Peet Bezuidenhout Familie Trust and Others v Nedbank Limited (74419/15) [2020] ZAGPPHC 239 (24 April 2020)

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

(1) REPORTABLE: NO

(2) OF INTEREST TO OTHER JUDGES: NO

(3) REVISED

CASE NO: 74419/15

In the matter between:

PEET BEZUIDENHOUT FAMILIE TRUST

FIRST APPLICANT

PETRUS MATTHEUS WILLEM

BEZUIDENHOUT N.O.

SECOND APPLICANT

PETRUS MATTHUES WILLEM

BEZUIDENHOUT

THIRD APPLICANT

PETRUS JOHANNES ERNST

MEINTJIES N.O.

FOUTH APPLICANT

DE WET BEZUDENHOUT N.O.

FIFTH APPLICANT

CESKA BEZUIDENHOUT N.O.

SIXTH APPLICANT

PETRUS BEZUIDENHOUIT N.O.

SEVENTH APPLICANT

ANDRE BEZUIDENHOUT N.O.

EIGHT APPLICANT

And

NEDBANK LIMITED

RESPONDENT

JUDGMENT

COLLIS J:

INTRODUCTION

[1] This is an opposed application wherein the applicants pray for the following relief:

1.1 That judgment granted by default in the above Honourable Court under Case No 74419/2015 on 15 November 2018 in favour of the respondent against the applicants, jointly and severally, be rescinded;

1.2 That the applicants be afforded a period of 20 days from date of the rescission order to file an amended plea to the respondent's amended particulars of claim;

1.3 That the respondent pays the costs of the application, only in the event of opposition;

1.4 That further and/or alternative relief be granted to the applicants.[1]

BACKGROUND

[2] On 22 March 2007 the first applicant (represented by the second applicant) entered into an agreement of loan with the respondent. On 4 July 2007 a suretyship agreement was entered into, which agreement was signed by the third applicant, and on 30 August 2007 a mortgaged bond was registered over the property.

[3] On 15 September 2015, the respondent launched an action under the above case number seeking the following relief:

3.1. Payment of the sum of R 1 794 260.95

3.2 Interest thereon at the rate prescribed in the summons; and

3.3 An order in terms whereof the immovable property described as Portion 194 of the Farm Legend No. 788, Registration Division K.R, Limpopo Province, Measuring 4 451 Square metres, held by deed of transfer number T 117748/07, be declared specially executable, and that a writ of execution be issued as envisaged in terms of Rule 46(1)(a);

3.4 Costs to be taxed on attorney and own client scale;

3.5 Further and/or alternative relief.

[4] On 27 October 2015 the respondent launched an application for summary judgment, which was duly resisted and whereafter leave to defend was granted by the court.

[5] On 10 December 2015 the first, second and third applicants filed their plea. On 23 February 2016, the respondent launched a joinder application to join the remainder of the trustees. This joinder was not opposed and subsequently an order was granted by the court on 24 March 2016.

[6] On 16 May 2016, the respondent delivered a Notice to amend its Particulars of Claim, to which no objection was noted. The respondent thereafter filed its amended pages to its Particulars of Claim.

[7] On 27 July 2016 the respondent delivered its Rule 35 notices seeking discovery of certain documents. The applicants failed to comply therewith and as a result of the non-compliance by the applicants, the respondent launched an application to compel compliance with the said Rule 35 notices. The first trial date was set for 1 September 2017 and in anticipation of such trial date, round table meetings were held in order to settle the arrears. For this reason the first trial date was not utilized.

[8] On 27 September 2017 a second trial date was allocated for 4 February 2019. In anticipation of this upcoming trial date, the respondent's attorneys delivered further Rule 35(3) and 35(12) notices on 2 May and 23 May 2018 respectively.

[9] On 18 May 2018 and 7 June 2018, the respondent's attorney caused a Rule 30A notice to be served, in respect of the applicants' wilful non-compliance with the said Rule 35(3) and Rule 35(12) notices. On 20 August 2018, the application to compel discovery was granted by the court. On 24 August 2018 the respondent served the order on the applicants seeking compliance therewith, to which the applicants failed to respond.

[10] On 1 November 2018, the respondent launched an application for the applicants' defence in the action to be dismissed for non-compliance with the Rule 35(3) and Rule 35(12) notices respectively.

[11] On 15 November 2018, the court granted an order dismissing the applicants' defence and also granted default judgment against the applicants, jointly and severally, the one paying the other to be absolved.

