Road Agency Limpopo v Tshepanga Engineers (Pty) Ltd (981/2016) [2020] ZAGPPHC 787 (24 December 2020)

REPUBLIC

OF SOUTH AFRICA

IN

THE HIGH COURT OF SOUTH AFRICA

LIMPOPO DIVISION, POLOKWANE

CASE NUMBER: 981/2016

(1) REPORTABLE: YES/NO

(2) OF INTEREST TO THE JUDGES: YES/NO

(3)

REVISED

24/12/2020

In the matter between:

ROADS

AGENCY LIMPOPO

APPLICANT

And

TSHEPAGA ENGINEERS (PTY) LTD

RESPONDENT

JUDGEMENT

MG

PHATUDI J

Summary:- Civil procedure- rescission of a default order or judgment erroneously sought or granted – applicant need not demonstrate

“good cause:- a bona fide defence would suffice- rule 42 (1) (a) Uniform rules of court – court may, in addition to any other powers, mero motu or on application by affected party rescind or vary judgment or order – the order obtained per incuriam if no proper notice served on absent party – in casu, order given erroneously by default due to respondnet’s concealment of fact that led to applicant’s absence –

such conuct inevitably misled court – a good ground to set aside the impugned default order- Held, application should have been struck off the roll – not dismissed. Held further, the order dismissing rescission application found erroneous, and is thus set aside with costs.

_________________

[1] This is an application for a rescission of the order granted against the applicant by Tshidada AJ on 12 February 2020. The order, which was granted by default, effectively, dismissed the application for a rescission of an order this court had granted by default against the present applicant, Roads Agency Limpopo (Soc) Ltd on 11 February 2019. (“RAL”). The order related to the main action proceedings.

2.1 The present application is opposed by the respondent Tshepang Engineers (Pty) Ltd (“Tshepega”).

FACTUAL BACKGROUND:

[2] On 29 March 2016 the respondent (“Tshepega”) sued out a combined Summons in this court against the applicant (“RAL”) for alleged breach of contract for delivery of the engineering services to the applicant being for upgrading of roads under PROJECT RAL/C535/2007.

2.1 The amount claimed by the respondent against the applicant as damages was in the sum of R10 632 497.07. together with interest reckoned at 9% from 23 June 2015 to date of payment, plus costs of suit.

2.2 Subsequent thereto and on 11 February 2019, MG Phatudi ADJP (as he then was) granted default judgment against the RAL, the present applicant’s for the amount claimed in the combined summons.[1] The said default Judgment was obtained after the RAL’s legal representative did not appear in court for RAL.

This much is also affirmed by the applicant’s interim Chief Executive Officer (“the CEO”) in the founding affidavit

(“FA”) in respect of the “first rescission” application, which was launched on 07 March 2019 against the default order. This application was also opposed by Tshepaga.

[3] It is however not clear from the papers what the fate of this “first rescission” application was. It seems to me that this “first rescission “ application was left pending since March 2019, until on 12 February 2020 when Tshidada AJ has had it dismissed with costs. The dismissal thereof, came as a result of the applicant’s failure to show up in court on 12 February 2020.

[4] Aggrieved by the dismissal of the “first rescission” application, the applicant approached this court once again by way of urgency seeking what I would refer to as the “second rescission” application. This application was launched on 02 March 2020. The matter was heard on 05 October 2020 and judgment was reserved. The issue of urgency was, however, not pursued.

[5] The reasons for the delay in bringing the “first rescission” application to a finality is, on a reading of the papers, due to both parties’ inaction and also a delayed expeditious exchange of legal process. The applicant alleged in its “FA” that it became aware of the “first default order” on 12 February 2019. The “first rescission” application was prepared launched and served on the respondent on 06 March 2019

5.1 It took the respondent just shy of five (5) months to deliver an answering affidavit (“AA”) to the current application, which was served on 30 July 2019.

5.2 A replying affidavit (“RA”) was served and filed some two months on 30 September 2019.

5.3 The time it took the parties to settle their respective affidavits, (“F.A.R”) was indicative of the Chameleonic pace with which the proceedings were set in motion and unfolded.

WAS THE APPLICANT IN WILFUL DEFAULT?

[6] I consider it opposite to first examine whether or not was the applicant in wilful default when the “second default order” dismissing the “second rescission” application was sought and granted.

