REPORTABLE Z.L.R. (31)

Judgment No S.C. 37\2002

Civil Appeal No 85\2001

(1) HIGHLINE MOTOR SPARES AND HARDWARE (1993) (PRIVATE) LIMITED (2) AMANDA ROSALINDA DAVID (3) NICHOLAS ABEDNIGO DAVID (4) EDWIN DAVID v ZIMBABWE BANKING CORPORATION LIMITED

SUPREME COURT OF ZIMBABWE

SANDURA JA, ZIYAMBI JA & GWAUNZA AJA

HARARE MAY 16 & 30, 2002

P. Kawonde, for the appellants

F. Girach, for the respondent

SANDURA JA: This is an appeal against a judgment of the High Court which dismissed with costs the appellants’ application for the rescission of a default judgment granted against them on 15 November 1999.

The relevant facts are as follows. In April 1999 the respondent issued a summons against the appellants claiming payment of the sum of $2 124 250.08 together with interest and costs of suit. After the summons was served on them, the appellants entered appearance to defend.

Subsequently, on 26 October 1999 the respondent’s legal practitioner served on the appellants’ legal practitioner a notice of intention to bar, which gave the appellants five days within which to file their plea. When that period expired and no plea had been filed the respondent, through its legal practitioner, barred the appellants on 3 November 1999.

Two days later, the respondent’s legal practitioner filed an application for a default judgment in the High Court, which was granted on 15 November 1999. Thereafter, a warrant of execution was issued and the appellants’ property was attached on 15 March 2000.

About two weeks later, the appellants briefed their current legal practitioner, and an application for the rescission of the default judgment was later filed in the High Court on 13 July 2000. That application was subsequently dismissed with costs. Aggrieved by that decision, the appellants appealed to this Court.

The learned judge in the court a quo dismissed the appellants’ application on two grounds. The first was that the appellants had not given an acceptable explanation for their default, and the second was that the appellants did not have a bona fide defence to the respondent’s claim.

Rule 63 of the High Court Rules, 1971 (“the High Court Rules”), in terms of which the application for the rescission of the default judgment was made, reads as follows:-

“(1) 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.

2. If the court is satisfied on an application in terms of subrule (1) that there is good and sufficient cause to do so, the court may set aside the judgment concerned …”

Commenting on subrule (1), I said the following in Viking Woodwork (Pvt) Ltd v Blue Bells Enterprises (Pvt) Ltd 1998 (2) ZLR 249 (S), at 251B-E:-

“In terms of r 63(1), a defendant against whom a default judgment has been granted has a period of one month, from the time he becomes aware of the judgment, within which to file an application for the rescission of that judgment. If he does not make the application within that period but wants to make it after the period has expired, he must first of all make an application for the condonation of the late filing of the application. This should be done as soon as he realises that he has not complied with the rule.

If he does not seek condonation as soon as possible, he should give an acceptable explanation, not only for the delay in making the application for the rescission of the default judgment, but also for the delay in seeking condonation. As STEYN CJ said in Saloojee & Anor NNO v Minister of Community Development 1965 (2) SA 135 (A) at 138H:

‘What calls for some acceptable explanation, is not only the delay in noting an appeal and in lodging the record timeously, but also the delay in seeking condonation.’

There are, therefore, two hurdles to overcome. The same view was expressed by CENTLIVRES CJ in CIR v Burger 1956 (4) SA 446 (A) at 449F-G …”

As already stated, the default judgment in this case was granted on 15 November 1999. The appellants alleged that they first became aware of the judgment on 15 March 2000 when the warrant of execution was served on them and their property was attached. I do not think that there is any truth in that allegation, as an examination of the correspondence between the parties will show.

After the appellants’ legal practitioner filed a request for further and better particulars, the respondent’s legal practitioner wrote to him on 16 November 1999 as follows:-

“Your Request for Further and Better Particulars in the above matter was received at our offices on the 9^th of November 1999.

We advise you that we had already barred you from filing any further pleadings in this matter and our Application for Default Judgment was lodged with the High Court on the 5^th of November 1999.”

In reply, the appellants’ legal practitioner wrote to the respondent’s legal practitioner on 14 December 1999. The relevant part of the letter reads as follows:-

“In view of the importance of this matter and the amounts involved, may your client consider the upliftment of the Bar by consent.”

The letter was copied to the appellants.

A week later, on 21 December 1999, the respondent’s legal practitioner replied as follows:-

“Indeed default judgment was entered in favour of our client against yours on 15^th November 1999.

Pursuant thereto, we issued our Writ of Execution against property on 9^th December 1999 …

In order for us to advise our client further in this matter, we would need to hear further from you regarding the basis of your client’s defence, for as we understand the position, your client has no bona fide defence to this claim.”

Thus, the appellants’ legal practitioner was informed on or about 21 December 1999 that the default judgment had been granted on 15 November 1999. In my view, it is unlikely that he did not inform his clients about the granting of the default judgment.

In any event, the appellants must have known, on or about 29 December 1999, that the default judgment had been granted. I say so because of the contents of a letter which was written by their legal practitioner to the respondent’s legal practitioner on 29 December 1999, and which was copied to them. The relevant part of the letter reads as follows:-

“Our client thus disputes the claimed amount of $2 859 299.96 but accepts its liability in respect of $1 569 882.00 …

We therefore look forward to hearing from you with regards to whether or not your client will consent to the recision (sic) of judgment by consent.”