[12] On 28 January 2019, the present application was launched for the rescission of the above order.[2]

APPLICABLE LEGAL PRINCIPLES FOR A RESCISSION OF A DEFAULT JUDGMENT APPLICATION

[13] In the present application, the applicants rely on the provisions of the common law to rescind the default judgment The principle applicable to the adjudication of rescissions based on common law is settled and trite. There is also abundant authority for the proposition that in matters of this nature, the terms "sufficient cause" and "good cause", are almost identical or used interchangeably. See inter alia, Colyn v Tiger Foods Industries Ltd t/a Meadow Feed Mills (Cape) 2003 (6) SA 1 (SCA) at 9C. In order to be successful, an applicant is required to satisfy the following requirements:

13.1 the application should be brought within a reasonable time;

13.2 there must be a reasonable explanation for the default;

13.3 the applicant must show that the application was made bona fide; and

13.4. the applicant must show that he has a bona fide defence, which prima facie has some prospect of success.

[14] The above principles are succinctly set out in Erasmus (81-307), that:

"At common law a judgment can be set aside on the following grounds: fraud, justus error (on rare occasions), in certain exceptional

circumstances when new documents have been discovered, when judgment had been granted by default and, in the absence between the parties of a valid agreement to support the judgment on the grounds of justus causa.

APPLICATION OF LEGAL PRINCIPLES

Application brought within a reasonable time

[15] As per the founding affidavit and more specifically paragraph 18.2 thereof the following is set out in relation to when the applicants first learnt of the default judgment having been granted against them. The relevant passage is quoted hereunder for ease of reference:

''The Applicants learned for the first time that the Default Judgment has been granted against them, on 6 December 2018, as will appear more fully infra." As previously mentioned the application for rescission was then launched on 28 January 2019.

[16] In opposition the respondent does not deny that the date upon which the applicants first became aware of the default judgment was indeed the 6Th December 2018. In the answering affidavit on point, an issue seems to be taken that where an application for rescission is brought in terms of the common law, such application should have been brought within a reasonable time and not within twenty court days, as this time limit is set where the application to rescind is premised on the provisions of Rule 31(2) (b), which is not applicable in the present instance.

[17] The application having been launched on 28 January 2109, it cannot be said that it was not brought within a reasonable time after the applicants first obtained knowledge of the judgement and as such I am satisfied that the first requirement has been met.

Reasonable explanation for default

[18] As mentioned, an applicant must satisfy the court of having given a reasonable explanation for his default.

[19] In this regard the deponent to the founding affidavit sets out that at the time when judgment was taken against them, (being 15 November 2018) they were represented by Wynand Du Plessis Inc. with its correspondent being Gerhard Botha and Partners.[3] On 20 November 2018, they terminated the services of this attorney and thereafter instructed Badenhorst & Associates Attorneys to represent them from then onwards. On 6 December 2018 their newly appointed attorneys first made contact with the respondents' attorney to arrange for pre-trial conference and it was on this date that they then obtained knowledge for the first time about the judgment against them.[4]

[20] In further establishing the circumstances in which judgment was taken against the applicants, their current attorney of record established contact with their previous attorney of record and in so doing was referred to their previous correspondent attorneys', Gerhard Botha Attorneys. In this regard, contact was made with Mr Swart the attorney responsible for the matter at the time. The applicants' present attorney was subsequently informed by Mr Swart, that indeed an application for default judgment was served on the applicants' erstwhile correspondent attorney, but that a fee dispute resulted in the correspondent attorney acting for the applicants withdrawing from the matter.[5] An email setting out their intention to withdraw as correspondent attorney and the reasons for such withdrawal was dispatched on 9 November 2018.[6] The said email, was however never received by the applicants' erstwhile attorney, Wynand Du Plessis Inc. as he experienced some

challenges with his emails and was at the time in the process of moving offices. As such Wynand Du Plessis Inc. was blissfully unaware of the date of hearing of the default judgment application.[7]

[21] It is on this basis that the applicants contend, that they were not in wilful default as they simply had no knowledge of the hearing date for the application for default judgment.