6.1 The deponent to the “FA”, Mr Everton Mohlatlego Dankuru, (“Dunkuru”) an attorney of this court, then a professional assistant to Verveen Attorneys and also the applicant’s attorneys of record, declared in evidence under oath, among other things, that on 29 October 2019, he received a notice of set down from the respondent’s attorneys of record. This notice was aimed at informing the applicant of the enrolment and the hearing of the main rescission application on 12 February 2020.

6.2 Upon receipt thereof Dankuru forwarded an email to attorney Mr Francois Alberts (“Alberts”) dated 08 October 2019[2]. In it, Mr Alberts was advised of the procedure that must be adhered to by a litigant seeking to enrol a matter on the opposed motion court roll for hearing.

6.3 According to Limpopo Practice Directives (“LPD”) the registrar shall only allocate a hearing date once the legal practitioners have settled both their respective heads of argument, and the Practice Note especially the applicant’s counsel. In addition, the court file must be properly indexed and paginated by the applicant or the requester. In the same breath, Dankuru anticipated a response and whether there has been compliance with the LPD referred to.

6.4 Pursuant thereto, Alberts in an email dated 29 October 2019, replied that he “referred the matter to our correspondent and “will revert” shortly.

6.5 On 11 November 2019, Alberts reminded Dankuru of the index, which is customarily required in preparation of opposed motions.

6.6 Based on further telephonic conversation between Dankuru and Alberts on 29 October 2019, Dankuru had verily believed that Alberts had fully appreciated the requirements of the LPD, and as such, the matter would not proceed to be heard on 12 February 2020, but will instead be removed by Alberts from the roll.

6.7 According to the correspondence exchanged by the attorneys, the objective facts as evinced in the exchanged emails ineluctably demonstrated that the rescission application was prematurely or improperly set down and in a spirit of collegiality, should have been removed from the roll of 12 February 2020.

[7] Furthermore, on 28 November 2019, Adv Venter filed a Practice Note[3]. Ex facie the said practice note under heading “Date on Roll”, it states that : “not allocated yet”. It follows

naturally that when the relevant practice note was prepared and filed, clearly, the respondent did not deem the matter ripe for

hearing yet.

7.1 On 05 December 2019 and in response to Alberts email dated 11 November 2019 (annexure “M”P10, “FA”) where he demanded an index, Dankuru undertook to furnish the same. (Annexure “EDM4).

7.2 Subsequent thereto and on 06 December 2019, Alberts requested Dankuru to forward to him heads of argument. ( annexure N”, P111, FA”).

[8] The contents of the email dated 20 January 2020 addressed to Alberts’ correspondent and copied to his counsel, Mr A.J Venter, demonstrated the cavalier manner in which Alberts has handled this rescission application before it was dismissed. (annexure “O”P.112, “FA”)

[9] Despite all these telling correspondences, and applicant having filed heads of argument as early as 13 February 2020, the matter proceeded before Tshidada AJ on 12 February 2020 in the absence of the applicant resulting in the dismissal thereof.

THE ISSUE:

[10] Bearing in mind the a foregoing factual matrix, can it reasonably be said that the applicant acted in wilful default when the main rescission application was dismissed in its absence?

The answer is a very definite “No’

The view I take of the matter is that the applicant had demonstrated from the evidence presented in its “FA” that sufficient

explanation had been given for the default. In the present instance, applicant need not show “good cause” for the default. It suffices to show that it has a bona fide defence or a triable issue in due course.

[11] But, what does the notion “good cause” entail in legal parlance?

[12] It is not competent for a court to assign any juridical meaning to the concept “good cause” for the purposes of deciding whether or not a litigant had succeeded to show that he/she was not in wilful default. It would be adequate, in my view, if sufficient and reasonable explanation is proffered by a party seeking an indulgence. Each case must be determined entirely on its own merits and peculiar circumstances. It is therefore difficult to lay down a hard and fast definition of the concept “good cause”. This, however, was unnecessary for present purposes.

