IN THE·HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

( l) REPORTABLE: NO CASE N0:41126/2013 (2) OF INTEREST TO OTHER JUDGES: NO

(3) REVISED: V

... . ~~,. SIGNATURE 2l ---

In the matter between:

LAUDS FOUNDRY EQUIPMENT (PTY) LTD APPLICANT

and

OMEGA FOUNDRY MACHINERY LTD RESPONDENT

JUDGMENT

THOBANEAJ,

1 of 21

Introduction

[1] The facts leading up to the granting of judgment in this matter are largely

common cause. The applicant seeks an order in the following terms;

"1. The order and/or judgment granted by the above

honourable court against the applicant on 26 November 2015

under Case No. 41126/2013 attached as annexure ''A4" to the

applicant's founding affidavit is hereby rescinded and set

aside.

2. The order and/or judgment granted by the above

honourable court on 30 March 2016 under Case No.

41126/~013 and attached as annexure ''AS" to the applicant's

founding affidavit is hereby rescinded and set aside;

3. The costs of this application are to be paid by the

respondent, only in the event of opposition by it.

"

[2] The application, according to the applicant, is brought in terms of Rule

42(1 )(a), or Rule 31(2)(b), or common law. The application is opposed by the

respondent.

[3] The following brief background will place the matter into better

perspective;

2 of 21

3.1. On 4 July 2013 the respondent instituted an action against

the applicant. The relief sought in the action, loosely stated,

was an order restraining the applicant from infringing the

respondent's copy right as well as an order restraining the

applicant from unlawfully competing with the respondent. The

other relief sought related to passing off, delivery for

destruction of all offending work, delivery of spare parts or

equipment, and further relief which is not relevant for purposes

of this application.

3.2. The applicant pleaded to the instituted action and

pleadings subsequently closed, however not before processes

to amend the particulars of claim were undertaken. Those are

equally not relevant for purposes hereof.

3.3. Discovery processes ensued. A rule 35(3) notice was

served , a courtesy letter was dispatched and when there was

no reply a rule 35(7) application was launched. On 26

November 2015 Nicholls J granted an order directing the

applicant to comply with a notice in terms of section 35(3)

within 10 days together with an order of costs.

3.4. Seemingly, the applicant failed to comply with the order of

Nicholls J and the respondent proceeded to have the plea and

the defence struck out. Thus judgment was granted against

3 of 21

the applicant on the basis that the applicant had failed to

comply with the order of Nicholls J.

Applicant's case

[4] The applicant sets out a chronology in the founding affidavit, detailing

how knowledge of the judgment came about. Applicant contends that

judgment was obtained under unusual and extraordinary circumstances. In

the chronology the applicant states that after the exchange of pleadings and

discovery notices, pre-trial procedures ensued. It was followed by a request

for further particulars, amendment of the particulars of claim, amendment of

the plea and a request for security. In setting out the detailed chronology the

applicant believes that it will be apparent that there was always an intention to

defend the action.

[5] Both the applicant and respondent utilized correspondent attorneys in

pursuance of the case. In the case on the applicant, the thrust of the

application is that its correspondent attorneys, Hack Stuppel & Ross were

remiss in their work in that there was a failure on their part to report on

developments in the case, with the requisite promptitude, to its instructing

attorneys MF Martins Costa. The applicant's case is that;

5.1 . On 5 October 2015 the instructing attorneys became

aware that a rule 35(3) was served on the correspondent

4 of 2 1

attorneys on 31 July 2015. The instructing attorneys became

aware for the first time that a rule 35(3) notice had been

served.

5.2. A consultation took place on 12 October 2015 between the

applicant and the instructing attorneys. The applicant was of

the view that the request was broad. The notice was viewed as

a fishing expedition and was not responded to. At this stage

the applicant anticipated that a notice to compel discovery

would foUow.

5.3. The instructing attorneys made contact with the

correspondent attorneys with the view to establishing what

was going on as they were surprised at the turn of events. The

efforts to contact the correspondent attorneys drew a blank.

5.4. On 7 December 2015 the instructing attorneys were

advised that on 31 July 2015 a rule 35(3) notice was served

and was not responded to. The notice was followed by a rule

35(7) application which was not opposed. Lastly, that on 26

November 2015 an order to compel discovery was obtained.

