SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy
IN THE HIGH COURT OF SOUTH AFRICA GAUTENG DIVISION, PRETORIA
CASE NO:  A922/15
Date of hearing: 12 May 2016
Date of Judgment: 27 May  2016

In the matter between:

SOOMAIYA GANI	Appellant

and

ESSA STEEL MANUFACTURERS CC	Respondent

MOTHLE J

JUDGEMENT

1.    Central, Pretoria. The judgment, which was delivered on   21 October 2015, dismisses Appellant's application for rescission of a default judgment that was granted against her on 23 January 2015 as well as a condonation application for the late  launching of the rescission application.

2.		Essa    Steel    Manufacturers    CC    (" the    Respondenf'), which obtained a default judgment against the Appellant, opposes this application.

BAC KG ROU N D

3.		On 27 May 2014,  the  Respondent  issued summons  as Plaintiff in the Magistrate's Court Pretoria, wherein it claimed an  amount of R498,005.50 plus interest at the rate of 15.5% per annum as well as costs of suit against the Appellant who was cited as the Second Defendant. The First  Defendant  cited  in  those summons is Build Kwik Wholesalers  (Pty)  Ltd  ("First Defendant'').

4.	The cause of action in the summons is based on alleged goods sold and delivered by the Respondent to the First Defendant, with the appellant signing as surety and co-principal debtor in solidum with the First Defendant.

5.	According to the two returns of service filed by the Sheriff, the combined summons were served on the First Defendant  on 4 June 2014 at 14HOO, by affixing at the principal door of the address […] Church Street Pretoria West. The return states that "After a diligent search and enquiry at the  given  address  no other manner of service was possible." On the same day, at the same address, at 14H01, the second return of service indicates
that a copy of the combined summons was served on the Appellant personally. The two returns of service became an issue before the  Magistrate and also on appeal  in this   Court.
will revert to this aspect later in this  judgment.

6.	On 23 January 2015, the Respondent obtained judgment in default against the Appellant (Second Defendant)  on the basis that the Appellant is alleged to have bound herself as surety and co-principal   debtor   with   the   First  Defendant.	This default judgment was granted almost seven months after the summons · were issued.

7.	On 25 February 2015, the Respondent issued a letter of demand to the First Defendant. On the same date, the bank informed the Appellant that there is a judgment that has been granted against the company and her. The events that unfolded from this point are central to the dispute that became a subject of debate in the subsequent applications for condonation and rescission of that default judgment, before the Magistrate. I will deal with these details in this judgment.

8.	At this stage, it is apposite to record that on 3 June 2015, Appellant launched an application for rescission of the default judgment together with an application for  condonation  for  the late filing of the application for rescission. The Respondent filed a notice to oppose these applications.

9.	The applications were heard by the Magistrate in the opposed motion Court on 21 October 2015. In his judgment dated 28 October 2015, the Magistrate concluded that Appellant  had failed to convince the Court that the application for condonation should be successful. Appellant then launched  an appeal against the dismissal of its application which is now before this Court.

ISSUES IN THIS APPEAL

10.	It is clear from the reading of the reasons for the decision provided by the Magistrate that he concentrated on the application for condonation and decided the fate of the whole application on that basis. In paragraph 6.10 of his reasons, the Magistrate states as follows:

" 6. 10 This Honourable Court being vested with a wide discretion to exercise when considering condonation applications, the court took into consideration the merits of the case as a whole, referred to the submissions made by the Respondent's attorneys of record, first and foremost the fact that the  Second  Applicant is not truthful with regards to the date upon which she obtained knowledge of the judgement and secondly the fact that the Second Applicant denies having received service of the processes in these proceedings. Although the  latter becomes more relevant when dealing with the aspects of wilful default, its relevance will be shown hereunder."

11.	Again, in paragraph 6.14 of the reasons for the decision the Magistrate opined thus:" ... . The Court, while considering the application for condonation, it assessed the merits of the application in its entirety, purely to accordingly establish the conduct and motive of the Second Applicant ..."

