Authorizing resolution may be attached in replying papers provided allegation re authority made in founding papers

Delay in launching rescission application

CASE NO.2391/96

IN THE MATTER BETWEEN:

SHISELWENI INVESTMENTS (PTY) LTD APPLICANT

AND

SWAZILAND DEVELOPMENT AND RESPONDENT

SAVINGS BANK

CORAM : MASUKU J.

FOR APPLICANT : MR P.M. SHILUBANE

FOR RESPONDENT : MR L.N.M. KHUMALO

JUDGEMENT

24/09/1999

By application in the long form, dated 12th July, 1999, the Applicant seeks the following relief:

be rescinded alternative (sic) be varied as follows: “Payment of the sum of

E150,000.00

it has with respondent at its Nhlangano Branch from 5th February, 1990

to date within 21 days.

upon debatement of the account.

The Affidavit in support of the application is deposed to by Mr P.M. Shilubane, the Applicant’s attorney of record. The Respondent joined issue and raised the following points in limine, which are the subject of this judgement, namely;

(i) that the application is not properly instituted as it is purportedly based on the

Founding Affidavit of Mr P.M. Shilubane who has no authority, and who has

given no evidence of authority to institute the proceedings on the Applicant’s

behalf and to represent the Applicant in such application so as to depose

to a Founding Affidavit on the Applicant’s behalf.

common to the parties. The Respondent states that it is unaware of any

mistake committed by it whatsoever.

it is clear that the Applicant accepted the judgement and proceeded to

settle the same. In the circumstances the rescission should be refused.

I shall now deal with the points in limine seriatim and as raised by the

Respondent’s Answering Affidavit.

(i) Mr Shilubane’s authority to depose to the Affidavit.

The Respondent’s contention is that Mr Shilubane had no authority to represent the Applicant in the absence of a Company Resolution. It is common cause that the Applicant, in response to the attack on Mr Shilubane’s authority, annexed a resolution to its Replying Affidavit, marked Annexure “PMS 9”. The said resolution, dated 12th July, 1999, reflects that the Applicant’s Directors resolved to institute an action in this Court to rescind the judgement obtained by the Respondent for E212,604.35, dated 24th January, 1997. It also authorises Mr Shilubane, in his capacity as the Applicant’s attorney, to sign all documents necessary to give effect to the resolution.

Mr Khumalo contends that the resolution is ineffectual because it was filed in a replying affidavit and must be disregarded on the principle that a party stands or falls on the contents of the Founding Affidavit. In this regard, the Court was referred to a

locus classicus judgement of Dunn J. IN ROYAL SWAZILAND SUGAR CORPORATION LIMITED v SWAZILAND AGRICULTURAL PLANTATIONS AND WORKERS UNION & 8 OTHERS CASE NO.2959/97, which deals with striking out new matter which ought to have been included in the Founding Affidavit.

In contra argument, Mr Shilubane stated that there is no need to file a resolution

authorising him to act. In support of his contention, he referred the Court to the case of CINELAND (PTY) LTD v LICENSING OFFICER, HHOHHO DISTRICT, AND OTHERS 1979 – 81 SLR 106, per Nathan C.J. (as he then was). Mr Shilubane further argued that the case of ROYAL SWAZILAND SUGAR CORPORATION v SAPWU (supra) was inapplicable in casu, because it deals with making out a case in the replying affidavit i.e. setting out the relevant facts to found a cause of action. A company resolution does not fall within the ambit of the allegations liable to be struck out as set out in the ROYAL SWAZILAND SUGAR CORPORATION case (supra), he further submitted.

In the CINELAND (PTY) LTD v LICENSING OFFICER case (supra) Nathan C.J. stated as follows at page 109 H.

“A power of attorney or resolution is not necessary in motion proceedings

unless the applicant’s authority to act is directly placed in issue – see

Herbstein and Van Winsen “The Civil Practice of the Superior Courts in

South Africa 2nd Ed p 115 (a resolution was in fact filed during the course

of the hearing) (my emphasis).

