Singh and Another v Narainsigh (AR 259/07) [2007] ZAKZHC 34 (26 November 2007)

IN THE HIGH COURT OF

SOUTH AFRICA

NATAL

PROVINCIAL DIVISION

CASE NO. AR 259/07

In the matter between:

KUAR

SINGH FIRST APPELLANT

KRUSHEEDA

SINGH SECOND APPELLANT

and

A.S.

NARAINSINGH RESPONDENT

______________

J U D G M E N T

NDLOVU J

[1] The appellants (the defendants in the Court a quo) were sued by the respondent (the plaintiff in the Court a quo) in the Magistrates Court for the district of Lower Tugela for judgment in respect of three separate claims which were substantially formulated in the following terms:

Claim 1

(Arising out of an oral agreement of lease.)

(a) Payment of R19 931,45 being arrear rental plus interest.

(b) Costs on attorney and own client scale.

Claim 2

(Arising out of a deed of sale.)

(a) Payment of R222 807,05 made up as follows:

(i) Part- purchase price due and payable on 31/12/04 and 31/12/05 (at R50 000,00 x 2) in the sum of R100 000,00.

(ii) Interest on purchase price in the sum of R86 349,19.

(iii) Interest on occupational consideration (rent) in the sum of R11 751,91.

(iv) Arrears for water, lights and refuse removal charges in the sum of R19 575,95.

(v) Legal costs for taking instructions, drawing up the agreement and preparation, in the sum of R5 130,00.

(b) Interest at 12% per annum reckoned monthly in advance on:

(i) R11 751,91 from 01/03/06 to date of payment.

(ii) R205 925,14 from 01/04/06 to date of payment.

(iii) R5 130,00 from 01/02/04 to date of payment.

(iv) Cost of suit on attorney and own client scale.

Claim 3

(a) Ejectment.

(b) Payment of R7 500,00 or part thereof per month being for occupational damages from 01/04/06 to date of ejectment.

(c) Costs of suit on attorney and own client scale.

[2] A schedule was attached to the particulars of claim showing in detail how the amounts claimed were computed and broken down.

[3] The appellants entered an appearance to defend the action, whereafter the respondent applied for summary judgment, which was granted by the Court a quo on 5 January 2007.

[4] The trial Magistrate’s one page judgment read as follows:

“It would appear from the papers filed that the defendant is grasping at straws, as it were, and does not have a bona fide defence to this matter. They almost say as much in their papers when they allege that they have a defence that one could call a “technical defence”.

One is not asking for a full disclosure of their defence, mind you, but some indication at least of what their bona fide defence is. Even the argument that the plaintiff has novated his cause of action is not supported by any evidence or documents, as argued by the plaintiff further. The question that now arises is “can the defence of the defendant be clearly and succinctly be evident from their papers? The answer is a resounding, No!

As a result, summary judgment is granted for the plaintiff for the amounts as claimed in claim 1 and 2, and for ejectment as claimed in claim 3 as prayed, with costs.”

[5] What immediately becomes significant in the judgment is the fact that:

(1) Claims 1and 2 were granted as prayed (save for the scale of costs);

(2) Claim 3 was granted partly in that the claim for damages at the rate of R7 500,00 per month or part thereof with effect from 1/4/06 to date of ejectment, was not granted.

(3) Costs were awarded on party and party scale, contrary to the costs on “attorney and own client scale” as sought in the particulars of claim.

[6] The appeal was lodged against the whole judgment. There was no cross-appeal.

[7] The preliminary point was on the appellants’ application for condonation of their late prosecution of the appeal. The application was opposed by the respondent on the grounds that -

(a) since the appeal had lapsed there was no appeal before the Court until it was reinstated; and

(b) there was no documentary proof furnished by the appellants in support of their claim that they incurred medical expenses in the sum of approximately R400 000,00 in respect of their son who was injured in a motor vehicle collision, which the appellants alleged adversely affected their financial capacity to prosecute the appeal timeously.

[8] Rule 50(1) of the Uniform Rules of Court provides:

“(1) An appeal to the Court against the decision of a magistrate in a civil matter shall be prosecuted within 60 days after the noting of such appeal, and unless so prosecuted it shall be deemed to have lapsed.”

