FORM A FILING SHEET FOR EASTERN CAPE HIGH COURT, MTHATHA JUDGMENT PARTIES: Tandwefika Dazana VS Edge To Edge 1199 CC Case Bo: A121/08 Magistrate: High Court: EASTERN CAPE HIGH COURT, MTHATHA DATE HEARD: 5 th June 2009 DATE DELIVERED: 11 th June 2009 JUDGE(S): Miller J, Dawood J (concurring) LEGAL REPRESENTATIVES Appearances: - for the Appellant(s): H.S Zilwa - for the Respondent(s): R.M Dilizo Instructing attorneys: Appellant(s): X.M Petse Inc Respondent(s): Manti Attorneys CASE INFORMATION - 1. Nature of proceedings: Civil- Appeal- Refusal to grant Rescission of Default Judgment.
2 IN THE HIGH COURT OF SOUTH AFRICA EASTERN CAPE HIGH COURT : MTHATHA CASE NO. A121/08 In the matter between: TANDWEFIKA DAZANA Appellant And EDGE TO EDGE 1199 CC Respondent APPEAL JUDGMENT MILLER, J.: [1] This is an appeal against the magistrates refusal to grant the appellant s application for rescission of a default judgment that had been granted against him. [2] The following facts appearing from the record of proceedings in the Court a quo are either common cause or undisputed : - the respondent caused a summons to be issued against the appellant, who is a practising attorney, in the Magistrate s
3 Court, Mthatha for payment of R82000.00 together with interest thereon such claim being in respect of monies paid into the appellant s trust fund, which monies the appellant, despite demand, failed or refused to refund to the respondent. - the appellant received the summons but did not file a notice of his intention to defend the action. - the magistrate then, on 11 March 2005, granted default judgment against the defendant. - a warrant of execution against the property of the appellant was issued by the clerk of the court on 16 September 2005. - the appellant instituted his application for the rescission of the default judgment on 21 September 2006. - the appellant drafted a written deed of sale agreement which was entered into between the estate late E. K. Mafungo (the appellant s erstwhile partner) represented by Mlungisi Ratsi July (the executor of the said deceased estate) and the respondent, represented by Mkululi Lumumba Kubukeli on 30 August 2002. - In terms of the deed of sale the respondent agreed to purchase immovable property for the price of R160000.00, with R82000.00 being paid upon the signing of the agreement and
4 the balance being paid upon the registration of the property into the name of the respondent. - the respondent on 30 August 2002 deposited the sum of R82000.00 into the appellant s trust account. - the property was never transferred to the respondent as the agreement fell through and the money that was paid into the appellant s trust fund was never refunded by the appellant to the respondent. [3] The appellant, in his affidavits filed in support of his application for rescission, contends that he was not in wilful default. In this regard he states that he received the summons but he genuinely believed that the respondent has sued the wrong person. He believes that the respondent should have sued Mr July because the respondent dealt with Mr July at all material times and he, the appellant, had nothing to do with the matter. He says that when he received the summons he contacted Mr July who informed him that he need not worry because he, Mr July, will attend to the matter. He says that he then completely ignored the matter as he is a very busy person who runs a number of businesses. [4] The appellant contends that he has a strong bona fide defence to the respondent s claim. In this regard he states that the R82000.00 was deposited into his trust account by the respondent but that it was held in that account for the benefit of Mr July and not for the benefit of the respondent and that he was merely acting as agent for Mr July. He says that Mr July once telephoned him and told him that a sum of money will be deposited into his account and that he will have to withdrew that
5 money and give it to him, Mr July, as he is the person who was to handle the sale. He says that he did in fact withdrew the money and gave it to Mr July. He states that after the issue of the summons Mr July informed him that he has made arrangements with the respondent s attorneys and has paid an amount of R15000.00 to them. He denies that a writ of execution was served on him and says that he only learnt of the writ when his attorney informed him on 27 August 2006 that he saw the writ in the Court file. The appellant, in his replying affidavit, also denies that he received a letter dated 20 April 2006, and which was served by the Sheriff on one Ms Nandipha apparently employed by the appellant at his place of business. In that letter the respondent s attorneys requested the appellant to forward them his file relating to the purchase of the property by the respondent from the Estate Late Mafungo as that file was required for purposes of a claim made by respondent against the Attorney Fidelity Fund. [5] Mr Kubukeli, who deposed to the answering affidavit on behalf of the respondent, states that the deed of sale was drawn by the appellant and entered into in the appellant s office and that the R82000.00 was paid into the appellant s trust account so as to secure it pending the transfer of the property into the name of the respondent. He states that after the sale fell through he requested the appellant in vain for repayment of the R82000.00. Thereafter summons was issued and served and default judgment obtained. The appellant then telephoned him as well as his attorney and undertook to repay the money. The appellant failed to honour his undertaking and a warrant of execution was issued and served