In NATIONAL HOUSING BOARD TENANT’S ASSOCIATION v NATIONAL HOUSING BOARD, AND TWO OTHERS, CASE NO. 977/92 (unreported), Hull C.J., (as he then was), stated as follows at page 5,

“As a matter of law, the annexing of resolution is not essential, and

in the present instance, it is not necessary: see MALL (CAPE) (PTY)

LTD v MERINO KO-OPERASIE BPK 1957 (2) SA 347 C”.

In light of the foregoing, it is clear that the filing of a resolution is not necessary.

Where the Respondent puts the question of the applicant’s authority in issue, then the Applicant is entitled to furnish the resolution, even if in a Replying Affidavit. Indeed in the CINELAND (PTY) LTD case, the resolution was filed whilst the matter was being heard.

The proper approach to be adopted in my view, was set out with absolute clarity by

Watermeyer J. in the MALL (CAPE) (PTY) LTD case (supra) at page 352 A - B.

“Each case must be considered on its own merits and the Court must

decide whether enough has been placed before it to warrant the

conclusion that it is the applicant which is litigating and not some

unauthorised person on its behalf. Where, as in the present case, the

Respondent has offered no evidence at all to suggest that the applicant

is not properly before Court, then I consider that a minimum of

evidence will be required from the applicant.”

In casu, I entertain no doubts that it is the Applicant that is litigating. An allegation of authority is made in the Founding Affidavit and when that was placed in issue,

the Applicant filed the resolution in its reply. Like in the MALL (CAPE) (PTY) LTD case, the Respondent has in my view brought no evidence at all to suggest that the Applicant is not properly before Court. If there was a doubt, the authority filed subsequently settles it.

The RSSC case is in my view inapplicable to this case. In that case, the Applicant had failed to make out a case in the Founding Affidavit and only sought to make the relevant allegations, in the Replying Affidavit. The Court correctly struck out the offensive portions thereof. In casu, the necessary allegation of authority was made in the Founding Affidavit. All that the Applicant did in reply was to furnish the document in proof of the allegation contained in paragraph 1 of the Founding Affidavit, after the Respondent put the question of authority in issue.

I must also point out that the question of filing company resolution cannot be equated to an allegation that can be held to found a cause of action such that if one filed the authority in reply, it can be the subject of a Notice of Motion to strike out. This is an unduly technical point to take and has no substance in my view.

Regarding Mr Shilubane signing the Affidavit, one only needs to relate an issue that Sapire C.J. has repeatedly mentioned in many recent judgements, namely, that no one needs authority to make an affidavit. The giving of evidence, being a positive act of the Deponent, done on his own volition. There may also be cases where a Director or other officer of a company is not privy to the facts of a matter, such that another person, who may not even be a company official deposes to the Founding Affidavit because the facts fall within his personal knowledge. It is in this light that Mr Shilubane’s signing of the Affidavit must be viewed. See JAMESON MNCINA v JAMES MAJAHENKHABA DLAMINI & ANOTHER CASE NO.1588/93. It is also noteworthy that Mr Shilubane was authorised by the Applicant’s directors to swear to the affidavit as reflected in annexure “PMS9”.

In my view, the Respondent’s first point in limine must fail.

In the founding Affidavit, the Applicant stated that the application was moved in terms of the provisions of Rule 42 (1)(c) at paragraph 8. However, in the Replying Affidavit, the Applicant changed and said that the application was actually moved in terms of the provisions of Rule 42 (1) (a) and the common law. This appears to be prejudicial to the Respondent because the Respondent was not able to respond to it on Affidavit. That notwithstanding, Mr Khumalo addressed me fully on the Replying Affidavit and I formed the view that the prejudice was thus ameliorated.

Rule 42 (1) (a) reads as follows:-

“The Court may in addition to any other powers it may have, mero motu or upon the application of any party affected, rescind or vary an order or judgement erroneously sought or granted in the absence of the party affected thereby;”

In BAKOVEN LTD v G.J. HOWES (PTY) LTD 1992 (2) 466 at 471 F, Erasmus J. held that a judgement may be set aside in terms of Rule 42 (1) (a) only if the Court has made a mistake in a matter of law appearing on the proceedings of a court or record: In deciding whether a judgement was erroneously granted, the Court is confined to the record of proceedings. See BAKOVEN LTD v G.J. HOWES

(PTY) LTD (supra) at page 471 F – G. In that case, it was also held that Rule 42 (1) was designed “to correct expeditiously an obviously wrong judgement or order”.