THE LEGAL PRINCIPLES:

[13] It is generally accepted that Rule 42 (1) of the Uniform Rules of Court governs applications of this nature. It provides inter alia as follows:-

Rule 42 (1):

“The court may, in addition to any other powers, it may have mero motu or upon 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) ------------------------------------------------------

(c) ------------------------------------------------------

[14] Properly interpreted sub rule 42 (1) (b) imports the following:

14.1 The court exercises a judicial discretion whether or not to grant a rescission of order or judgment erroneously sought or granted, and

[15] An order would be erroneously sought or granted per incuriam if no proper notice to the absent party had been served. This is irrespective of the correctness or otherwise of the order or judgment issued.[4]

[16] Accordingly, an order is erroneously granted if it was legally incompetent for the court to have granted it in the first instance.

[17] Where the absent party, such as the present applicant, was not properly notified of the date of hearing by a proper notice of set down, or where after having been improperly served, an order or judgment subsequently granted as a result of such an irregular notice, would, in my view, be erroneously sought and granted.

[18] The above proposition would in fact obtain where the court hearing the default application, was not apprised of the irregular notice, or that certain material facts had been concealed to enable a trier of fact to make a fair and just decision on the merits, with the result that, had the true facts been made known to it, the court would not have granted the disputed order or judgment[5]. Such order or judgment is liable to be rescinded and set aside without further a do.

[19] It is generally trite principle at common law that the court is perfectly entitled to rescind an order or judgment obtained by default of appearance provided sufficient cause is shown on the facts. Sufficient explanation would require a reasonable explanation for the default. Crucially, the defaulting party is, in addition, obliged to establish on the merits that he/she has a bona fide defence at law, regard being had to the provisions of Rule 31 or 42.[6]

[20] In this instance, the facts and the evidence presented on behalf of the applicant (para: [6], 6.1 to 6.6; and [7] 7.1 to 7.2; [8] and [9], above are on a balance of probabilities, compelling to conclude that the applicant did not act in wilful default when the dismissal was effected. This is borne out by the fact that the learned Acting Judge did not hear the matter on the merits.

[21] It stands to reason therefore that the decision did not lead to a final definitive order of the underlying dispute or a substantial portion thereof. In other words, this court is not precluded to alter its own decision, with the result that the order in question is susceptible to be varied by this court, and is in consequence, not appealable. [7] This is because the order can be rescinded at the instance of the aggrieved party.

[22] The submission on behalf of the respondent by Mr Venter that as no replying affidavit had been delivered, then the Plascon- Evans[8] rule applies, is in my view, untenable.

22.1 This is because the dismissal of the “second rescission’ application did not flow from the hearing of the merits.

22.2 Furthermore, nothing on the affidavits indicate that the applicant, despite the purported set down, was in fact made aware that the matter would proceed. Dankuru’s version was that he laboured under the impression that pursuant to the telephonic discussion he held with Alberts previously, and later counsels Practice Note, the matter was at that time not yet enrolled.

22.3 Furthermore, nothing appears from the papers to suggest that Alberts forwarded Dankuru notice that the application persists.

22.4 No wonder it was submitted by Mr. Gouws, counsel for the applicant, that Mr Alberts’ conduct had “simply stole a march on the applicant”. I agree.

22.5 The fact that a notice of set down was allegedly served by the respondent on the applicant’s attorneys did not in itself pave way for Mr Alberts to renege on the attorney’s agreement not to persist with the matter. This conduct, in my view, boarders on a breach of professional ethics.

22.6 Moreover, the denial by the respondent’s attorneys of the agreement not to proceed with the matter though irregularly set down contrary to the Practice Directives of this Division, is defied by a myriad of correspondence exchanged between the parties.

22.7 What these documents laid bare actually illustrates a profound egregious conduct on the part of the respondent’s attorneys. The non-disclosure to Tshidada AJ by the respondents counsel or his attorney of the reasons of applicants absence in court, amounted to misleading the court, which is essentially conduct that substantially deviated from norms and standards expected of the legal practitioners. The aforegoing sentiments were echoed in STAINBANK v SA APARTHEID MUSEUM AT FREEDOM PARK & ANOTHER[9]

[23] For the above considerations, I reject the submissions made by the respondent in an attempt to justify its opposition to the matter at hand.

WAS THE DISMISSAL OF THE “SECOND RESCISSION” APPLICATION COMPETENT?

[24] In the present instance, I am satisfied on the facts and the evidence presented that the order granted was a default order, clearly, obtained in the absence of the applicant.

