DUBE J: This is an application for rescission of a judgment
of MTSHIYA J under HC 2439/11.
The salient facts of this application are as follows.
The parties entered into an instalment sale of land for $658 000-00 payable in
6 months. The applicant paid $360 000-00. The respondent subsequently
cancelled the agreement of sale on the basis of non-payment of the full
purchase price. The applicant issued summons claiming transfer of the
land purchased upon payment of the balance of the purchase price or
alternatively restitution of monies paid towards the purchase price. The
matter was set down for a Pre-Trial Conference on 19 February 2013. The
applicant did not turn up at the hearing on time and default judgment was
granted against it.
The applicant's explanation for the default is that the
matter was diarised by its legal practitioner's secretary for 9:30 am on 19
February 2013. At about 9:15 am on the appointed date, counsel for the
applicant received a call from respondent's legal practitioner, Mrs Matshiya
,who indicated that she was waiting at court and that the matter was set down
for 9 am. Counsel for the applicant consulted with Mr Hashiti
who had appeared on his behalf on a previous occasion and he confirmed that the
matter had been set down for 9 am. He together with Mr Hashiti rushed
to court. Applicant's representative was already at court. When
counsel arrived at the judge's chambers at 9:30 am, the matter had already been
dealt with and default judgment granted against the applicant. The
applicant maintains that the respondent snatched at a judgment because counsel
proceeded and applied for default judgment despite that applicant's counsel was
on his way to court. Applicant insists that it was not in wilful default
as the default arose out of error and oversight and not out of the making of
the applicant. The applicant submitted that mistakes arising out of
misdiarisation of matters do occur and are common. It contended that this was a
minor transgression for which the applicant should not be penalised. The
applicant avers that it has a bona fide defence on the merits as the
sale was not properly cancelled and that effectively there was no cancellation
of the sale. The applicant argued that the agreement between the parties
is still operational.
The respondent argued that the applicant was in wilful default. It
refuted allegations that respondent's counsel snatched at a judgment because
she telephoned applicant's counsel to inform him of the hearing. Respondent
submitted that default judgment was granted because the applicant did not
attend resulting in the court directing the parties to be ushered into the
judges' chambers for the matter to be dealt with. This was after
applicant's counsel had promised to call back and failed to do so as
promised. The respondent further submitted that the applicant has no bona
fide defence on the merits and urged the court to dismiss the
application. It submitted that the sale was cancelled for failure to pay
the full purchase price and its failure to develop the land and ultimately that
it is not entitled to receive transfer of the land. It submitted that the
alternative claim has no prospects of success because the respondent was
entitled to set off amounts outstanding for rates owed by the applicant against
part of the purchase price paid.
An applicant seeking to have a judgment rescinded in terms
of order 9 r 63(2) is required to show the existence of “good and sufficient
cause” for the rescission. The following are the factors that the court
is expected to consider:-
1. the
applicant's explanation for the default.
2. the bona
fides of the application to rescind the judgment.
3. the bona
fides of the applicant's defence on the merits of the case.
See Deweras Farm (Pvt) Ltd and Ors v Zimbabwe
Banking Corporation 1997 (2) ZLR 47 (HC).G.D. Haulage (Pvt) Ltd.
v Mumugwi Bus Services (Pvt) 1979 RLR 447, Duprez v Hughes
R&N 706 (SR).
The court will consider cumulatively these requirements in
determining whether or not good and sufficient cause has been shown for
rescission of the judgment.
In considering the explanation for the default, the court
is required to consider the reasonableness of the default. In Zimbank
v Masendeke 1995 (2) ZLR 400 (S) the court in defining the concept of
wilful default remarked as follows:
“Wilful default occurs when a
party with the full knowledge of the service or set down of the matter, and of
the risks attendant upon default, freely takes a decision to refrain from
appearing.”
The default is attributed to the applicant's legal
practitioners who misdiarised the matter. The misdiarisation was simply a
mistake. I do not read anything else into the circumstances. The court in Zimbabwe
Banking Corporation v Masendeke (supra), in dealing with
mistakesremarked as follows,
“Here there was a mistake.
It was clearly a mistake. Zimbank had no possible reason to allow the
claim against it to go by default. No one and in that term includes Mr Moyo
of Chikumbirike and Associates who acted for Mr Masendeke, could
reasonably have thought otherwise”
These sentiments are equally applicable to this case.
Counsel for the applicant conceded that applicant's
explanation is reasonable and that misdiarising of matters happens in practice.
I am unable to find that the applicant with the full knowledge at the
fact that the matter had been set down for 9 am and being aware of the risks
attendant upon default, freely took a decision to refrain from attending the
Pre-Trial Conference. This assertion is not supported on the facts. The applicant's
counsel hurried to court the moment it was advised of the hearing. His
client was already at court. Having lodged its claim and pursued it this
far, there is nothing to suggest that the applicant had abandoned its claim and
would allow its claim to go by default.
