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Da Silva v South Bakels (Pty) Ltd and Another (11577/2011) [2011] ZAWCHC 542 (27 October 2011)

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SOUTH BAKELS (PTY) LTD ….....................................................................First Respondent

THE LEARNED MAGISTRATE MR BURT,

WYNBERG MAGISTRATE'S COURT …....................................................Second Respondent

JUDGMENT

SALDANHA, J

This is an application for the review of a decision of the second respondent, Magistrate Burt, of the Wynberg Magistrate's Court wherein he ordered the dismissal of an application for rescission of a judgment which had been obtained by default by the first respondent against the applicant. Neither the first nor the second respondents opposed the application and indicated that they would abide the decision of this Court.

Very briefly, the background of the matter relates to an action in the Magistrate's Court in which the first respondent sued the applicant and a company of which he was the director for an amount of R63 259,21. The summons was served by the sheriff at the residence of the applicant by placing a copy thereof on his gate. Neither the applicant nor the company, which had subsequently been liquidated, defended the action.

The first respondent applied for and was granted default judgment on 9 July 2009. The applicant claimed that he only got to know of the action and the judgment against him when the sheriff of the court subsequently informed him of it. The applicant claimed that he had not received nor had he found the summons and that it could possibly have been blown away by the wind.

He immediately contacted his attorneys and instructed them to bring an application for the rescission of the judgment. The application, it appears, was served on the first respondent's attorneys on 29 October 2009 and was initially enrolled for hearing on 25 November 2009.

In a nutshell, the applicant's defence to first respondent's claim against him was that at all material times in the contractual relationship between the first respondent and the company he acted as a director of the company. Inasmuch as the first respondent had sued him in his capacity as a surety for the debts of the company, the applicant disputed that he had signed any suretyship agreement in his personal capacity with the first respondent. The applicant also challenged the validity of the surety agreement and its compliance with Section 6 of the General Law Amendment Act. The applicant claimed that he had a bona fide defence to the first respondent's claim.

The first respondent opposed the application and filed an opposing affidavit. The first respondent, it appeared, had, however, agreed to hold over any execution processes which it had instituted against the applicant. The applicant claimed that the application for rescission had been postponed on several occasions and for a variety of reasons but disclaimed any responsibility on his part therefor.

The application was eventually set down for hearing for the 22 April 2010. A Ms Christina Zandberg, a candidate attorney in the employ of applicant's attorneys, attended to the matter. She confirmed that she attended court on the morning of 22 April 2010 and found that the matter had not been enrolled. She eventually traced the file and found only a notice of set down of the previous hearing in it and that the file was bereft of any other pleadings. She claimed that she had made a duplicate of the pleadings and shortly before 13h00 handed the file to the second respondent for the matter to be enrolled and to be considered by him.

The first respondent was legally represented at the proceedings and by arrangement between Ms Zandberg and first respondent's attorney the matter was to be heard before the second respondent later that very afternoon. The second respondent required the opportunity to peruse the file and stated he also had another matter in which he was required to hand down judgment.

Ms Zandberg claimed that at approximately 15h00 she and the first respondent's attorneys appeared before the second respondent for the hearing of the matter. Ms Zandberg claimed that the second respondent requested them to approach the bench and requested of them how they wished to deal with the matter and whether the matter should be postponed. The first respondent's legal representative objected to any further postponement and insisted that the matter be disposed of on the day. Ms Zandberg claimed that in response to the first respondent's attorney's objection to a further postponement the second respondent indicated that he had read the papers and that he would in any event have dismissed the application, as it had appeared to him that the applicant had signed the suretyship.

Ms Zandberg claimed that she insisted on the opportunity of addressing the Court on the legal issues in respect of the application. She disputed that the applicant had no defence in law with regard to the suretyship.

Despite Ms Zandberg's protestations the second respondent appeared again to have indicated that he would not have ruled in favour of the applicant. Ms Zandberg claimed that, being a candidate attorney and that having been her first appearance, she reluctantly did not press the matter further with the second respondent. The second respondent, she claimed, without further ado dismissed the application, with costs. He apparently also remarked that should the matter be taken on appeal the applicant carried the risk of an adverse order of costs against him.