The court should, therefore, not have dismissed the application, but should have simply struck the matter from the opposed roll because of non-appearance of the applicant and/or its counsel. In that event, the matter would have upon the submission of an affidavit explaining the default, be reinstated in a matter of few weeks as permitted in terms of the Practice Directives. This approach is also in line with the sentiments expressed by Makgoba JP (Muller J et Ledwaba AJ, concurring) writing on behalf of the Full Court in the case of the MINISTER OF POLICE V KRITZINGER.[10]

[25] Having found that the order was erroneously sought and granted, this court is at large, without more, to rescind and set it aside. This is supported by the recognised principle that where an order of judgment was erroneously obtained due to non-disclosure of certain material facts at the time it was issued, it is often even unnecessary for the defaulting party to show ‘good cause’ for the default under the subrule.[11]

[26] In the premises, the application under consideration must succeed.

COSTS:

[27] Legal costs in the majority of cases follow the event. The awarding of costs resides in the court’s discretion.

The applicant in this instance has been successful in its application for rescission of the impugned order;

[28] The applicant prayed for the attorney and client costs de bonis propris against the respondents’ attorneys, in particular, Mr Alberts. I would be loath to consider granting a personal punitive costs order against him, even if it can be argued that he” stole a march on the applicant,” for him to gain surreptitious

advantage over Dankuru or applicant. The applicants chronology events and how two court appearance notices slipped through its fingers, militates against the awarding of costs de bonis propriis against Mr Alberts personally..

[29] The applicant’s conduct also reveals that it was the author of its own misfortune. It is to blame for its self-inflicted damage, which leaves much to be desired. The conduct of its proceedings from the word go, was done quiet lackadaisically.

[30] Although I have expressed disquiet on how Mr Alberts has handled the matter, I am not entirely persuaded to mulct him personally with an adverse costs order. His law firm should however carry the client’s costs as it was he who opposed the application.

[31] In the result, this extreme measure would be unjustified in the circumstances, which, in any event, are not exceptional. I thus make the following order.

ORDER:

(a) The application for a rescission of the order granted on 12 February 2020 (Tshidada AJ) is granted;

(b) that, the default order issued on 12 February 2020 is set aside;

(c) That, the Writ of Execution authorised by the Registrar of this court is set aside;

(d) Further, the applicant be and is granted leave to defend the main action;

(e) Further, that the law firm Alberts Attorneys Incorporated and/or Mr. Louis Francois Alberts is ordered to pay attorney and client costs jointly and severally, the one paying the other is absolved, such costs to include the costs occasioned by employment of counsel.

MG

PHATUDI

JUDGE

OF THE HIGH COURT

REPRESENTATIONS:

Counsel for Applicant : Adv S.G Gouws

Briefed by

: Verveen Attorneys, Polokwane

Counsel for the Respondent : Adv A.J Venter Attorneys

Briefed by

: Alberts Attorneys Inc, Bloemfontein

C/O Chayya Attorneys, Polokwane

Date of heard : 05 October 2020

Date delivered :

Judgment is deemed electronically

delivered on 24 December 2020.

[1] Index: The rescission application Vol.1, P23, “FA”.

[2] Ibid p.

108. Annexure “EMD”FA”

[3] Annexure “EMD3” “FA”

[4] Custom credit corporation Ltd v Bruwer 1969 (4) SA 564 (D)

[5] Van der Merwe V Firstrand Ltd t/a Wesbank and Another 2012 (1) SA 480 (ECG)

[6] De wet v Western Bank Ltd 1979 (2) SA 1031 (A)

[7] Pitelli v Everton Gardens Projects CC 2010 (5) SA 171 (SCA) para: 27.

[8] Plascon – Evans Points Ltd v Van Riebeeck Paint (Pty) Ltd 1984 (3) SA 623 (A).

[9] 2011 (10) BCLR 1058 (CC) at Para: 52.

[10] Case No: HCAA 09/2018 [2019] ZALMP HD delivered on 10.05.2019, para ; [22]

[11] Naidoo v Matlala N.O & Others 2012 (1) SA 143 (GNP) at 153C. See also Kgomo v Standard Bank S.A Ltd 2016 (2) SA 184 (GNP)