Pandhari Lodge (Pvt) Ltd v TN Harlequin Luxaire (Ltd)

### Preamble
1
HH 471-18
HC 1679/15
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PANDHARI LODGE (PVT) LTD

versus

TN HARLEQUIN LUXAIRE (LTD)

HIGH COURT OF ZIMBABWE

MUZOFA J

HARARE, 19 July 2018 & 8 August 2018

Opposed Application

T Thomas, for the applicant

T.W Nyamakura, for the respondent

MUZOFA J: The applicant seeks a rescission of a default judgment granted by this court on 22 September 2014. In terms of the order the applicant was to pay US$17 255.41 with interest at the rate of 6% from 19 February 2014 to the date of full and final settlement.

It is not in dispute that the respondent issued out summons commencing action which was served on applicant on 19 May 2014. The applicant did not file any opposing papers. The respondent applied for a default judgment which was granted.  A writ of execution was issued for the attachment of applicant’s moveable property. Applicant states that it became aware of the default judgment when the Sheriff went to its premises to attach property.

According to the applicant’s founding affidavit, it was not in willful default. When the summons was served it did not see the summons. The summons was discovered on 22 July 2014 in a drawer that was used by students on attachment and had since left. Upon such discovery the summons was sent to its legal practitioners who entered an appearance to defend. It was upon perusing the chamber application for a default judgment filed by the respondent that it established that service of the summons was effected through one Vongai, a student who was on attachment. Vongai had endorsed that she was a Human Resources Manager. The truth was that Vongai was a student on attachment and a contract was attached to confirm this position.  Applicant said Vongai was not a responsible person to accept service on its behalf.

On the merits applicant said there are prospects of success in the main matter since it has a strong defence. Applicant admitted its indebtedness to the respondent save for the amount. It alleged that the sum of US$17 255.41 was not justified. The statement of account attached to the summons by the respondent showed an outstanding balance of $7 100 there was no explanation how that figure ballooned to US$17 255.41.

The application was opposed by the respondent who indicated that on 19 February 2014 a letter was written to the applicant indicating the amount of indebtedness as US$17 255.41. Applicant did not dispute the amount owing at the material time. Prior to that on 17 July 2013 applicant had written to respondent proposing a payment plan to liquidate a debt of $14 173.68 in instalments of $2000 per month. Applicant did not honour its payment plan which led to the letter dated 19 February 2014 being written. To that extent the applicant has no prospects of success. The capital amount owed was $7 100 which accrued interest leading to the amount claimed. Respondent indicated that applicant was in wilful default. Although not disputing that the applicant discovered the summons on 22 July 2014, respondent submitted that the applicant filed an irregular appearance to defend since it was already barred.  Applicant, who had legal representation then, should have sought condonation for the failure to file the appearance to defend in terms of the rules. Clearly this was a case of deliberate abstention from action. Applicant was complacent and no reasonable explanation was given for the default.

In an application for rescission of judgment, the applicant has to show good and sufficient cause for the application to be granted. In determining what constitutes “good and sufficient cause” the court has a very wide discretion. See Deweras Farm (Pvt) Ltd and Others v Zimbank 1998 (1) ZLR 368 (S) at 369-E-370. In Croco Properties (Pvt) Ltd v Swift Debt Collectors (Pvt) Ltd t/a Ruby Auctions 2013 (2) ZLR 79 (H) at 83 F – G, 84 A, MATHONSI J succinctly set out what constitutes good and sufficient cause as follows:

“In the exercise of its wide discretion whether to grant an indulgence to an applicant for rescission of judgment, the court has regard to essentially three factors, namely the reasonableness of the explanation for default, the bona fides of the application and the bona fides of the defence on the merits which prima facie carries some prospect of success… All these factors must be considered in conjunction with each other and with the application as a whole. An unsatisfactory explanation for one may, in fact, be strengthened by a very strong defence on the merits.

Gerogias and Another v Standard Chartered Finance Zimbabwe Ltd 1998 (2) ZLR 488 (S) at 493 C, du Preez, v Hughes N.O 1957 R & N 706 SR at 709 A – F. The applicant must show what entitles him to an indulgence.”

