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REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA [GAUTENG DIVISION, PRETORIA]

CASE NO: 42041/2016

REPORTABLE:NO

OF INTEREST O THE JUDGES:NO

REVISED

DATE: 11/09/ 2020

In the matter between:-

NETCARE LTD                                                                                                       Applicant

and

NJ DE JAGER                                                                                                    Respondent

In re:

NJ DE JAGER                                                                                                           Plaintiff

NETCARE LTD                                                                                                     Defendant

JUDGMENT

SKOSANA AJ

[1] In this case the applicant, who is the defendant in the main case, essentially seeks the rescission of a default judgment granted in favour of the respondent as plaintiff on 22 August 2017 as well as an order reinstating the applicant's defence in respect of quantum. In the notice of motion, the applicant initially sought additional relief, being the upliftment of the notice of bar and the extension of time for the delivery of the applicant's discovery affidavit. However, these additional prayers were not pursued by the applicant with the result that only the issue of rescission and reinstatement of the applicant's defence remain for adjudication. The application was instituted in November 2019.

[2] The matter has a drawn-out history. I will consequently set out only that part of its history which I deem relevant for my decision. The respondent's claim in the main action relates to an unsuccessful eye surgery which took place at the applicant's Pretoria East Hospital on 18 March 2014. This resulted in the respondent losing sight in his left eye and therefore claiming damages.

[3] The chronology of events is set out in the founding affidavit as well as the answering affidavit and is largely not in dispute. The portions of such chronology which I find relevant are the following:

[3.1] The issue of the summons on 26 May 2016;

[3.2] Amendment of particulars of claim by the respondent on 29 September 2016;

[3.3] The applicant's plea filed on 29 November 2016;

[3.4] Notice by the respondent seeking applicant's discovery on 09 March 2017;

[3.5] Court order to compel delivery of the applicant's discovery affidavit per Holland-Muter AJ on 01 June 2017;

[3.6] Court order of 22 August 2017 striking the applicant's defence for failure to make discovery("the default order");

[3.7] Letter from applicant's attorneys dated 19 February 2018, agreeing that the draft order be made an order of court before Ledwaba DJP on 20 February 2018;

[3.8] Court order by Ledwaba DJP on 20 February 2018 ordering the separation of liability from quantum, the applicant to pay 100% of the respondent's proven or agreed damages and postponing the determination of quantum sine die.

[3.9] A warrant of execution served by Sheriff on the applicant on 23 August 2018;

[3.10] Correspondence by the applicant's erstwhile attorney (Mr Du Toit) to the applicant dated 12 March 2019 conveying that the respondent has increased its original quantum from R5,5 million to R24 887 600-64;

[3.11] Interim payment of R2 million made on 26 April 2019;

[3.12] The termination of the mandate of Mr Du Toit on all matters wherein he had been instructed by the applicant on 19 June 2019 but not in the present matter. However, upon perusal of files in another unrelated matter, it was established that Mr Du Toit had been giving erroneous reports to the applicant which justified the termination of his mandate in the present matter;

[3.13] Mr Van der Lith was appointed as applicant's attorney of record on 24 July 2019 and upon being furnished with 3 arch-lever files on 03 September 2019, he placed himself on record as applicant's attorney of record on 04 September 2019;

[3.14] A substantive applicant for postponement of the quantum trial which was set down on 07 October 2019 was instituted on 04 September 2019 on behalf of the applicant resulting in the postponement of the such trial on the former date. In addition, an order of a further interim payment of R2,5 million was made bringing the total interim payments to R4,5 million;

[3.15] The present application for rescission was instituted on 18 November 2019;

[4] The applicant has not filed a replying affidavit following the respondent's answering affidavit. However, as stated earlier, there does not seem to be serious factual disputes in the respective versions of the parties nor was any such dispute pointed out to me.

[5] As stated earlier, the applicant only pursues two prayers from its notice of motion, namely, the rescission as well as the reinstatement of its defence[1].

