Olua v Standard Bank of South Africa Ltd and Another (43883/2016) [2020] ZAGPPHC 703 (7 December 2020)

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

(GAUTENG DIVISION, PRETORIA)

REPORTABLE

CASE NO: 43883/2016

In the matter between:

AMAECHI OLUA

Applicant

and

STANDARD BANK OF SOUTH AFRICA LTD

First Respondent

SHERIFF OF THE HIGH COURT OF SOUTH AFRICA,

CENTURION WEST, PRETORIA

Second Respondent

In re

STANDARD BANK OF SOUTH AFRICA LTD

Plaintiff

AMAECHI OLUA

Defendant

JUDGMENT

NGALWANA AJ

[1] On 4 July 2016 the first respondent (“the bank”) secured judgment by default against the applicant in relation to a 2015 Toyota Yaris 1.3 XS 5DR (“the motor vehicle”) following his failure to file a notice of opposition. The order also directed retention by the bank of all monies paid to it by the applicant in relation to the motor vehicle, and granted leave to the bank to apply for damages together with interest thereon reckoned from 1 May 2016.

[2] A week later, the bank secured a warrant of attachment and delivery of the motor vehicle.

[3] Some three years later, in April 2019, the applicant launched these proceedings for the rescission of the default judgment and warrant of attachment. He did so pursuant to rule 42(1)(a) of the rules of this court and in terms of the common law. Although he appears to confuse the two sets of grounds, his solitary ground for rescission under the rule appears at paragraphs 31 and 32 of his founding affidavit where he says “the cause of action … is excipiable”. Elsewhere (in paragraph 17 of his founding affidavit) the applicant says the registrar “exceeded the powers conferred upon him/her in terms of the Uniform Rules” when s/he granted leave to the bank to claim damages and interest thereon against him. He then concludes (in paragraph 23) that “the default order was erroneously granted”. But neither an exception nor ultra vires conduct constitutes a valid rescission ground under the rule. While an exception may be a possible defence against the bank’s claim in the main proceedings, ultra vires conduct, it seems to me, is a possible ground of review, and not a ground upon which a judgment secured by default can validly be rescinded.

[4] The rescission ground advanced by the applicant in terms of the common law seems to be that he has “bona fide defences”, which include

4.1 that the high court lacks jurisdiction by reason of the parties having contracted out of it by way of clause 23.5 of their instalment sale agreement which ousts the high court’s jurisdiction;

4.2 that the summons and particulars of claim are excipiable;

4.3 that the vehicle had “pre-existing and material defects” that the bank and the dealer failed to disclose to him;

4.4 that he does not owe the bank any money in respect of the motor vehicle;

4.5 that neither the summons nor the warrant of attachment was ever served on him.

[5] What the applicant seems to be missing, however, is this. Default judgment is granted not for lack of a defence on the merits but for failure by the defendant to file a notice of intention to oppose the claim after the defendant has been notified of the plaintiff’s claim as required by the rules of this court. The existence of a defence on the merits is an irrelevant consideration to a court deciding whether or not default judgment is to be granted. Thus, a defence that is disclosed subsequent to the granting of default judgment (as in this case) cannot transform a validly obtained judgment or order into an erroneous judgment or order.[1]

[6] Also missed by the applicant is this. A judgment or order to which a party was procedurally entitled cannot be considered to have been granted erroneously by reason of facts that emerge subsequent to the granting of the judgment or order, and which were not within the knowledge of the Judge who granted the judgment or order.[2] Thus, the fact that it now transpires that the applicant may not have been in wilful default cannot transform an order which had validly been obtained into one that is erroneous, either in its seeking or in its granting.[3]

[7] The circumstances in this case seem similar to those in Colyn v Tiger Food Industries Ltd t/a Meadow Feed Mills (Cape) 2003 (6) SA 1 (SCA) where an application in terms of rule 42(1)(a) for rescission of a summary judgment granted in the absence of the defendant was refused notwithstanding the fact that it was accepted that the defendant wanted to defend the matter but did not do so because the claim had not been brought to the attention of his Bellville attorney. The Supreme Court of Appeal held that no procedural irregularity or mistake in respect of the issue of the order had been committed, and that it was not possible to conclude that the order had erroneously been sought or had erroneously been granted by the Judge who granted it.

