Timothy James Searson and Simon David Searson and Brenda Carol Leeper and Couchgrass (Pvt) Ltd v Samalyn Investments (Pvt) Ltd and Registrar of Deeds N.O and Master of the High Court N.O

### Preamble
1
HH 646-18
HC 993/18
---------


TIMOTHY JAMES SEARSON

and

SIMON DAVID SEARSON

and

BRENDA CAROL LEEPER

and

COUCHGRASS (PVT) LTD

versus

SAMALYN INVESTMENTS (PVT) LTD

and

REGISTRAR OF DEEDS N.O

and

MASTER OF THE HIGH COURT N.O

HIGH COURT OF ZIMBABWE

DUBE J

HARARE, 28 May 2018 & 10 October 2018

Opposed Matter

S M Hashiti , for the applicants

W Ncube for the respondents

No appearance for the 2nd and 3rd respondents

DUBE J: The applicants bring an application for rescission of judgment for failure to file a notice of opposition in an application.

The main application is based on the following facts. In December 2004 the first respondent entered into an agreement of sale for an undeveloped stand called Lot 4 Reitfontein in the district of Salisbury with June McLachlan, [hereinafter referred to as the property]. June McLachlan died before transfer of the property was made. Around the year 2011 the first respondent learnt that the estate of June McLachlan was selling the property. The property was subsequently transferred to the fourth applicant in September 2012. The first respondent filed an application under HC 9866/17 challenging the transfer.

The applicants’ explanation for the default is as follows. The first respondent brought an application against the applicants but failed to serve it on them and went on to apply for default judgment. The matter ought not to have been placed on the unopposed roll when the applicants had filed a notice of opposition in the main application. The first and second applicants live in Australia, were not served with the application and did not become aware of the application and were not in default. It was fraudulent of the first respondent through Mr Sheshe, their legal practitioner, to attempt service at Chryston Bank on first and second applicants who live in Australia. There was no service of the application. The respondent purported to effect service at the registered office of the fourth applicant despite knowledge that the applicants were  represented. No service was effected on fourth applicant. No separate copy of the application was served on the applicants.

When Mr Warhurst, the applicants’ legal practitioner, discovered that the matter had been placed on the unopposed roll, he attended the hearing. The first respondent agreed to have the matter struck off the roll. As service had never been effected on the fourth applicants, they filed opposing affidavits in the main application. They wrote to respondent’s legal practitioners on 15 November 2017 advising them of this and that it was not necessary to apply to uplift the bar (as invited to do so by the first respondent) as no bar could have come into effect given that there had been no service. The applicants asked the first respondent to file answering affidavits and heads of argument otherwise an application would be made to have the application struck out for want of prosecution. There was no response and they waited for heads of argument to be filed. They later discovered that default judgment had been granted against the applicants on 3 January 2018 on 21 January 2018. The third and fourth applicants were not in wilful default. On 2 February 2018 they filed this application for rescission of default judgment.

The applicants aver that the first respondent lacks locus standi to bring these proceedings and that there are numerous disputes of fact ex facie the papers which cannot be resolved by way of application. They submitted that the applicants ought not to have resorted to motion proceedings. The applicants contended that  this matter has already been before the court on five previous occasions and is res judicata. Further, that  the matter has prescribed as the original agreement was signed in 2004 and prescribed three years on. The applicants insist in their papers that there was a house on the property contrary to what the said agreement states.

The second and third respondent did not defend the application. The first respondent will, for convenience, henceforth be referred to as the respondent. The respondent submitted that the first to third applicants are not properly before the court for the reason that they failed to file supporting affidavits to the application brought by the fourth applicant. The basis of the respondent’s opposition is that the applicants were in wilful default and that they have not proffered a reasonable explanation for the default. Further, that the applicants do not have a bona fide defence on the merits of the matter.

An applicant seeking to rescind a default judgment is required to show good and sufficient cause for rescission of judgment in terms of r 63 (2). In Chihwai Enterprises (Pvt) Ltd v Atish Investments (Pvt) Ltd 2007 (2) ZLR 89 (5).

