Shaya Phansi Projects CC v Montgomery Plant Hire and Construction CC and Another (2849/2021) [2025] ZAMPMHC 36 (25 July 2025)

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

MPUMALANGA DIVISION (MIDDELBURG LOCAL SEAT)

CASE NO: 2849/2021

(1) REPORTABLE: NO

(2) OF INTEREST TO OTHER JUDGES: NO

(3) REVISED: NO

DATE: 25 July

SIGNATURE

In the matter between:

SHAYA PHANSI PROJECTS CC

APPLICANT

AND

MONTGOMERY PLANT HIRE AND CONSTRUCTION CC FIRST RESPONDENT

MONTGOMERY GROUP (PTY LTD)

SECOND RESPONDENT

JUDGMENT

CORAM: LANGA J:

Introduction and Concise Facts

[1] This is an opposed application for the rescission of the judgment granted in default on 29 April 2024 by the Registrar of this court against the Applicant in favour of the Respondents. The Applicant, who is the Defendant in the main action, seeks the rescission of the said judgment in terms of Rule 42(1) of the Uniform Rules, (“Rules”), on the grounds that it was erroneously sought and granted in its absence. In the alternative the Applicant contends that that good cause exists for the rescission of the judgment. The Respondents, who are the Plaintiffs in the main action, are opposing the application.

[2] This matter emanates from a contract entered into by the Applicant and the Respondents in 2020 in terms of which the latter were required to perform certain demolition work for the former. It is common cause that subsequent to the demolition work in question, and after the Respondents issued a letter of demand in terms of section 345 of the Companies Act 68 of 1973, the Applicant raised a dispute relating to the quality of the service rendered by the Respondents.

[3] It is however not disputed that the Applicant paid certain amounts towards the deposit and that on 30 November 2020 the Respondents rendered a statement to the Applicant in the amount of R676 048.00. It is further common cause that subsequent to this statement the Applicant paid an amount of R200 000.00 to the Respondents on 7 January 2021 in respect of the services rendered. It seems not to be disputed that of the contract amount of R1 243 380.00, the Applicant paid in all an amount of R752 331.58. The Respondents therefore contend that an amount of R491 048.42 is still outstanding, and this is the amount claimed in the summons and in respect of which judgment was granted by the Registrar as stated above.

[4] It is common cause that consequent the non-payment, the Respondents, as stated above, caused a letter of demand in terms of section 345 of the Companies Act 68 of 1973 to be issued and sent to the Applicant on 19 May 2021. The Respondents demanded payment of R476 048.00 allegedly owed to them by the Applicant.

[5] In response to this letter the Applicant disputed the alleged indebtedness based ostensibly on section 345 of the Companies Act 68 of 1973. Mention must be made at this stage that in this letter the Applicant is cited by the Respondents as Shaya Phansi (Pty) Ltd (Registration number 2004/029291/23) with the address at 1[…] Avenue, Rietkol, Sundra, Mpumalanga. I will revert to this aspect in the ensuing paragraphs.

[6] In response to the statutory demand in terms of section 345, on 14 June 2021 the Applicant’s attorneys informed the Respondents’ attorneys inter alia that they are acting on behalf of the Applicant and that the Applicant is disputing the alleged indebtedness to the Respondent. They further informed the Respondents’ attorneys that “if any further legal action is to be brought by your offices you are welcome to serve such summons on our office”. A further letter was issued by the Applicant’s attorneys on 26 August 2021 informing the Respondents’ attorneys that they have instructions to oppose any legal action to be instituted by the Respondents and requesting that they be advised when a summons is issued and requesting an undertaking that they will be given ample notice of such proceedings.

[7] It however appears from the papers that on 25 August 2021, a day before the Applicant’s letter of 26 August 2021 referred to in paragraph 6 above, the Respondents caused a summons (which was signed by the Respondents’ attorneys on 13 Augst 2021) to be issued against the Applicant. It is common cause that the summons was served on the Applicant by way of affixing at the address which was used by the Applicant as its registered address when the contract was entered into. The address in question is 2[…] T[…] Avenue, Rietkol, Sundra, Mpumalanga. It is clear from the return of service that the Sheriff recorded that the Applicant was unknown at that address which was occupied by one De Lange at the time. It is pursuant that service that on 29 April 2024 default judgment was granted by the Registrar against the Applicant in favour of the Respondents in the former’s absence.