[8] In any event, the jurisdiction ground is suited more to a special plea raised in answer to the main claim. It is not a rescission ground. The exception ground is, self-evidently, a matter to be raised by way of exception in terms of rule 23. It is not a valid ground for rescission. The third and fourth grounds –

alleged “pre-existing and material defects” in the vehicle, and the argument that the applicant does not owe the bank – are possible defences on the merits and do not constitute valid grounds for rescission of an order properly granted as they are facts of which the Judge granting the order was not aware at the time. The fifth ground – the wilful default ground – cannot get past the Lodhi 2 Properties and Colyn judgments of the Supreme Court of Appeal by which I am bound.

[9] But even if I were wrong in my assessment, the applicant seems to me to have been the author of his own misfortune in this case. Having failed to file replying papers and heads of argument, after the bank had filed an interlocutory application to compel him to do so, this court invited him to do so even considerably long after the period for filing those papers and heads of argument had passed. In that invitation, the applicant was invited by the court to explain

in his replying affidavit why he had failed to file his reply and heads of argument, and to address the issue of the delay in filing

his reply and heads of argument. Both parties were also invited to address the court in written submissions on the jurisdiction issue and on the possible implications of an order rescinding the judgment at this late stage.

[10] The applicant filed only his heads of argument, largely traversing material that is not germane to the rescission application, and then addressing the specific issues which both parties were invited to address. No reply was filed. No explanation was advanced as regards why no reply had been filed. No explanation for the late filing of the heads of argument was given. No condonation was sought for the late filing of the heads of argument. The applicant simply launched himself headlong into the merits of his defence in the main case in relation to which the bank has already secured default judgment.

[11] The bank’s answering affidavit was filed some three weeks out of time. Condonation was sought. An explanation was offered. The applicant had suffered no prejudice. Condonation is granted.

[12] The failure to file a replying affidavit leaves the bank’s answers to the applicant’s averments in his founding affidavit largely uncontroverted. For example, the applicant’s allegation that the bank’s particulars of claim and the warrant of attachment were never served on him is fully addressed by the bank. The applicant offers no countervailing version in reply as he has filed none. The proper approach in these circumstances in motion proceedings is trite.

[13] In National Director of Public Prosecutions v Zuma [2009] ZASCA 1; 2009 (2) SA 277 (SCA) at para 26, the Supreme Court of Appeal summarised the principles as follows:

13.1 Motion proceedings, unless concerned with interim relief, are all about the resolution of legal issues based on common cause facts.

13.2 Unless the circumstances are special, motion proceedings cannot be used to resolve factual issues because they are not designed to determine probabilities.

13.3 It is well established under the Plascon-Evans rule[4] that where in motion proceedings disputes of fact arise on the affidavits, a final order can be granted only if the facts averred in the applicant’s affidavits, which have been admitted by the respondent, together with the facts alleged by the respondent,

justify such order.

13.4 It may be different if the respondent’s version consists of bald or uncreditworthy denials, raises fictitious disputes of fact, is palpably implausible, far-fetched or so clearly untenable that the court is justified in rejecting them merely on the papers.

[14] The applicant’s failure to offer, in a replying affidavit, countervailing facts to the bank’s explanation as regards why it says the summons, particulars of claim and the warrant of attachment must have come to the applicant’s notice at his chosen domicilium, is fatal.

[15] The grounds raised by the applicant for rescission are not rescission grounds; they are possible defences to the bank’s claim in the main action. The applicant has thus failed to advance any ground that could move this court to rescind the default judgment. It is then unnecessary to deal with the other issues, including joinder (which in my view is a bad point), and the effects of a rescission at this late stage (which in my view would be irrelevant if a proper case for rescission had been made out).