6 (the return of service reflects that the warrant was served personally on the appellant on 01 April 2005). Thereafter, he states, a sum of R15000.00 was paid on the appellant s behalf by his son at the offices of the respondent s attorneys (the receipts reflect that such amount was paid by means of four payments over the period 07 June 2005 to 14 June 2005 each receipt reflects that the payment was received from T. Dazana). He states that a claim was lodged with the Attorneys Fidelity Fund and that he has been paid the capital, i.e. R82000.00 by such fund. [6] Rule 49(1) of the Magistrates Court Rules provides, inter alia, that for a rescission of a default judgment the Court may, upon good cause shown, rescind the default judgment. The magistrate in this matter refused the appellant s application for rescission, she having found that the appellant acted in wilful default and also that the appellant does not have a bona fide defence to the respondent s claim. [7] The wilful nature of a defendant s default is one of the considerations which the courts take into account in the exercise of their discretion to determine whether or not good cause is shown. See De Witts Auto Body Repairs (Pty) Ltd vs Fedgen Insurance Co, Ltd 1994(3) SA 705 (ECD) at 708 G. [8] There is no doubt that in this matter the appellant was in wilful default. On his own version all that he did upon receiving the summons was to communicate with Mr July and then ignore the matter. See Maujean t/a Audio Video Agencies vs Standard Bank of S. A. Ltd 1994(3) SA 801 at 803H where it was held that in the context of a default judgment wilful connotes deliberateness in the sense of knowledge of the action and of its legal consequences and a conscious and freely taken
7 decision to refrain from giving notice of intention to defend, whatever the motivation for this conduct might be. The appellant, being an attorney must have or, at least, should have been aware of the probable legal consequences of his inaction. [9] Mr Zilwa, who appeared for the appellant, has argued that the appellant s wilful default should be set off by the fact that the appellant has a bona fide and good defence to the respondent s claim. In this regard it was argued that because it is common cause that the seller of the property was Mr July, in his capacity as executor of the estate Late Mafungo, and not the appellant, all that happened was that the trust account of the appellant was used by the respondent on Mr July s instruction to deposit the money in question, which money constituted part of the purchase price. The appellant was therefore merely acting as an agent of Mr July and this being so the respondent should have sued Mr July and not the appellant because it is trite law that if payment is made to an agent authorised to receive it and repayment can be reclaimed at a later stage the principal is liable to repay the amount even if the agent did not in fact hand over to him the amount originally paid, reference being made by Mr Zilwa to Kerr The Law of Agency, 3 rd Edition, page 295. [10] I, with respect, do not agree with this argument. The appellant did not file a confirmatory affidavit deposed to by Mr July. His allegations that Mr July told him that he would handle the matter of the summons and that he, Mr July, had paid the R15000.00 to the respondent s attorneys are therefore hearsay and inadmissible. Besides, the unconfirmed allegation that the appellant was acting as Mr July s agent in holding the money in his trust account is strenuously disputed by Mr Kubukeli who insists that he deposited the money in the trust account for
8 safekeeping for respondent pending the transfer of the property into the respondent s name. The probabilities also, in my view, favour the respondent s version. It is apparent from the deed of sale that the sale was not a sale of land on instalments as contemplated by Chapter 2 of the Alienation of Land Act, 68 of 1981. The R82000.00 was therefore not an instalment immediately payable to Mr July but was rather part of the purchase price to be held in trust pending the payment of the balance of the purchase price and the transfer of the property into the name of the respondent. [11] The appellant s allegations that Mr July paid the R15000.00 to the respondent s attorneys, besides being hearsay, also lack credibility and are against the probabilities. The receipts, as already stated, are made out to Mr T. Dazana, i.e. the appellant. If the appellant had nothing to do with the sale and the monies received therefrom as that was Mr July s responsibility, as he alleges, then it is illogical and inexplicable that the respondent s attorneys on receiving payment from Mr July would make out a receipt in favour of the appellant and that Mr July would accept such a receipt. [12] I am accordingly of the view that the appellant has not shown that he has a bona fide defence. [13] The respondent also took the point that the application for rescission was brought more than a year after the granting of the default judgment and should therefore be dismissed for being out of time. This point, although dealt with in the respondent s heads of argument and not abandoned was not argued at the hearing of this matter. Because of this and also because of the conclusion that I have arrived at in this matter, it
9 is not necessary that this point be dealt with, save to say that on a consideration of all the evidence, the appellants contention that he only became aware of the warrant of execution and the judgment during August 2006 is, in my view, spurious. [14] The magistrate, in my opinion, was correct in finding that the appellant was in wilful default and that he does not have a bona fide defence. The appeal must therefore fail. The respondent will, of course, be obliged to repay the monies received from the Attorney Fidelity Fund upon receipt of monies received by it from the appellant, the judgmentdebtor. [15] In the result, the following order is made: 2. The appeal is dismissed with costs. 3. The Registrar of this Court is directed to forward a copy of this judgment to the Attorneys Fidelity Fund, for its information. JUDGE OF THE HIGH COURT DAWOOD, J. : I agree JUDGE OF THE HIGH COURT
10 HEARD ON : 05 JUNE 2009 DELIVERED ON : 11 JUNE 2009 COUNSEL FOR THE APPELLANT INSTRUCTED BY : P. H. S. Zilwa : X. M. Petse Inc. COUNSEL FOR THE RESPONDENT INSTRUCTED BY : R. M. Dilizo : Mantyi Attorneys