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IN THE HIGH COURT OF SOUTH AFRICA REPORTABLE

DURBAN AND COAST LOCAL DIVISION

Case No. 11969/2006

In the matter between

EBRAHIM CASSIM NAROT Applicant

and

135 SMITH STREET TRUST First Respondent

YUNUS AHMED MEER NO Second Respondent

FAROOK MEER NO Third Respondent

EBRAHIM CASSIM SEEDAT NO Fourth Respondent

ABDUL GAFOOR SULEMAN OSMAN NO Fifth Respondent

SOLVISTA INVESTMENTS (PTY) LTD Sixth Respondent

______________________________________________________________

JUDGMENT

______________________________________________________________

Delivered:

31 July 2008

TSHABALALA JP

[1] Applicant launched an application for rescission of the judgment granted against him on 24 April 2007. He also seeks an order joining the second to fifth respondents as party to the action on the basis that the order for rescission is granted. The second, third, fourth and fifth respondents are all trustees of the first respondent.

Background

[2] According to the Applicant, he had concluded a lease agreement with the first respondent (represented by Dr Meer) on 31 July 2006, in respect of Shop 4, Ground floor, Logtech House, 135 Smith Street, Durban (hereinafter referred to as the premises).

[3] Fifth respondent in his capacity as trustee of the first respondent entered into a purchase and sale agreement with sixth respondent on 1^st June 2006. The subject matter of the sale was ERF 10603 of the township of Durban, situated at 135 Smith Street Durban. The premises leased by the Applicant formed part of the property which was sold.

The dispute between the parties relates to the Applicant’s entitlement to occupy the said premises.

[4] Subsequently in order to protect his possession of the premises Applicant launched an urgent application to this Court. In the application he did not cite any of the trustees as party to the proceedings. He cited the first respondent as 135 Smith Street Trust and the second respondent as Solvista Investment, who is cited as sixth respondent in these proceedings.

[5] The matter was set down for hearing on 13 November 2006. On the said date, an order was taken by consent to include the following:

(a) adjourning the matter until 4 December 2006;

(b) that transfer of the property will not be effected, and

3. that no third party will be placed in occupation or possession of the premises (see Annexure “A” to Respondent’s heads or argument).

[6] The matter continued to be on the Court roll on several further occasions but on 9^th February 2007, this Court (per Mr Acting Justice Motala) granted an order referring the matter to trial for final relief on 2^nd , 3^rd and 4^th May 2007 (see Annexure “NCN1” to applicant’s notice of motion).¹

Further in terms of the order Applicant was to deliver his declaration on or before 21 February 2007. However he failed to do so. The Respondents served a notice of bar on the Applicant on 7 March 2007, and Applicant still failed to comply. Respondents then applied to Court to have the Applicant’s application dismissed with costs. The notice of motion was served on the Applicant on 28 March 2007.

[7] On 24 April 2007 when the matter came to court the Applicant had still failed to file his declaration. The application was accordingly dismissed by Acting Justice Govindasamy. The present rescission application was launched on 3 September 2007. That, in essence, is a broad overview of the chain of events leading up to judgment being granted on 24 April 2007.

Applicant’s case

[8] Applicant claims that he was unaware that the matter had been set down for hearing on the 24^th of April 2007. He also makes a point that the counsel he had appointed to handle the matter for him was not the counsel that appeared in Court on that day. He had instructed Advocate M F Moosa but instead Advocate N Moosa attended the hearing. According to Applicant’s former attorney (Mr Ramlakhan), he had briefed Advocate M F Moosa as early as 2^nd April 2007, who then in turn briefed Advocate N Moosa.

Applicant goes on to argue that Advocate N Moosa that represented him on 24 April 2007 did not have the mandate to do so, and this resulted in a procedural irregularity. Therefore the judgment was a default judgement granted in his absence. Accordingly, a procedural error of such a nature would warrant a judgment being rescinded under Rule 42 (1) (a).