5.5 . Surprised at the turn of events the instructing attorneys

sought an explanation from the correspondent attorneys. None

was forthcoming.

5.6. As it was around the festive season, offices closed and

legal representatives went away. But not before the instructing

5 of 21

attorneys wrote a letter on 24 December 2015 to the

correspondent attorneys advising them that they have had no

sight of either the notice to compel or the order compelling

discovery.

5.7. Upon returning back to work and specifically on 21

January 2016, the instructing attorneys realized that there still

wasn't any response to their query on the notice to compel.

Contact was made with the correspondent attorneys and there

was an assurance given that the matter would be receiving

attention. I pause to indicate that at this stage the applicant

was aware of the possibility that there was a judgment already

because one of the considerations was to obtain rescission by

consent.

5.8. The instructing attorneys were content with the status quo,

uncertainty not withstanding, comfortable in the belief that the

correspondent attorneys were giving the matter attention, the

aforementioned remissness not withstanding.

5.9. On 15 April 2016 the instructing attorneys received a bill of

costs. This came as a surprise to them because the instructing

attorney was unaware of any proceedings to strike out the

applicant's case. More discussions took place between the

correspondent as well as the instructing attorneys.

6 of 21

5.10. The instructing attorneys resolved to obtain the court file

so as to appraise themselves of the status of the case.

5.11. On 18 April 2016 the applicant came across a press

release by the respondent stating that there was judgment

against the applicant.

5.12. On 21 April 2016 the applicant consulted with the

instructing attorneys.

5.13. On 28 April 2016 the court file was obtained. From the

court file it became clear that a rule 35(3) notice was served on

the correspondent attorneys, an order to compel was obtained

and that the applicant's defence had been dismissed or struck

out.

[6] The applicant attacks the process leading up to the granting of the order

as follows;

6.1. That the rule 35(3) notice is defective in that it did not

specify what documents, tape recordings or copies were

required to be discovered;

6.2. That there was lack of compliance with rule 35(3) in that

there was no specific averment that the required documents

were relevant to the action;

6.3. That there was no allegation that the applicant possessed

the requested documents;

7 of 21

6.4. That the request was generic, all encompassing and not

specific to. enable the applicant to comply therewith and further

that it was irrelevant;

6.5. That the order to compel was never served on the

applicant to enable the applicant to oppose it therefore the

application ought not to have succeeded.

6.6. Similarly it was argued that the application to dismiss the

action should have suffered the same fate.

Respondent's case

[7] The respondent contends that at all material times, the applicant was

represented and had also appointed offices of a correspondent on whom all

processes were to be served. The respondent is of the view that all notices

were served on the correspondent attorneys. In substantiation of that the

respondents states the .following;

7 .1. On 31 July 2015 the rule 35(3) notice was served on the

applicant's correspondent attorneys. The notice was forwarded

by the correspondent attorneys to the instructing attorneys

under cover of a letter dated 3 August 2015.

7.2. On 5 October 2015 a courtesy letter was sent by the

resp~:>ndent attorneys directly to the instructing attorneys

together with a copy of the rule 35(3) notice;

8 of 21

7.3. That on the applicant's own version a consultation took

place between the applicant and its legal representatives who

decided not to take any action in relation to the notice but

rather to wait to be compelled;

7.4. That a rule 35(7) notice was served on the correspondent

attorneys on 16 October 2015. The notice was forwarded

under cover of a letter dated 19 October 2015 by the

correspondent attorneys to the instructing attorneys.

7 .5. On 4 December 2015 a letter was dispatched to the

applicant's correspondent attorneys. It alerted them to the fact

that an order had been obtained to compel discovery and it

called upon the applicant to discover within 10 days;

7 .6. On 10 December 2015 the instructing attorneys, aware of

the fact that judgment had been obtained, dispatched a letter

to its correspondent attorneys and stated in the process that

they will be applying for rescission of judgment;

7.7. On 26 January 2016 the instructing attorneys were

advised that a further application will be launched.

7.8. On 30 March 2016 an order effectively laying the matter to

rest by striking out the action , was obtained.

