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IN THE HIGH COURT OF SOUTH AFRICA (BOPHUTHATSWANA PROVINCIAL DIVISION) CASE NO: CA 9/2006 In the matter between: W J VICTOR N.O. 1st Appellant J L DU PLESSIS N.O. 2nd Appellant W H J CILLIERS N.O. 3rd Appellant W J VICTOR 4th Appellant M J VICTOR 5th Appellant M E LUTTIG 6th Appellant M E LUTTIG N.O. 7th Appellant J L DU PLESSIS N.O. 8th Appellant W H J DU PLESSIS N.O. 9th Appellant and NEDCOR BANK LIMITED Respondent CIVIL APPEAL LEEUW J; HENDRICKS J; LANDMAN J DATE OF HEARING : 08 SEPTEMBER 2006 DATE OF JUDGMENT : 27 OCTOBER 2006 COUNSEL FOR THE APPELLANTS : ADV J SCHEEPERS COUNSEL FOR THE RESPONDENT : ADV N SNELLENBURG JUDGMENT HENDRICKS J: [A] Introduction:  This is an appeal against a default judgment granted by Magistrate Ms Sepato of the Vryburg Magistrate Court on 05 December 2005 against the Appellants.  During March 2000 the Respondent, Nedcor Bank LTD issued summons against the Appellants and one Mr Luttig (who was the sixth Defendant in the court a quo) for payment of the amount of R2 395 178-70 plus interest and costs on an attorney and client scale. Certain properties were also to be declared executable.  The first three Appellants were cited in their capacity as trustees of Germi Trust. Appellants numbers 4, 5 and 6 together with Mr Luttig were cited in their capacity as sureties. Mr Luttig is not an appellant. Appellants numbers 7, 8 and 9 were cited in their capacity as trustees of the Poppiesdale Trust. [B] History of the matter:  This matter has a relatively long history. After the issuing of the summons, the Appellants defended the action whereupon the Respondent filed its reply. Several firms of attorneys represented the Appellants and withdrew from time to time.  At first, the Appellants were represented by E. G. Cooper & Sons of Bloemfontein with their local correspondents in Vryburg being Kotze Low & Swanepoel. The matter was enrolled for trial from 3rd to 7th July 2002. On 17 May 2002 attorneys E. G. Cooper & Sons withdrew as attorneys of record.  On 23 May 2002 attorney Mr Marius van Rensburg became the attorney of record for the Appellants and because he was not ready to proceed with the trial scheduled for 3-7th July 2002, it was agreed that the matter be postponed and Appellants were ordered to pay the wasted costs occasioned by the postponement.  The trial was rescheduled for 21-25 October 2002 but on 19 September 2002 Mr van Rensburg withdrew as attorney of record. On 7 October 2002 Dawid van Zyl Attorneys filed a notice of appearance as the attorney of record for the Appellants. The Respondent then removed the matter from the roll.  New trial dates were obtained for 7-11 April 2003 but the matter was not proceeded with on those dates. Instead, it was removed from the roll by consent between the parties and re-enrolled for 6-10 September 2004. Appellants indicated that they wish to obtain the services of an advocate to represent them.  The matter was removed from the roll and re-enrolled for 15-17 November 2004 but counsel for the Appellants was not available on those dates. The matter was enrolled for 11-15 April 2005 which dates were agreed upon by the parties.  The Respondents at that stage amended its particulars of claim, which necessitated a request for further particulars by the Appellants. Certain settlement negotiations were also embarked upon but it never materialized.  The dates of 05-09 December 2005 were given by the Clerk of the Court as trial dates and the matter was subsequently enrolled. Appellant‟s attorneys informed the attorneys for the Respondent that those dates did not suit them because counsel was not available. In response to this, Respondent‟s attorneys indicated to Appellant‟s attorneys that they should apply on affidavit to Court for a postponement, which application they intend to oppose. No such application was made, instead Dawid van Zyl Attorneys then withdrew as attorneys of record for the Appellants.  On 07 November 2005 Venter, Booysen & Ferreira attorneys filed a notice indicating that they represent the Appellants. They requested a postponement. The respondent‟s attorneys did not consent to their request and indicated that if they want a postponement they must formally apply for one on or before 18 November 2005. Mr Venter confirmed that he instructed counsel to draft a formal application for postponement.  On 01 December 2005, with only one court day left before the trial date, Mr Venter informed Respondent‟s attorneys that he intends withdrawing from the matter and filed a notice of withdrawal. [C] Date of hearing:  On the date of trial (05 December 2005) counsels for the Respondent, Adv van Rhyn SC and Adv Snellenburg together with Attorney van Zyl were present at court. It was said that they have witnesses present at court.  