[9] Applicant further alleged that he did not know the outcome of the matter on 24 April 2007. He learnt that the premises were advertised to be let to the public in mid May 2007. He then telephoned Mr Ramlakhan who advised him that they had lost the case. It was later discovered that Advocate M F Moosa did not deal with the matter because he had not been paid. Applicant contacted his current attorneys (Zehir Omar Attorneys) on 23 June 2007.

[10] Out of frustration at the way in which his matter was handled, Applicant even went to the extent of referring Mr Ramlakhan’s conduct to the Law Society (see Annexure “NCN11” of Applicant’s founding affidavit for a copy of the letter).²

[11] It was applicant’s submission that a greater fundamental irregularity was that judgment was granted at the instance of a non-existing party, namely the trust and not the trustees. He goes on to state in para 25 of his heads or argument that:

“Although it appears not to have been given any consideration by any of the parties, the question remains as to whether, in view of the fact that the First Respondent was cited as 135 Smith Street Trust (and concomitantly the trustees were not cited) whether the judgment of this Honourable Court sought to be rescinded dismissing the Applicant’s claim has any status.”

It was further submitted that in the circumstances of this case the judgment granted was a nullity. Applicant goes on to state the basis that there was a mistake common to all parties in relation to locus standi of the trust, the judgment could be rescinded on the basis of rule 42 (1)(c).

[12] Another issue raised on Applicant’s behalf was that the sale to the sixth respondent was void because not all the trustees consented to the sale.

[13] In any event, Applicant submitted that he had good cause for the rescission. He had a bona fide right to occupy the property in that he had a lease agreement with the first respondent and therefore the matter was initially set down for trial.

Respondent’s case

[14] Respondent took the position that the Applicant was merely laying blame with his legal representatives. Mr Ramlakhan never stated that he was not authorised to instruct any other counsel other than Advocate M F Moosa. It is not right that the Applicant be allowed to say that Advocate N Moosa did not have a mandate. At the end of the day Applicant was represented by counsel, and the merits of the adjournment application were considered by the court when judgment was granted.

[15] Another argument made by the respondents is that a rescission can only be granted if the relief which the Applicant seeks in the main application is available to him. This is not the case since Dada Motors CC is in occupation of the premises and the premises was let to it for a period effective from the 15^th of June 2007 to the 30^th of June 2009.

Furthermore, Dada Motors CC has a direct and substantial interest in the outcome of this application and ought to have been joined in these proceedings. The non-joinder is fatal to the rescission application.

[16] The Applicant and his attorney have showed little interest in this matter, and the Applicant has not given a reasonable explanation to this Court for his default. Applicant initially brought the application as a matter of urgency resulting in time periods for the filing of papers even being curtailed. Applicant failed to advance any reason as to why he waited until 3 September 2007 to launch the rescission application.

[17] The issue of the trust not being correctly cited was an issue during the main application. The proper approach to have been taken by the Applicant was to have commenced proceedings afresh and correctly cited the trustees.

[18] It was submitted that the Applicant is not entitled to any relief in terms of Rule 42 (1) (a) of the Rules of Court, as the judgment granted against him does not fall under any of the categories envisaged in rule 42.

Points in limine

[19] One of the first issues to discuss is that of whether the non inclusion of the trustees in the proceedings is an irregularity. It is trite law that a trust lacks legal personality and that it could only act through its trustees nomine officii, that it has no legal standing in litigation and that it could sue or be sued only through its trustees. It is a fundamental rule of trust law that in the absence of contrary provisions in the trust deed the trustees must act jointly if the trust estate is to be bound by their acts.³

In the decision of Mariola and Others v Kaye-Eddie NO and Others 1995 (2) SA 728 (W) it was re-affirmed that all trustees have to be joined when a trust sues or is sued.

[20] Applicant’s argument that the issue of the trustees not being properly cited was not canvassed during proceedings holds no water. In terms of the Respondents’ heads of argument in the main application dated 2 February 2007, this issue is specifically dealt with (see paras 9-12).

It must be held that Applicant’s failure to include the trustees as parties in the application is an irregularity.

