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REPUBLIC OF SOUTH AFRICA

IN THE GAUTENG DIVISION OF THE HIGH COURT, PRETORIA

JUDGMENT

Case No: 41675/2013

DATE: 13 NOVEMBER 2015

In the matter between:

MOHAMMED MAHIER TAYOB N.O........................................................................First Applicant

IFIHLILE AIRCON CORPORATION (PTY) LTD................................................Second Applicant

And

MICHAEL HILTON NISS N.O..................................................................................First Respondent

STEVEN DAVID GOTTSCHALK N.O.................................................................Second Respondent

In re:

MICHAEL HILTON NISS N.O.....................................................................................First Applicant

STEVEN DAVID GOTTSCHALK N.O....................................................................Second Applicant

And

MOHAMMED MAHIER TAYOB N.O.....................................................................First Respondent

IFIHLILE AIRCON CORPORATION (PTY) LTD............................................Second Respondent

MNGQIBISA-THUSI, J

1. The first applicant is seeking an order rescinding the default judgment granted against the applicants on 8 September 2014.

2. The rescission of the judgment and order is sought in terms of Rule 31 (2)(b), alternatively, Rule 42(1 )(a), and further in the alternative under the common law.

3. The first applicant is the business rescue practitioner of the second applicant. The second applicant was placed under business rescue proceedings in 2012.

4. The first and second respondents are the trustees of the Delfan Family Trust (“Delfan Trust”).

Factual Background

5. During 2011 the respondents issued summons against the second applicant in the Gauteng Local Division for payment of a sum of R22 million in relation to an alleged sale agreement of book debts to the Delfan Trust.

6. The second applicant entered appearance to defend and the respondents applied for summary judgment against the first applicant. Whilst the summary judgment application was pending, the first applicant was placed under business rescue proceedings and the first applicant was appointed as Business Rescue Practitioner to the second applicant.

7. On receiving the respondents’ claim, the first applicant rejected the claim against the second applicant on the ground that the respondents did not provide sufficient documentation of their claim against second applicant nor that they did not attend creditors’ meetings in order to substantiate their claim. Five months later, the respondents launched an application for the review and setting aside of the first applicant’s decision not to recognise their claim. After the pleadings were closed, the respondents set the matter down for hearing, which set down was communicated to the first applicant’s attorneys of record at the time. On the day of the hearing the first applicant did not appear nor was there appearance on its behalf. As a result default judgment was granted.

Condonation application

8. The first applicant seeks condonation for the late filing of this application which was, in terms of Rule 31 (2)(b), filed two days late. It was submitted on behalf of the first applicant that the business rescue practitioner only got knowledge of the default judgment order on 24 September 2014. That on getting to know about the order, it needed to consult with its legal representative and for counsel to be appointed. Further, first applicant denies that the order was served on it on 17 September 2014 as alleged by the respondents. In this regard, a confirmatory affidavit by the sheriff is attached indicating that the order was served on 17 September 2014 on the first applicant erstwhile attorneys and not on the first applicant.

9. I am of the view, taking into account the explanation given by the first applicant and the extent of the lateness of filing this application, that the delay is not unreasonable and should be condoned.

10. The first applicant’s explanation for their non-appearance on the day the review application was heard is that it was not in wilful default of appearance in that it was not aware of the reasons why its former attorney had not appeared in court. It is the first applicant’s contention that the default was solely due the fault of its former attorney of record. The attorney, Mr Naeem Essop (“Mr Essop”), has filed a confirmatory affidavit in which he takes full responsibility for the default. Mr Essop explains that there was an administrative error in his office in failing to note the date of the hearing of the application.

11. Even though it is not in every situation that failure by a litigant’s legal representative to appear on the day of the hearing of the matter is condoned, I am satisfied that it cannot be said that the first applicant contributed or was negligent in his attorney’s failure to appear on the date of the hearing. All indications point to the fact that the first applicant had the intention of opposing the respondents’ review application but was let down by its attorney.

12. I am satisfied that the first applicant has provided a reasonable explanation for its non-appearance and that it was not in wilful default of appearance. The first applicant was under the impression that its attorney will prosecute its defence by appearing on its behalf on the day of the hearing.

13. It is the respondents’ contention that the applicants have no reasonable prospects of succeeding in opposing the review application if the order is rescinded in that the first applicant failed to give due regard to the documents submitted by the respondents in support of their claim which proves that the respondents against the second applicant is valid. The applicant contend that the respondents failed to prove their claim against the second applicant and an given the opportunity to oppose the respondents’ application, the applicants would show that respondents in fact have no claim against the second applicant in that second applicant never concluded an agreement with Value Logistics, the company which allegedly sold the book debts to the respondents. Further, it is the applicants’ contention that given the fact that the respondents’ claim has not been tested in court, the default judgment should be rescinded in oredr for the first applicant to prove that there is no basis for the respondents’ claim. Further, it is the applicants’ contention that, given the fact that 2nd Respondents was under business rescue proceedings, the second applicant’s other creditors would be prejudiced if the respondents’ unchallenged claim was upheld without being tested.

14. I am satisfied, from reading the documents filed of record and the submissions made, that it appears that the first applicant has on the face of it a bona fide defence against the respondents’ claim. Further, taking into account the second applicant’s other creditors, and the extent of the second applicant’s alleged indebtedness to the respondents, that it would be in the interest of justice that the order granted on 8 September 2014 be rescinded and that the disputed claim should be tested in court. Further, the fact that a punitive cost order was granted against the first applicant in its absence despite the fact that the Respondents claim was contested, is more reason why rescisiion is appropriate.

15. Accordingly the following order is made:

The order granted on 8 September 2014 is in its entirety rescinded with costs’.

N P MNGQIBISA-THUSI JUDGE OF THE GAUTENG DIVISION, PRETORIA

Appearances

For the Applicants: Adv SJ Van Rensburg

Instructed by: Delport Van den Berg

Attorneys For the Respondents: Adv J L Kaplan

Instructed by: Ian Levitt

Attorneys

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