And rule 49(6)(b):

“The Court to which the appeal is made may, on application of the appellant or cross-appellant, and upon good cause shown, reinstate an appeal or cross-appeal which has lapsed.”

Rule 51(9) of the Magistrates’ Courts Rules is consistent in this regard:

“The party noting an appeal or a cross-appeal shall prosecute the same within such time as may be prescribed by rule of the court of appeal and, in default of such prosecution, the appeal or cross-appeal shall be deemed to have lapsed, unless the court of appeal shall see fit to make an order to the contrary.”

(See also section 84 of the Magistrates’ Courts Act 32 of 1944.)

[9] It seems to me that the appellants’ condonation application was, in essence, an application for the reinstatement of their appeal as envisaged in rule 49(6)(b). The reinstatement of an appeal under rule 49(6)(b) simply means, in my view, the condonation of late prosecution of such an appeal. Indeed, the Court of Appeal has the power to extend the prescribed period for both the noting and the prosecution of an appeal (Van Winsen et al : “The Civil Practice of the Supreme Court of South Africa” – 4th Ed (1997) at 842. See also Rusek v Pellew 1926 TPD 462 at 463.)

[10] In Fortman v South African Railways & Harbours 1947 (3) SA 505 (N) at 509 the Court gave the following guideline:

“It seems to me that in deciding whether the Court’s discretion will be exercised in favour of an application (to note and prosecute out of time an appeal) the Court will have regard to all the circumstances of the particular case before it, and will endeavour to reach a conclusion which will be in the best interests of justice.”

[11] I further consider the decision in Melane v Santam Insurance Co. Ltd 1962 (4) SA 531 AD at 532B-C (per Holmes JA) where the Appellate Division stated:

“In deciding whether sufficient cause has been shown, the basic principle is that the Court has a discretion, to be exercised judicially upon a consideration of all the facts, and in essence it is a matter of fairness to both sides. Among the facts usually relevant are the degree of lateness, the explanation therefore, the prospects of success and the importance of the case. Ordinarily these facts are interrelated: they are not individually decisive, for that would be a piecemeal approach incompatible with a true discretion, save of course if there are no prospects of success there would be no point in granting condonation … What is needed is an objective conspectus of all the facts. … And the respondent’s interest in finality must not be overlooked.”

[12] Indeed, the appellants did not furnish any proof, documentary or otherwise, in support of their averment that they spent up to R400 000,00 on medical costs in respect of their son who was involved in an automobile accident. However, this was a factor which the Court had to weigh up against other factors that were, to a greater extent, favourable to the appellants, namely:

(a) that the fact that the appeal was noted timeously was proof of importance of the case to the appellants;

(b) that the length of delay in prosecuting the appeal was only 30 days, which was not inordinately excessive in the circumstances;

(c) that there seemed to be prima facie prospects of success by the appellants in the main case.

(d) that no prejudice would be caused to the respondent by the reinstatement of the appeal.

In the circumstances, it seems to me it would be in the interests of justice to condone the late prosecution of the appeal. I would accordingly allow the appeal to be reinstated.

[13] I now turn to deal with the merits of the appeal. The procedure on summary judgment in the Magistrate’s Court is governed by rule 14 of the Magistrates’ Courts Rules which provides, in part, as follows:

“(1) When a defendant has entered an appearance to defend, the plaintiff in convention may apply to the court for summary judgment on one or more of such claims in the summons as are only –

(a) …

(b) for a liquidated amount in money;

(c) …

(d) for ejectment

in addition to costs.

(2) …

(3) Upon the hearing of an application for summary judgment the defendant may –

(b) …

(c) satisfy the court by affidavit delivered not later than noon of the day preceding the hearing of the application (which affidavit may by leave of the court be supplemented by oral evidence) that he has a bona fide defence to the claim on which summary judgment is being applied for or a bona fide counterclaim against the plaintiff. Such affidavit and evidence shall disclose the nature and grounds of the defence or counterclaim.

(4) …

(5) …

(6) Subject to the provisions of rule 17(7), the court may, if the defendant does not satisfy the court, give summary judgment for the plaintiff.

(7) If the defendant complies with the provisions of paragraph…(c) of subrule (3), the court shall give leave to defend and the action shall thereupon proceed as if no application under this rule has been made.

