N & S Properties (Pvt) Ltd v Umguzane Rural District Council

### Preamble
1
HB 139/19
HC 1734/17
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N & S PROPERTIES (PVT) LTD

Versus

UMGUZA RURAL DISTRICT COUNCIL

IN THE HIGH COURT OF ZIMBABWE

TAKUVA J

BULAWAYO 9 NOVEMBER 2018 & 19 SEPTEMBER 2019

Opposed Application

S. Sengweni for the applicant

S. Chamunorwa for the respondent

TAKUVA J:	The respondent obtained a default judgment which it now clings on to for dear life resulting in this application for rescission of that default judgment.

The facts

In 2008, the parties voluntarily entered into an agreement wherein the respondent offered its land for development by the applicant.  Some of the material terms of the parties’ agreement were that;

The applicant was obliged to service the whole designated area and provide sewer and water connection, storm water drains and culverts in addition to developing roads according to the specifications.

The applicant would commence servicing the land in issue within six (6) months of the date of the agreement.

Either party would be entitled to terminate the agreement upon “a fundamental breach” of the contract.  Such a breach would include failure to complete work by a period of twenty-eight (28) days or by a period in excess of twenty-eight (28) days.

The applicant failed to complete the work within a period of six months contemplated by the parties in their agreement.  Respondent angered by this breach, cancelled the agreement but applicant remains in occupation.

On 24 February 2016, respondent caused to be issued summons against applicant claiming an order for confirmation of cancellation of agreement between the parties and an order that applicant and all those claiming occupation through it vacate a certain piece of land in Ntabazinduna.

Applicant entered appearance to defend and after closure of pleadings, the matter was set down for a pre-trial conference on the 23rd of May 2017.  Applicant failed to attend the pre-trial conference and as a result its defence was struck out and the respondent was granted leave to set the matter down on the unopposed roll and as a result the default judgment was granted against the applicant on 22 June 2017.

Applicant then filed this application on 29 June 2019.

Basis and nature of application

This is an application for rescission of a default judgment.  The application is made in terms of o63 of the High Court Rules 1971 (the Rules).  The basis of the application is broadly that the applicant contends that it was not in wilful default when it failed to appear at the pre-trial conference and that it has a bona fide defence to the claim.

Wilful default

Applicant Argued that it was not in wilful default for the following reasons:

Upon receipt of summons, applicant immediately engaged Mr Gary Sengweni who handled the matter until the pre-trial conference.

In order to adequately prepare for his wedding which was set for the 6th of May 2017, Mr Sengweni took a two (2) month leave from the 3rd of April up to 3rd May 2017.  Indeed his marriage certificate attached as annexure ‘E’ confirms that he wedded on the 6th May 2017.

Meanwhile, and in his absence a notice of set down was served on applicant’s lawyers on the 11th of April and it was misfiled by the receptionist.  It was never brought to the attention of Miss Queen Chimbo who was handling Mr Sengweni’s matters during his absence.  The net result was that both Miss Chimbo and Mr Sengweni were not aware of the pre-trial conference date.

Mr Gary Sengweni filed a supporting affidavit confirming that he was on leave when the matter was placed before a judge for a pre-trial conference.  In paras 9 and 11 of his affidavit he stated:

“9.	I only became aware of the set down date when counsel for the respondent met me at the Magistrates’ Court and advised me that he had set the matter on the unopposed roll because I had failed to make appearance for pre-trial conference together with applicant.

10. 	…

11.	Applicant was therefore not in willful default as there was a mix up with the notice of set down, and had it been known by applicant, it was going to attend the pre-trial even in my absence.”

On her part Sharon Nkhoma, the receptionist also filed a supporting affidavit in which she stated:

“6.	On the 11 April 2017 I received notice of set down for pre-trial conference for the matter between respondent and applicant.  At that time Mr Sengweni who is dealing with the matter had taken a 2 month leave from office to enable him to prepare for his wedding which was scheduled for the 6th May 2017.

7.	I then took the notice of set down and erroneously placed it inside the applicant’s file which was on Mr Sengweni’s desk instead of taking it to Miss Chimbo who was dealing with Mr Sengweni’s matters during his absence.  I received the notice of set down after 4pm at a time Miss Chimbo had left office for the day.  As a result, the matter was head in applicant’s absence.”

For these reasons, applicant submitted that the default appearance at pre-trial conference was not willful and, if it was not for the misfiling of the notice of set down, applicant would have attended the pre-trial conference.

Bona fide defence

As I pointed out above, the respondent vigorously opposed this application.  As is the norm these days, the opposition consists of two parts, namely “in limine” and on the “merits”.  In respect of the former is was argued that the court should not grant applicant audience until it has complied with an enforcement order issued against it in terms of s33 of the Regional, Town and Country Planning Act (Chapter 29:12).  It was also contended that applicant has not complied with an order of this court under HC 451/16 by remaining on the property it was ordered to vacate.