An appeal was lodged against the decision of the second respondent in an endeavour to obtain his reasons for the order. Ms Zandberg was eventually referred directly to him in chambers. She noted from the court file that the following was recorded:

"Ms Zandberg for the applicant; Mr Lynch for the respondent. No judgment before the Court. Ms Zandberg does not pursue the application. Application dismissed, with costs."

Ms Zandberg claimed that the Magistrate, on noting the contents of the file, expressed surprise that he had recorded that there was no judgment in the file, yet at the same time dealt with the matter. He indicated to her that it was not necessary for him to give reasons, as it appeared from the court file that Ms Zandberg had withdrawn the application. Ms Zandberg claimed that she disputed that she had, in fact, done so.

In the light of the above the applicant reconsidered his position with regard to the appeal and decided not to proceed therewith, but rather to bring an application for the review of the second respondent's dismissal of the application for rescission. The affidavit in support of the review application appears to have been signed on 8 July 2011 and was issued on 19 July 2011.

The applicant claimed that his legal representative had instructed an advocate to draft the papers. Their counsel, it appeared, had not attended to it timeously and therefore the inordinate delay in the matter. The applicant therefore sought condonation for the late filing of the application. In the light of the applicant's explanation as to the cause of the delay, I am of the view that the applicant should not be prejudiced by the conduct of his legal representative in not having timeously attended to the drafting of the papers. In the circumstances I am prepared to condone the late filing of the application.

As already indicated, the respondents did not oppose the application. The second respondent, however, filed what he termed an "Explanatory Affidavit To Assist The Court". He placed on record in the affidavit that he did not oppose the application. He claimed though that he only recalled the matter somewhat vaguely, as he had dealt with many matters on an almost daily basis in his court. He, however, recalled that there were no documents in the court file and the matter had stood down on a number of occasions.

The only reason that he dismissed the application was because he believed that the applicant's attorney had decided not to pursue the application for rescission of the judgment. As indicated, the second respondent indicated that his recollection of the matter was somewhat vague and in the circumstances understandable.

In considering whether there are grounds for the review of the decision of the Magistrate, the Court has regard to the provisions of Section 24(1)(c) of the Supreme Court Act, which provides that a gross irregularity in the proceedings would be a valid ground for review. The question arises as to whether the conduct of the Magistrate in the circumstances amounted to a gross irregularity.

Ms Pratt, who appeared on behalf of the applicant at the hearing, referred the Court to the commentary in Erasmus's Superior Court Practice at A1 - 19 and to the various authorities referred therein. In particular, Erasmus deals with the question of a gross irregularity in the proceedings and with reference to various decided cases state as follows:

"A gross irregularity in civil proceedings in an inferior court means an irregular act or an omission by the presiding officer (or possibly some other official of the court) in respect of the proceedings of so gross a nature that it was calculated to prejudice the aggrieved litigant on proof of which the Court can set aside such proceedings, unless it was satisfied that the litigant had, in fact, not suffered any prejudice. In the circumstances it is the cumulative effect that counts and a case may be so full of irregularities, none of which is gross in itself, but they may be said to be gross irregularity as to the whole proceedings."

Erasmus refers to several decisions and in particular those that relate to where a Court had failed to observe the principle of audi alteram partem. It appears that the principle is aptly applicable in the matter before the Court. Ms Pratt also referred to the decision of Telcordia Technologies Inc. v Telkom SA Ltd 2007 (5) SA BCLR 503 (SCA) paragraphs 6, 72 and 73.

