Dobsa Services CC v Dlamini Advisory Services (Pty) Ltd

• Jurisdiction: South Africa
• Judge: Bosielo JA, Petse JA, Mathopo JA and Mocumie JA and Schoeman AJA
• Judgment Date: 28 September 2016
• Docket Number: 050/2016
• Court: Supreme Court of Appeal
• Hearing Date: 06 September 2016
• Citation: 2016 JDR 1786 (SCA)

Petse JA (Bosielo, Mathopo and Mocumie JJA and Schoeman AJA concurring):

[1]

These two appeals are concerned with two costs orders granted in the Gauteng Local Division of the High Court, Johannesburg (Reyneke AJ) in two interrelated applications. The appellant in the first appeal is Dobsa Services CC (Dobsa), a close corporation which carries on business as, inter alia, an auditing and accounting corporation in Braamfontein, Johannesburg. The first respondent is Dlamini Advisory Services (Pty) Limited (the company) which is a private company conducting business as business advisory and consulting services provider in Parktown of which the second respondent, Mr Zolile Abel Dlamini (Dlamini), is the managing director. In the second appeal the company and Dlamini are the appellants and Dobsa is the respondent. For the sake of convenience, I will henceforth refer to the company and Dlamini collectively as the company unless the context dictates otherwise.

[2]

In the first appeal the court a quo awarded costs against Dobsa which had unsuccessfully opposed an application for an interdict to stay enforcement of the judgment granted by default in its favour. The company against which the default judgment had been granted sought an order staying the enforcement of such judgment pending the outcome of an application to rescind the default judgment. The second appeal raises the question whether the company which had applied for rescission of the default judgment sought an indulgence from the court a quo and must therefore bear the costs of such application even though it was successful in its application as the court a quo found. These issues arise against the following backdrop.

2016 JDR 1786 p3

Petse JA (Bosielo, Mathopo and Mocumie JJA and Schoeman AJA concurring)

[3]

During November and December 2010 Dobsa, on the one hand, and the company and Dlamini as the administrator of Bakubung Ba-Ratheo Traditional Community (Bakubung Ba-Ratheo), on the other hand, concluded a written contract in terms of which Dobsa undertook to render certain forensic investigation services to Bakubung Ba-Ratheo on behalf of the company and Dlamini at an agreed remuneration rate of R1 350 per hour subject to the terms and conditions spelt out in the parties' written contract. Initially all had proceeded well between the parties. It appears that some work was done and Dobsa was paid for such work.

[4]

During March to May 2011, a dispute arose between the parties in relation to payments that Dobsa claimed were overdue. So as to induce the company to settle the alleged overdue amounts, Dobsa withheld its forensic report and insisted that it would not release it to the company without payment upfront. On its part, the company asserted that it would not be possible to pay without it being provided with the forensic report first. The respective positions taken by the parties became entrenched and this resulted in a stalemate. This led to what appears to have been an irretrievable breakdown of the parties' contractual relationship.

[5]

As indicated, Dobsa asserted that there were further moneys owing to it. On 6 June 2013 it instituted an action against the company in the Gauteng Local Division of the High Court, Johannesburg comprising four claims (styled Claims A, B, C and D). Claim A was for payment of R191 085.87 being the balance of the amount owing in respect of services rendered in January 2011. Claim B was for payment of R213 034.10 in respect of services rendered in February 2011. Claim C was for payment of R253 360 in respect of services rendered in March 2011. And Claim D was for payment of R467 856 which represented the amount that the appellant alleged it would have earned, but for the respondent's repudiation, had the contract been allowed to run its course, ie until May 2011.

[6]

Dobsa's summons was served on the company on 19 June 2013. Despite having been served with the summons, the company, through inadvertence, failed to defend the action. It bears mentioning that upon service of the summons on the company, Dlamini transmitted it by email to his attorney with whom he had had an attorney and client relationship for some 15 years for the latter to defend the action. It was

2016 JDR 1786 p4

Petse JA (Bosielo, Mathopo and Mocumie JJA and Schoeman AJA concurring)

uncontested that the email address to which the summons was sent by Dlamini was incorrect and therefore the summons did not reach his attorney, hence the failure to defend the action. Upon the expiry of the dies induciae, Dobsa applied for and obtained default judgment against the company on 1 August 2013. On 28 October 2013 Dobsa caused to be issued a writ of execution against the company.

[7]

On 23 October 2013 the company ascertained that default judgment had been granted against it. On 29 October 2013, and unbeknown to them that a writ of execution had already been issued on 28 October 2013, the company's attorneys addressed a letter to Dobsa's attorneys proposing that they stay further action against the company pending the outcome of a rescission application that they were instructed to launch, stating that:

'Given that it [appeared] that the judgment was granted . . . some three months ago, there [could] be little prejudice to [Dobsa] in holding off.'

They went on to indicate that in the event that Dobsa was not prepared to provide an undertaking to hold further enforcement of the judgment in abeyance, the company would bring an urgent court application for its stay. Thereafter a series of letters were addressed to Dobsa's attorneys which elicited no response. In the event, no undertaking was given by Dobsa's attorneys. On 12 November 2013 the company launched an application to rescind the judgment granted against it by default.

[8]

But, Dobsa was unrelenting. It proceeded to instruct the sheriff to remove the company's goods pursuant to the attachment. Consequently, on 28 November 2013, the company launched an urgent application for an interdict restraining Dobsa from removing the company's goods pursuant to the attachment effected on 26 November 2013 and ancillary relief. Dobsa opposed the application. It contested not only the issue of urgency but also questioned the company's bona fides in bringing such application, contending that the application was a stratagem merely to delay and frustrate Dobsa's attempts to obtain satisfaction of its judgment. It is apparent from the record that Dobsa essentially adopted the attitude...