Mr Luttig, the sixth Defendant, was also present at court. Mr Luttig indicated to the court that he was appearing not only for himself but also on behalf of all the other Defendants (Appellants).  He produced to the court documents from the Appellants which all read as follows:- “Hiermee verleen ek, ….., die ……., verweerder onder saak nommer 968/2000 volmag aan G.D. Luttig om namens my op te tree op 5 Desember 2005 aangesien ons regsverteenwoordiger onttrek het op 1 Desember 2005 en ons nie gereed is om met die verhoor voort te gaan nie.”  These documents are not powers of attorney neither does it specify that Mr Luttig is mandated to apply for a postponement only. Each one of the Appellants mandated Mr Luttig to represent them on the 05th December 2005. Sight should not be lost of the fact that some of the Appellants were sued in their personal capacity and some as trustees.  Adv van Rhyn SC initially queried the mandate given by the trustees to Mr Luttig to act on their behalf. He however informed the court that he was prepared to accept that Mr Luttig had the necessary authority. The Magistrate did not rule on this concession by Adv van Rhyn SC – instead she allowed Mr Luttig to appear on behalf of the Appellants. The Magistrate did not indicate to Mr Luttig that he could appear on behalf of the Appellants for the postponement only.  Mr van Zyl, the attorney for the Respondents testified. His evidence related mainly to the history of this matter and the delays that occurred. He was cross-examined by Mr Luttig. Mr Luttig did not testify.  After listening to argument from both Adv van Rhyn SC and Mr Luttig the Magistrate gave an ex tempore judgment, which was later on supported by written reasons.  In her ex tempore judgment the Magistrate stated:- “I find that the application for postponement herein, the sixth defendant, on behalf of the other defendants, has not made a case convincing to grant an application for postponement. I refuse to postpone this case today. This application for postponement is dismissed with costs.” (My underlining.)  Adv van Rhyn SC then submitted that seeing that all the other Defendants (Appellants), [save for the sixth Defendant, Mr Luttig] were not at court, default judgment should be granted against them. He chose to deal with Mr Luttig at a later stage.  The Magistrate then granted default judgment against all the other Defendants (Appellants) in the following terms:- “Judgment is hereby granted in respect of prayers 1, 2, 5 and 7 as set out in the amended Particulars of Claim against the first, second, third, fourth and fifth and seventh, eighth, ninth and tenth defendants herein. Costs awarded on an attorney-and-client scale against these nine defendants. Such costs shall include preparation costs, travelling time or expenses, accommodation expenses, increased advocate fees for this case. Each paying absolve in the other. That is they are jointly and severally liable herein.”  After the granting of this order, Adv van Rhyn SC asked for a short adjournment. When the court resumed thereafter, he withdrew the action against Mr Luttig.  The Appellants, with the exclusion of Mr Luttig, noted an appeal against the judgment of the Magistrate. The grounds of appeal read thus:- “Die Appellante appelleer teen die uitspraak in die geheel en voer eerbiediglik aan dat die Edelagbare Landdros fouteer het in een of meer of in elkeen van die volgende opsigte deur:- 1. met die verhoor van die saak voort te gaan en vonnis te verleen sonder om die bovermelde Appellante, wat teenwoordig was deur die Sesde Verweerder in die aksie, aan te hoor; 2. vonnis by verstek tee te staan teen die bovermelde Appellante in terme van Reël 32 (2) terwyl die Appellante nie in verstek was nie. Die Appellante was verteenwoordig deur die Sesde Verweerder in die aksie; 3. nie te bevind dat die Appellante verteenwoordig was deur die Sesde Verweerder in die aksie nie; 4. „n uitgebreide kostebevel te verleen teen die Appellante onder omstandighede waar vooraf kennis daarvan aan die Appellante gegee behoort te gewees het, indien die Edelagbare Landdros korrek sou wees (wat met eerbied ontken word) on vonnis te verleen in terme van Reël 32 (2).” [D] Did Mr Luttig represent the Appellants?:  The question to be asked at first is whether Mr Luttig represented the Appellants.  It is clear that Mr Luttig was present at court during the hearing of this matter. He was mandated by the Appellants to represent them. The wording of the mandates is to the effect that he had to represent them on that particular day. It does not categorically state that it was merely for a postponement, though it mentions the fact that they were not ready to proceed with the trial.  As unrepresented lay people the Appellants must have labelled under the impression that it was in order for them to mandate Mr Luttig to appear on their behalf on that particular day. Especially in view of the fact that it was commonly known that Mr Luttig was the person who always appeared on their behalf, even with regard to the signing of the agreements with the Respondent.  