[16] In the circumstances, the rescission application must fail, and there is in my view no compelling reason why costs should not follow the cause.

[17] What then remains is the scale of costs to be granted. The bank asks for costs on attorney and client scale. This is not there for the asking. A proper case must be made for them. The Constitutional Court[5] has relatively recently restated the standard for costs on this scale. It said:

“[223] More than 100 years ago, Innes CJ stated the principle that costs on an attorney and client scale are awarded when a court wishes to mark its disapproval of the conduct of a litigant.[6] Since then this principle has been endorsed and applied in a long line of cases and remains applicable.[7] Over the years, courts have awarded costs on an attorney and client scale to mark their disapproval of fraudulent, dishonest or mala fides (bad faith) conduct;[8] vexatious conduct;[9] and conduct that amounts to an abuse of the process of court.[10]

(footnotes in original text)

[18] While I cannot say that the applicant’s conduct in this case meets the standard of bad faith, fraud, dishonesty or vexatiousness, there is enough, in my assessment, to find that he has conducted this application in a way that can be described as abuse of the court process. But is that enough, in the exercise of the court’s discretion in the circumstances of this case, to warrant costs on this scale? I think not.

[19] The points raised by the applicant in order to sustain his rescission application have been found wanting and not quite relevant in an application of this sort. His failure to file a reply and heads of argument – the former not at all, and the latter after being invited by the court to do so – has resulted in the unnecessary delay in the finalization of this case, and put the bank to unnecessary expense of launching an application to compel him to file a pleading and resist an unmeritorious rescission application. This, in my assessment, is an abuse of court process. It is also careless conduct. But it cannot reasonably be elevated to bad faith. I put it down to seeming inexperience of junior counsel conducting his own litigation and getting another junior counsel to argue his case. The Constitutional Court, citing Canadian Supreme Court authority, has found that a mistake or careless conduct does not constitute bad faith.[11]

[20] In the result, costs on attorney and client scale seems to me unjustified in the circumstances.

[21] I thus make the following order:

The rescission application is dismissed with costs

V NGALWANA

ACTING JUDGE OF THE HIGH COURT

GAUTENG DIVISION OF THE HIGH COURT, PRETORIA

Electronically submitted therefore unsigned

Delivered: This judgement was prepared and authored by the Judge whose name is reflected and is handed down electronically by circulation to the Parties/their legal representatives by email and by uploading it to the electronic file of this matter on CaseLines. The date for hand-down is deemed to be 07 December 2020.

Date of hearing: 19 November 2020

Date of judgment: 07 December 2020

Appearances:

Attorneys for the Applicant: BL Nkuna Inc (info@blnkunainc.co.za)

Counsel for the Applicant: Adv. T Daniels (079 251 1102)

Attorneys for the 1st Respondent: Findlay & Niemeyer Inc (philip@findlay.co.za / vaf@findlay.co.za)

Counsel for the 1st Respondent: Adv. Z Schoeman (072 123 2614)

[1]

Lodhi 2 Properties Investments CC and Another v Bondev Developments (Pty) Ltd 2007 (6) SA 87 (SCA), at para 27 (“Lodhi 2 Properties”)

[2]

Lodhi 2 Properties (supra), at para 25

[3]

Lodhi 2 Properties (supra), at para 26

[4]

Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd [1984] ZASCA 51; 1984 (3) SA 623 (A) at p 634E - 635D

[5]

In Public Protector v South African Reserve Bank (CCT107/18) [2019] ZACC 29; 2019 (9) BCLR 1113 (CC); 2019 (6) SA 253 (CC) (22 July 2019) (“PP v SARB”)

[6]

Orr v Solomon 1907 TS 281. See Nel v Waterberg Landbouwers Ko-Operatieve Vereeniging 1946 AD 597 at 609 where it was held: “Now if a trial judge is satisfied that a defendant's conduct in connection with the subject matter of the proceedings was fraudulent that seems to me a ground on which he may be entitled in a particular case to exercise his discretion in favour of an award of attorney and client costs to the successful party.”

