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IN THE HIGH COURT OF SOUTH AFRICA _BOPHUTHATSWANA PROVINCIAL

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IN THE HIGH COURT OF SOUTH AFRICA _BOPHUTHATSWANA PROVINCIAL Powered By Docstoc
					          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:


[1]   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.


[2]   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.


[3]   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:


[4]   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.

[5]   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.


[6]   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.


[7]   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.
[8] 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.

[9]   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.


[10] 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.

[11] 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.


[12] 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.
[13] 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:


[14] 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.


[15] 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).


[16] 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.”


[17] 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.


[18] 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.


[19] 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.


[20] 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.


[21] 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.)


[22] 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.


[23] 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.”


[24] 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.


[25] 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?:


[26] The question to be asked at first is whether Mr Luttig
      represented the Appellants.
[27] 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.


[28] 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.


[29] 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.


[30] 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.


[31] 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.


[32] 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.


[33] 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.


[34] 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.
[35] 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.
[36] 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.


[37] 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.


[38] 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.


[39] 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.
[40] 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?:


[41] The question as to whether the default judgment is
appealable need also to be considered.

[42] 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.
[43] 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.)

[44] 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.”


[45] 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.)

[46] 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:


[47] 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.


[48] 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.


[49] 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:


[50] I am of the view that the appeal should succeed and that the
      default judgment granted by the Magistrate should be set
      aside.


[51] 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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