I had the opportunity of perusing the judgment of my brother Landman J and I am in agreement with his view that Mr Luttig could not represent the Appellants because he is not a legal representative (practitioner) as contemplated by Section 20, 21 and 22 of the Magistrates‟ Court Act 32 of 1944 read with Rule 52 of the Rules of the Magistrate‟s Court.  However, the matter does not end there. It is clear from the record that the Magistrate did not inform Mr Luttig that he does not have the right to represent the Appellants and that he could only appear for himself. In fact, Mr Luttig was allowed by the Magistrate to act on behalf of the Appellants as can be seen from the wording of the order when she refused a postponement. The words “the sixth defendant, on behalf of the other defendants” bears testimony to this.  In my view, the Magistrate committed a gross irregularity by allowing Mr Luttig to appear on behalf of the Appellants, even though he was not in law entitled to do so.  After the postponement was refused the Magistrate did not inform Mr Luttig that he could not appear on behalf of the Appellants during the trial. Labelling under the false impression created by the court a quo that Mr Luttig was entitled to represent the Appellants during the trial, he remained in attendance during the application for default judgment against the Appellants.  The court informed Mr Luttig during his address on the application for a postponement that the Plaintiff wanted to proceed with the trial on that particular day and that he will be entitled to cross-examine.  It may well be argued that at that stage Mr Luttig himself was still a party to the proceedings. However, this should not be viewed in isolation. The events in court on that day need to be carefully examined.  Mr van Rhyn SC in his address during the application for default judgment against the Appellants in the court a quo stated:- “Mnr van Rhyn: Ja ek het aan die begin van die betoog gesê dat ons vra, in Afrikaans, ons vra verstek vonnis teen die verweerders behalwe die Sesde Verweerder. Ons vra nie nou vonnis teen hom nie, ons sal later met hom handel maar in terme van die Hof Reëls is die verweerders, die ander verweerders, nie voor die hof nie. Ons het hier verwys na die prima facie getuienis van die sertifikate wat aangeheg is by die Besonderhede van Vordering soos bedoel in 18(c) van die kontrakte, almal lees dieselfde. Ons verwys na die moeilikheidsgraad van die saak as gevolg van hierdie ontkennings wat die verweerder, die sesde verweerder gemaak het dat hy kon teken namens die trusts en optree, was dit nodig om te repliseer op „n regsbeginsel soos estoppel en “ostensible authority” ensovoorts, om te sê dat jy het eitnlik die bank bedrieg, julle wat die trustees is, om aan te toon. Die punt wat ek wil maak, dit is moeilike regsvrae en baie dokumente is daaroor blootgelê om te wys wat het hierdie sesde verweerder eintlik alles names die trust gedoen. Om te kom sê maar julle kan nie nou kom sê hy het nie magtiging gehad nie, want hy is die enigste ou wat ooit vir julle praat, soos vandag ook by die uitstel. Maar sy mandaat het daar geeindig.” (My underlining.) See record page 232 line 11-17.  It is clear from the address by Mr van Rhyn SC that Mr Luttig signed contracts for and on behalf of the trust, which was a matter of contention. If indeed Mr Luttig signed the contracts for or on behalf of the trust and as surety, he will most definitely indirectly be affected by the default judgment. The matter could not be simply withdrawn against him. The trust was also affected seeing that Mr Luttig who appeared on their behalf throughout was now excluded.  It is also vitally important to note that the order include prayer 5 which refers to the property described as “gedeelte 45 van die plaas Bernauw 674 …” which was declared executable.  Mr Luttig signed a surety over the said property and so too did Poppiesdale Trust. As mentioned, it is a contentious issue whether it was legally correct for the trust to sign a surety over the property.  As can be seen from the address by Mr van Rhyn SC, Mr Luttig represented the trust during the signing of the contracts with the Respondent. As to what his capacity was when he so signed it, is not clear. If, for argument sake, he signed as trustee, then he was entitled to represent the trust. If he signed merely as a representative of the trust, it must be determined whether he had the necessary authority to do so. It is common cause that at one stage Mr Luttig was a trustee of both the Germi Trust as well as the Poppiesdale Trust. See Record page 161 lines 16 – 17.  