The Applicant’s contentions

[8] The Applicant contends that when the summons was purportedly served by affixing, it was no longer using the service address which it avers had changed when it converted from Close Corporation to Private Company in 2016. The Applicant further alleges despite the fact that the Respondents were informed that the Applicant was no longer at that address and further that notwithstanding the fact that its attorneys had indicated to the Respondent’s attorneys that any court process may be served on them, the summons was nevertheless served by affixing and not even informing them or serving the summons on the Applicant’s attorneys.

[9] The Applicant contends therefore that it did not receive the said summons and that it only became aware of the judgment on 06 June 2024 and unsuccessfully attempted to obtain a rescission by consent. However, when the Respondents refused to acquiesce to the request the Applicant approached court for the rescission of the judgment.

[10] The Applicant contends therefore that the legal issues to be determined in this matter are the issues of the citation of the Applicant as a close corporation and whether the order was sought and granted erroneously, alternatively, whether there is good cause for the granting of the application.

The Respondent’s Contentions

[11] The Respondents on the other hand argue that since the order in this case was granted by the Registrar, the processes and requirements of Rule 31(5)(d) are of application in this matter. They argue that the Applicant has failed to explain why the matter has not been dealt with in terms of this rule and that this constitutes a fatal irregularity in the application.

[12] The Respondents further argue that it must be determined whether the Applicant has for the purposes of Rule 31(5)(d), alternatively, the common law, shown "good cause" for the recission. They contend that the Applicant must establish inter alia that first, there is a reasonable explanation for default. Secondly, the absence of wilfulness causing default must be established. Thirdly, it must establish that the application is made bona fide and not with intention to delay. Fourthly, that the Applicant has a bona fide defence to the Respondents’ claim which prima facie carries some prospect of success. The Respondents rely inter alia on the matter Vilvanathan and Another v Louw 2010 (5) SA 17 (WCC).

[13] The Respondents argue further that for the purposes of Rule 42(1) it must be determined whether the Applicant has established that the order was erroneously sought or granted by court in its absence and whether if so, the Court should exercise its discretion to rescind or set aside the order. They argue that some of the jurisdictional requirements have not been met and that the application therefore falls to be dismissed.

The legal issues for determination

[14] The issues for determination in this matter can be summarised as follows:

[14.1] Whether the Applicant followed the correct procedure in seeking the setting aside or rescission of the order;

[14.2] Whether the Applicant has shown good cause for rescission for the purposes of Rule 31(5)(d) or common law;

[14.3] Whether the Applicant has established, for the purposes of Rule 42(1)(a), that the order was sought and granted erroneously in the absence of the Applicant, and if so, whether the court should exercise its

discretion to rescind or set aside the order.

[14.4] The last issue is one of costs.

The Applicable Legal Principles

[15] It is trite that once a court has granted an order, it is functus officio and does not itself have the authority to alter or set aside that order. It is further established law that an order granted by the Registrar of a court remains an order of Court and any rescission thereof has to be done in terms of the rules. As the

order in casu was granted by the Registrar, the processes and requirements of Rule 31(5)(d) of the Rules apply.

[16] Rule 31(5)(d) essentially provides that any party dissatisfied with a judgment granted or direction given by the Registrar may, within 20 days after such party has acquired knowledge of such judgment or direction, set the matter down for reconsideration by the court.

[17] Rule 42(1)(a) on the other hand provides that a Court may mero motu or upon application by any party affected, rescind or vary any order or judgment erroneously sought or erroneously granted in the absence of any party affected thereby. In terms of this rule judgment may be rescinded where there is a mistake or error either in the process of seeking the judgment or in the granting of the default judgment. See Kgomo v Standard Bank of South Africa 2016 (2) SA 184 (GP). In such a case the applicant does not have to show good cause for the rescission or variation. Where the applicant is able to show that there was an error the court may without further enquiry rescind or vary the default judgment.

[18] Such a judgment granted in default may also be rescinded or varied in terms of common law if the applicant can show that (a) there is a reasonable explanation for the default, (b) that the application is bona fide and (c) that he has a bona fide defence with some prima facie prospects of success. See Colyn v Tiger Food Industries Ltd t/a Meadow Feed Mills (Cape) 2003 (6) SA 1 SCA at paragraph 11.

Discussion and analysis

Point in limine and service of the summons

[19] Before I deal with these legal issues I will address the Applicant’s point in limine regarding its citation by the Respondents as a Close Corporation in paragraph 4 of the particulars of claim. The Applicant’s assertion is that it converted from the Shaya Phansi CC to Shaya Phansi (Pty) Ltd on 20 December 2016. It avers further that its registered address was also changed to 3 Duiwelspiek, Aerorand, Middelburg, Mpumalanga on 18 July 2019 and that this new address was effective from 27 July 2019 as supported by the CIPC records. The Applicant relies in this regard on Annexure “I”

of its Founding Affidavit and annexure “RA1” to its Replying Affidavit.

