Air Traffic Navigation Services Company Limited v Diversified Properties Services Company Limited

• Jurisdiction: South Africa
• Judge: Weiner J
• Judgment Date: 24 April 2014
• Docket Number: 12/15125
• Court: South Gauteng High Court, Johannesburg
• Hearing Date: 14 March 2014
• Citation: 2014 JDR 0969 (GSJ)

Weiner J:

Notice of set down

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Weiner J

[1]

Subsequent to the hearing of this matter and when the parties were informed that judgment would be handed down on the 24th of April 2014, my Registrar received correspondence from the Respondent's attorney. In Summary, they contend that:-

1.

Two stamped Notices of Set Down were served on them on the 10th of March 2014 at 10h58. A computerised copy stating that the matter would be heard on the 10th of March at 10h00 and the other stating that it would be heard on the 14th of March at 10h00.

2.

They did not appear on the 10th of March as the Notice of Set Down was only served on that day at 10h58.

3.

There was previous correspondence in which the Respondent was willing to consent to the rescission but that the Applicant had made certain allegations in the Founding Affidavit, which the Respondent required the Applicant to retract.

[2]

None of these allegations and correspondence was brought to the court's attention by the Applicant's counsel at the time of the hearing on the 14th of March. The stamped Notice of Set Down for the 10th of March was amended to the 14th of March as it was only filed on the 10th of March. The copy served on the Respondent has not been amended (this appears from the copy attached to the correspondence received on the 23rd of April). As stated above, another stamped Notice of Set Down for the 14th of March was served on the Respondent on the 10th of March 2014. This was not a computerised copy. There was no appearance for the Respondent at the hearing on the 14th of March.

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Weiner J

[3]

However, the court mero motu raised the question of whether the Applicant could obtain rescission without setting out a bona fide defence as required in terms of the Uniform Rules of Court. Argument was provided by the Applicant's counsel in this regard and my judgment is based upon such submissions.

[4]

As a result of the decision at which I have arrived, the Respondent's procedural concerns, although legitimate, do not require further adjudication.

Background

[5]

The Applicant seeks an order in terms of the common law for the rescission of a default judgment granted against them on 26 July 2012.

Business of the Applicant

[6]

The Applicant provides air traffic and navigation services for the air traffic management community, primarily in South Africa, as well as the rest of Africa and the Indian Ocean region. The Applicant is obliged to raise funds from time to time. Accordingly, the Applicant approaches financial institutions and applies for credit facilities.

The lease agreement

[7]

On 3 November 2008, the Applicant and the Respondent concluded a

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Weiner J

written lease agreement. The Applicant leased from the Respondent certain premises for a period of four years commencing on 1 October 2008 and terminating on 30 September 2012.

[8]

On 26 July 2012 the Respondent obtained default judgment against the Applicant for a total amount of R3 746 437.39 on three claims arising from the breach of the lease agreement.

The settlement agreement

[9]

On 11 September 2012, the Applicant launched an application to rescind the default judgment on the basis that the summons did not come to the Applicant's attention. However, this application was not pursued further as the parties subsequently agreed to the settlement of the default judgment. This settlement agreement was signed by the Applicant and the Respondent on the 3rd and 4th of October 2013 respectively. It was agreed that the Applicant would pay the Respondent an amount of R3 352 581.82 ("the settlement amount") in full and final settlement of the default judgment obtained by the Respondent.

[10]

It was further agreed that upon payment of the settlement amount by the Applicant, the Respondent would immediately provide the Applicant with written consent to the rescission of the default judgment granted against the Applicant.

[11]

On 5 October 2013 the Applicant paid the settlement amount to the Respondent. However the Respondent has failed to provide the Applicant with

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Weiner J

written consent to the rescission of judgment.

[12]

The Applicant contends that, on the basis that the Applicant has settled the judgment debt to the satisfaction of the Respondent, the Applicant should have the judgment against it rescinded. The judgment currently prevents the Applicant from accessing credit, which is essential to the Applicant's continued operations.

Rescission – applicable principles

[13]

The question is whether a default judgment of the High Court can be set aside simply because it has been satisfied in full by the judgment debtor, with no prejudice to the judgment creditor. The Applicant contends that there is sufficient cause for the rescission on the basis of justice and fairness. It is noted that even if the Respondent did consent, the same question would arise by virtue of the authorities cited below.

[14]

In terms of Rule 31(2)(b) of the Uniform Rules of Court, "good cause" must be shown for an application for rescission to succeed. This requires, inter alia, that there is a bona fide defence to the plaintiff's claim and that he was not in wilful default. The mere subsequent settlement of judgment debt is not in itself a cause for setting aside a default judgment. See 31.11 of the Uniform Rules of Court.

[15]

The Magistrate Court Rules differ in this regard, permitting rescission where there is a subsequent settlement of the judgment debt. See Rule 49(5) of the Magistrates' Court Rules.

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Weiner J

Rescission in terms of the common law

[16]

The Rules are not the only mechanisms by which a judgment can be set aside. The common law provides an alternative basis on which an application for rescission can be brought, and it was on this basis that the application in casu was brought.

[17]

To rescind a judgment under the common law, "sufficient cause" must be shown. Miller JA in Chetty v Law Society, Transvaal 1985 (2) SA 756 described "sufficient cause" as having two essential elements. Miller JA at 764 I – 765 E said:-

"(i)

that the party seeking relief must present a reasonable and acceptable explanation for his default; and

(ii)

that on the merits such party has a bona fide defence which, prima facie, carries some prospect of success."

[18]

The above was emphasised in the SCA in Colyn v Tiger Food...