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REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, JOHANNESBURG

 

CASE NO: A3074/21

REPORTABLE: YES

OF INTEREST TO OTHER JUDGES: YES

REVISED: YES

DATE: 19 May 2022

 

In the matter between:

NICOLAAS DE WAAL N.O                                                           Appellant

and

TOP TEN CATERING AND SECURITY CC                                  First Respondent

ANNA MARIA DLADLA                                                                Second Respondent

 

Coram:          Wepener J, Vally J et Mudau J

Heard:            9 May 2022: The ‘virtual hearing’ of the Full Court Appeal was conducted as a videoconference on Microsoft Teams.

Delivered:     19 May 2022 – This judgment was handed down electronically by circulation to the parties' representatives via email, by being uploaded to CaseLines and by release to SAFLII. The date and time for hand-down is deemed to be 11H00 on 19 May 2022.

 

Summary:     Settlement agreement- Rule 27(6) and Rule 27(7) of the Magistrate’s Court Rules-proper construction

 

Held: In casu- the settlement agreement did meet the requirements for making such agreement an order of court. Making such an order will have been competent and proper as it related to the pending litigation; accord with the Constitution, law and public policy; and was of practical and legitimate advantage.

Appeal:  Upheld

ORDER

On appeal from: The Gauteng Regional Court, Johannesburg.

 

1.            Condonation for the late filing of the opposing papers is granted.

2.            The appeal is upheld with no order as to costs.

3.            The order of the court below is set aside and substituted as follows:

(a)   The settlement agreement is made an order of court.

(b)   The first and second respondents to pay the costs of this application, jointly and severally, the one paying the other to be absolved.”

 

JUDGMENT

 

Mudau J (Wepener J et Vally J concurring):

 

[1]          This is an appeal against the dismissal by the Regional Magistrate, Johannesburg of an application for making a settlement agreement between the litigants of an order of court. The appeal is unopposed. As a preliminary issue, the appellant also launched an application for condonation of the late application for the assignment of a date for the hearing of an appeal (civil appeals from Magistrates’ Courts) in terms of Rule 50(4)(a) of the Uniform Rules of Court.

Condonation Application

[2]          A court may condone any non-compliance with the rules, unless the non compliance is so severe that the litigation will amount to a nullity.[1] On 8 July 2021, the appellant filed its Notice of Appeal against the judgment of the Regional Magistrate dated 8 June 2021. In terms of Rule 50(4)(a) of the Rules:

“The appellant shall, within 40 days of noting the appeal, apply to the registrar in writing and with notice to all other parties for the assignment of a date for the hearing of the appeal and shall at the same time make available to the registrar in writing his full residential and postal addresses and the address of his attorney if he is represented.”

[3]          The application for an appeal date was served on the respondents on 4 February 2022 and filed on 8 February 2022. The registrar, having considered the appeal date application, placed this appeal on the roll for hearing on 9 May 2022. The appeal date application fell outside of the requisite time period as prescribed by the Rules, being 40 days after the noting of the appeal. The application for a date of appeal should have been filed by 2 September 2021.

[4]          The appellant’s instructing attorney in an affidavit deposed to in support of the condonation application, explains that due to no fault on the part of the appellant, he was involved in several matters during the course of last year. On a personal level, he and his wife had their first child born on 26 November 2021, and was out of the office for a short period of time on paternity leave. The condonation application means that the appellant seeks an indulgence from the Court. The appellant contended that, taking into account that the appeal was timeously noted in accordance with the Uniform Rules; and further that the dies non period (16 December 2021 to 15 January 2022) which ought to be taken into account in accounting for the delay, there can be no prejudice to the respondents in regard to the question of condonation. After hearing submissions by counsel and having considered the matter, condonation was granted.

Factual Background

[5]          On 8 December 2018, the appellant launched an action out of the Johannesburg Regional Magistrate's Court under case number 2909/2018. The summons was served on the respondents on 11 December 2018. The action was based on a lease agreement for arrear rental and ancillary charges for the period March 2016 to November 2018. The claim against the second respondent was based on a deed of surety for the obligations of the first respondent.