(8) …

(9) If on the hearing of an application made under this rule it appears either that ...the defendant is entitled to leave to defend as to part only of the claim, the court may –

(b) give leave to defend to the defendant as to such part of the claim and give judgment against the defendant as to the balance of the claim unless the defendant shall have paid such balance into court; …”

[14] Rule 17(7), referred to in rule 14(6) above, provides:

“An exception or application to strike out shall, if particulars thereof have been delivered before the hearing of an application by the plaintiff for summary judgment, be heard and determined at the hearing of such application. If no such application be made, either party may on 10 days’ notice set down such exception or application for hearing before the trial.”

[15] The Magistrate granted the summary judgment after the respondent had filed an affidavit, in terms of rule 14(2), whereby the respondent verified the cause of action and the amount claimed and further stated that in the respondent’s belief there was no bona fide defence to the respondent’s claim and that the appellants had entered the appearance to defend solely for the purpose of delaying the action. Clearly, the Magistrate agreed with the respondent in this regard.

[16] Indeed, the procedure of summary judgment was designed to prevent a defendant who had no bona fide defence whatsoever (Meek v Kruger 1958 (3) SA 154 (T) at 159H-160A) from entering an appearance to defend merely as a delaying tactic and in what amounted to an abuse of the Court process (Edwards v Menezes 1973 (1) SA 299 (NC) at 303F). However, in Eisenberg’s v OFS Textile Distributors (Pty) Ltd 1949 (3) SA 1047 (O) the Court observed that the summary judgment procedure “constitute(d) a negation of a fundamental principle in the administration of justice; audi alteram partem. Consequently the drastic remedy provided therein should only be resorted to and accorded where a plaintiff can establish his claim clearly and the defendant fails to set up a bona fide defence or to raise a fairly triable and arguable issue” at 1054). (See also Barclays National Bank Ltd v Smith 1975 (4) SA 675 (D) at 684A-B.)

[17] Furthermore, one had to bear in mind the decision in Mowschenson & Mowschenson v Mercantile Acceptance Corporation of SA Ltd 1959 (3) SA 362 (WLD) at 366E-H where the Court (per Marais AJ) stated:

“The proper approach appears to me to be the one which keeps the important fact in view that the remedy for summary judgment is an extraordinary remedy, and a very stringent one, in that it permits a judgment to be given without trial. It closes the doors of the Court to the defendant. …. That can only be done if there is no doubt but that the plaintiff has an unanswerable case. If it is reasonably possible that the plaintiff’s application is defective or that the defendant has a good defence, the issue must, in my view, be decided in favour of the defendant. It is true that the Rule requires the defendant ‘to satisfy the Court … that he has a bona fide defence to the action’, but, since the plaintiff is deprived of all opportunity of testing the averments of the defendant if the latter testifies orally, and of contradicting the defendant on affidavit if he answers by way of affidavit, and since the Court itself is by implication precluded from cross-examining the defendant, the word ‘satisfy’ cannot refer to a conclusion arrived at by weighing the defendant’s positive averments against the plaintiff’s opposing allegations in the latter’s verifying affidavit. If there is nothing inherently incredible in the defendant’s answer and if that answer, if proved, would support a defence that is good in law, the Court would be obliged to dismiss the application and to give the defendant leave to defend the action.”

[18] In other words, “[t]he Court will not be disposed to grant summary judgment where, giving due consideration to the information before it, it is not persuaded that the plaintiff has an unanswerable case”. (Shepstone v Shepstone 1974 (2) SA 462 (N) at 467E-F.)

[19] In Standard Krediet Korporasie v Botes 1986 (4) SA 946 (SWA) at 948F-G the Court further pointed out that “the procedure of summary judgment is very often not used for the purpose of obtaining speedy relief for a plaintiff who has an unanswerable case, but rather for the ulterior purpose of snatching a judgment or to get the defendant to disclose evidence to which the plaintiff would not normally be entitled”.

[20] Hence, the Court has been reluctant to ordinarily grant summary judgment where there was opposition. In Dowson & Dobson Industrial Ltd v Van der Werf 1981 (4) SA 417 (C) at 419C-D the Court (per Marais AJ) put it thus:

“I think it is fair to say that an ever increasing reluctance to grant summary judgment in the face of opposition is evident from the more recent decisions in South African Courts. Given the exceptional nature of the remedy and the fact that it may result in a final judgment being given against a defendant without a full ventilation of the issues, this reluctance is entirely understandable.”