[22] In opposition the respondent alleges that the applicants numerous mistakes, oversights, lapses, negligence and other faults and inadvertence is of their own doing, and in all probability, deliberately calculated and so intended by the applicants themselves.[8]

[23] In their replying affidavit the applicants reiterated the fact that they were never informed of the hearing date for the application for default judgment by their erstwhile attorneys of record and that the only date which they were made aware of was indeed the trial date set for the 4 February 2019.[9]

[24] Mr. Baer, appearing on behalf of the applicants submitted that the explanation by the applicants regarding their default on the day that the judgment was granted, is clear and simple. They simply were not aware of the date and had they been made aware of such date, it follows they would have taken steps to make an appearance.

[25] Mr. Strydom appearing on behalf of the respondent in contrast argued that the default judgment granted on 15 November 2018, was first preceded by the service of rule 35(3) and rule 35(12) notices and thereafter by the service of a court order compelling the applicants to comply with the rule 35(3) and rule 35(12) notices. It was only as a result their failure to comply with such court order, that a subsequent judgment by default was granted against them.

[26] The explanation given by the applicants save to explain that they were not made aware of the hearing date of the default judgment, fails to address this court that they were also not aware of the notices served on their erstwhile attorneys in terms of rule 35(3) and rule 35(12) respectively.

[27] The explanation so tendered further fails to explain, that they were never served with the subsequently issued court order. In the present matter the applicants' wishes to rely upon the ineptitude or remissness of their erstwhile attorneys, but they fail to explain that none of it is to be imputed to themselves.

[28] Albeit, that the applicants were absent on the day that the judgment was granted against them, given the deficiencies of the explanation, I must conclude that the explanation is indeed inadequate under the circumstances.

Bona fide defence which prima facie has some prospect of success

[29] A weak explanation however is not the end of the matter for an applicant. A court is still required to consider the bona fide defence which has a good prospect of success.

[30] As to the applicants' bona fide defences to the respondents claim, the deponent to the founding affidavit sets out that those defences have been set out in the affidavit resisting summary judgment as well as in their plea and special pleas.[10]

[31] In this regard it is specifically alleged that the loan agreement annexed as annexure A to the Particulars of Claim, was signed by only one of the trustees on behalf of the trust on 22 March 2007. Further that at the time when the loan agreement was so signed, the signatory was not authorised to do so by the other remaining trustees. It is on this basis that the applicants contend that no valid and enforceable loan agreement was concluded between the trust and the respondent.

[32] In addition to the above, the applicants further deny the quantum that is due to the respondent more specifically the interest that have been charged by the respondent. It is on this basis that they contend that the disputed quantum also constitutes a triable issue.[11]

[33] In opposition to the defences as alleged by the applicants, the respondent alleges that the defence that the signatory to the loan agreement was without authority when he signed the loan agreement, is terse, bald and unsubstantiated. Further that the assertion that as a result thereof, the remaining trustees cannot be held to the terms of the loan agreement is wrong in law.[12] In this regard the respondent alleges that in law there is nothing precluding one trustee, acting on behalf of a trust to enter into any agreement on behalf of the trust. In this regard it is therefore contended that it is not necessary for all the trustees to co-sign the agreement for the trust to be held bound.[13]

[34] In addition, the respondent contends that the assertion by the applicants that as a result of lack of authority of the signatory that consequently, no valid and enforceable loan agreement was concluded, that this defence is therefore without merit and substantiation.[14]

[35] As to the challenge mounted in relation to the calculation of interest, the respondent contends that this defence also is meritless, as the loan and mortgage agreement contains an acceleration clause and sets out the applicable interest rate to be charged on the outstanding amount which becomes due and payable.[15]

[36] In relation to the remaining defences raised in their affidavit resisting summary judgment and pleas, i.e. specifically the point in limine of non-joinder of the remainder of trustees and non-compliance with section 129 and 130 of the National Credit Act, these preliminary

points have since all been attended to and as such they cannot once again be raised as defences to be considered in this rescission of application.[16]

[37] In their replying affidavit, the applicants deny that the defences so raised by them are not good and bona fide defences and further assert that in confirmation of this, the court had previously granted them leave to defend when the summary judgment application was indeed considered. They therefore emphatically deny that they do not possess good and bona fide defences.[17]

[38] It should be borne in mind that the judgment which forms the subject matter of this rescission application was granted pursuant to a failure by the applicants to comply with a compelling order granted against them on 20 August 2018. This court order was subsequently served on them on 24 August 2018.