[6]          On 29 March 2019 and in settlement of the action, the parties entered into a settlement agreement. Subsequently the appellant, on 22 June 2020, after having not received payment in terms of the settlement agreement, launched the first application to have the settlement agreement made an order of court. The settlement agreement included arrear rental up until the date it was concluded, which explains why the settlement agreement amount differed to that of the summons. This explanation was included in the first application to have the settlement agreement made an order of court. The first application came before the Regional Magistrate on 9 November 2020. The Regional Magistrate raised concerns why the amount in the settlement agreement differed from that which was claimed in the summons and in addition to that, there was only one signature provided for in the settlement agreement. The Regional Magistrate did not accept any of the explanations and dismissed the first application.

[7]          On 10 March 2021, the appellant launched another application (the second application and subject of the appeal). In this regard, the appellant addressed the Magistrate's concerns regarding the signature of the settlement agreement in a supporting affidavit and advised the Court that it had attempted to obtain consent from the respondents to have the settlement agreement made an order but to no avail.

[8]          The appellant had brought the application with a view to address the Magistrate’s concerns emanating from the first application and assist the learned Magistrate in granting the order sought therein albeit on new facts. The application was served on the first and second respondents respectively on 8 April 2021. The matter came before the same Regional Court Magistrate on 17 May 2021. Although unopposed and as indicated, the Magistrate dismissed the application. But, as Nicholas J concluded in Glen Comeragh (Pty) Ltd V Colibri (Pty) Ltd and Another,[2] there is no reason in principle why a person should not sign a contract in two capacities, i.e. in his capacity as agent and in his personal capacity, so that his signature is in effect a double signature. It is trite that a person by his conduct in putting his signature to a document admits that he is acquainted with its contents. The admission is not of course conclusive, but it is sufficient to establish that fact prima facie.[3] It is a critical fact which does not deprive the respondents of a remedy in the form of an appeal or review to set aside the recordal of the settlement agreement. I return to this aspect below at para 14.

[9]          The appellant’s relief in the application, which is the subject matter of this appeal, is based on the provisions of the Rules Regulating the Conduct of the Proceedings of the Magistrates' Courts. Rule 27(6) thereof, provides as follows:

“(a)  Application may be made to the court by any party at any time before judgment to record the terms of any settlement agreed to by the parties to a proceeding without entry of judgment: Provided that if the terms of settlement so provide, the court may make such settlement an order of court.

(b)   Where any party to a settlement agreement is not present at the time when the terms of a settlement agreement are recorded or made an order of court, the presiding Magistrate may call for the verification of the authenticity of any signature of a party to a settlement agreement before recording the terms thereof or recording same as an order of court or granting judgment in terms thereof.”

[10]       In terms of subrule (7):

“An application referred to in sub-rule (6) shall be on notice, except when the application is made in court during the hearing of any proceeding at which the other party is represented or when a written waiver (which may be included in the statement of the terms of settlement) by such other party of notice of the application is produced to the court.”

[11]       Subrule (9)(a) provides thus:

“When the terms of a settlement agreement which was recorded in terms of subrule (6) provide for the future fulfilment by any party of stated conditions and such conditions have not been complied with by the party concerned, the other party may at any time on notice to all interested parties apply for the entry of judgement in terms of the settlement.”

[12]       In dismissing the application, the Magistrate was of the view in his written reasons that “an application in terms of Rule 27(6) is intended to be undertaken under the same case number of the pending proceedings”. The Magistrate found that the application was defective by virtue of the fact that the case number assigned to the application differed to that of the action. There is no authority cited for this proposition. The appellant attacks this reasoning. As pointed out, the application was brought on notice as required in terms of Rule 27(6) and was validly served on the respondents in terms of the Rules. Furthermore, the founding affidavit made reference to the case number connected to the pending action and so too, the settlement agreement. The suggestion that an application of necessity has to be launched under the same case number is without foundation, particularly in circumstances where all the facts have been disclosed in the accompanying affidavit, in support of the motion.

[13]       In the second application which is the subject of the appeal, it was pointed out in the supporting affidavit that: “the deed of settlement was signed by the second respondent was surety for the first respondent and possessed the requisite authority to sign on behalf of the first respondent which signing was done in the presence of two witnesses” (para 14). In this regard, the appellant sought to address the Magistrate’s concerns flowing from the dismissal of the first application. However, the Magistrate reasoned that the “statement was also unnecessary and added nothing of substance to the first application” and that “a mere submission by counsel from the bar would have been sufficient”.