[21] Furthermore, as submitted by the Respondents, Dada Motors CC, the current lessees of the premises, ought to have been joined in these proceedings. They do after all have a substantial interest in the matter.

[22] Secondly, the issue whether the sale agreement between the first and sixth respondent was valid must be dealt with. Fifth respondent who signed the purchase and sale agreement did have the necessary authority, which is set out in terms of Annexure “AG2”. ⁴ There was a resolution passed at a meeting of the trustees on 1 June 2006 where it was resolved that the fifth respondent would have the authority to sign the sale agreement on behalf of the trust.

Accordingly it must be held that there was a valid purchase and sale agreement between the sixth and first respondents.

[23] Another point is that the Applicant alleged that Dr Meer signed the lease agreement between Applicant and the first respondent. However there is no resolution to state the Dr Meer was duly authorised by the trust to enter into the said lease agreement.

The sale agreement concluded between the first respondent and sixth respondent specifically provides in respect of clause 4.17 of Annexure “B” that:

“As at the Effective Date, the Seller will not enter into any new leases in respect of the Property without the written consent of the Purchaser”⁵

Therefore the lease agreement would be null and void since the first respondent entered into the so called lease agreement on 31 July 2006 and the written consent of the sixth respondent, as required by clause 4.17, was not obtained.

Rescission application

[24] Applicant has based his claim for rescission on Rule 42(1) (a) or (c), alternatively the common law or rule 32 (1) (b).

In Bakoven Ltd v G J Howes (Pty) Ltd 1992 (2) SA 466 (E), at 468H the learned Judge Erasmus expressed himself as follows:

'There are three ways in which a judgment taken in the absence of one of the parties may be set aside, viz in terms of (i) Rule 31(2)(b) or (ii) Rule 42(1) of the Uniform Rules of Court, or (iii) at common law. . . .”

[25] Rule 42 (1) (a) of the Uniform Rules of Court empowers the Court to rescind an order erroneously sought or erroneously granted in the absence of the party seeking rescission provided that such party is affected by such order or judgment. The prerequisite factors for granting rescission under this Rule are the following:

(a) firstly, the judgment must have been erroneously sought or erroneously granted;

(b) secondly, such judgment must have been granted in the absence of the applicant; and, lastly,

(c) the applicant's rights or interest must be affected by the judgment. ⁶

Once these three requirements are established, the applicant would ordinarily be entitled to succeed, cadit quaestio. He is not required to show good cause in addition thereto (see Hardroad (Pty) Ltd v Oribi Motors (Pty) Ltd 1977 (2) SA 576 (W) at 578G and Topol and Others v LS Group Management Services (Pty) Ltd 1988 (1) SA 639 (W) at 650D-J).

[26] The Applicant was adamant that the judgment was granted in his absence. His argument was that Advocate N Moosa was not authorised to represent him. However Mr Ramlakhan, in a fax dated 27 August 2007 to Zehir Omar, states:

“…the writer had spoken to him and on the 23^rd April 2007, Advocate Moosa confirmed that the matter will be attended to on the 24^th of April 2007 by his son Advocate N Moosa”.⁷

Furthermore in Applicant’s replying affidavit, at para 41, he states:

“At all material times I mandated my former attorneys of record to do everything necessary to protect my interests in all proceedings…”⁸

This only proves that Mr Ramlakhan did not oppose Advocate N Moosa appearing in court on behalf of the Applicant on 24 April 2007. In the premises it must be accepted that Advocate N Moosa did have the authority to act on behalf of Applicant. Applicant now cannot rely on the provisions of Rule 42 (1) (a) because the order dismissing his case was not granted in his absence as counsel duly represented him on that day.

[27] Applicant also relied on rule 42 (1) (c) of the Uniform Rules of Court, which reads:

'(1) The Court may, in addition to any other powers it may have, mero motu or upon the application of any party affected, rescind or vary:

. . .

(c) an order or judgment granted as the result of a mistake common to the parties.'

