the Applicant and the Respondent would now have an opportunity to be heard and the court would be able to determine the outcome after hearing both sides. It could be so that this is a slow and long winded process, given the business rescue operations that the Respondent was undergoing when the main application was initiated. However, the Respondent is not free from any blame in this regard. For it seemed to have been determined to choose a method of service that would not come to the attention of the Applicant as it knew that the address where service was effected was not its preferred and chosen domicilium citandi. It also was aware at the stage it proceeded to apply for default judgment, that the application did not come to the Applicant’s

attention. It knew the methods of service that could easily have brought the application to the Applicant’s attention, and it chose not to employ them.

[21] Costs.

The Applicant submitted in the main that the costs of this application should be costs in the main application. The costs of the urgent application, the order of which was handed down on 10 August 2021, were reserved to be determined in this application. Although the urgent application was unopposed, it took place at the behest of the Respondent who refused to make an undertaking not to execute the warrant of eviction, pending the outcome of the rescission application. I am of a view that the Applicant is entitled to its costs occasioned by the urgent application.

[22] For the aforesaid reasons, I make the following order.

[22.1] The order granted by this court under case number 945/2021 on 07 May 2021 and a warrant of eviction issued thereupon, are hereby rescinded and set aside.

[22.2] The costs of this application are reserved for determination in the main application.

[22.3] The Respondent is ordered to pay the costs of the urgent application the order of which was handed down on 10 August 2021.

TV RATSHIBVUMO

ACTING DEPUTY JUDGE PRESIDENT

MPUMALANGA - MIDDELBURG

FOR THE APPLICANT: ADV. L DE BEER INSTRUCTED BY: PRETORIUS LE ROUX INC C/O: GFT PISTORIUS INC MIDDELBURG FOR THE RESPONDENT: ADV. J KLOPPER INSTRUCTED BY: CLOETE VAN WYK INC C/O: KRUGER & BEKKER ATT :MIDDELBURG DATE HEARD: 29 AUGUST 2023 JUDGMENT DELIVERED: 11 SEPTEMBER 2023

[1] See para 10.4 of the Founding Affidavit to this application on p.66 of the paginated bundle.

[2] See Annexure LLW4 on p.30 of the main application.

[3] 1990 (1) SA 1 (AD) at 5J-6D.

[4] See Mathome Training Development (Pty) Ltd v Finsch Diamond Mine Training Center and Another (424/2019) [2022] ZANCHC 8 (25 February 2022).

[5] See footnote 1 above.

[6] [2008] ZASCA 34; 2008 (4) SA 312 (SCA) at para 8.