Tona Trade Holdings CC V Mvula Properties CC (I 164-2014) 2015 NAHCNLD 41(12 August 2015)

REPUBLIC OF NAMIBIA

IN THE HIGH COURT OF NAMIBIA, NORTHERN LOCAL DIVISION, OSHAKATI

JUDGMENT

Case no: I 164/2014

In the matter between:

TONA TRADE HOLDINGS CCAPPLICANT

and

MVULA PROPERTIES CC 1ST RESPONDENT

ERASTUS NIKODEMUS t/a NIKODEMUS

ARCHITECTURAL DESIGN2ND RESPONDENT

Neutral citation: Tona Trade Holdings CC v Mvula Properties CC (I 164-2014) [2015] NAHCNLD 41(12 August 2015)

Coram:CHEDA J

Heard:27 July 2015

Delivered:12 August 2015

Flynote: Applicant delayed in filing an appearance to defend by 20 days due to miscommunication and other administrative issues at the Registrar’s office. Explanation for the delay was reasonable. Respondents were aware that applicant was denying their claim. Application succeeds and applicant to pay costs for this application.

Summary:Application for rescission of a default judgment. Application was out of time of by 20days. Evidence showed that his legal practitioner and a correspondent miscommunicated. Applicant’s legal practitioner was further delayed when he was awaiting a transcript of proceedings. Parties had a dispute before summons were issued and had indulged each other before regarding completion time of project. Explanation for the delay was reasonable and applicant had a prima facie defence. Application granted and applicant ordered to pay the costs of the application

ORDER

Condonation of non-compliance with the rule 16 (1) be and is hereby granted;
Application for rescission of a default judgment is granted on the 15 September 2014 be and is hereby granted;
Applicant is granted leave to defend the action in terms of the Rules; and
Applicant be and is hereby ordered to pay costs of this application and such costs to include costs of one instructing and one instructed counsel.

JUDGMENT

CHEDA J:

[1]This is an application for a rescission of judgement. The salient facts of this matter are as outlined hereinunder.

[2]Applicant is a close corporation duly incorporated in accordance with close corporation laws of Namibia. The first respondent is also a close corporation duly registered in terms of the laws of Namibia. Third respondent is an architect trading under the name and style of Nikodemus Architectural Design.

[3]It is common cause that applicant (the then defendant) and respondent (the then plaintiff) entered into a building contract. A dispute arose which resulted in respondent issuing out summons against applicant. The said summons were duly served and applicant failed to enter an appearance to defend timeously.

[4]Respondent then applied for and was granted a default judgment on the 15 September 2014 under case no. 164/2014. Applicant now applies for a rescission of the said judgment in terms of Rule 16 of the High Court Rules. It also applied for the condonation of non-compliance with rule 16 (1) of the said rules. In addition, thereto applies for leave to defend the main action and that in the event of an opposition, respondent should pay the costs of this application jointly and severally, the one paying the other to be absolved.

[5]Applicant has submitted that it was not in wilful default and that, it has a bona fide defence to respondent’s claim. Onesmus Tobias Amadhila [hereinto referred to as “Amadhila”] its representative deposed to an affidavit wherein he stated that summons were served on applicant on the 13 August 2014 and immediately, thereafter, he embarked on a defence by engaging its legal practitioner, Mr. Namandje who is its legal practitioner of record. He instructed Mr. Namandje on the 08 September 2014. Unbeknown to him the dies induciae had expired on 28 August 2014.

[6]It is common cause that Mr. Namandje commenced communications with his correspondent attorneys, Messrs Mugaviri Attorneys for the purposes of filing an appearance to defend. Thereafter, there was correspondence between the two legal practitioners of which he was not privy to. The Registrar’s Office also became part thereof as it was responsible for the transcript of the record of proceedings, which was required by Mr. Namandje before he could not proceed with his instructions.

[7]While this was going on, respondent now armed with a default judgment proceeded to execute against applicant on the 22 October 2014. This came as a surprise as applicant was all along under the impression that the matter was being adequately defended.

[8]It, however, turned out that there had been some miscommunication between the instructing and instructed attorneys hence the delay in noting an appearance to defend which resulted in respondent applying for and obtaining a default judgment.