[21] Of course the appellants’ affidavit opposing the summary judgment was not one of the best of such affidavits, particularly if one were to bear in mind that the appellants at the time were legally represented. The affidavit contained argumentative and, sometimes, vague averments. However, notwithstanding these shortcomings, it did seem to me that the appellants’ opposition met at least the minimum requirements envisaged in rule 32 to justify the refusal of summary judgment and granting the appellants leave to defend the action.

[22] It also appeared to me that the Magistrate (and indeed counsel for the respondent during argument on appeal) tended to focus more on the appellants’ defence and less (if anything at all) on the respondent’s case itself. In my view, this approach alone was a misdirection. Whether or not the appellants’ defence met the required standard, the Court a quo had to satisfy itself that the respondent’s claim made out a case in the first place, which could justify the granting of summary judgment even if unopposed. I noted what appeared to me to be some material shortcomings in the respondent’s case. I propose to deal with these presently.

[23] Claim 1, under which the respondent alleged an oral agreement of lease, was formulated in the following terms:

“During or about June 2002 the Plaintiff and Defendants concluded an oral Agreement of Lease in terms whereof:

2.1 Plaintiff let to Defendants who took on hire the commercial building on Erven 829 and 841 Stanger – King Shaka Street, Kwa Dukuza.

2.2 The rental for the period 1 June 2002 to 31 December 2003 was R3 500,00 per month payable monthly in advance on the 1st day of the month for which it was due.

2.3 In addition to the monthly rental the defendants undertook to pay water, electricity and refuse removal charges.

2.4 The defendants undertook to pay the fees for taking instructions, drawing, preparation and traversing of an agreement of lease which was drawn and not signed at the behest of the Defendants who represented that they were considering purchasing the property. In the event of a default in their payments, then they became liable to pay interest from the date of default, plus costs on a scale as between attorney and own client.”

[24] It is evident that the agreement lacked some of the common material clauses in a lease agreement, whether written or oral, such as -

(i) who between the parties was responsible for maintenance and repairs of the leased property;

(ii) whether the appellants were allowed to effect alterations, additions and improvements to the property, and the implications thereof;

(iii) the liability of the appellants in the event of damage to property;

(iv) remedy for breach of the agreement by either party; and

(v) termination of the agreement by either party.

[25] It also appears to me that sub-paragraph 2.4 of the respondent’s particulars of claim was somewhat ambiguous, if not confusing. The sub-paragraph opened with an alleged undertaking by the appellants which related to an aborted written lease agreement that had ended up not being signed by the appellants. This undertaking, in context, had, in my view, nothing to do with the oral agreement of lease between the parties. On that basis, it was difficult to understand why it was included as one of the clauses in the oral lease agreement, in the first place. As if the inclusion of this undertaking was not confusing enough, the sentence which appears immediately after the undertaking, beginning with the words “In the event of a default in their payment …” tended to leave one in complete darkness as to the intended meaning of sub-paragraph 2.4 as a clause pertinent to the oral lease agreement. Indeed, as this last sentence was not a separate sub-paragraph but (on the face of it) an integral part of sub-paragraph 2.4, then, in that context, it ought to be construed as relating to a default of payment by the appellant in terms of the undertaking referred to in sub-paragraph 2.4. On the other hand, a different interpretation was also possible, in that the respondent might have intended to have the second part of sub-paragraph 2.4 to refer to the oral lease agreement itself. In that light, the entire sub–paragraph 2.4 was rendered ambiguous and confusing. This apparent ambiguity and confusion in the averred oral lease agreement alone should, in my opinion, have been sufficient to preclude the Magistrate from granting the summary judgment in respect of Claim 1.

[26] Concerning claims 2 and 3: If the respondent indeed cancelled the deed of sale on 3 April 2006, as he alleged, the respondent would have been entitled to claim, against the appellants, damages including those of holding on the property. However, it was unclear on what basis the respondent claimed R100 000,00 which was part of the purchase price in terms of the agreement which was already cancelled. This was tantamount to claiming a penalty, yet there was no penalty stipulation in the deed of sale as envisaged in the Conventional Penalties Act 15 of 1962.

