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REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NO: 995/2015

Not reportable

Not of interest to other judges

Revised.

21/10/16

In the matter between:

Ronald Bobroff and Partners Inc                                                                      First applicant

Bobroff, Ronald                                                                                           Second applicant

Bobroff, Darren Rodney                                                                                  Third applicant

and

Motara, Yasmin                                                                                            First respondent

Van Staden, Johann, NO                                                                        Second respondent

Zimerman, Rael                                                                                           Third respondent

Bezuidenhout, Steven                                                                               Fourth respondent

In re:

Motara, Yasmin                                                                                                        Applicant

and

Ronald Bobroff and Partners Inc                                                                  First respondent

Ronald Bobroff and Partners Inc                                                                  First respondent

Bobroff, Ronald                                                                                       Second respondent

Bobroff, Darren Rodney                                                                              Third respondent

 

Judgment

 

Van der Linde, J

[1] This is an application for rescission of judgment in terms of rule 42(1)(a) alternatively the common law. It comes on the unopposed roll, together with eight other matters, but counsel for both sets of parties attended in chambers before the hearing to advise me that it was necessary to read the papers in only one of the matters, being the above, and that any order made in this matter should also be made in each of the other matters.[1] The nine matters were then called and the present matter only was argued, in accordance with what I had been told; that they were, for present purposes, identical.

[2] The applicants for rescission are an incorporated firm of attorneys, who was the first respondent in the settlements now sought to be rescinded, and Messrs R and D Bobroff, who were at all relevant times directors, with Mr Bezuidenhout, of the firm. The first respondents in the various matters are previous clients of the firm, all of whom had applied to set aside the fee arrangements that had been entered into between them and the firm. Their causes of action were the same: that the fee arrangement was what might be called a common law contingency fee agreement, and that such an agreement was invalid.

[3] The judgments that were sought to be rescinded had been given by consent in terms of written settlement agreements signed by attorney Bezuidenhout[2] ostensibly on behalf of the "Respondent".

[4] The first paragraph of the settlement agreements thus expressly provided that such contingency fee agreement was declared "invalid, void and of no force or effect." These settlement agreements were made orders of court in each instance by Spilg, J.

[5] Although the rescission applications were all set down on the unopposed roll, they were in substance opposed. Counsel for both sides were heard. The clients, first respondents in the rescission applications, had filed notices of intention to defend, but not answering affidavits. Their reason for not doing so was explained in an affidavit by their attorney, Mr Millar, who on their behalf applied for a postponement of the rescission applications, so that these could be enrolled on the opposed roll; and so that they could file proper answering affidavits. From the Bar, they invited the court to place them on terms (ten days were suggested) for the filing of their answering affidavits.

[6] The applicants for rescission opposed the postponement and asked that the rescissions be granted on an unopposed basis. They accepted however that the court was still required to be persuaded about their applications and, in this respect, accepted that apart from bringing themselves within the ambit either of the rule and if not, of the common law, they also had to show that their assertions of a defence on the merits must satisfy the threshold that, if established at the trial, would entitle them to the relief they seek in the main applications. This threshold was likened, by counsel for the applicant, to the Grant v Plumbers (Pty) Ltd, 1949 (2) SA 470 (O) standard.

[7] Herbstein & Van Winsen, The Civil Practice of the High Courts of South Africa,[3] point out that some courts have held that if it is found that the order was erroneously granted in the absence of a party, the court should without further enquiry rescind or vary the order. The authors also pointed to authority, however, that held that the court still retains a discretion whether to rescind or vary the order.[4]

[8] In my view, this is correct. It is particularly pertinent in the present case, for the following reason. The applicants explained from the Bar that their defence was the following: if they were successful in rescinding the orders, they would defend the cases of the ex-clients of the firm (the applicants in the main applications) on the basis that the common law contingency fee agreements were in fact not invalid and void. They accepted in oral argument that many courts have by now so held, but submitted that they were entitled to have their argument tested in the Supreme Court of Appeal and, if needs be, in the Constitutional Court.