[9]Applicant also argued that it has a bona fide defence to this action because respondent’s claims of certain penalties which flow from applicant’s alleged failure to complete its work timeously as previously agreed. However, it is, applicant’s argument that its failure to complete the said work was due to an industrial action in South Africa, excessive rain fall in the Northern part of Namibia and first respondent’s failure to vacate premises where work was due to be carried out.

[10]It is clear that as a result of applicant’s inability to complete its work on schedule, the parties then entered into negotiations resulting in the extension of time and other ancillary agreements for the purposes of completing this project.

[11]On the other hand, first respondent argued that applicant was in wilful default by its failure to file a notice to defend timeously. Dr. E Mvula on behalf of the first respondent deposed to an affidavit wherein he took the court through the historical background of this case and with emphasis on applicant’s conduct after summons had been issued. He strongly argued that applicant’s failure to assert and pursue its rights timeously and/or as envisaged by the court rules was akin to neglect and should not be excused.

[12]It is our legal position and indeed trite that these courts are clothed with inherent jurisdiction to set aside and/or rescind a judgment or order obtained in default of appearance to defend provided that sufficient or good cause is shown. Sufficient cause requires two essential elements being that, the party seeking relief must show a reasonable and acceptable explanation for its default and that, on the merits it has a bona fide defence, see Chetty v Law Society Transvaal 198 5 (2) SA 756 (A) at 764 J – 765 D; Marais v Standard Credit Corporation Ltd 2002 (4) SA 892 (W) at 895 and Harris v Absa Bank Ltd t/a Volkskas 2006 (4) SA 527 (T) at 528 – 529. These are South Africa authorities, which are not necessarily binding on this jurisdiction, but, however remain persuasive and I am indeed persuaded by them. This is the burden which remains on the shoulders of the party seeking relief. This principle was adopted by our courts and has been applied without question, see Lewis v Shampoio 2000 NR 186 (SC) and Ministry of Home Affairs, Minister Ekandjo v Van Der Berg 2008 (2) NR 543(SC) where this legal principle was reiterated and expanded on. In that case good cause was defined in the following manner:

“(a) The applicant must give a reasonable explanation of his default. If it appears that his default was wilful or that it was due to gross negligence, the court should not come to his assistance.

(b) The application must be bona fide and not made with the intention of delaying the plaintiff’s claim.

(c) The applicant must show that he has a bona fide defence to the plaintiff’s claim. It is sufficient if he make out a prima facie defence in the sense of settling out averments which, if established at the trial, would entitle him to the relief asked for. He need not fully deal with the merits of the case and produce evidence that the probabilities are actually in his favour.” (my emphasis)

[13]Applicant in its application asserted that it entrusted its legal practitioner of record to handle its defence, at that moment it genuinely believed that the matter was being professionally handled. Unfortunately this, was not to be, as its attorneys instructed a correspondent attorney and from that time it appears that the matter lost its logical track and was not pursued with the expected zeal. Both, its member in the person of Amadhila and Mr. Namandje explained the difficulties they encountered in defending this action. The explanation, in my view is reasonable in the circumstances as both parties had along been aware of their dispute as evidenced by previous correspondence. In, my view, respondents were aware that applicant was hell beat to defend this action in the event of respondents taking legal action against it. Above all, Mr. Namandje was eager to peruse the record of proceedings before taking legal action.

[14]A further requirement is that applicant must show that it has a bona fide defence. The parties have had a long standing dispute with regards to the timeous completion of this project. They have been accusations and counter-accusations as to why the project could not meet the timelines as agreed in the building contract. Applicant by way of a letter to first respondent advised them of the problems of an industrial action and floods in the northern part of Namibia at the relevant period. There is no dispute about this. I find it difficult, therefore, that applicant should be penalised for such acts which he had no control over. As far as the floods are concerned this was a vis maior. It is therefore a clear indication that respondent does not have a clear case and cannot hold on to a judgment on the basis of some technicality.