According to the Applicant the judgment granted against him was granted at the instance of a non-existent party, namely the trust and not the trustees. He argued that there was a mistake common to all parties in relation to locus standi of the trust and that the judgment could be rescinded on the basis of rule 42 (1) (c). However, there was no common mistake because the issue of locus standi was taken up by the respondents, and they were awake to the fact that the trust was incorrectly cited and this was accordingly an irregularity. It must be held that there was no mistake on the Respondents’ part. Thus Applicant can not base his claim on rule 42 (1) (c).

[28] I turn now to the relief under the common law and rule 31 (2) (b) since rules 42(1) (a) and (c) have no application in this matter. Since Applicant made allegations of fraud it must be stated that at common law a judgment can be set aside on grounds of fraud. In order to succeed on a claim that a judgment be set aside on the ground of fraud, it is necessary for the applicant to allege and prove the following:

(a) that the successful litigant was a party to the fraud;

(b) that the evidence was in fact incorrect;

(c) that it was made fraudulently with intent to mislead; and

(d) that it diverged to such an extent from the true facts that the court would, if the true facts had been placed before it, have given a judgment other than that which it was induced by the incorrect evidence to give.⁹

Applicant has gone to the extent of claiming that the respondents have been involved in fraud, in that the purchase and sale agreement was falsely produced by the Respondents’ attorneys, Lochkat and Associates. Unfortunately for his case, he has been unable to provide this Court with evidence to substantiate his claim. Applicant is merely making allegations without the proper proof.

[29] An application for rescission may be brought under Rule 31(2) (b) where the defendant has been in default of the delivery of notice of intention to defend or of a plea. Rule 31(2)(b) does not, in terms, require that the conduct of the applicant be not wilful, but it is clearly an ingredient of the good cause to be shown that the element of wilfulness be absent.¹⁰ The absence of 'wilful default' does not appear to be an express requirement under Rule 31(2) (b) or under the common law. However, the application for rescission of a judgment must show good cause, both at common law and in terms of Rule 31(2) (b). The applicant, being the party which seeks relief, bears the onus of establishing 'sufficient cause'.

Whether or not 'sufficient cause' has been shown to exist depends upon whether:

(a) the applicant has presented a reasonable and acceptable explanation of his default; and

(b) the applicant has shown the existence of a bona fide defence that is one that has some prospect or probability of success. (See Chetty v Law Society, Transvaal 1985 (2) SA 756 (A) at 765A).

[30] It must be accepted that since Applicant brought the initial application on an urgent basis that he intended to pursue the matter. He has maintained that he was under the impression that his attorney and counsel would do what was necessary and comply with all the technical requirements. Applicant has tried extremely hard to lay blame with the legal representatives in this matter. This Court is acutely aware of the fact that many of those who come before it find the processes of the law difficult to understand. However, ignorance is no excuse for a complete lack of diligence or concern. Every litigant should ensure that his/her matter is being properly dealt with.

In his founding affidavit he states that he was not told about the orders handed down on the 9^th of February 2007 and the 24^th of April 2007.¹¹ However, in a letter marked Annexure “NCN12” Mr Ramlakhan confirms that the client (the Applicant) was advised as to the outcome of proceedings held on the 9^th of February 2007. ¹² Therefore there are conflicting versions from the attorney and the Applicant.

It must be held that even if there was a failure of an attorney to inform his client as to procedural developments, it does not necessarily justify rescission (see De Wet v Western Bank Ltd 1979 (2) SA 1031 (A) and Colyn v Tiger Food Industries ltd t/a Meadow Feed Mills Cape 2003 (6) SA 1 (SCA).

[31] At this point reference must be made to the Eastern Cape decision of Slabbert v Brett [2007] JOL 20835 (E), where the respondent had sued the applicant for payment of an amount owing in terms of a contract between the parties. The respondent had filed a request for particulars for trial, and when the applicant had not complied, obtained an order for the striking out of the applicant's defence. Having obtained judgment, the respondent proceeded to execute same which led to the application for rescission.