The court defined the concept of good and sufficient cause and laid out the requirements for an application for rescission of judgment as follows,

a)	that there is a reasonable and acceptable explanation for the default

b)	bona fides of the application and

c)	that the applicant has a bona fide defence on the merits which prima facie, has some prospects of success.	See also Ndebele v Ncube 1992 (1) ZLR 288 (S), Zimbabwe Bank Corporation v Masendeke 1995 (2) ZLR 400, Sangore v Olivine Industries (Pvt) Ltd 1988 (2) 400.

These factors are required to be considered cumulatively. The traditional approach to applications of this nature is that if the explanation for the default is unreasonable, that is the end of the matter, the indulgence of rescission will be refused. See Karimazondo v Standard Chartered Bank 1995 (2) ZLR 404 (S) where the court held that wilful default disqualifies an applicant from rescission of judgment. There has been a shift in the approach to applications of this nature. A more practical approach has been adopted where rescission will be granted in deserving cases. The courts will grant rescission even in cases where the applicant has been shown to have been in wilful default but it has been shown that the applicant has a bona fide defence on the merits which carries prima facie prospects of success. The courts tend to place more emphasis on the merits of the case. See Deweras Farm (Pvt) Ltd and Ors v Zimbabwe Banking Corporation 1998 (1) ZLR 368 (SC) where the court remarked as follows,

“That, the High Court Rules require only good and sufficient cause on the basis of rescission 	of judgment. This gives the court a wide discretion of what constitutes sufficient cause to 	justify the grant of the indulgence. Even where there has been wilful default there may still be 	good and sufficient cause, for instance, “good and sufficient” might arise from the 	motive behind the default. ‘’

In considering whether a default is wilful, the court considers “whether the default is a deliberate one, i.e. whether  a defendant with full knowledge of the set down and of risks attendant on his default, freely takes a decision to refrain from appearing” See Neuman (Pvt) Ltd v Marx 1960 R & N 166.

According to Herbstein and van Winsen 3 ed at p 37,

“The applicant must show that he has a bona fide defence to the plaintiff’s claim, it being sufficient if he sets out averments which  if established at the trial would entitle him to the relief asked for, he need not deal with the merits of the case or produce evidence that the probabilities are actually in his favour.”

A court dealing with an application for rescission of judgment need only look at the averments made with respect to the merits of the matter. It need not call for evidence in support of the merits of the case. It is sufficient if the applicant sets out averments which if established at the trial would entitle him to the relief he seeks.

Where an application for default judgment has been set down on the unopposed roll on the premise that a party is barred, a respondent may, unless the matter has been withdrawn or there is a consent to removal of the bar, only appear before the court for purposes of postponing the application, removing it off the roll or striking it  off the roll This to enable him to file  an application for upliftment of the bar. The litigant  who is barred may not be heard on the merits. A litigant who is barred  in these circumstances is still required to file an application for upliftment of bar even where he believes that he is not barred. He is required to show that he is not barred and  may not proceed and file a notice of opposition in the main application where the other party insists that he is barred. He  may not on his own decide that he is not barred and neglect to file an application for upliftment of bar. A party facing an application for default judgment has no luxury of deciding to ignore the application for default judgment on the basis that he believes that he is not barred or that it  lacks merit. He is required to explain his conduct by way of an application for upliftment of bar. Where he is advised, out of courtesy that the other party insists that he is barred and that if he fails to file the application for upliftment of bar, the other party will proceed to set down the mater for judgment, he risks a judgment being obtained against him if he continues to dispute the existence of an operative bar against him and declines or fails to comply with the rules. He must not cry foul if default judgment is eventually obtained against him. Where a party fails in these circumstances, to file an application for upliftment of bar, he remains barred, entitling the other party to  proceed and pursue the application for default judgment. Any notice of opposition filed in the main application has no effect of  barring  the other party  from enrolling the matter on the unopposed roll for default judgment.

The first to third applicants did not file supporting affidavits and are not properly before the court. The court will only make findings in respect of the  fourth applicant .The applicants applied for stay of execution pending the hearing of this application. An application for placement of a caveat over the property in dispute pending this application was also filed. The courts that dealt with these matters were not seized with applications for rescission of the judgment which is the subject of this application.  They were entitled to express their views over the conduct of the applicants and the merits of this application. They were not asked to determine the application before the court and did not make definitive findings on the question of the applicants’ default. This court is not bound by the observations made by these courts. It is only this court that has the mandate to make a definitive finding on the default enquiry and the merits of this application in terms of r 63. An interlocutory matter cannot dispose of the merits of the main matter. A court that deals with an application for rescission of judgement is not bound by views expressed by other courts over the question of default in interlocutory matters that are brought by the parties pending the determination of the application. I do not agree that this court cannot revisit the issue of the wilfulness of the default and the merits of this application.  All that this court can do is to have regard to the views of the other courts. This case is distinguishable from the case of Galante v Galante HH 31/2002. In that case the question of the domicile of the defendant had been determined in earlier proceedings. The court held that the issue could not be raised again. In this case the issue of the default of the applicants was not determined in the applications for stay of execution or registration of a caveat.