Mr Khumalo argued that on the papers the Applicant failed to make out any case for error in terms of Rule 42 (1)(a). That being the case, when a judgement was not erroneously granted, an application for rescission in terms of Rule 42 will not succeed. See DEWET & OTHERS v WESTERN BANK LTD 1979 (2) SA 1031 at 1038 B – 1039H. Mr Shilubane argued that the error relied on was that the return of service reflected that service of the Simple Summons was effected on Mrs Edems and not it terms of the provisions 4 (2) (e) of the Rules of Court.

In response, Mr Khumalo argued that there was no substance in this argument because although the return of service reflects personal service, it continues thereunder to state as follows: - “served to Mrs Edems one of the directors”. This is not denied. Mr Khumalo argued that the Court should not unduly be fastidious by insisting on form, oblivious to the substance, which fully complies with the requirements of Rule 4 (2)(e). I agree. It is clear from the return of service that service was effected on the Applicant by serving the Summons on one of the Applicant’s Directors. This would not qualify for the criteria set out in the BAKOVEN case (supra). The object of the Rule on service is to ensure that the Defendant becomes aware of the action it faces. There is no allegation by the Applicant that it never became aware of the Summons, albeit not served strictly in terms of Rule 4 (2)(e).

It is worthy of note that the only Return of Service in the Court file and which the Court must have considered in granting the default judgement reflects that service of the Summons was effected on the 28th November, 1996, by serving the same on one Marlene Serino at the Applicant’s premises in Nhlangano. This was again filled under the wrong part of the Return of Service. Its substance however is in keeping with service on a company. It is also noteworthy that it appears that Serino is the very one who signed the Company Resolution annexed and marked “PMS9.”

In view of the foregoing, I find that there was no error in the return of service such as to disturb the Court’s granting of the default judgement.

Mr Shilubane also argued that the judgement was obtained fraudulently and should therefore be rescinded in terms of Rule 42 (1) (a). I am disinclined to agree with Mr Shilubane. Fraud was not pleaded at all in the papers. It has been stated time and again that charges of fraud are, in their nature of the greatest gravity and should not be lightly made, and when made should not only be made expressly but should be formulated with the precision and fullness demanded in a criminal case. See SCHIERHOUT v UNION GOVERNMENT 1927 AD 94 @ 98; JAMALODIEN v AJIMUDIEN 1917 CPD 297 @ 295; ESTATE SCHICKERING v SCHICKERING 1936 CPD 269 at 271 – 2; and WASTON v HUNTER & ANOTHER 1948 (3) SA 110B

Even a cursory glance at the Applicant’s papers clearly shows that it has failed to allege fraud at all in its papers, let alone with the requisite precision stated in the above cited cases. Mr Shilubane only introduced fraud in argument. I must further add that a party seeking to rely on fraud must show that he was unaware of the fraud until after judgement was delivered – see PORT EDWARDS TOWN BOARD v KAY & ANOTHER 1994 (1) SA 690, AT 703 – 705. In casu, the Applicant was served with the summons and should then have realised the fraud. Subsequent to service of Summons, default judgement was entered and no defence was raised thereto. I shall deal with this aspect in the last leg of the points in limine. The issue of fraud must therefor fail; suffice to mention that fraud constitutes a separate ground for rescission and does not fall under Rule 42 (1) (a).

The Applicant’s papers also reflect that the rescission was also in terms of the common law. To obtain rescission at common law, the Applicant for rescission must:-

facie carries some prospect of success. See LEONARD DLAMINI

v LUCKY DLAMINI CASE NO. 1644/97 (per Dunn J, unreported).

Mr Shilubane did not address me on rescission under the common law. I have also considered the Applicant’s papers and have come to the view that the Applicant has dismally failed to substantiate a case for relief under common law.

In the result, I will uphold this point in limine.

Mr Khumalo argued that the Applicant, on its own version became aware of the judgement in April, 1998, and proceeded to settle it. In Mr Khumalo’s submission, the Applicant accepted the judgement and cannot, sixteen months later be allowed to rescind that judgement. In Mr Khumalo’s submission, the application for rescission should have been moved within a reasonable time.