[20] The Applicant contends therefore that the effect of the conversion of the close corporation is that Shaya Phansi is no longer a close corporation but a company and should be sued as such. It contends further that when the summons was issued it was operating as a private company from the new address confirmed by the CIPC on 18 July 2019 and not the previous address of the CC where the summons was served by affixing.

[21] In the answering affidavit the Respondents argue that the service of the summons was effected by their erstwhile attorney in terms of Rule 4(1)(a)(v) on the registered address of the Applicant as the CC. The Respondents further contend that the reason for the service at the CC’s address was the result of the representations made by the Applicant in its dealings with the Respondents. They argue that all along the Applicant transacted as a CC even though it contends that it had converted to a company with anew address and was therefore wrongly cited as a CC.

[22] It is indeed evident even from the founding affidavit in this matter that the Applicant still continued referring to itself as Shaya Phansi Projects CC, “a close corporation duly registered and incorporated in terms of the laws of the Republic of South Africa”. Furthermore, the resolution in Annexure “A", purports to be that of SHAYA PHANSI PROJECTS CC (Reg. Nr:

2004/029291/23). In addition, the purchase order, (Annexure “AA5”), still refers to the registration number of the close corporation (Reg. Nr: 2004/029291/23) and the addresses used thereon is not the new one which the Applicant now relies on. The address reflected is the one which the Applicant used as its principal place of business as a CC, namely 195th Avenue, Rietkol Sundra, Mpumalanga. This is the same address used by the Applicant in the letter of 21 July 2020 to the Respondents accepting the quotation.

[23] Given the above facts, it is clear that despite its argument otherwise, the Applicant deliberately or inadvertently gave the impression that it is still operating as a close corporation from the same addresses. If the Applicant was no longer operating as a close corporation this would have and should have been spelt out in the founding affidavit as well. Although annexure “I” to the founding affidavit shows that the Applicant is operating as Shaya Phansi (Pty) Ltd from a different registered address, the Applicant still cited itself as CC and not a private company even in these proceedings.

[24] Over and above the impression created by the Applicant, it is further clear that even long after its conversion, the Applicant still appeared in the CIPC data base as a close corporation with the same registered address namely 2[…] T[…] Avenue, Rietkol, Sundra, Mpumalanga. This is the same address where the summons was served according to the Sheriff’s return of service as stated in the preceding paragraphs.

[25] It is necessary at this stage to consider the provisions of Rule 4(1)(a)(v) which provides that in the case of a company or corporation, 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 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”. In this case the summons was dealt with by affixing as there was no employee at all to accept any service.

[26] The Applicant seems to argue that since it has not been established that there was an employee of the Applicant not willing to accept service, the service by affixing was therefore bad. This contention in my view amounts to elevating form over substance and is inconsistent with the decision in Brangus Ranching (Pty) Ltd v Plaaksem (Pty) Ltd 2011 (3) SA 477 (KZP) which was quoted with approval in Arendsnes Sweefspoor CC v Botha [2013] JOL 30596 (SCA). The SCA in Arendsnes agreed with the proposition that effectiveness of the service of a court process or substantial compliance should trump form. Consequently, even though there was no employee present not willing to accept the service, the service of the summons by affixing at the registered address constitutes substantial compliance with the rule. A proper procedure was therefore followed in order to allow the Applicant an opportunity to participate in the process. Any confusion or prejudice which may have resulted stems from the Applicant’s own conduct in representing itself as a CC and/or failing to ensure that the CIPC records are properly updated. This service in my view was adequate and in conformity with the law.

[27] The next question is whether the address was the correct address. In the light of the representations made by the Applicant as alluded to above, the issue whether the Applicant was cited as a close corporation or private company is of no moment. What is important is that in the circumstances where until 2014, 8 years after the conversion from CC to Pty (Ltd), the Applicant still presented itself as a close corporation, the Respondents were clearly entitled to assume that the Applicant still operated as a close corporation with the registered address at which the summons was served.

[28] It is also evident that even when the contract was entered into, the Applicant purported to act as a close corporation. Furthermore, the Applicant has not refuted the averment by the Respondents that up until at least 2024, the CIPC records still reflected the Applicant as a CC with the same registration number despite the Applicant’s contention that the details have been changed. The Respondents in my view cannot be held responsible for the lapse in the proper updating of the records.

