The Supreme Court of Appeal recently (26/06/2014) handed down judgment in an appeal against the dismissal of an application for rescission of judgment (Vhembe District Municipality vs Stewarts & Lloyds Trading (Booysens) (Pty) Limited & 1 Other: Case no 397/13) which was granted in terms of Rule 31(2) of the Uniform Rules of Court.

The Appellant failed to give a reasonable explanation for their default and to show existence of a bona fide defence or to disclose their defence with sufficient particularity.

As it was put in Colyn v Tiger Food Industries Ltd t/a Meadow Feed Mills (Cape) 2003 (6) SA 1 (SCA) para 11, the courts generally expect an applicant to show good cause: (a) by giving a reasonable explanation for the default; (b) by showing that the application is made bona fide; and (c) by showing a bona fide defence to the plaintiff’s claim which prima facie has some prospect of success.

THE FACTS:

The Court a quo granted judgment in favour of the first respondent after summons was served by the sheriff (second respondent) on Mrs Ramukhotheli (hereinafter referred to as “Mrs R”), being “a person in attendance at the municipality at the municipal managers office”, therefore complying with the Uniform Rules of Court and Section 115(3) of the Local Government: Municipal Systems Act, 32 of 2000.

The municipal manager on behalf of the appellant denied that Mrs R was known to him and that “a person by that name does not appear on the list of persons employed by the appellant”.  The appellant admitted that the summons reflected the “appellant’s official receipt date stamp” and that it was served at the proper address.

The first respondent challenged the appellant to disclose its list of employees to support its contention that Mrs R was not of its employees.  This allegation did not ellicit a response from the appellant.  The appellant’s lack of candour was exacerbated by its failure to disclose the identity of the person who was authorised to accept service on behalf of the appellant or who was entrusted with the “official receipt dated stamp”.

BONA FIDE DEFENCE:

The first defendant sued on a written agreement of cession in terms whereof a close corporation ceded its right, title and interest in and to monies due to it by the appellant.

“[18] In its founding affidavit the appellant set out its defence as follows:
10.1 I aver that the Applicant does not owe the 1st Respondent an amount of R698 885-00 as indicated in the Writ of Execution and therefore intend to defend the action if any against the Applicant;

10.2 I aver further that the only amount brought to the attention of the Applicant for payment was an invoice of R215,259.04 which was duly paid under certificate no. 14 prepared on the 28th May 2009;

10.3 The Applicant is not formally informed of any other deliveries of materials to the site by the 1st Respondent which the Applicant is liable to pay as required under conditions of direct payment item 4 and 6 on the cession form.”

The Court a quo found the response to the allegation in the particulars of claim lacked candour and amounted to nothing more than a bare denial.  The first respondent placed the appellant’s allegation in dispute.  In reply this was met by a response which amounted to a mere repetition of what was stated in the founding affidavit coupled with an averment that in rescission proceedings it is not necessary to fully deal with the merits or to proof the defence raised and that “it is sufficient to set out facts, which if established at the trial, would constitute a good defence”.  What had been set out by the municipal manager were not facts.  They were bold averments.  Nowhere in his affidavit does he state that he has personal knowledge of the contract in question or details of the reticulation project foundational to the contract.  Nor, in the absence of personal knowledge, does he divulge source of his knowledge.  No confirmatory affidavit is filed by him in support of those bold averments.  The unsubstantiated averments in his affidavit were thus wholly inadequate to support the appellant’s assertion that it had a bona fide defence to the claim.

COSTS OF THE APPEAL:

The first respondent requested costs on an attorney and client scale however van Zyl, D AJA was not persuaded that such shortcomings, as there may have been in the appellant’s conduct, are such as to warrant it being mulcted with a punitive costs order.