In my view, the Magistrate erroneously allowed Mr Luttig the right to represent the other Defendants, which is a gross irregularity. [E] Is the judgment appealable?:  The question as to whether the default judgment is appealable need also to be considered.  In the book “The Civil Practice of the Supreme Court of South-Africa” by Van Winsen, Cilliers and Loots the following is stated on page 881:- “A default judgment that a magistrate has refused to vary or rescind under s 36 of the Magistrates‟ Courts Act, since the effect of the refusal is to convert the judgment into a final judgment, which is appealable. A magistrate‟s refusal to condone a delay in the filing of an application for rescission of a default judgment is likewise appealable. But where there was nothing in the record, on appeal, to show that an extension of time within which to have the judgment rescinded had been refused in an application under magistrate‟s court rule 60(5), or that there had been a waiver or peremption of the right to have the judgement rescinded, it was held that as the judgment did not have the effect of a final judgment, it was not appealable under s 83(b) of the Magistrates‟ Courts Act.” The learned authors does not state whether a default judgment becomes final due to the passage of time.  In Sparks v David Polliack & Co (Pty) Ltd 1963(2) SA 491 (T), on page 493 A-D Trollip J stated:- “The fact that a judgment was granted in favour of the plaintiff, on the default of the defendant, for the amounts claimed does not necessarily mean that it cannot operate as a final judgment in order to sustain an appeal, or a plea of res judicata, or an action in another court (Spencer Bower on Res Judicata, para. 38; Beck on Pleadings, 2nd ed. P. 139). The problem that usually arises, as in the present case, is whether it can be regarded as final in view of the fact that it is rescindable by the court that granted it. (I am, of course, dealing here with a judgment granted in the suit or on the action itself, and not with one granted on any procedural point arising out of, or in the course of, the suit or action). According to the authorities, the general rule is that, if in terms of the statute and practice of the court granting such a judgment, that court can itself rescind it, then that judgment is not final and conclusive, but only provisional, until it is no longer rescindable through lapse of time or otherwise; but the relevant statute or practice might enact expressly, or by necessary implication, that despite the judgment‟s rescindability by the court granting it, it must nevertheless be regarded as final and binding unless and until it is rescinded. In the latter case, while the judgment stands, it would have the effect of a final judgment” (My underlining.)  On page 494 H the learned Judge continue:- “A judgment might, in terms of the statute and practise of the court, be final and therefore appealable even though the remedy of rescission is also available; and if the statute does confer the right of appeal against the judgment.”  The learned Judge concludes as follows on page 496 D:- “I think that a default judgment becomes final when it is no longer rescindable. That could occur either through lapse of time or by the defendant waiving or perempting his right to rescind or both.” (My underlining.)  In this case, I am of the view that due to the lapse of time, the default judgment became final and therefore appealable. [F] The costs order made by the Magistrate:  The Magistrate awarded costs against the Appellants on an attorney and client scale as prayed for. She added that “such costs shall include preparation costs, travelling time or expenses, accommodation expenses, increased advocate fees for this case”. This was not included in the prayer for costs.  There is also no indication on record that the Appellants (Defendants) were notified that such costs order will be applied for, bearing in mind also that the order was granted by default and therefore in their absence.  It is furthermore disturbing to note that even though Mr Luttig was present (bearing in mind the fact that he was allowed, erroneously though, to represent the Appellants), he was not given a chance to address the court before the costs order was awarded in those terms, which in my view is another gross irregularity committed by the Magistrate. [G] Conclusion:  I am of the view that the appeal should succeed and that the default judgment granted by the Magistrate should be set aside.  I therefore make the following order:- [i] The appeal is upheld with costs. [ii] The default judgment and costs order granted by the Magistrate is set aside. [iii] The matter is remitted to the court a quo for continuation of the trial. R D HENDRICKS JUDGE OF THE HIGH COURT I agree. M M LEEUW JUDGE OF THE HIGH COURT Attorneys for the Appellant: SMIT STANTON INC.
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