9 of 21

Issue

[8] The issue in this matter is whether the applicant has made out a case for

rescission of the orders granted on 26 November 2015 and 30 March 2016.

Legal framework and evaluation

[9] The applicant brings the application on all grounds possible in the

alternative. This is so because the applicants states that the application is

brought in accordance with rule 42(1 )(a), alternatively rule 31 (2)(b) of the

uniform rules of court, alternatively common law.

[1 O] Rule 42(1 )(a) reads as follows;

"(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."

[11] The prerequisites that the applicant is required to satisfy under this sub­

rule are the following:

11 .1. The default judgment must have been erroneously

sought or erroneously granted;

10 of 21

11.2. Such judgment must have been granted in the absence

of the Applicant; and

11.3. The Applicant's rights or interest must be affected by the

judgment 1

[12] It is self evident that the latter two requirements are on the facts easily

established and do not warrant further consideration. Therefore they can be

taken as having been established by the applicant. However, in order to

succeed in seeking rescission of a default judgment in terms of the sub-rule,

the applicant be~rs the onus of establishing that the default judgment

aforesaid was erroneously granted. A judgment is erroneously granted if there

existed at the time it was sought, a fact of which the court was unaware and

which had it been aware of, it would not have granted the judgment2. In

Lodhi 2 Properties Investments CC v Bondev Development (Pty) Ltd

2007 (6) SA 87 (SCA), Streicher JA held that if notice of proceedings to a

party was required but was lacking and judgment was given against that party

such judgment would have been erroneously granted. The following dicta is

relevant

"Where notice of proceedings to a party is required and judgment is

granted against such party in his absence without notice of the

1 Mutebwa v Mutebwa and Another 2001 (2) SA 193 at page 199 F

2 Erasmus: Superior Court Practice 2 ed (Revision Service 1, 2015) Vol 2 at 01-567. See also Naidoo v Matlala NO 2012 (1) SA 143 (GNP) at 153C.

11 of 21

proceedings having been given to him such judgment is granted

erroneously. That is so not only if the absence of proper notice

appears from the record of the proceedings as it exists when

judgment is granted but also if, contrary to what appears from such

record, proper notice of the proceedings has in fact not been

given . ... "

[13] The applicant was legally represented at the time default judgment was

obtained. All notices that were required in terms of the uniform rules were

sent to the correspondent attorneys and in certain instances courtesy letters

were sent directly to the instructing attorneys. On the papers and in argument

before me, the applicant has not pointed to any error in support of the

contention that judgment ought to be rescinded under this rule. It follows that

to the extent that the applicant relies on this rule in arguing that judgment

ought to be rescinded, such an argument must fail.

[14] Rule 31 (2)(b ), on which the applicant relies in the alternative, provides

as follows;

"A defendant may within twenty (20) days after he or she has

knowledge of such judgment apply to court upon notice to the plaintiff

to set aside such judgment and the court may, upon good cause

shoyvn, set aside the default judgment on such terms as to it seems

meet".

12 of 21

In order to succeed in terms of this rule, the applicant must show good cause.

The approach to be adopted was set out in Co/yn v Tiger Food Industries

Ltd t!a Meadow Feed Mills (Cape) 2003 (6) SA 1 (SCA) para 11. It was

stated that an applicant shows 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 defense to the plaintiffs claim which prima facie

has some prospect of success.

[15] Before even dealing with the question whether the applicant meets the

requirements under this rule, I must first attend to the respondent's contention

which is meritorious. The respondent argues that judgment which falls to be

rescinded under rule 31 (2)(b) is a judgment obtained in circumstance set out

in rule 31 (2)(a), which reads as follows;

"2 (a) Whenever in an action the claim or, if there is more than one

claim, any of the claims is not for a debt or liquidated demand and a

defendant is in default of delivery of notice of intention to defend or of

a plea, the plaintiff may set the action down as provided in subrule (4)

for default judgment and the court may, after hearing evidence, grant

judgment against the defendant or make such order as to it seems

meet. "