I am not persuaded that respondent's counsel snatched at a
judgment. If she had desired to do that she would not have advised applicant's
counsel of the hearing. It is unclear how the matter ended up being dealt
with before applicant arrived. The indications are that it is the court
that directed that the parties be ushered into the judge's chambers and let the
matter proceed, resulting in the default.
This default is attributable to the applicant's legal
practitioners. Case authority is clear that wilful disdain of the rules of the
court by a party's legal practitioner will be treated as non-compliance or
wilful disdain by the party himself. See Saloojee & Anor v Minister
of Community Development 1965 (2) SA 135. I have not found that the
applicant's legal practitioners freely took a decision not to attend the Pre-
Trial Conference. The court has also considered that the misdiarisation
arises out of an administrative error which amounts to ordinary negligence and
not gross negligence and therefore does not amount to wilfulness. There
is no basis for visiting the sins of the legal practitioner on the client. I
find the applicant's explanation for the default reasonable and
understandable.
I am satisfied that the applicant is bona fide
when it avers that it is genuinely pursuing this matter and wants to see it to
finality. The applicant immediately noted an application for rescission
of judgment and within 7 days of the default order. Applicant's counsel
rushed to court the moment he was advised that he was required at court.
This sort of conduct is not consistent with someone who is acquiescing to
judgment.
The respondent claims transfer of the land to it upon payment of the full
purchase price in the main claim. Termination of instalment sales is
governed by s 8 of the Contractual Penalties Act [Cap 8: 04] which
reads as follows:
“8(1) No seller
under an instalment sale of land may, on account of any breach of contract by
the purchaser—
(a) enforce a penalty
stipulation or a provision for the accelerated payment of the purchase price;
or
(b) terminate the contract; or
(c) institute any proceedings for damages;
unless he has given notice in
terms of subsection (2) and the period of the notice has expired without the
breach being remedied, rectified or discontinued, as the case may be.
(2) Notice for the purposes of subsection (1) shall—
(a) be given in writing to the purchaser; and
(b) advise the purchaser of the breach concerned;
and
(c) call upon the
purchaser to remedy, rectify or desist from continuing, as the case may be, the
breach
concerned within a reasonable
period specified in the notice, which period shall not be less than—
(i) the period fixed for the purpose in the instalment sale of the land
concerned; or
(ii) thirty days;
whichever is the longer period”.
Subsection 8 (2) (c) requires a seller to call upon the
purchaser to remedy the breach within a reasonable period specified in the
notice which shall not be less than thirty days. The applicant maintained that
the respondent failed to comply with mandatory provisions of s 8 (2) (c) in
that it cancelled the sale with immediate effect. That the applicant was
not given an opportunity to remedy the breach. The respondent argued that the
requirement is not mandatory and further that it had substantially complied
with the requirements of s 8.
No notice to remedy the breach was given in terms of the
act. It appears to me that the cancellation of the sale may not have been
done in accordance with the law. My view is that the requirement to
give notice which should not be less than 30 days is mandatory because of the
use of the word “shall”. I have misgivings about suggestions by the
respondent that the applicant was given in excess of 4 months to remedy the
breach. I am not convinced that the letters written to applicant a few months
before the cancellation constitute notice to remedy the breach and that the
respondent substantially complied with s8. The notice to remedy the breach is
required to be part of the notice of cancellation. Communication to the
applicant that he was in breach and demands made for payment before the notice
of cancellation do not suffice for purposes of s 8. Section 8 prescribes
what should be contained in the notice. The notice falls far short of
that. The claim for cancellation is linked to the right to take transfer
of the property. Once the cancelation is declared irregular, the
applicant would be entitled to transfer of the land upon payment of the full purchase
price. The claim for specific performance is therefore likely to succeed.
The respondent has refused to reimburse half the purchase
price paid and costs incurred in surveying the land. That is the subject
of the alternative claim. The respondent initially claimed that it was
entitled to set off the amount owed to the applicant against what the applicant
owes in outstanding rates. Respondent's counsel conceded that no
counterclaim had been filed and the defence of set off was not specially
pleaded and is therefore not available to it. No basis has been laid for
holding onto half the purchase price and other costs claimed. There seems to be
no merit in that claim.
I am satisfied that the applicant has shown “good and
sufficient cause” for rescission of judgment.
In the result it is ordered as follows:-
1. The
application for rescission of judgment is allowed.
2.
The judgment granted by MTSHIYA J under HC 3439/10 be and is hereby set aside.
3. Costs
shall be in the cause.
Mhishi Legal Practice,
Applicant's
Attorneys `
Mtetwa
and Nyambirai, Respondent's Attorneys