On the merits, respondent argued that the applicant was in willful default on the following grounds:

There is no proof of when Mr Sengweni took leave.

The explanation for the default is inadequate in that the notice of set down was lying for 25 days in the file and Miss Chimbo “ought to have perused the file in those 25 days.  Miss Chimbo should have deposed to an affidavit explaining her role.

The litigant would have acted differently from the applicant in that they should have inquired with their legal practitioners during the course of the 25 day period to check out the progress.  There was negligence in this matter by both the applicant and its legal practitioners.  This negligence amounts to willful default as there was recklessness as to the consequences of their inertia.

There was no meeting of minds between respondent on the one hand and the applicant on the other to regulate their affairs other than through the written agreement.  The meetings were held but no binding agreement was reached on the material issue.

Respondent denies receiving money from the applicant.  It also denies issuing instructions or directions to the applicant.  The fact that applicant admits breach of the parties’ agreement puts paid to any defence that the applicant can claim to have.

Applicant should have explained what he did when he became aware of the judgment at the pre-trial conference and the set down of the matter or 22 June 2017.  Clearly, he did nothing and this renders the application defective as there ought to be an explanation for “all periods of default”.

Nothing has been placed before the court to show why the negligence of the applicant’s legal practitioners should not be imputed to their client.  Once it is established that Ms Nkhoma had knowledge of the set down of the matter, that knowledge ought to be imputed to the applicant’s legal practitioners and applicant.

The law

O9 r63 of the High Court Rules 1971 provides:

“63.	Court may set aside judgment given in default

A party against whom judgment has been given in default whether under these rules or under any other law, may make a court application, not later than one month after he has had knowledge of the judgment, for the judgment to be set aside.

If the court is satisfied on an application in terms of subsection (1) that there is good and sufficient cause to do so, the court may set aside the judgment concerned and give leave to the defendant to defend or to the plaintiff to prosecute his action, on such terms as to costs and otherwise as the court considers just.

Unless an applicant for setting aside of a judgment in terms of this rule proves to the contrary, he shall be presumed to have had knowledge of the judgment within two days after the date thereof.”

In Deweras Farm (Pvt) Ltd & Ors v ZIMBANK 1998 (1) ZLR 368 (S) McNALLY JA stated that “the High Court Rules require only “good and sufficient cause” as the basis of rescission of judgment.  This gives the court a wide discretion and it is not possible to provide an exhaustive definition of what constitutes sufficient cause to justify the grant of indulgence.  Even where there has been wilful default, there may still sometimes be good and sufficient cause for granting rescission.  The good and sufficient cause for instance might arise from the motive behind the default.”

A litigant desirous of establishing good and sufficient cause must at least satisfy the following requirements;

H/She must proffer a reasonable explanation for the default.  Where the default was wilful or it was due to gross negligence, the court would normally not come to his/her assistance.

The application must be bona fide and not made with the intention of delaying the other party’s relief or claim.

He/she must have a bona fide defence anchored on averments which if established at trial would entitle him/her to the relief.

In ZIMBANK vs Masendeke 1995 (2) ZLR 400 (S) it was held that:

“Willful default occurs when a party freely takes a decision to refrain from appearing with full knowledge of the service or set down of the matter.  Where there is negligence in relation to the default, the court will examine whether the negligence is so gross as to amount to willfulness.  In coming to its conclusion, there is a certain weighing of the balance between the extent of the negligence and the merits of the defence.”

It was held further that the default had not been wilful but had been the result of a mistake in misfiling of the summons.  The judge a quo was wrong to say there was no explanation, the appellant had offered an explanation.

As regards costs, it was further held that “in cases in the future, the court will consider awarding costs personally against lawyers who not only snatch at judgments but then stubbornly and unreasonably cling to them when they could have saved triable and expense by contacting the lawyers on the other side.” (my emphasis)

As regards the bona fides requirement, it was held in Bentley Maudesley and Company Ltd vs Carburol (Pvt) Ltd & Anor 1949 (4) SA 873 that, “I have no doubt that when the rule says “bona fide defence” it means what it clearly says, a defence set up bona fide or honestly which if proved will constitute a valid defence to plaintiff’s claim …” (my emphasis)

In the present matter it can hardly be said that the applicant was in willful default because the reason it did not appear before a judge at a pre-trial conference is that its legal practitioners had not informed it of the set down date.  In my view a reasonable explanation has been given by Mr Sengweni (the legal practitioner) and Miss S. Nkhoma (the receptionist) who received the notice of set down.  There would have been no need, and the court could not have been assisted in any may by an affidavit from Ms Chimbo because the receptionist admitted that she did not bring the notice of set down to her attention.  The situation would have been different if Ms Nkhoma had informed Ms Chimbo of the existence of the notice of set down.