[14]       The Magistrate was concerned that the capacity in which the second signatory signed remained vague, albeit the words “DEFENDANTS” below the signature was helpful but was insufficient to address the concerns. It is trite that, unlike a pleading, an affidavit contains evidence and not only allegations of fact. It is also trite that a settlement, whether extra-judicial or embodied in an order of court, is a transactio which has the same effect as res judicata.[4] Like any other contract, and like any order of court, a transactio may be set aside on the ground that it was fraudulently obtained or on the ground of mistake where the error is justus.[5] Alternatively, the matter could have been referred in terms of rule 27(6)(b) of the Rules for the hearing of viva voce evidence or verification on the question whether the first respondent signed the deed of sale, not only as agent for the second respondent, but also in his personal capacity.

[15]       Generally, a settlement agreement and the resultant settlement order eliminate the underlying dispute. Once the matter has become settled and the settlement agreement and the terms thereof made an order of court, this development in the lis between the parties supersedes the action and creates new obligations between the parties and the appellant. In the words of the Constitutional Court:

‘The effect of a settlement order is to change the status of the rights and obligations between the parties. Save for litigation that may be consequent upon the nature of the particular order, the order brings finality to the lis between the parties; the lis becomes res judicata (literally, 'a matter judged'). It changes the terms of a settlement agreement to an enforceable court order. The type of enforcement may  be execution or contempt proceedings. Or it may take any other form permitted by the nature of the order. That form may possibly be some litigation the nature of which will be one step removed from seeking committal for contempt; an example being a mandamus”[6].  

[16]       The Magistrate was also of the view that the application was fatally defective because an application brought in terms of Rule 27(6) of the Magistrate's Court Rules was intended to be brought on a long form notice of motion, which contains a description of the procedural rights of the respondents after service of the notice of motion. In terms of subrule (7) referred to above, the application under this subrule shall be on notice, except when the application is made in court during the hearing of the proceedings, in which case there must be compliance with the provisions of subrule (7). In terms of rule 2(1) notice means in writing. The suggestion that the application was fatal in that it did not comply with long form of notice of motion for the benefit of the respondents is clearly untenable and defeats the clear provisions of Rule 27(6) which is intended to provide a mechanism of settling disputes between litigants.

[17]       The Magistrate found that the settlement agreement was incapable of being made an order of court by virtue of the fact that the amount therein contained differed to that in the summons. The appellant also attacks this finding. It was pointed out in the application by the appellant that the settlement agreement and the amount contained therein was different to that in the summons by virtue of the fact that there were further arrear rentals incurred by the respondents up until the settlement date of 29 March 2019, which was provided for in the settlement agreement itself. This is a sound approach at insuring that the appellant did not have to incur further legal costs to enforce the claim it would have had to the additional arrear rental. However, the Magistrate reasoned that, although the preferred approach made common sense, he was of the view that, “this court is constrained to enter a judgment within the parameters of the relief claimed in the summons, and not to exceed the nature and extent of the relief claimed … On the strength of an agreement between the parties to do so”. On further reflection, the Magistrate was willing to accept that it is competent to do so but had concerns “regarding the proper completion of the agreement which militated against the granting of the order”.

[18]       The correct approach to the interpretation of documents, such as a settlement agreement, was summarised by the Supreme Court of Appeal in Endumeni Municipality:[7]

“… Interpretation is the process of attributing meaning to the words used in a document, be it legislation, some other statutory instrument, or contract, having regard to the context provided by reading the particular provision or provisions in the light of the document as a whole and the circumstances attendant upon its coming into existence. Whatever the nature of the document, consideration must be given to the language used in the light of the ordinary rules of grammar and syntax; the context in which the provision appears; the apparent purpose to which it is directed and the material known to those responsible for its production. Where more than one meaning is possible each possibility must be weighed in the light of all these factors. The process is objective, not subjective. A sensible meaning is to be preferred to one that leads to insensible or unbusinesslike results or undermines the apparent purpose of the document. Judges must be alert to, and guard against, the temptation to substitute what they regard as reasonable, sensible or business-like for the words actually used. To do so in regard to a statute or statutory instrument is to cross the divide between interpretation and legislation; in a contractual context it is to make a contract for the parties other than the one they in fact made. The ‘inevitable point of departure is the language of the provision itself’, read in context and having regard to the purpose of the provision and the background to the preparation and production of the document.”