12.	The reasons for the decision point out that in dealing with the condonation application, the Magistrate ignored what was common cause between the two parties, namely, that the Appellant came to know about the judgment on 21 of April 2015.

13.	In regard to the service of the summons, notwithstanding an affidavit by the Sheriff that service  was  effected  personally on the Appellant, there are two problems which arise in this regard. The first is that the return of service  in regard to Appellant  and the company are one minute apart. However, the one for the Appellant indicates there was personal service while the other return of service for the First Defendant was by affixing the documents on the entrance of the premises as per the same address of domiculum citandi et  executandi.  This  does  not make sense as Appellant is a director of the First Defendant  and if she was present and received service personally, nothing prevented her from doing so on behalf of the First Defendant.This relationship is clear from the combined summons  . The First and second Defendants mentioned in the combined summons shared the same address. The affidavit of the Sheriff
does not clear this anomaly  up.

14.	Secondly, the evidence that Appellant was informed by the bank that there is a judgment against her and the company, does not clear up the question as to when Appellant first came to know about the judgment. The information from the bank as  conveyed to the Appellant shortly after 25 February 2015, was such that it would not on its own, constitute knowledge of  the  judgment within the meaning of the rule. One cannot rely on such information to launch a rescission of judgment. At best, the information only serves to sensitise the party involved to investigate further or verify. The Magistrate erred in paying attention to any suggestion that verbal information from the bank constitutes sufficient notice as envisaged in the rule.

15.	Appellant further raises two reasons why there was delay in launching the application for rescission of the judgment. First reason is that her legal attorneys struggled to obtain documents

from the Court relating to the default judgment. This happens to be a common occurrence even in the High Court and is unfortunately part of the administration.  There was  no evidence to refute this allegation and the Magistrate strangely did not give reasons why he rejected it.

16.	The second reason is that Appellant's attorney was on leave for approximately 11 days. I would agree with the Magistrate  that this appears to be a flimsy reason. Any attorney, who understands that he/she is an officer of the Court,  cannot  afford to be tardy in dealing with time frames set by the rules in civil proceedings. A diligent attorney would have realised that once instructions from a client indicate that there is a possible or probable default judgment, the proverbial clock is ticking and the application has to be scrupulously dealt with.

17.	Rule 49 of the Magistrate's Court Rules provides for rescission and variation of judgments. The genesis  of the  rule arise  from the provisions of Section  36(1)  of the  Magistrate's  Court's Act, 32 of 1944, which empowers the Court to rescind or vary any judgment granted by it, considered in the absence of the person against whom that judgment was  granted.  Rule  49  takes off from this provision by stating in detail the procedures relating to the  variation   or  rescission   of  judgments	in  the  Magistrate' s Court.  Rule 49(1) provides thus:

"49.	Rescission and Variation of Judgments

(1)	A party to proceedings in which a default judgment has been given, or any person affected by such judgment, may within 20 days after obtaining knowledge of the judgment seNe and file an application to court, on notice to all parties to the proceedings, for a rescission or variation of the judgment and the court may, upon good  cause shown, or if it is satisfied that there is a good reason to do so, rescind or vary the  default judgment  on such terms as it deems  fit:  provided  that  the 20 days period shall not be applicable to a request for rescission or variation of judgment  brought in  terms of sub-rule (5).

(2)	It will be presumed that the Applicant  had knowledge of the default judgment 10 days after the date on which it was granted, unless the Applicant proves otherwise."
(1)	

18.	Sub-rule (5) dispenses with the 20 days period where a Plaintiff in whose favour the judgment was granted, has agreed in writing that the judgment be rescinded or varied. In the matter of
Phillips t/a Southern Cross Optical v S  A  Vision  Care (Pty) Ltd ,  the Court emphasised that:

"Rule  49(1)  provides  that  a  Court  may  rescind  or  vary  a

default judgment on such terms as it may deem fit

(a)	upon good cause shown; or

(b)	if it is satisfied that there is good reason to do so."

19.	The Court found that the introduction of the concept "good reason" in Rule 49(1 ), intended to expand the discretion of the Magistrate's Court in rescission applications by introduction of less stringent criteria. The need to prove absence of wilful default is no longer a necessary requirement for rescission.