The Court held at para [13] that:

“While the Court’s are sometimes reluctant to allow a litigant to suffer the consequences of his attorney’s neglect, this does not exonerate an applicant for rescission from the obligation of giving a proper explanation for the default”

[32] As also stated by Steyn CJ in Saloojee and Another NNO v Minister of Community Development 1965 (2) SA 135 (A) at page 141:

“If, as here, the stage is reached where it must become obvious also to a layman that there is a protracted delay, he cannot sit passively by, without so much as directing any reminder or enquiry to his attorney and expect to be exonerated of all blame; and if, as here, the explanation offered to this Court is patently insufficient, he cannot be heard to claim that the insufficiency should be overlooked merely because he has left the matter entirely in the hands of his attorney. If he relies upon the ineptitude or remissness of his own attorney, he should at least explain that none of it is to be imputed to himself. ”

[33] Applicant’s submission that he knew he had lost the matter only after he saw the “to let” sign and then phoned Mr Ramlakhan is difficult to comprehend. I have difficulty in accepting that Applicant had no contact with Mr Ramlakhan for such a long period of time. No explanation has been advanced as to why the Applicant failed to keep in contact with his attorneys in relation to the application which he had brought on an urgent basis. To make matters worse, Mr Ramlakhan had stated that Applicant was aware that the hearing was set down for early May.

Applicant’s attitude towards the proceedings appears to have been lackadaisical. As a result thereof, the first leg of the enquiry fails, and the Applicant’s explanation must be rejected as being unreasonable and unacceptable. His conduct does not measure up to a reasonable explanation for his default in filing the declaration.

[34] I now turn to consider the question of a bona fide defence. The Applicant is required to demonstrate reasonable prospects of success on the merits. This means that the grounds of defence must be set forth with sufficient particularity and detail to enable the Court to conclude that there is a bona fide case and that the application is not being brought purely for the purposes of delay (see Creative Car Sound and Another v Automobile Radio Dealers Association 1989 (Pty) Ltd 2007 (4) SA 546 (D) at para 45).

[35] If Applicant did have a bona fide defence he would have done everything to see that his matter was receiving the necessary attention from his attorney, but he merely sat back and this resulted in his default in filing the declaration.

[36] It appears that the Applicant was merely making allegations without the proper proof required to prove his case. An example of this would include the allegation of fraud.

What this Court has before it is the following:

• a purchase and sale agreement concluded between the first and sixth respondents;

• a resolution authorising the fifth respondent to enter into the sale agreement on behalf of the trust;

• there is no resolution purporting to authorise Dr Meer to enter into the lease agreement with Applicant; and

• if the lease was subsequently entered into between the first respondent and the Applicant, it was entered into after the premises were sold without (my emphasis) written consent being obtained from the sixth respondent. This would nullify the lease agreement.

This Court is of the view that the Applicant has not made out a proper case as he has not been able to put up a defence which has good prospects of success.

[37] Another feature which plays against the Applicant is the delay in bringing the rescission application. The delay was considerable. If Applicant was aware of the judgment granted against him in May, why did he wait until end of June to consult his current attorneys? Thereafter it was another 3 months until the rescission application was launched. The delay was considerable, far in excess of the 20 days laid down in rule 31 (2) (b).

[38] Transfer has not yet taken place as a result of these proceedings. It is unfair to all the respondents for this matter to further continue. Respondents have followed all the proper procedures. In the premises, it seems likely that the Applicant has merely launched this application to delay the transfer of the immovable property and that his defence is not bona fide.

[39] In the result, the rescission application is dismissed with costs. I further direct that the applicant is to pay the costs of this application, including the costs occasioned by the employment of senior counsel

TSHABALALA JP ___________________________________

Date of Hearing: 18 June 2008

Date of Judgment: 31 July 2008

For Applicant: Mr. Z. Omar

Instructed by: Zehir Omar Attorneys

Counsel for Respondents: Mr. T.N. Aboobaker, SC

Instructed by: Lockhat & Associates

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