[19]       In this case the settlement agreement is not contentious and without any ambiguity. It is indeed the position that a court must thus not be mechanical in its adoption of the terms of a settlement agreement. The inevitable starting point is the language of the settlement agreement itself. It is headed “Settlement Agreement”. Although it refers to the plaintiff and the defendants, the references should clearly be to the appellant and the respondents respectively. Section C of the agreement sets out the fundamental point that the respondents were desirous of settling the outstanding amount. The parties agreed that the respondents shall pay the sum of R417 699,66 inclusive of legal costs in full and final settlement, the one paying the other to be absolved, on terms arising out of the present course of litigation, failing which an amount then of R776 774 82 with interests in terms of the lease agreement would immediately become due and payable.

[20]       The settlement agreement made provision that it was the whole agreement between the parties in relation to the subject matter and subject to the usual caveat, i.e. that any effected changes had to be in writing, and signed by the parties. The terms of settlement provided that the Court make such settlement an order of court. There is no dispute that the parties intended to settle the dispute between them in terms of the settlement agreement.

[21]       It is trite that in our adversarial system of litigation, a court is required to determine a dispute as set out in the affidavits (or oral evidence) of the parties to the litigation. All the essential averments which the applicant must allege must be in the founding affidavit filed in support of his or her application. It is a core principle of this system that a judicial officer (Judge or Magistrate) remains neutral and aloof from the fray. The purpose of pleadings is to define the issues for the other party and the court, and for the court to adjudicate those issues in dispute.[8] It is not for the court to raise new issues not traversed in the pleadings or affidavits, however interesting or important they may seem to it, and to insist that the parties deal with them.

[22]       Admittedly, there are instances where the court may, of its own accord, raise a question of law, but this question must fully emerge from the evidence, and be necessary for the court's decision. The clear fundamental foundation for Rule 27 is that where litigious matters are settled, a mechanism is provided for judgements to be granted in terms of the settlement without having to begin ab initio with an action based on the settlement agreement.[9] It accordingly follows that the concerns by the Magistrate in that regard were without basis.

[23]       It is common cause that the application was served on the respondents at the chosen domicilium citandi et executandi. The Magistrate was concerned that there was not effective service, albeit it “may well have been competent”. In fairness to the Magistrate, he was at pains to concede in his reasons for judgment that his “approach to the matter may have been overly strict”. Indeed, it appears he elevated form over substance. The concession by the Magistrate is well made and is dispositive of the appeal.

[24]       The settlement agreement did meet the requirements for making such agreement an order of court. Making such an order will have been competent and proper as it related directly to the pending litigation between the parties; accord with the Constitution, law and public policy; and was of practical and legitimate advantage. Accordingly, I conclude that the Regional Court erred by not making the settlement agreement an order of court. There remains the issue of costs. The appeal has not been opposed. In the circumstances it would only be fair to make no order as to costs.

[25]       In the result, the following order is made:

1.         Condonation for the late filing of the opposing papers is granted.

2.         The appeal is upheld with no order as to costs.

3.         The order of the court below is set aside and substituted as follows:

“(a)         The settlement agreement is made an order of court.

(b)          The first and second respondents to pay the costs of this application, jointly and severally, the one paying the other to be absolved.”

 

T P Mudau

Judge of the High Court

Gauteng Division, Johannesburg

 

W L Wepener

Judge of the High Court

Gauteng Division, Johannesburg

 

B Vally

Judge of the High Court

Gauteng Division, Johannesburg

 

HEARD ON:                                                  9 May 2022 – in a ‘virtual hearing’

during a videoconference on Microsoft Teams.

 

JUDGMENT DATE:                                    18 May 2022 – judgment handed down

 electronically

 

FOR THE APPELLANT:                            Advocate S Meyer

 

INSTRUCTED BY:                                     Cliffe Dekker Hofmeyr Inc.

 

FOR THE FIRST and SECOND RESPONDENTS:      No Appearance

 

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