[27] During argument counsel for the respondent submitted that there was a miscalculation in relation to the amount of interest claimed under paragraph (B)(ii) (Claim 2) in the particulars of claim, namely R205 925,14 which, according to counsel, had to be reduced by R100 000,00 to read R105 925,14. Counsel attributed the error to an innocent mistake. The bottom line, however, was that (for whatever reason the mistake was made) the Magistrate granted summary judgment in favour of the respondent as against the appellants in the sum of money which was, now admittedly, wrongly calculated to the extent of R100 000,00 at the expense, and to the prejudice, of the appellants. In other words, if the matter was not taken on appeal a wrong judgment, to that extent, would have stood. On this ground alone I would set aside the summary judgment in respect of this particular claim.

[28] The appellants submitted in their opposing affidavit that the deed of sale, being in respect of the sale of land in instalments, did not comply with “all the formalities contained in Chapter II of the Alienation of Land Act 68 of 1981” (the Act). The appellants did not set out the facts on which they intended to rely with regard to this particular legal point.

However, notwithstanding this omission, it seems to me that the Magistrate was still enjoined to satisfying himself firstly, on whether the Act was applicable as alleged; and secondly, if so, on whether or not the deed of sale complied with the provisions of the Act.

[29] Indeed, Chapter II of the said Act dealt with “Sale of Land on Instalments”. The definition of “land” under this chapter (pertinent to the facts of this case) was given as “any land used or intended to be used mainly for residential purposes”. (Section 1(c) of the Act under the definition of ‘land’.)

[30] It was common cause in the present case that the deed of sale dated 30 November 2003 involved the sale of land in instalments. The Act would therefore ordinarily apply provided that the land in question (the property) was used or intended to be used mainly for residential purposes. Indeed, if the Act applied other formalities prescribed under this chapter would have to be complied with, such as having the deed of sale recorded with the registrar in terms of section 20 of the Act. There was no suggestion that the deed of sale was so recorded. In any event, as already stated, the preliminary issue which the Magistrate had to determine was whether or not the Act was applicable in this particular instance.

[31] The deed of sale described the property as consisting of “commercial and residential buildings”. In other words, some part of the property was used or intended to be used for commercial purposes whilst the other part for residential purposes. It is significant that the Act did not require that the “land” be used exclusively or solely for residential purposes but “mainly” for such purposes. This then, in my view, presupposed the usage of land for some other purposes (including commercial purposes) but to a lesser extent, as long as the land was otherwise mainly used for residential purposes. If this interpretation was correct it would mean that the Act applied to the transaction under consideration. However, without attempting to make any pronouncement on this particular issue, it seems to me, nevertheless, that the matter was arguable and, for that reason, the Magistrate was not entitled to grant summary judgment on the claim.

[32] The appellants further alleged, in their opposing affidavit, that there was “a bar on registration and transfer of property including that forming the subject of the deed of sale, by the registrar of deeds, due to pending land claims”. Again, the appellants did not set out further details relating to the facts on which they intended to rely with regard to this particular allegation, such as specifying the alleged pending land claims. However, this allegation had the element of a factual dispute, in the absence of any documentary proof by the appellants of this allegation. A trial would allow the appellants to lead evidence, if any, in substantiation or proof of the allegation in their defence. To my mind, it was such a serious averment that the Magistrate ought also to have regarded it in that light by allowing the appellants to defend the action.

[33] It follows that if the judgment in claims 1 and 2 were to be set aside, the order of ejectment (in claim 3) cannot stand. Costs should follow the result.

[34] I therefore propose the following order:

1. The late prosecution of the appeal is condoned and the appeal is reinstated.

2. The appeal is upheld with costs.

3. The Magistrate’s judgment dated 5 January 2007 is set aside and substituted with the following order:

“(a) The summary judgment is refused.

(b) The defendant is granted leave to defend the action.

(c) Costs are reserved for determination by the trial court.”

4. The appellants (as defendants at the trial) are directed to file their plea within 10 days from the date of this judgment, in terms of Rule 19(1) of the Magistrates’ Courts Rules.

……………………………………………

MURUGASEN AJ I agree

NDLOVU J It is so ordered.

Appeal heard on : 10 September 2007

Counsel for the appellants : Mr H. Fraser

Instructed by : Nirvan Kawulesar & Company

Counsel for the respondent : Mr S. Khan

Instructed by : Jay Pundit & Company

Judgment handed down on : 26 November 2007