20.	Considering that after she became aware of the default judgment on 21 April 2015, the application was launched on 3 June 2015, Appellant was a few days late with her application sine the 10-day period had expired sometime in May 2015.

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21.	Apart from stating that he has considered the merits of the main action between the parties, the Magistrate does  not  provide detail as to which aspect of the merits did he consider and what conclusions he reached.

22.	It is indeed trite that a Court considering an application for rescission should also guard against any prejudice which might affect the interests of the parties. See in this regard Grant v Plumbers (Pty) Ltd as well as HOS Construction (Pty) Ltd v
Wait •	A  measure  of  flexibility  is  necessary  for  the  Court  to

exercise, especially in cases where a bona fide defence may compensate for a poor explanation.

23.	Appellant,  with  reference to  a  number  of  invoices  relating to the alleged   goods   sold   and   delivered   to   the   First   Defendant, demonstrates   that  she  has  a  bona   fide  defence   in  that  the invoices  relate  to  another  company.    Appellant  demonstrates with  reference to specific  invoices that  purchases and deliveries were  made  by  a  company  called  Build  kwik  Trading  (Pty)  Ltd, which  was  liquidated  in May 2014.   According  to Appellant,  the Respondent claims  payment from  First Defendant which  is Build Kwik  Wholesalers (Pty) Ltd for these  purchases.   She attaches

 

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a number of purchase orders made by  Build  kwik  Trading. These claims are refuted by the Respondent. The Respondent admits that indeed there appears to have been two separate companies bearing similar names but sharing the same address. The one company had a director who was a previous director of the First Defendant.

24.	On the face of it, it seems to me that this discrepancy  needs  to be adjudicated by the Court and cleared. Failure to do so may result in an injustice where the one party is settled with the debts of another entity that has been liquidated.

25.	For these reasons, I am of the view that the Magistrate erred in refusing to grant condonation for the late filing of the application for rescission of judgment as well as the application  for rescission itself.

26.	It should have been apparent to  the  Magistrate  when considering the merits of the application that there is a bona fide defence on the part of the Appellant in that some of  the purchases which constitute the amount claimed relate to a different entity. To refuse a rescission of this judgment would result in prejudice and injustice to the Appellant. The Appellant
4.	
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will	be  compelled  to   pay  for   goods   that   she   or   the   First Defendant never purchased or even received delivery  thereof.

27.	Considering the conspectus of the evidence in this case, I am of the view that the applications for condonation and rescission of judgment should be granted and the Appellant  should  be allowed to file her plea. The matter should follow the normal course of civil proceedings in terms of the Rules.

28.	In regard to the costs, the Respondent argued that it should be awarded the costs as a rescission is an indulgence granted  to the Applicant. I do not agree. By electing to oppose this appeal, the Respondent incurred the risk of being mulcted with costs.

29.	In the premises I make the following order:

1.	The appeal succeeds.

2.	Condonation for the late filing of the application for the rescission is hereby granted.
3.	The decision by the Magistrate dismissing the application for both condonation and rescission of judgment dated  28 October 2015 is hereby set aside;
4.	The default judgment granted against  Appellant  on  23 January 2015 is hereby rescinded;
1.	

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5.	The Appellant is granted leave to file her plea within 10 days from the date of this order;
6.	The costs of the applications  for condonation  and  rescission in the Magistrate's Court will be costs in the cause; and
7.	Appellant is granted the costs of appeal in this Court.

S P MOTHLE
Judge of the High Court Gauteng Division Pretoria

I concur:
 H K KOOVERTJIE
Acting Judge of the High Court Gauteng Division
Pretoria

For the Appellant:	Adv. R J Groenewald Instructed by:	Lacante Henn Inc
Attorneys Appellant: Ashley  Gardens, Pretoria.

For the Respondent:	Advocate A S L Van Wyk Instructed  by:	Pratt Luyt and De Lange Attorneys
c/o Savage Jooste & Adams Inc Neuw Muckelneuk, Pretoria