I am, therefore, satisfied that the appellants knew about the default judgment long before their property was attached in March 2000.

In terms of r 63(1) of the High Court Rules, the appellants had one month, from 29 December 1999, within which to make a court application for the rescission of the default judgment. However, no such application was made within that period. Instead, the application was filed on 13 July 2000, without first of all making an application for the condonation of the late filing of the application. In the circumstances, the court a quo should not have entertained the appellants’ application.

However, even if the appellants had made an application for the condonation of the late filing of the application, and it had been granted, I do not think that they would have succeeded in establishing that they were not in wilful default. Their argument was that the failure to file a plea in response to the notice of intention to bar was not their fault but that of their legal practitioner.

In my view, that is not a valid argument. In a number of cases, this Court has stated that a litigant cannot escape the consequences of the lack of diligence on the part of his legal practitioner. Thus, in the Viking Woodwork case, supra, this Court said the following at 252H-253C:-

“Although the fault was most probably that of the appellants’ legal practitioners, the appellant cannot escape the consequences of the lack of diligence on the part of its lawyers. As STEYN CJ said in the Saloojee case, supra, at 141B-E:-

‘I should point out, however, that it has not at any time been held that condonation will not in any circumstances be withheld if the blame lies with the attorney. There is a limit beyond which a litigant cannot escape the results of his attorney’s lack of diligence or the insufficiency of the explanation tendered. To hold otherwise, might have a disastrous effect upon the observance of the rules of this court. Considerations ad misericordiam should not be allowed to become an invitation to laxity. In fact, this court has lately been burdened with an undue and increasing number of applications for condonation in which the failure to comply with the rules of this court was due to negligence on the part of the attorney. The attorney, after all, is the representative whom the litigant has chosen for himself, and there is little reason why, in regard to condonation of a failure to comply with a rule of court, the litigant should be absolved from the normal consequences of such a relationship, no matter what the circumstances of the failure are.’

This passage was quoted with approval by DUMBUTSHENA CJ in S v McNab 1986 (2) ZLR 280 (S) at 284A-D.”

See also Beitbridge Rural District Council v Russell Construction Co (Pvt) Ltd 1998 (2) ZLR 190 (S) at 192H-193A-D.

In the circumstances, I am satisfied that the appellants did not give a reasonable and acceptable explanation for their default. That, in fact, should be the end of the matter.

However, I shall briefly consider whether the appellants have a bona fide defence to the respondent’s claim. I do not think they have. I say so for three reasons.

Firstly, in its opposing affidavit the respondent avers as follows:-

“It is denied that the Applicants have a bona fide defence, as follows:

The Applicants enjoyed letter of credit facilities for the importation of electrical equipment. They were supposed to fund their current account in local currency pending the drawdown of the three letters of credit payments. There were, however, at the time of drawdown, insufficient funds in the current account which resulted in an unauthorised overdraft coming into existence. The local balance on the account attracts penalty rates of interest which at the time was 52% per annum compounded monthly.”

Dealing with the above averments, the appellants averred that the agreed interest rate was 11% per annum. In my view, the suggestion that at the relevant time an overdraft attracted interest at the rate of 11% per annum does not deserve serious consideration.

Secondly, in his letter to the respondent’s legal practitioner dated 29 December 1999 the appellants’ legal practitioner stated that the appellants admitted liability in the sum of $1 569 882.00 (which was later altered to $1 656 419.50) together with interest at the rate of 11% per annum. However, in their letter dated 31 May 2000, which was written to the respondent, the appellants did not state that their liability was for a sum less than that claimed. The letter reads as follows:-

“Re: $200 000.00 Repayment For Month Ending May 2000

We write to advice (sic) that we will be in a position to remit the above mentioned payment combined with the month ending June 2000 payment making a total remittance of $400 000.00.

There has been a delay by Central Payments Office, a government wing, in paying out creditors including our company. However after checking with Government we will have assured of a payment in our favour on 30/06/2000. Please see attached two copy debit invoices and two copy Government requisitions both totaling (sic) $721 182.96 for your information and record.

We hope for your understanding and hope to hear from you at your earliest.”

If the appellants were denying liability for the full sum they should have said so in their letter. The fact that they did not is significant.

Finally, as already stated, the respondent issued and served its summons on the appellants in April 1999, and yet by 21 December 1999 the respondent’s legal practitioner still did not know the basis of the appellants’ defence. That prompted her to write to the appellants’ legal practitioner on 21 December 1999 as follows:-

“In order for us to advise our client further in this matter, we would need to hear further from you regarding the basis of your client’s defence, for as we understand the position, your client has no bona fide defence to this claim.”

That letter was written eight months after the summons had been issued and served upon the appellants. If the appellants had a bona fide defence to the respondent’s claim, one wonders why, by 21 December 1999, the basis of that defence had not been disclosed.

In my view, the conclusion that the appellants do not have a bona fide defence to the respondent’s claim is inescapable.

In the circumstances, the appeal is devoid of merit and is dismissed with costs.

ZIYAMBI JA: I agree

GWAUNZA AJA: I agree

Kawonde & Company, appellants’ legal practitioners

Gill, Godlonton & Gerrans, respondent's legal practitioners