[29] Further, the argument by the Applicant that the service is defective as its attorneys had indicated that the summons may be served on them if action is taken cannot be correct. The fact that the attorneys volunteered to receive the summons does not trump the rules or render the service thereof in terms of the rules defective. The Respondents were not under any obligation to slavishly act in terms thereof and were entitled to serve the summons at the registered address of the Applicant in terms of the rules. As stated in Arendsnes Sweefspoor CC, supra, if service is contested the court must determine “whether service was good and legally recognised or substantially compliant with the rules of service”. For the reasons stated above I find that the service was consistent and substantially compliant with the rules of service and in particular Rule 4(1)(a)(v).

Rule 31(5)(d)

[30] I will now proceed to deal with the question whether the Applicant followed the correct procedure in seeking the setting aside or rescission of the order granted by the Registrar. The Respondents contend that the Applicant failed to follow the correct procedure by not having the matter set down for reconsideration in terms of Rule 31(5)(d). They further submit that the failure to explain why the correct subrule was not followed has fatal consequences to the application insofar as it seeks to make out a case in terms of the rule. They contend that the only mention of Rule 31 made in the founding papers is to subrule 31(2)(b) which is of no application in this matter.

[31] It is trite that Rule 31(5)(d) deals with judgments granted by the Registrar and affords the dissatisfied party 20 days after such party has acquired knowledge of such judgment, to set the matter down for reconsideration by the court. While reconsideration is an option for the defendant against whom an order has been made by the Registrar, I am however not in agreement that the failure by the Applicant to have the matter reconsidered in terms of Rule 31(5)(d) renders the application for rescission fatally defective.

[32] It is trite that a judgment by default granted and entered by the Registrar is deemed to be a judgment of the court in terms of section 23 of the Superior Court Act 10 of 2013. That being so a court still retains its discretion under the rules and common law to set aside such an order once the applicant has established all the jurisdictional facts as set out in the Rules and in the common law. The failure to follow the process prescribed by Rule 31(5)(d) does not in my view bar the Applicant from approaching the court on the basis of other rules or the common law.

Whether judgment was erroneously sought or granted

[33] It is evident from the application that the Applicant relies specifically on Rule 42(1)(a). For the purposes of this rule, it must be determined whether the Applicant has established that the default judgment was erroneously sought and granted in its absence and that there was an error committed by court in granting it. I have already dealt with the question of the address and service above and found that contrary to the Applicant’s contentions, the service was not defective. The error relied on by the Applicant is in the service is that the service by affixing was bad as it was at a wrong address. Unlike in this case, in Brangus, supra, where there was no affixing, the service was found to be defective. As already pronounced above, the service in this case was not defective as it complied substantially with the rules of service. On this basis alone the judgment was not erroneously sought and granted. This should be the end of the matter as the application is predicated on the allegedly defective service. However, notwithstanding this finding, I will consider whether the Applicant was in wilful default and whether it has a bona fide defence.

[34] It is trite that for a court to grant the application for rescission the Applicant has to, at the very least, show that it was not in wilful default and that it has a bona fide defence. A further requirement under common law is that the applicant must show good cause. In the absence of a bona fide defence such an application ought not to be granted.

Wilful default

[35] As regards default, there appears to be no issue that when the summons was served the Applicant was no longer at the given address. The return of service clearly shows that the Applicant is unknown at the given address. The facts therefore do not support a conclusion that the Applicant had knowledge of the action and wilfully refrained from entering appearance to defend. It accordingly could not be disputed that the Applicant never had any knowledge of the action and wilful default cannot therefore be attributed to it. I consequently find that there was no wilful default on its part. This then takes me to the issue of bona fide defence which is important for the Applicant to establish.

Bona fide defence

[36] Concerning the requirement of a bona fide defence, it is trite that the Applicant only has to establish a prima facie defence. The Applicant must accordingly set out the facts which if established at the trial would constitute a good defence. It is not necessary at this stage for the Aplicant to prove the case on the merits.

[37] The Applicant’s defences on the merits appears to be firstly the contention that the claim had prescribed as the defective service would not have interrupted prescription. Secondly, it raises a defence akin to the exceptio non adimpleti contractus by contending that it did not have to pay the Respondents because the latter did not perform according to the agreement.

[38] Concerning prescription, considering the finding that the service was not irregular or defective, the prescription clearly would have been interrupted. Consequently, this defence cannot stand and is therefore dismissed.

[39] The next defence is in essence that the Respondents have not performed in terms of the agreement and that they failed to perform the demolition services on time and with the necessary degree of skill and diligence . The Applicant contends therefore that the Respondents were in breach of the agreement which entitles it to damages and to withhold payment.