[9] On the basis of this defence, there is in my view no prospect of the applicants succeeding, for two substantive reasons. First, counsel for the respondent relied on the full bench of the Gauteng High Court, Provincial Division, in De la Guerre that held that such a contingency fee agreement is invalid.[5] That judgment not only collected the authorities on the point, but explained that the Supreme Court of Appeal in Pricewaterhouse Coopers Inc v National Potato Co-op Limited[6] had so held back in 2004. De la Guerre is binding on this court.

[10] The second reason is that the applicants were themselves parties in De la Guerre, and so they will have known since 2013 of that judgment. Whether or not a court should, without more, set aside a judgment erroneously granted in the absence of a party, it seems to me that where, as here, the applicant is aware of a judgment that really forecloses its prospects of succeeding if the judgment were to be set aside, it would be an unnecessary waste of judicial resources to allow the matter to go forward.

[11] That brings me to whether to refuse the rescission applications; or whether to accede to the postponement application of the respondents to enable them to put full affidavits before the opposed motion court. Their counsel made it plain that they wish the opportunity to do just that. The decision in these matters was ultimately dictated by the events subsequent to the hearing, explained below.

[12] Counsel for the applicants asked, in reply, for an opportunity to consider the De la Guerre judgment and to submit further written argument in regard thereto. There was no objection, and counsel explained that Monday, 17 October 2016 afforded him sufficient time. Respondent's counsel agreed to respond by Tuesday, 18 October 2016. I agreed to receive and consider those submissions, and postponed the matters all to Friday, 21 October 2016, for judgment.

[13] The applicants' supplementary submissions however made the following points: first, that the contingency fee agreements in issue were in fact not common law contingency fee agreements, and so De la Guerre does not apply to the main applications; second, that in any event the applicants also rely on other defences that are not identical, and so the parties ' agreement to argue all the matters together is not "appropriate"; third, that in fact the applicants need not show that they have a defence which, if established at the trial, would entitle them to succeed; fourth, if they are wrong, in any event their defences are set out in an annexure X[7] which Mr Ronald Bobroff said he would arrange be annexed to his founding affidavit but which was, in the event, not annexed; and fifth, the applicants cannot advance their rescission applications in the absence of the relevant annexures X, and so they require a postponement of the matter to put up those annexures.

[14] I have decided to grant the postponement sought in each of matters 20, 21, 22, 26, 28, 29, 30, 31 and 32, primarily because both parties want it. However, since the respondents sought the postponements from the outset, and the applicants refused to consent then, and only now seek it to obtain attachments that were expressly already referenced in their founding affidavit, the postponement must be at their costs. It is necessary that the outstanding issues be regularised, and that is incorporated in the order.

[15] In the result I make the following orders in each of matters 20, 21, 22, 26, 28, 29, 30, 31 and 32:

(a)  The applicants' applications for rescission of judgement are all postponed sine die.

(b)  The applicants' are to file the annexure X, referenced in their founding affidavit in their rescission applications under the heading "The Applicant s' Defences to the Claims of the Respondent in its Main Application" by no later than 28 October 2016.

(c)  The respondents in the rescission applications are to file their answering affidavits, if any, by no later than 11 November 2016.

(d)  The applicants' in the rescission applications are to file their replying affidavit by no later than 25 November 2016.

(e)  The applicants are directed to pay the costs occasioned by the postponements on the opposed scale.

 

WHG van der Linde

Judge, High Court

Johannesburg

 

For the applicants: Adv D Vetten

Instructed by JJF Cameron Attorneys

Hurlingham Office Park

Block G, Ground Floor

Cnr. William Nicol & Republic Roads

Sandton

Tel: 011285 0043

 

For the respondents: Adv J Erasmus

Instructed by Norman Berger and Partners Inc

84 -6^th Avenue, Cnr. Louis Botha Avenue

Highlands North

Johannesburg

Tel: 011 786 3096

Ref: Mr Millar/su (961170)

 

Date of argument: 12 October 2016

Date of judgment: 21 October 2016

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