[39] It is significant to note that in their founding affidavit, the applicants make no mention of their failure to comply with the provisions of rule 35(3} and rule 35(12) notices respectively. A somewhat belated attempt is made in their replying affidavit that they could not have complied with the said notices as same were never served on them, neither did they receive delivery of the court order compelling them to comply.[18] From this it appears that blame is to be apportioned to their previous attorneys of record at the time, being Wynand Du Plessis

Inc.

[40] The founding affidavit however, is evidently silent as to why they failed, after having been compelled by the court to comply with the notices, and upon further being given an indulgence to do so, they remained remiss to comply with same. It is trite that an applicant must make out a case for the relief it seeks in their founding papers, and not in a relying affidavit as is attempted to be made in the present case.

[41] It is significant to note that at the time when the said notices in terms of rule 35(3) and rule 35(12) were served on them, the applicants were represented by Wynand Du Plessis lnc.[19] This was the same attorney representing them when the court order compelling them to comply with the said notices was also obtained and subsequently served on them.

[42] Mr. Riaan Pretorius practicing as such at Wynand Du Plessis Inc. deposed to a confirmatory affidavit in support to the founding affidavit, but failed to explain in this affidavit, why the notices in terms of rule 35(3) and rule 35(12) were not complied with when served, neither did they provide the reasons as to why the subsequent compelling order obtained by the respondent was also ignored.[20]

[43] The applicants' silence on point leaves this court to resort to mere speculation as to the reasons for their failure as they have simply not taken this court into their confidence to explain how it came about that judgment ended up being taken against them. These reasons are crucial to determine as to whether the application is made bona fide and whether the applicants have a bona fide defence.

[44] Mr. Bekker appearing on behalf of the respondent expressed this very same sentiment that it was incumbent upon the applicants that they should have taken the court into their confidence and furnished an explanation, as to their failure to comply with the said notices, which ultimately resulted in judgment being taken against them.

[45] It is trite that orders of a court should be complied with and that parties simply don't have the liberty to willingly ignore compliance with court orders. It is for the very same reason that a recalcitrant party will be sanctioned upon being ordered by a court, to comply with a court order and in the event that such party remain in default and in defiance of having to comply with such court order that a judgment against such party may follow as a result.

[46] The applicants' failure to take the court into their confidence in explaining the reasons why they have been remiss in complying with the compelling order of the court, is demonstrative of a lack of bona fide defence which is indicative of having some prospect of success. It, as a result, must follow that the applicants have failed to also satisfy this requirement to have the judgment rescinded.

[47] Given the totality of reasons expanded above the following order is consequently made:

47.1 The application is dismissed.

47.2 The applicants are ordered to pay the costs of the application jointly and severally, the one paying the other to be absolved on an Attorney and Client scale, such costs to include the costs upon the employment of two counsel.

Judgment electronically transmitted

C.J. COLLIS

JUDGE OF THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION PRETORIA

APPEARANCES:

1. FOR THE APPLICANTS: ADV. H.E. BAER

2. INSTRUCTED BY:

J.J.BADENHORST & ASSOCIATES INS

ATTORNEYS

3. FOR THE RESPONDENT: ADV. C.J. BEKKER SC

& ADV. S STRYDOM

4. INSTRUCTED BY:

BEZUIDENHOUT VANZYL AND

ASSOCIATES INC.

5. DATE OF HEARING:

14 NOVEMBER 2019

6. DATE OF JUDGMENT: 24 APRIL 2020

[1] Notice of Motion p 1-2

[2] Founding affidavit p 9-13 para 15.

[3] Founding Affidavit para 19.6 p 17

[4] Founding Affidavit para 19.8-para19-11 p 18

[5] Founding Affidavit para 19.12-para 19.14 p 19

[6] Founding Affidavit annexure "FA 10" p 53

[7] Founding Affidavit para 19.15- para 19.17

[8] Answering Affidavit para 26.1 p 99

[9] Replying Affidavit para 94-97 p 165

[10] Founding affidavit para 201. p 22

[11] Founding affidavit para 20 p 22-24

[12] Answering affidavit para 28 p 101

[13] Answering affidavit para 28.4 p 101

[14] 14 Answering affidavit para 28.5 p 101

[15] 15 Answering affidavit para 28.10 p 102

[16] Answering Affidavit para 28.8 & para 28.9 p 102

[17] Replying Affidavit para 188-191 p 185

[18] Replying Affidavit para 94 & para 95 p 165

[19] Founding Affidavit para 19.5 p 17

[20] Annexure "FA 8" P 48-49