13 of 21

[16] It is common cause that the judgment obtained against the applicant

followed the applicant's failure to discover. A notice in terms of rule 35(3) was

dispatched followed by another one dispatched in terms of rule 35(7). When

there was no reply the respondent obtained default judgment. Rule 31 (2)(a)

contemplates default judgment as a result of a litigant's failure to deliver a

notice of intention to defend or a plea. Which is why rule 31 (2)(b) is couched

in the manner that it is. It is intended to be a tool at the disposal of a litigant

who seeks to rescind a judgment referred to in 31 (2)(a). Rule 31 (2)(b) reads

as follows;

"(b) A defendant may within 20 days after he has knowledge of such

judgment apply to court upon notice to the plaintiff to set aside such

judgment and the court may, upon good cause shown, set aside the

default judgment on such terms as to it seems meet."

[17] I agree with the respondent's contention that it is not competent to apply

for rescission, in the circumstances sketched above, in terms of rule 31 (2)(b ).

The respondent relied on Terrace Auto Services Centre (Pty) Ltd And

Others v First National Bank of South Africa 1996 (3) SA 209 (WLD) in

making such a proposition.

[18] Even if I am wrong in finding that the application can not be brought

under rule 32( 1 )(b ), the applicant has failed to demonstrate that the

14 of 21

requirements of the rule have been met. For a start the applicant has failed to

bring the application within 20 days of obtaining knowledge of the judgment.

On the applicant's own version the court file was obtained on 28 April 2016 by

its instructing attorneys, after the applicant had become aware of the

judgment via a press release of the respondent on 18 April 2016, resulting in

the launch of this application in May 2016. The respondent on its part had

served all discovery notices on the applicant's correspondent attorneys, being

the applicant's chosen method of service. That being the case, it means the

applicant was made aware, through its correspondent attorneys, of the

unfolding litigation. The respondent took the trouble of not only

communicating with the correspondent attorneys but also the instructing

attorneys. This is evident in the numerous reminders about the non

responsiveness to the discovery notices as well as the order to compel. For

example the respondent dispatched a letter dated 5 October 2015 directly to

the applicant's instructing attorneys reminding them that a rule 35(3) notice

had been served on 31 July 2015 and that no reaction thereto had been

received. The letter further warned the applicant's legal representatives that

in the absence of a response the respondent intended taking the matter

forward. On 2 December 2015 another letter was dispatched, also directly,

stating that an order to compel had been obtained on the unopposed roll of

the 26 November 2015. The letter further warned the instructing attorneys to

comply with the order within 10 days. On 10 December 2015 the applicant's

instructing attorneys wrote to the respondent's legal representatives

15 of 21

disclaiming knowledge of the rule 35(7) notice as well as the court order. The

following was also stated in that letter;

"We advise that we shall be applying to rescind the court order and

request whether you shall hold over further steps until we receive the

requested documentation and proceed with the rescission

application."

[19] In addition, on 26 January 2016 a letter was dispatched to their offices

and attached to it was the order to compel. On 28 January 2016 the letter

was forwarded to the applicant's instructing attorneys. On 26 February 2016

the application to dismiss was served on the correspondent attorneys. It was

forwarded to the applicant's instructing attorneys on 1 March 2016. In each

instance a report was produced indicating that the fax had been successfully

transmitted. The applicant contends that the correspondent attorneys

"dropped the ball" in handling this matter, hence the termination of the

mandate given to them. The picture that the applicant seeks to paint is that

the correspondent attorneys failed to give the matter the attention it deserved.

Which brings me to the question whether the explanation proffered for the

default is reasonable.

[20] In opposing the application for rescission the respondent attached inter

a/ia an affidavit of Julie Anne Pretorius who was in the employ of the

16 of 21

correspondent attorneys and tasked with dealing with the matter. She laid

bare correspondence, which I have referred to above, between her office and

that of the instructing attorneys. In terms of such correspondence, all

communication to the instructing attorneys was done through a fax number

given to them by the applicant's instructing attorneys. There were also reports

showing that the faxes were successfully transmitted. She disputed the notion

that her office and herself in particular was remiss in dealing with the matter.

She further stated that whereas the applicant refers to "Hack" as the person

with whom contact was made at their offices, no one bears that name at their

offices.