The respondent claims that it  served the fourth applicant with the application  at its registered office. The applicant maintains that it did not see the application .There are affidavits from employees of fourth applicant who state that they were never served with the application. The respondent was aware that the applicants were at all material times represented by Matizanadzo and Warhurst. It ought to have served the application                        at its legal practitioner’s offices. It ought to have occurred to the respondent when it did not receive opposing papers that there was something amiss and made enquiries with the applicant’s legal practitioner. I am not satisfied that there was service of this application. Even assuming I am wrong in this finding, there is no suggestion that the applicant deliberately abstained from adhering with the rules of court when it failed to file                                   opposing papers. I find therefore the applicant’s explanation that it did not become aware of the service of process reasonable and acceptable. I am unable to say that the fourth applicant was in wilful default at this stage of proceedings. I find the applicant’s explanation for the failure to file opposing papers acceptable and reasonable.

The developments that took place after the matter was struck off the roll are of great concern to the court. The application for default judgment was struck off the roll in order to give the respondent an opportunity to defend the application. The respondent’s counsel wrote to the applicant’ legal practitioners on 23 November 2017 and advised as follows,

“We refer to the above, matter and to events of yesterday 22 November 2017 at the motion court. You advised that you represent Brenda Leeper and Couch Grass (Pvt) Ltd, the third and fourth respondents in the above –referred matter. You indicated of your client’s application for upliftment of bar and condonation by no later than 28 November failing which we shall proceed to reset the matter on the unopposed roll….”

The fourth applicant ignored the warning and did not file any application for upliftment of bar insisting instead that it was not barred. It filed notices of opposition in the main application and insisted that the respondent should file its answering affidavit. For as long as the other party insisted that there was a bar in place, the  applicant was required in terms of the rules to attend to the upliftment of bar. The applicant had no entitlement to file opposing papers in the main application without uplifting the bar. There being a dispute over the existence of a bar, the dispute over the operation of the bar was, required to be decided by the court, hence the need to file the application for upliftment of bar as suggested. A party barred is not entitled to  file a notice of opposition when there is insistence that it is barred. The fact of filing an application for upliftment of bar is not in itself an acceptance that a party is barred.

The applicant’s attitude of refusing to apply for upliftment of bar upon invitation to do so by the respondent’s legal practitioner is of grave concern to the court. The applicant failed to comply with the rules of court resulting in default judgment being obtained against it. The  applicant through its  legal practitioner is to blame for the default judgment obtained against it. Such  conduct calls for punitive measures. In future, it may be appropriate in such cases to mulct the legal practitioners concerned with costs personally despite that they may have been correct on the legal position regarding the bar. The applicant’s legal practitioner showed a total disregard of the rules of the court. However, the court is not prepared to visit the sins of the legal practitioner on the client considering that the applicant has adequately explained the circumstances surrounding the bar.

When the record of proceedings was placed before MUSHORE J, the  opposing papers filed by the applicants and  the letter of Mr Warhurst protesting the manner of service had been removed from the record. The applicant alleges that this was done so as to give the impression that the application was unopposed. The suggestion by the applicant is that one of the clerks in the registry temporarily removed these when the application was placed before the judge who presided over the matter. Further,  that these documents were not included in the “amended index’’ painting the picture that the matter was unopposed thereby ensuring that default judgment was granted. We do not expect legal practitioners to select documents to place before the court when they prepare records. Every pleading and correspondence that has been filed in respect of a matter must be brought to the attention of the court whether filed procedurally or not. The appearance is that the respondent snatched at a judgment. The allegations against the clerks ought to have been investigated by the Registrar’s office.

