Nketoana Local Municipality v Sibamu Building Contractors and Another; In Re: Sibamu Building Contractors (Pty) Ltd v Nketoana Local Municipality and Another (3509/2019) [2020] ZAFSHC 111 (26 June 2020)

IN THE HIGH COURT OF SOUTH AFRICA,

FREE STATE DIVISION, BLOEMFONTEIN

Case number: 3509 /2019

In the matter between:

NKETOANA LOCAL MUNICIPALITY Applicant

and

SIBAMU BUILDING CONTRACTORS 1ST Respondent

KHATO CONSULTING ENGINEERS 2ND Respondent

In re:

SIBAMU BUILDING CONTRACTORS (PTY) LTD Applicant

NKETOANA LOCAL MUNICIPALITY 1ST Respondent

HEARD ON: 18 JUNE 2020

JUDGMENT BY: MAJOSI, AJ

DELIVERED ON: 26 JUNE 2020

[1] This is an application for rescission of a default judgment in terms of the Uniform Rules of Court. The default judgment was obtained 12th of September 2019 where the now applicant (the Municipality) together with the second respondent (Khato) were directed to obtain the testing results of a test conducted on a 15km pipeline constructed by the first respondent under the supervision of the second respondent be made available and if same are not available, that the first respondent obtain same at its own costs.

[2] The background of the matter is as follows: The first respondent (Sibamu) launched an application against the applicant and the now second respondent. It was duly served by the sheriff on the applicant via Ms Segacwi, the Assistant to the Municipal Manager on the 13 August 2019 and handed over to the then Municipal Manager Mr. Manzi, who was suspended three (3) days later and replaced by an Acting Municipal Manager, Mr. Alexander.

[3] The applicant failed to defend the matter and judgment by default was granted in favour of the first respondent in which the applicant and now second respondent they were:

3.1 Directed and or mandated and or compelled the applicant (the Municipality) to acquire / procure within 15 days of the order of this court the testing results of tests conducted by the first respondent under the supervision of the second respondent pertaining to the 15km pipeline from Reitz WTW to Petrus Steyn constructed by Sibamu in pursuance of the contract concluded between them.

3.2 Khato was directed /mandated to forthwith make available and dispatch the test results to the Municipality as per paragraph 1 (para 3.1 herein ) above within 15 days of the court order.

3.3 In the event that the test results are no longer being available, directing and or compelling the Municipality at its own costs to undertake the testing of the pipeline in accordance with sub clause 38.3.5.3 of the contract.

3.4 Directing the now Applicant (Municipality) to pay the costs of this application.

[4] The applicant as mentioned above failed, to defend the matter and the judgment by default only came to their attention on the 16th of October 2019 when it was served on them. This knowledge led them to consult with counsel and their newly appointed engineers, Pro Plan Engineers and file an application for rescission of judgment accompanied by an application for condonation for the late filing of the rescission. They are also of the opinion that they have a bona fide defence and should be granted the opportunity to file their opposing affidavit.

[5] The first respondent is opposed to the application for rescission of judgment on the basis that the applicant failed to advance reasonable explanations for the late filing of this application or its failure to oppose the main application. They also contended that the applicant has not demonstrated the existence of a bona fide defence and have requested that the application be dismissed with costs.

[6] It is so that this application has been filed out of time with a mere 14 days. Upon reading the papers, I could not discern what prejudice the first respondent will suffer as applicant still has to explain their reasons for not opposing the main application in the first place. In light thereof, condonation ought to be granted.

[7] For the applicant to be successful in their application they must with sufficient detail explain why they were in default and that they have an actual bona fide defence with prospects of success. In other words, the affidavit of the Acting Municipal Manager must discharge this onus and also reveal what the applicant deems to be a bona fide defence. In the absence thereof, rescission ought not to be granted.

[8] In DE WITTS AUTO BODY REPAIRS (PTY) LTD v FEDGEN INSURANCE CO LTD 1994 (4) SA 705 (E) Jones J said the following at page 712 “ An application for rescission is never simply an enquiry whether or not to penalise a party for his failure to follow the rules and procedures laid down for civil proceedings in our courts. The question is, rather, whether or not the explanation for the default

and any accompanying conduct by the defaulter, be it wilful or negligent or otherwise, gives rise to the probable inference that

there is no bona fide defence, and hence that the application for rescission is not bona fide .

The magistrate's discretion to rescind the judgments of his court is therefore primarily designed to enable him to do justice between the parties. He should exercise that discretion by balancing the interests of the parties bearing in mind the considerations referred to in Grant v Plumbers (Pty) Ltd 1949 (2) SA 490 (O)supra) and HDS Construction (Pty) Ltd v Wait 1979 (2) SA 298 (E) and also any prejudice which might be occasioned by the outcome of the application.”

[9] The refusal of an application of this nature is dire and thus the explanation for default by the applicant must thus enable the court to understand how the default came about to properly evaluate the conduct and motives of the applicant.[1]

[10] Counsel for the applicants insists that their failure to oppose the application came about due the Municipal Manager being suspended and his incumbent not being made aware of the pending legal action until of course the resultant default judgment was served on them on the 16th of October 2019. This change of guard took place a mere 4 days after the said suspension. This is confirmed by Ms. Segacwi, assistant to the Municipal Manager in a confirmatory affidavit attached to the papers.[2] These events led the incumbent to instruct their legal team to deal further with the matter and to obtain further information from their new consulting engineers, Pro Plan Consulting Engineers, in preparation of the application for rescission of the default judgment.