Mr Shilubane argued that the Applicant never accepted the judgement as granted by the Court but it accepted the judgement insofar as it was to the amount of E150,000.00.

In my view, the question to be decided is whether the application for rescission was made within a reasonable time. In this regard, I find it apposite to address this question by looking at two events, namely, the service of the Simple Summons in October/November, 1997, which I have held was in keeping with the Rules of Court, save that the return of service was filled in the wrong column. The second event relates to the Applicant’s conduct after becoming aware of the judgement in April, 1998.

It is common cause that the Applicant was duly served with the Simple Summons but did not contest the action. It did not claim that the money claimed was incorrect or, fraudulently sought. It was content to have the judgement entered against it. After becoming aware of the default judgement in April, 1998, the Applicant approached the Respondent for purposes of settling the matter and now wants to rescind the judgement, sixteen months later.

IN FIRESTONE South Africa (PTY) LTD v GENTICURO A.G. 1977 (4)

SA 298 at 306 F – G (AD), Trollip J.A. propounded the law as follows: -

“The general principle, now well established in our law, is that, once a Court

has duly pronounced a final judgement or order, it has itself no authority

to correct, alter or supplement it. The reason is that it thereupon becomes

functus officio: its jurisdiction in the case having been fully and finally

exercised, its authority over the subject-matter has ceased.... There are,

however, a few exceptions to that rule which are mentioned in the old

authorities and have been authoritatively accepted by this Court. Thus,

provided the court is approached within a reasonable time of its pronouncing

the judgement or order, it may correct, alter, or supplement it in one or more

of the following case:.....”

In FIRST NATIONAL BANK OF S.A. LTD v VAN RENSBURG N.O. and OTHERS 1994 (1) SA 677 at 681, Eloff J.P., approved the above statement by Trollip J.P. and stated that the reasoning to the effect that rescission be applied for within a reasonable time applies with equal force to Rule 42 (1) applications. He proceeded to state thus: -

“It is in the interest of justice that there should be a relative certainty

and finality as soon as possible concerning the scope and effect of

orders of Court. Persons affected by such orders should be entitled within a

reasonable time after the issue thereof to know that the last word has been

spoken on the subject. The power created by Rule 42 (1) is discretionary...

and it would be a proper exercise of that discretion to say that, even if

the appellant proved that Rule 42(1) applied, it should not be heard to

complain after the lapse of a reasonable time. A reasonable time in this

case is substantially less than the three years referred to.”

In ROOPNARIN v KAMALAPATHY AND ANOTHER 1971 (3) SA 387, a period of six (6) months was held to have been unreasonably long as to have been inexcusable. In that case, James J.P. proceeded to state that the time period set out in Rule 31(3) (b) (i.e. twenty-one days) is an indication of what a reasonable time within which to seek rescission is.

In PROMEDIA DRUKKERS & UITGEWERS (EDMS) BPK v KAIMOWITZ AND OTHERS 1996 (4) SA 411 at 421, VAN RENEEN J, also stated at F.

“What is required is that the application should be brought within a

reasonable time. What is reasonable time depends on the facts of the

individual case”.

Turning to the facts of the instant case, the Applicant delayed for sixteen months without applying for rescission. In FIRST NATIONAL BANK OF S.A. LTD v VAN RENSBURG (supra), where the delay was three years, Eloff J.P. held that a reasonable time is “substantially less than three years”. I am of the view that sixteen months is an unreasonably long period and is long enough to preclude the Applicant from obtaining rescission. Parties who obtain judgements in their favour must know as soon as practicable that a final word thereon has been spoken. They must not be held in tenterhooks by the Defendant for unreasonably long. If the Defendant, subsequently applies for rescission, after an unreasonably long time that application must be refused even if an error has been discovered in the judgement. See FIRST NATIONAL BANK OF S.A. LTD v VAN RENSBURG N.O. (supra).

No other inference can be drawn from the Applicant’s inaction than that it accepted the judgement. If it did not accept the judgement, then it is guilty of inordinate delay such that the application should be refused.

The Respondent’s last two points in limine are therefor upheld with costs.

T.S. MASUKU

JUDGE

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