While I take note of the principle that the failures of one’s legal practitioner to act when required are the litigant’s failures and that in casu applicant should be held liable for its legal practitioners’ failures, each case has to be looked at on its own circumstances.  In casu, Mr Sengweni who was seized with this matter was on leave.  When the notice of set down was received by Ms Nkhoma she filed it in the correct file but failed to notify the lawyer who had been handed over some of Mr Sengweni’s files.  Clearly the receptionist acted negligently but I do not share Mr Chamunorwa’s view that this was an act of gross negligence tantamount to willfulness and that this negligence must be attributed to the litigant.

I agree with McNALLY JA (as he then was) that such mistakes are common in offices.  Documents can be misfiled and or that their existence is not brought to the right personnel – see Masendeke’s case supra.  Applicant’s failure to attend pre-trial conference cannot in my view be regarded as a deliberate conscious and freely taken decision to refrain from appearing for pre-trial conference.

The respondent submitted strongly that the applicant failed to explain the default in respect of the order granted on 22 June 2017 and that such failure renders the application defective.  The gist of the argument as I understand it, is that applicant should have “done something” after it became aware that the matter had been set down on the unopposed roll.  In dealing with this aspect Mr Sengweni stated in para 9 of his supporting affidavit that:

“9.	I only became aware of the set down date when counsel for respondent met me at the Magistrates’ Court and advised me that he had set the matter on the unopposed roll because I had failed to make appearance for pre-trial conference together with applicants.” (my emphasis)

It is not clear when in relation to the 22nd June this conversation took place.  Without that information this court is unable to assess the tardiness or unreasonableness of the applicant’s legal practitioner.  Counsel for the respondent did not assist either.  He could have, since this information was within his personal knowledge.  In any event the criticism seems to be that applicant’s lawyers should not have waited for the default judgment to be granted.  This in my view amounts to splitting hairs.  This is a matter where respondent’s counsel could have saved trouble and expense by informing the lawyers on the other side that if an application for rescission of judgment were to be filed he would not oppose it so that there is finality in litigation on the merits.

I find for these reasons that the applicant’s default was not wilful.

I now turn to the bona fides or applicant’s defence on the merits.  The defence is one of acquiescence or estoppel.  For such a defence to succeed, it must be shown that the person against whom the defence is raised, has lain by with full knowledge of his rights and of the infringement of those rights.  In other words the applicant’s argument is that the delay by the respondent to act lulled the applicant into a false sense of security such that the enforcement of respondent’s right could cause real inequity in that respondent’s conduct could amount to unconscionable conduct.

Bearing in mind that the applicant does not have to deal fully with the merits of the case and produce evidence to show that the probabilities are actually in his favour, I need to closely examine and analyse the averments forming the foundation of the defence.  It is common cause that the parties entered into an agreement in 2008.  It is also common cause that by 2010 applicant had not completed the project.  However from 2011 to 2014 applicant continued to work on respondent’s land with the knowledge of the respondent as though applicant had not breached the agreement.

The parties met sometime in 2014 and agreed on some position as regards the way forward as shown by annexures L and M of the respondent’s opposing papers.  Respondent’s submission that the correspondence or engagement related to the Nyamandlovu project is not accurate as the letters refer to both projects.  The letters do not show that the respondent had cancelled the agreement or was about to do so.  Instead, they paint a picture of the parties having reached a general meeting of minds to continue in terms of the agreement despite the breach.  What is clear from the above is that the respondent knew from 2010 of the breach of the agreement, and the whole of 2011 whilst respondent was working on its land, it did not cancel the agreement, but set back and watched.  In 2012, respondent did the same.  In 2013 respondent directed applicant to bring its agreement for reconfirmation.  In 2014 the respondent accepted by minutes in annexure ‘L’ that the project had ran too long and that there was a need to expedite the completion of the projects.

Respondent has submitted that it did not receive any money from the applicant and that it never gave applicant instructions.  I take the view that these are disputes of fact that should be resolved at trial.  These disputes do not in my view make the defence mala fide.  Equally so, the denial of the existence of a verbal agreement does not extinguish the bona fides of the defence in that the totality of the circumstances show that it probably existed.

Finally, a closer scrutiny of the agreement signed in 2008/9 shows that the parties left possibilities of further variations without reducing the terms to writing.  This is the case because the deal does not have “a non variation” clause.  By the respondent’s conduct from 2010 to 2015, applicant continued to develop respondent’s land with the knowledge of the latter.

Consequently, I find that the applicant has raised a defence that is bona fide.  Therefore the applicant has shown good and sufficient cause to set aside the default judgment.

Accordingly, it is ordered that:

The order granted on the 23rd May 2017 and 22nd June 2017 under case umber HC 451/16 be and is hereby set aside.

The Registrar of the High Court be and is hereby ordered to set the matter down for pre-trial conference.

Each party to bear its own costs.

Messsrs T. Hara & Partners applicant’s legal practitioners

Messrs Calderwood Bryce Hendrie & Partners, respondent’s legal practitioners