[40] The Applicant relies in this regard mainly on the Respondents’ email dated 12 October 2020 in which they inform the Applicant of the failure of the blast on “Thursday”, (presumably the Thursday before Monday of 12 October 2020) and the reason therefor. The Respondents however explain that the email referred to was simply a feedback on the failure of the first blast and why second blasts, which were completed on 20 October 2020 (eight days later), were required. They further aver that the Applicant was satisfied with the work and it was only after the section 345 notice was issued in respect of the outstanding amount that the Applicant complained about the quality or completion of the work. This explanation by the Respondents was not seriously disputed by the Applicant in reply.

[41] While the Applicant confirms that its attorneys only raised the issue in response to the section 345 notice, it however does not also mention that it raised the issue of the quality of work and duration only after it had already made partial payments without complaint. In fact, it is evident from the email dated 30 November 2020, (“Annexure AA10”), from Justin Langley of the Applicant, that the Applicant even requested the Respondents to provide it with the invoice and statement for the works and did not raise any complaint regarding the work done.

[42] Furthermore, apart from merely baldly alleging that the Respondents are in breach of the contract, the Applicant does not fully set out the factual basis for the said breach. The Applicant ought to have made all the essential averments to sustain the exceptio non adimpleti contractus defence if it seeks to rely on a right to withhold its performance due to non-performance or improper performance by the Respondent. The Applicant has failed to make all the essential averments necessary to support this defence.

[43] On the other hand, the Respondents have demonstrated that despite delays to which the Applicant contributed and the further blasts for which the Applicant was not charged extra, the work was completed within the stipulated time frame. I am accordingly of the view that the Respondents have shown the terms of the agreement entered into, the correct wording of the guarantee and that the work was in fact done in accordance thereto. The Respondents have cast serious doubt on the Applicant’s alleged defences on the merits.

[44] It is trite law that an applicant cannot make out his case in reply. A proper case must be made out for the relief sought in the founding papers. The Applicant not only made bald allegations that purports to constitute a defence, but it also raised the issue of bona fide dispute of fact only in reply after the Respondents refuted its defences in the answering affidavit. It must be pointed out that factual disputes are not the jurisdictional requirement for rescission particularly as the relief sought is not final.

[45] In Gangat v Akoon [2021] ZAGPJHC 828, the court found that the Plascon-Evans Rule dealing with dispute of facts was not applicable to applications for rescission as the order to be made would be interim in effect. However, in Jansen van Rensburg v Beynon [2003] JOL 10630 it was held that where the rescission would have the effect of a final relief in that the parties would not have an opportunity to ventilate their cases before another court, the Plascon-Evans Rule should apply. See also Storti v Nugent and Others 2001 (3) SA 783 (W). In the present case, apart from the fact that the issue of bona fide factual dispute was only raised in reply without substantiation, this is in any event not a jurisdictional requirement in terms of the common law or the rules. The Plascon-Evans Rule should not be of application in this matter. However, the Applicant’s change of defence by adding dispute of fact in reply only shows the Applicant’s lack of bona fides.

[46] In the final analysis what stands out in this matter is that the Applicant failed to set out the material facts on which its allegations are based. The Applicant has in my view failed to set out a proper defence on the merits. Likewise, concerning the alleged damages which the Applicant ostensibly relies on for the purpose of rescission, the Applicant has not set out a proper counterclaim to establish a bona fide defence or good cause. What it relies on is an unsupported potential claim for damages which does not constitute a bona fide defence based on which a rescission ought to be granted.

[47] If it had a bona fide defence on the merits based on the alleged breach of contract and if it relies on an alleged damages claim against the Respondents, the Applicant should have set out its case properly in its founding papers and could have issued summons against the Respondents. Whether a recission is sought in terms of the common law or the rules, it is incumbent on the Applicant to set out a bona fide defence that has some prospect of success. The Applicant has dismally failed in this regard.

Conclusion

[48] In the light of the above, I find that the Applicant has not made out a case for the granting of the application for rescission. As the Applicant has failed to make all the essential averments necessary to support the rescission of judgment the application accordingly ought to be dismissed with costs, including costs of counsel.

Order

[49] In the result I make the following order:

The application for rescission is dismissed with costs, including costs of counsel on Scale B.

MBG LANGA

JUDGE OF THE HIGH COURT

MIDDELBURG LOCAL SEAT

Appearances:

For the Applicants:

Advocate M Louw

Instructed by:

Mathys Krog Attorneys

For the Respondents:

Advocate CK van Niekerk

Instructed by:

BLR Attorneys

Date heard:

06 March 2025

Date delivered:

25 July 2025

This judgment was handed down electronically by circulation to the parties’ representatives by email. The date for hand-down is deemed to be the 25 July 2025 at 14h30.