[15]In an application of this nature the court is not required to delve into a trial or adjudication procedure. All that it is required to do, is to determine whether the averments set out by the defendant amount to a prima facie defence. The court in an application for rescission concerns itself with the reasonable explanation advanced by applicant. With regards to the bona fides or otherwise of applicant the Supreme Court in Van der Berg (supra) at 582 – F – G – stated:

“An Application for rescission is never simply an enquiry whether or not to penalize a party for his failure to follow the rules and procedures laid down for civil proceedings in our courts. The question is, rather whether or not the explanation for the default and any accompanying conduct by the defaulter, be it wilful or negligent or otherwise, give rise to the probable inference that there is no bona fide defence, and hence that the application for rescission is not bona fide.”

To me this is a case which cries out for a full ventilation of the facts and issues involved and such can only be achieved at a full trial if it reaches that stage.

[16]It has been argued by respondents that applicant was 10 days out of time in filing its appearance to defend. Concern has also been raised with regards to the non-compliance of Rule 16 which deals with the requirement that an application for rescission must be brought to court within 20 days and that security should be provided for. This, indeed, may be so, but, the 20days delay in my view is not out of the ordinary in the circumstances and cannot be used to prevent the courts from hearing the facts of this matter.

[17]An application of this nature, in as much it is governed by rule 20 and other rules, applicant is not precluded from bringing this application under common law or some such other law applicable.

[18]The issue for security was raised by respondent. It is indeed a requirement in our law. In my view the 20 day period or limitations should not be viewed in isolation. These courts are open to persuasion with regards to rules of court whose existence is to serve the interests of justice. They are their rules of after all. First and foremost they are there in order to prevent injustice between the parties, therefore, they exist in a positive manner, see Mutebwa v Mutebwa 2001 (2) SA 193 (HC). In that case it was pointed out that the fact that an application is brought in terms of one rule, does not prevent it from being brought pursuant of another rule or under common law.

[19]The same point was applied with equal force by our Supreme Court in Peiter de Villers v Axis Namibia (Pty) Ltd [No 49/2008] (unreported delivered 09/06/2011). With regards to the security of costs, in as much as they should be paid upon application, in reality and for all intents and purposes there is no legal impediment if it can be paid before the commencement of proceedings. What falls for determination is whether or not applicant has met the criteria for the success of a rescission of judgment in this matter.

[20]The parties in this matter have had a dispute which at one point they contemplated the engagement of an arbitrator. It is clear therefore, that they were not in agreement about the dispute at hand.

[21]Where there is a dispute of that nature the courts are constrained to delve deep into the dispute and should not be deprived of that right on the basis of a technicality such as being out of time in filing certain process by a few days. The court should take into account the following factors:

a) the relationship of the parties, prior to the dispute;

b) the complexity of the contract;

c) the extent of the alleged delay in filing documents;

d) the reasonable explanation for such delay;

e) the defence raised in the main action;

f) the importance of the matter to the parties; and

g) the prejudice each party will suffer in the event of the application for rescission being refused.

The list is in exhaustive. In casu I find that all the answers to the above are in the affirmative.

Costs

[22]Applicant has asked for costs in the event of its success. It is generally understood and is now trite that costs follow success or that costs follow the event. This is the general rule. However, there are exceptions and one of the exceptions is where applicant is craving for indulgence. In my view it is applicant which should pay the costs in light of the fact that it is applicant who is asking for condonation of non-compliance with the rules of court and for consequential relief, see Fourie v Saayman 1950 (3) SA 724 (0) Van Marseveen v Chion Gaut 1918 AD 60.

[23]It is applicant which desires relief and must therefore incur the costs of this application.

[24]The application succeeds and this is the order of the court:

Condonation of non-compliance with the rule 16 (1) be and is hereby granted;
Application for rescission of a default judgment is granted on the 15 September 2014 be and is hereby granted;
Applicant is granted leave to defend the action in terms of the Rules; and
Applicant be and is hereby ordered to pay costs of this application and such costs to include costs of one instructing and one instructed counsel.

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M Cheda

Judge

APPEARANCES

APPLICANT:S. Namandje

Of Sisa Namandje & Co. Inc., Windhoek

1ST RESPONDENT:W. Horn

Of the W Horn Attorneys, Oshakati