[11] Counsel for the first respondent contends that this explanation is tantamount to administrative deficiencies and thus the applicants are authors of their own demise and offered a Labour Court case , South African Municipal Workers Union obo Dywili v Inkwanca Municipality

P399/2014 [2017] ZALCPE 3 31 January 2017 in support thereof. They surmised that the incumbent assertion that his predecessor left with the court process is not plausible and that none were found on his desk is tantamount to gross negligence.

[12] In my view, the explanation for the default demonstrates with sufficient detail that the default was not wilful or due to gross

negligence on the part of the applicant as it could not have foreseen that the now respondent could have served an application on them on the 13 of August 2019 and a mere 3 days later, the suspension of the Municipal Manager would take place. It appears from the papers that such suspension was immediate and did not allow for a proper handing over to be done as evidenced by the incumbent having to peruse papers left behind on a desk. No form of negligence can thus be attributed to the applicant.

[13] The incumbent’s conduct after the 16 October 2019 further demonstrates that once the default judgment came to his knowledge, he did not rest on his laurels but instead, gave an immediate instruction to counsel rescind the matter and to gather court file

contents and facilitated consultations with his assistant, and consulting with their engineers to establish what obligations in

terms of a prior contract they have not only with the first respondent, but also the second respondent. I deem this explanation for default amendable.

[14] The only question that now remains is if the applicant has shown that it has a bona fide defence. The applicant in its founding affidavit has made it known that the underlying agreement between themselves and the first respondent required the latter to perform independent testing of a 15km pipeline under the supervision of the second respondent and provide the test results to them. The second defendant, as per the contract, would provide the Municipality with the results so that they may release retention funds.

[15] The applicant further asserts that these results were never in their possession and thus they could never have complied with the default judgment and they, in terms of the contractual agreement, cannot be forced to obtain the test results from the second defendant, whose services have long been terminated resulting in the second defendant also instituting legal action against them and have offered the case of Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 583 (SCA) in support of their argument which states that courts must guard against the temptation to substitute contractual context.

[16] The first defendant contends that this can never be seen as a bona fide defence because as per the contract, they complied with the testing of the 15km pipe line and handed over the test results to the second respondent, as it was done under their supervision, as they were a consulting engineer company appointed by the applicant. The first defendant also states that it is not impossible for the applicant to comply with the order as it may simply request the test results from the second defendant.

[17] Though the applicant has mentioned in their heads of argument that the judgement by default was obtained in error as they were never in possession of the results, I do not agree with this assertion that it is impossible to comply with as the court order simply directs them to request the results from the second defendant which they have failed to do to date despite conceding that the first respondent is entitled to be paid out the retention amount upon presentation of the said test results.

[18] The actual purpose of the default order granted in my view is to compel the Second respondent to release the results to the first defendant so that it may comply with its obligations in terms of their contract and pay out the retention funds. I questioned the first defendant at argument stage why this default judgment was never enforced on either the Municipality or more importantly on its former agent Khato and the only explanation received was that the rescission application had come to the fore and could not pursue enforcement of the judgment any further.

[19] In my view, the first respondent cannot be called upon to perform a duty that is not the basis of the contract between themselves and the first defendant. This is a matter that they ought to have actively pursued with the second defendant. The applicant’s replying affidavit refers to annexures R 1 ,R 2 and R 3 which are in actual fact letters emanating from Pro – Plan Consulting Engineers to the first defendant requesting the said test results as far back as the 10 of April 2019 so the Practical Completion may concluded and their retention being paid out as per their contract.

[20] It then follows that the first respondent could not provide the test results to the applicant to release the funds alluded to above. Though this aspect was not expanded upon in arguments, the applicant’s assertion in that regard remains uncontested and is in fact, confirmed by the first respondent in its opposing affidavit as it maintains throughout that they provided the tests results to the second defendant and not the first defendant. I thus conclude that the applicant has a bona fide defence and has shown sufficient cause to rescind the judgment.

[21] It is trite that costs usually follow the successful party. In casu, the applicant will be allowed to file an opposing affidavit and it is unknown if their opposition will bear fruit and as a consequence thereto, costs will thus be costs in the cause.

[22] Accordingly I make the following order: -

1. Condonation is granted to the applicant for the late filing of the application.

2. The judgment granted in default against the Applicant is hereby rescinded.

3. The applicant to file their opposing affidavit within 10 days of the date of this order.

4. Costs to be costs in the cause.

­_________________

OR MAJOSI, AJ

On behalf of Appellant: Adv J.S Rautenbach

Instructed by: C/O Honey Attorneys

BLOEMFONTEIN

On behalf of Respondent: Adv.M.S Mazibuko

Instructed by: Blair Attorneys

[1] Silber v Ozen Wholesalers (Pty Ltd 1954(2) SA 345 A

[2] P.25 Confirmatory affidavit Annexure FA 3