[6]

Orr v Solomon 1907 TS 281. See Nel v Waterberg Landbouwers Ko-Operatieve Vereeniging 1946 AD 597 at 609 where it was held:

“Now if a trial judge is satisfied that a defendant's conduct in connection with the subject matter of the proceedings was fraudulent that seems to me a ground on which he may be entitled in a particular case to exercise his discretion in favour of an award of attorney and client costs to the successful party.”

[7]

Limpopo Legal Solutions v Eskom Holdings Soc Limited [2017] ZACC 34; 2017 (12) BCLR 1497 (CC) at paras 35 and 37; South African Liquor Traders’ Association v Chairperson, Gauteng Liquor Board [2006] ZACC 7; 2009 (1) SA 565 (CC); 2006 (8) BCLR 901 (CC) at para 48; and Swartbooi v Brink [2003] ZACC 25; 2006 (1) SA 203 (CC); 2003 (5) BCLR 502 (CC) at para 27.

[8]

MEC for Economic Affairs, Environment and Tourism v Kruisenga [2010] ZASCA 58; 2008 (6) SA 264 (SCA) at paras 77–80; Law Society, Northern Provinces v Mogami [2009] ZASCA 107; 2010 (1) SA 186 (SCA) at para 31; Davis above n 30 at para 28; Nordbak (Pty) Ltd v Wearcon (Pty) Ltd 2009 (6) SA 106 (W) at 117H; Bernert v Swanepoel 2009 (4) All SA 440 (GSJ) at 443b–d; Spieth v Nagel 1997 JDR 0375 (W) at 18; Friederich Kling GmbH v Continental Jewellery Manufacturers; Speidel GmbH v Continental Jewellery Manufacturers 1995 (4) SA 966 (C) at 975I-976E; BEF (Pty) Ltd v Cape Town Municipality 1990 2 SA 337 (C); Jooste v Minister of Police 1975 (1) SA 349 (E) at 356–7; Simmons v Gilbert Hamer & Co Ltd 1962 (2) SA 487 (D) at 496H-498C; Van Dyk v Conradie 1963 (2) SA 413 (C) at 418E; and Suzman Ltd v Pather and Sons 1957 (4) SA 690 (D) at 690G-691A.

[9]

Thunder Cats Investments 49 (Pty) Ltd v Fenton 2009 4 SA 138 (C) at paras 33–4; Page v ABSA Bank Ltd t/a Volkskas Bank 2000 (2) SA 661 (E) at 667A-F; SA Droëvrugtekoöperasie Bpk v SA Raisins (Edms) Bpk 1999 3 All SA 245 (NC) at 254-7; Ernst & Young v Beinash 1999 (1) SA 1114 (W) at 1148D-G; Van Deventer v Reichenberg 1996 (1) SACR 119 (C) at 129B-D; and Delfante v Delta Electrical Industries Ltd 1992 (2) SA 221 (C) at 233B-G.

[10] Law Society of SA v Road Accident Fund 2009 (1) SA 206 (C) at paras 21-6; Alton Coach Africa CC v Datcentre Motors (Pty) Ltd t/a CMH Commercial 2007 (6) SA 154 (D) at para 40; Hudson v Wilkins 2003 (6) SA 234 (T) at para 20; Rhino Hotel & Resort (Pty) Ltd v Forbes 2000 (1) SA 1180 (W) at 1184J-1185B; Lourenco v Ferela (Pty) Ltd (No 1) 1998 (3) SA 281 (T) 300C-H; Mahomed & Son v Mahomed 1959 (2) SA 688 (T) at 692B-693B; and Hayes v Baldachin 1980 (2) SA 589 (R) at 595D.

[11] See PP v SARB, at para 72 (minority judgment) from which the majority did not differ. In Réjean Hinse v Attorney General of Canada 2015 SCC 35 at paras 48 and 53 the Supreme Court of Canada adds at para 52 that “[a] simple fault such as a mistake or a careless act does not correspond to the concept of bad faith”.