"The law as stated in Ellis v Morgan (supra) has been accepted in subsequent cases, and the passage which has been quoted from that case shows that it is not merely highhanded or arbitrary conduct which is described as a gross irregularity; behaviour which is perfectly well-intentioned and bona fide, though mistaken, may come under that description. The crucial question is whether it prevented a fair trial of the issues. If it did prevent a fair trial of the issues, then it will amount to a gross irregularity. Many patent irregularities have this effect and if from the Magistrate's reasons it appears that his mind was not in a state to enable him to try the case fairly this will amount to a latent gross irregularity. If, on the other hand, he merely comes to a wrong decision owing to his having made a mistake on a point of law in relation to the merits, this does not amount to gross irregularity. In matters relating to the merits the magistrate may err by taking a wrong one of several possible views, or he may err by mistaking or misunderstanding the point in issue. In the latter case it may be said that he is in a sense failing to address his mind to the due point to be decided and therefore failing to afford the parties a fair trial. But that is not necessarily the case. Where the point relates only to the merits of the case, it would be straining the language to describe it as a gross irregularity or a denial of a fair trial. One would say that the magistrate has decided the case fairly but he has wrong on the law. But if the mistake leads to the Court's not merely missing or misunderstanding a point of law on the merits, but to its misconceiving the whole nature of the inquiry or if its duties in connection therewith, then it is in accordance with the ordinary use of language to say that the losing party has not had a fair trial. I agree that in the present case the facts fall within this latter class of case, and that the magistrate, owing to the erroneous view which he held as to his functions, really never dealt with the matter before him in the manner which was contemplated by the Section. That being so, there was a gross irregularity, and the proceedings should be set aside."

Ms Pratt submitted, and correctly so, that it is not necessary for the applicant to show that the Magistrate had willingly acted in a highhanded manner but merely, although bona fide, was mistaken as to exactly what was said to him in the circumstances of the application before him. If he had misconstrued what Ms Zandberg had said to him which resulted in prejudice to the applicant, then the conduct of the Magistrate in the circumstances would amount to a gross irregularity.

More importantly, it appears that the applicant's instructions to Ms Zandberg and her firm were very clear: that the application for rescission of judgment had to be brought and had to be prosecuted to its logical conclusion. It appeared that Ms Zandberg did not have any instructions to abandon the application for review. It is interesting to note the comment of the Magistrate on the file appears to record "Ms Zandberg does not pursue the application" rather than it having been on the instruction of her client.

In the circumstances it is clear that the applicant was prejudiced that the application for the rescission was considered to have been abandoned by his legal representative without the opportunity of her addressing the Court.

The Magistrate in his affidavit also indicated that he was under some pressure that afternoon, as he had to attend to other matters. He specifically raised in his affidavit that at 3 o'clock the afternoon he was required to attend to certain other ex parte applications in chambers in which another attorney was involved. It is apparent that the Magistrate was under pressure to complete his roll. Whether that had a direct bearing on his handling of the matter is not entirely clear, but this Court takes it into account on his own version he was what appears to have been under some pressure.

With regard to whether the applicant has set out a basis for bringing an application for rescission, I am of the view that is a matter that this Court leaves to be determined by the Magistrate in due course. I am satisfied though, that at the very least the applicant has set out what would appear to be a bona fide defence to the action and that such defence should be properly argued and considered by the Magistrate in an application for rescission of judgment.

In the circumstances I am of the view that the applicant is entitled to the review of the decision of the Magistrate not to have heard the application for rescission. I wish, however, to make it clear this does not amount to a finding that the Magistrate had deliberately or willingly undermined the rights of the applicant. As indicated, it may well have been a misunderstanding on his part and as a result of the pressure under which he had laboured.

In the circumstances the following order is made as per the draft handed up by Ms Pratt:

1. The decision of the second respondent, the Wynberg Magistrate's Court, granted on 22 April 2010 under case number 4364/09 to dismiss, with costs, an application for rescission brought in terms of Rule 49 of the Magistrate's Court Rules, is reviewed and set aside;

2. The noting by second respondent on the court record that the application for rescission was not pursued with is reviewed and set aside;

3. The matter is remitted back for rehearing by the Wynberg Magistrate's Court, including the hearing of oral and/or written argument presented on behalf of any of the parties;

4. It is directed that the execution process or any further processes following the default judgment of the Magistrate's Court under case number 4364/09 be suspended pending the finalisation of the rescission application, including any postponement appeals or review thereof;

5. No order is made as to costs.

SALDANHA J