(21] The above in particular brings into sharp focus the question whether the

application is bona fide. The refutations of Ms Pretorius supported by the

paper trail, coupled with the courteous letters sent by the respondent's legal

representatives directly to the applicant's instructing attorneys suggests that

the application is not brought bona fide. It is further disconcerting to learn that

the correspondent attorneys have not been served with any termination of

mandate, the allegation by the applicant to the effect that they have,

notwithstanding.

[22] The applicant lays the blame squarely at the door of the correspondent

attorneys in arguing its case, the nub of which is that they were not aware of

the discovery notices as well as the orders obtained. The fact that the

17 of 21

applicant only acknowledges receipt of correspondence which supports its

contention that the correspondent attorneys were lax in their approach to the

litigation, in circumstances where al l correspondence was sent to the same

fax number, is a further indication of the lack of bona fides on the part of the

applicant. For the above reasons also, I am unable to find that the application

has been brought in good faith.

[23] There are limits to the extent to which an applicant can escape liability

on the basis of a legal representative's negligence. Mavundla J in the

unreported case of Leonett Bezuidenhout v Schalk Pieter Hendrik

Bezuidenhout Case Number 28997/2005 (31/08/2005) stated the following

and quoted extensively from case law;

"The Applicant was aware that the matter was coming at Court

on the 28th May 2003. On her version she proceeded to Court

and on the advice of her attorney she waits at the ground floor.

Her attorney arrives late after an Order had been granted. She

does not explain why she did not immediately upon coming to

know of the Order of the 28th May 2003 not take steps to bring

application for rescission."

The court continued;

"In Mkwanazi and Another v Manstha and Another 2003 (3)

All SA 222(T) 230 at paragraph 26 Van Rooyen AJ says:

18 of 21

'Even if applicant had not terminated his attorney's

mandate, it is unlikely that a reasonable explanation

would have been established. In Colyn v Tiger Food

Industries Ltd tla Meadow Feed Mills Cape 2003 (2)

All SA 113 (SCA) Jones AJA stated as follows:

"While the courts are slow to penalize a litigant

for his attorney's inept conduct of litigation,

there comes a point where there is no

alternative but to make the client bear the

consequences of negligence of his attorney. .. "

[24] In paragraph 17 Mavundla J states as follows;

"Promedia Drukkers & Uitgawers (Edms) Bpk 1996(4) SA 411 at

420A Van Reenen J states that:

"Those decided cases which have held that there is a limit

beyond which a litigant cannot escape the result of his

attorney's lack of diligence were diced in the context of clients

who, with knowledge that action had to be taken, sat by

passively without so much as directing any reminder or inquiry

to the attorney in whose hands such matter were left (see for

example Salojee and Another v Minister of Community

Development 1965(2) SA 135 at 141 C and Moraliswani v

19 of 21

Mami/i (333/87) [1989] ZASCA 54; [1989) 4 All SA 766 (ADJ

(17 May 1989)H)"

[25] Under common law, an applicant who wants a judgment rescinded,

must show sufficient cause, which means that:

22 .1 . There must be a reasonable explanation for the default;

22 .2. The applicant must show that the application was made bona

fide; and

22.3. The applicant must show he has a bona fide defence which prima

facie has some prospect of success.

(26] What is left is to consider whether the appl icant in seeking rescission

has disclosed a bona fide defense which prima facie has some prospects of

success. The applicant states in the founding affidavit that there is a bona fide

to the merits of the main action . The applicant denies that there was a copy

right registered over certain items, denies receiving technical drawings in

relation to foundry equipment and denies passing off as alleged by the

respondent. Without disclosing any basis, the applicant then asserts that the

defences raised mean that the matter ought to be ventilated at a trial. What is

clearly lacking is some indication that the defences raised have some

prospects of success. Apart from it not being raised, I could find none.

20 of 21

[27] I am not satisfied that what the applicant submits are defences have

been sufficiently established to amount to bona fide defences that prima facie

carry some prospect of success. The applicant has failed to show good cause

for the relief sought.

[28] I therefore make the following order;

1. The application is dismissed with costs.

SATHOBANE

ACTING JUDGE OF THE HIGH COURT

GAUTENG DIVISION, PRETORIA

21 of 21