Default judgment was granted on 3 January 2018. Barely ten days later, on 2 February 2018 had the applicant filed this application. Despite the earlier discourse in refusing to apply for upliftment of bar, I view that the applicant is genuine when it says that it wants to have its day in court. This is a long drawn dispute that the applicant has always defended. It acted swiftly after it obtained knowledge of the default judgment.

The applicant raised numerous defences.  The applicant submitted that the respondent  was not incorporated in 2004 when it alleges that its cause of action arose.  It alleges that the company was only registered in September 2016 as evidenced by a certificate of incorporation and that its cause of action could not have arisen in 2004.  If it is established at the trial that the respondent was not incorporated in 2004 when the respondent alleges that its cause of action arose, it means that a company registered in 2016 would not have the right to sue as far back as 2004.  The first respondent would be lacking in locus standi.

The applicant claims that the relief sought is identical and the cause of action the same as in HC 2017/14. The applicant submitted that the applicant under HC 2017/14 was Phillipus Naude t/a Samalyn Investments. Phillipus Naude is a director of Samalyn Investments and its company secretary. They assert that Phillipus Naude decided after the dismissal of the matter to come back to court on identical facts through the respondent which was only incorporated in 2016.  The respondent contends that the case does not involve the same parties and the same cause of action. The appearance is that HC 9866/17 has already been dealt with under HC 2017/14 which was dismissed and may be res judicata. This is a matter that will need to be decided by the trial court. If the applicant establishes this averment, it will be entitled to the relief sought.

The cause of action is the alleged agreement of sale dated 2004. The certificate of incorporation of Samalyn Investments (Pvt) Ltd shows that it was incorporated in 2016 but purportedly entered into the agreement of sale in 2004. There is a suggestion that the signature of the seller was forged. The allegations needs to be fully ventilated. The property was bought at $Z1.2 billion. The applicant argued the order of Mushore J ordered recovery without revaluation or proper quantification. That the  default order was granted in a different currency without revaluation or proper quantification and  the problem is that the court did not determine that figure and it will be difficult for the Sheriff to determine the figure for purposes of execution .It may well be that there may be difficulties in enforcing this order.

The facts indicate that this application was brought 13 years after the agreement of sale. There are assertions that prescription was interrupted. The respondent claims that this is a rei vindicatio claim to which prescription does not apply. The applicant argued that once transfer has been effected, the real owner cannot vindicate it and relied on the case of Nzara v Kashumba SC 18/18 for that proposition. The matters involving the parties are many and will require a meticulous check of the events leading to this application. There is a dispute between the parties which a court properly seized with the matter must determine. Once again, if the averment is proved, the respondent would not be entitled to the relief sought.

The applicant affirms that there was an agreement of sale whilst the respondent insists that there was none. The applicant  challenges the documents relied on by Mr Naude. The issues regarding the validity of this agreement  and the exigencies of bringing an application to enforce an agreement of  sale with a non-existent company is best dealt with on the merits in the main matter. The respondent argued that the transfer of title to applicant is defective. It also asserts that the sequence of transfer was not followed. It contended that the transfer was done without paying capital gains tax clearance certificate and that the transfer is illegal and void ab initio. The respondent asserts that the property was transferred contrary to a caveat and that the applicant cannot successfully challenge this illegality. The applicant maintains that the caveat was placed by a non -existent person and that the caveat is one that notes interest in a property and does not stop title. The point is arguable.

This is a complex matter where evidence will require to be led to deal with all the disputes highlighted. There are disputes which a court properly seized with the matter must determine. I am satisfied that the applicant has a prima facie defence to the claim on the merits which carries good prospects of success if the matter proceeds to trial.  In fact, both parties have arguable cases .The applicant has shown good and sufficient cause for rescission of judgment. The justice of the matter demands that the parties ventilate the matter fully on the merits. The applicant is entitled to the order sought.

I find no basis for an order for costs de bonis propriis against Mr Sheshe as no grave findings of improper dealings calling for such a scale of costs have been made by the court.

Consequently it is ordered as follows:

The default Judgment granted in HC 9866/17 on 3 January 2018 be and is hereby rescinded.

The fourth applicant is to file its opposing papers under HC 9866/17 within 10 days of being aware of this judgment. Thereafter, the application will proceed in terms of the rules.

The respondent is to bear the costs of this application.

Matizanadzo & Warhurst, applicant’s legal practitioners

Stevenson & Associates, respondent’s legal practitioners