In this case I am not satisfied by the applicant’s explanation, applicant was not diligent in

protecting its interests. Even if the explanation that the summons was discovered on 22 July 2014 in a drawer is accepted, what the court has regard to is what the applicant did after 22 July. A copy of the summons filed of record does not show when it was issued.

However, the Sheriff’s return shows that Vongai received the summons on 19 May 2014. When applicant had receipt of the summons on 22 July 2014, it was clear that the applicant was out of time in filing its appearance to defend. It was almost three months later. It is expected that a reasonable legal practitioner would know of the bar, and at that time, seek to find out the position of the case through the Registrar or even from the respondent. This was not done and no explanation was given for the inaction. Instead the applicant filed an appearance to defend which certainly was not going to serve any purpose since applicant was already barred. The appearance to defend was filed in the absence of an application for condonation. It is a settled position in our law that condonation cannot be granted where it is not sought see Forestry Commission v Moyo 1997 (1) ZLR 254 SC. In the absence of an application for condonation and it being granted the appearance to defend was a non-event, it was as good as non-existent. So there was nothing to resist the claim by the respondent. In the normal course of court process therefore it was inevitable that the respondent had to seek a default judgment. This should not have been a surprise to the applicant, the default judgment was just but a consequence of its inaction or dilatoriness in protecting its interests.

I did not hear any explanation why the appearance to defend was filed out of time, and how applicant sought to surmount the hurdle of the bar in the absence of an application for condonation. Even if it can be accepted for a moment that there was an oversight there is some further inaction. The applicant in fact filed the notice of appearance to defend on 22 July 2014, from then on it did not do anything until the day when the Sheriff sought to attach its property. If indeed applicant intended to defend, a plea should have been filed. Applicant literally sat on its laurels so to speak, and it cannot expect the court to come to its rescue. The complacency was just beyond the ordinary. I do not know what the applicant expected of the case, after filing the appearance to defend with no plea. The same fate was inevitable.

According to the applicant’s founding affidavit, the application for a default judgment was filed by the respondent on 7 July 2014. It means when the applicant filed its appearance to defend the respondent had filed its application. Had the applicant been diligent and sought to establish the position of the case on 22 July 2014 before filing the appearance to defend, it could have known of the application for a default judgment. It deliberately did not take that necessary step which only lead to an inference that there was deliberate abstention as submitted for the respondent. Applicant said it learnt of the default order on 27 January 2016. This application was filed on 24 February 2015. There was no explanation for the almost one-month delay in making this application.

On the merits, applicant does not deny its indebtedness; it is the amount that is in issue. The statement attached to the summons show an invoice balance due as at 31 October 2010 as

$7 100. The balance due as at 31 December 2012 is indicated as A.L.R. $13 492.08 and O.B.R.  $16 653.66 it is unclear what that means. However, it was on that basis that the claim was made for $17 255.412. Before this court respondent attached to its opposing affidavit what it termed the induplum schedule which set out the capital amount and interest charges over a period of 33 months of non-payment. The total amount is $14 173.68. This is the amount that applicant proposed a payment plan for in the letter dated 17 July 2013.

There is no statement of account to justify the claim of $17 255.41 in the default judgment. Even the respondent’s legal practitioner was at pains to justify it and even suggested that the difference from $14 173.68 could be abandoned. However, the court cannot revisit the default order; its mandate is to consider the application form rescission.

The documentary proof, before the court certainly favour the applicant’s case, there are prospects of success only to the extent of the amount due.

Applicant has a strong defence and l am inclined to grant the application.

Applicant requested for costs on a higher scale, there was no justification for the that request. It is settled that costs follow suit however in this case l shall depart from that principle and deny the applicant costs because of the way it handled the matter. The applicant did not actively protect its interests and the respondent was entitled to apply for a default judgment. Respondent was also entitled to oppose the application due to the unsatisfactory explanation.

Accordingly, the following order is made.

The application for rescission of a default judgment be and is hereby granted.

The default judgment entered against the applicant on 22 September 2014 under case number HC 2469/14 be and is hereby rescinded.

The applicant be and is hereby ordered to file its plea within 10 days from the date of this order.

Each party to bear its own costs.

Mahuni Gidiri Law Chambers, applicant’s legal practitioners

Mtetwa & Nyambirai, respondent’s legal practitioners