[6] From the respective submissions made on behalf of the parties, it is common cause that the rescission application is brought in terms of the common law and not in terms of either Rule 42 or 31(2)(b) of the Uniform Rules. The common law grounds of rescission that are relevant in the present case are two, namely that the party seeking relief must furnish a reasonable and acceptable explanation for his default and that he has a bona fide defence which, prima facie, carries some prospects of success[2]. Both these two grounds are covered under the rubric 'sufficient cause' which applies only where the order or judgment was taken by default[3].The court retains a discretion in regard to such application which must be exercised after a proper consideration of all the relevant circumstances[4].

[7] The discretion in relation to a common law rescission extends beyond the grounds provided for in Rules 31 and 42 and is less fettered than the one to be exercised under those Rules. The discretion of the court in granting rescission at common law is fairly wide[5]

[8] Returning the facts of the present case, while accepting that the applicant's defence was struck as a whole including the defence relating to quantum by virtue of the order of 22 August 2017, there are peculiar factual circumstances in this case. These circumstances include the following:

[8.1] Contrary to the default order (28/08/2017), the applicant remained, with the implicit approval of the respondent, actively involved in the proceedings as reflected in the order of Ledwaba DJP on 20 February 2018.

[8.2] Paragraph 1 of such court order (20/02/2018) separated liability from quantum in terms of Rule 33(4). The respondent's counsel stringently advanced the argument that such order was granted or could have been granted by the court's own motion. I disagree. First, it is a well-known and common practice that such orders are granted by parties' agreement at roll call. Second, the letter from the applicant's attorneys dated 19 February 2018, a day before such order was made, clearly demonstrates that the order was granted on the basis of the consent by the applicant. Unless the contrary is shown, this is clearly the letter that would have been handed up to the DJP and which would have convinced him that the draft order is a product of an agreement between the parties. Third, there would axiomatically be no need to postpone the quantum if the order was being granted by default and without the participation of the applicant. In the latter event, the respondent would probably have sought default judgment in respect of the whole claim including quantum.

[8.3] I find it hard not to construe the conduct of the respondent in this regard as anything short of the waiver of its right to enforce the default order. The respondent's conduct reflects a surrender of the right to enforce the default order with the full knowledge of such right by doing something inconsistent with the intention to enforce such right[6]. On the same proposition that the applicant's defence had been struck in toto by virtue of the default order, such default order could not be waived partially, i.e. in relation only to liability and not quantum. It is illogical for the respondent to allow the applicant to participate in relation to the adjudication and/or settlement of liability after the default order but to resist its participation in relation to the quantum on the basis of the same default order.

[8.4] It is true that the finalization of the claim has been somberly delayed, the delict having occurred about 6 years ago in 2014. However, sight should not be lost of the fact that interim payments totaling R4,5 million have already been made to the respondent. This is more than 80% of the respondent's original claim of R5,5 million. The prejudice caused by the delay is minimal or has been greatly reduced thereby.

[8.5] The applicant has also demonstrated significant distortion of information from its erstwhile attorney about the progress of the legal proceedings. Although the respondent has advanced sharp criticism against the applicant's version, he could not effectively refute it since it occurred outside his knowledge. Before deducing from information obtained from an unrelated matter, the applicant could not detect this disinformation and foil it.

[8.6] Although the respondent contended that the court orders of 20 February 2018, 01 June 2017 and 22 August 2017 came to the knowledge of the applicant on 23 August 2018, such knowledge was of little or no consequence in the light of the respondent's conduct as outlined above. In fact, the order of 20 February 2018 was equivalent to waiver of the default order or at least threw serious doubt at the respondent's intention to enforce the default order.

[9] The respondent has not directly raised the issue of condonation in his papers nor was it raised in its heads of argument. Although the postponement of 05 February 2019 was, as argued by the respondent's counsel, based on the need to bring this rescission application, it occurred at the stage when the applicant was still being represented by its erstwhile attorney who, as demonstrated above, distorted information and misled the applicant in a number of crucial respects. The applicant was only exposed to the true facts and proper legal advice closer to the second enrolment of the quantum trial on 07 October 2019, when Mr Van der Lith took over, hence the second postponement.

[10] A daunting argument was presented by the respondent's counsel in relation to the second requirement of rescission namely a bona fide defence contending that the applicant has failed to satisfy that requirement by for instance pointing out flaws in the quantum claim by the respondent. That may be so. However, I have a discretion which I must exercise by having regard to all the facts of the case. In exercising such discretion, I take into account the following factors:

[10.1] In March 2019, the respondent substantially increased the quantum from R5,5 million to over R24 million. In my view, such increase could only have occurred by way of amendment of the respondent's particulars of claim in terms of Rule 28. There is no doubt that this amount of increase is quantum leap which raises eye brows.

[10.2] Such amendment occurred not only after the default order as well as the court order of 20 February 2018 but also after the first postponement of the quantum trial on 05 February 2019. The quantum is therefore not the same one that had been claimed as at the time of the default order, the order of 20 February 2018 and the first quantum trial postponement. To me, it may lead to travesty of justice to use a court order barring a defence to a specific amount of claim, to prevent defence in respect of a substantially different amount. More often than not the increased quantum will involve additional heads of damages and/or will require additional averments and evidence.

[10.3] I was also assured by counsel for the applicant that his client is in possession of experts' reports in relation to the quantum. The preclusion of the applicant from defending the increased quantum claim under these circumstances in my view implicates the applicant's constitutional right of access to court in terms of s. 34 of the Constitution.

[10.4] In the interest of fairness and justice, the radical increase of the quantum has elevated the matter to a different level thereby creating a justification for the applicant's participation in the adjudication of that quantum. After all, the applicant's participation in the proceedings had been condoned by the respondent by virtue of the court order of 20 February 2018. Hence, the applicant was represented at all subsequent dates of the quantum trial and its erstwhile attorney was notified of this quantum amendment.

[10.5] I also accept that a balanced account or presentation by both parties in relation to quantum will no doubt be of great assistance to the court that ultimately adjudicates upon such quantum. In other words, the involvement of the applicant and the concomitant submission of joint expert reports may greatly reduce chances of further disagreements between the parties as well as an erroneous judgment and the potential for further appeals.

[11] In the light of the above, I am inclined to exercise my discretion in favour of the applicant by granting the application.[12] As to costs, this is not a case where costs should follow the result for these reasons:

[12.1] I cannot turn a blind eye to the fact that the delay in finalizing the respondent's claim is entirely at the instance of the applicant even though it may not have been due to any willfulness or fault on its part.

[12.2] On the other hand, the respondent has, as far as I am aware, always acted diligently in the prosecution of his claim as also illustrated by its employment of two counsel. I do not see why he should be put out of pocket. I also do not find the respondent's opposition of this application to have been unreasonable. Further, there is no question that the employment of two counsel was warranted or is a reasonable precautionary measure for the present case.

[12.3] On the other hand, I do not find it proper to penalize the applicant with a punitive costs order. In any event, such order would penalize the applicant rather than its previous attorney, who occasioned it.

[13] In the result, I make the following order:

[13.1] The judgment and order of Jansen van Nieuwenhuizen J dated 22 August 2017 is hereby rescinded.

[13.2] The applicant's defence in respect of the quantum is hereby reinstated.

[13.3] The applicant is granted leave to adjust its plea in relation to quantum, if so advised.

[13.4] The applicant is ordered to pay the costs of the application, including costs of two counsel.

DT SKOSANA

Acting Judge of the High Court

APPEARANCES:

Applicant :                            Adv S Joubert SC

Instructed by:                      Whalley & Van Der Lith Inc

                                                  c/o Van Stade Van der ende Inc

Respondent:                         Adv B.P Geach SC

                                                 Adv W Botha

Instructed by:                        Van Niekerk Attorneys

                                                    c/o PA Nel Attorneys

Date of Hearing:                   9 September 2020

Date of Judgement:              1 November 2020

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