Predynamic (Pty) Ltd v Kruger & Co Inc and Another (20457/2023) [2025] ZAWCHC 237 (2 June 2025)

IN
THE HIGH COURT OF SOUTH AFRICA

(WESTERN
CAPE DIVISION, CAPE TOWN)

Reportable/Not
Reportable

Case
no: 20457/2023

In
the matter between:

PREDYNAMIC
(PTY) LTD                                             

Plaintiff

and

KRUGER
& CO INC                                                       

First Defendant

FREDERICK
SAAYMAN                                                

Second Defendant

Neutral
citation: Kruger & Co v Predynamic (Pty) Ltd (Case
no20457/2023) [2023] ZAWCHC (02 June 2025)

Coram:
LEKHULENI J

Heard:
28 March 2025

Delivered:
02 June 2025

Summary: 
The plaintiff applied for default judgment against the first
defendant for costs due to the first defendant’s failure to file a
plea, despite receiving a notice of bar. In response, the first
defendant applied to have the bar lifted so that it could plead
to
the plaintiff’s summons. The court found that the first defendant
showed good cause for lifting the bar and granted the application.

The plaintiff’s request for a default judgment on costs was
dismissed. The costs of both applications will be costs in the cause.

ORDER

1             
The application for the upliftment of bar is granted.

2             
The first defendant is ordered to file its plea (should
it wish to
defend the matter) within five (5) days from date hereof.

3             
The application for default judgment on costs is
hereby dismissed.  

4             
The costs of both applications will be costs in the
cause.

JUDGMENT

LEKHULENI
J

Introduction

[1]       
There are two applications before this Court: an application by the
plaintiff for
default judgment on costs against the first defendant,
a firm of attorneys and an application by the first defendant for the
upliftment
of the notice of bar. In the application for default
judgment, the plaintiff seeks an order that the first defendant pays
the costs
of the main action, which has since been settled. The first
defendant opposed the default judgment application and applied for
the upliftment of the bar as it intends to defend the question of
costs that the plaintiff seeks against it in the main action.

Background
facts

[2]       
In 2015, the first defendant (Kruger & Co Inc) represented the
second defendant
in a claim that the second defendant instituted
against the Road Accident Fund (‘RAF’). The claim against the
RAF was ultimately settled, and the second defendant received a
capital payment from the RAF in the sum of
R3 050 000.00, pursuant to
an order of this Court taken by agreement on 3 June 2022. In June
2015, the second defendant and the
plaintiff were engaged in various
business transactions and ventures. As a result of those business
transactions, the second defendant
became indebted to the plaintiff.

[3]       
As it was anticipated that the second defendant would successfully
prosecute his claim
against the RAF, the first defendant was
approached by one C H Prinsloo, a director of the plaintiff, who
sought an undertaking
that the amount owed by the second defendant to
the plaintiff in respect of certain business transactions be paid
from the proceeds
of his RAF claim, should there be funds available
after the deduction of legal costs had been made. The first defendant
made such
an undertaking in writing to CH Prinsloo (“Prinsloo”)
of the plaintiff. In addition, in 2015, after the undertaking was
given, the second defendant executed an acknowledgment of debt
in
favour of the plaintiff for R1,000,000 plus legal costs related to
certain identified business transactions. In 2018, the plaintiff

obtained default judgment against the second defendant based on the
Acknowledgment of debt.

[4]       
After the second defendant’s claim with the RAF had been settled and
finalised, in
compliance with the undertaking, the first defendant
addressed a letter of discharge to Prinsloo, the import of which was
that
the first defendant would pay Prinsloo the amount of R600,000 in
terms of the undertaking and Prinsloo would, in turn, discharge
the
first defendant from its obligations and liability under the
undertaking. Prinsloo and the plaintiff were dissatisfied with
this.
The plaintiff took the view that the undertaking was not limited to
R600,000 but also included monies owed by the second
defendant to the
plaintiff pursuant to the judgment debt. The plaintiff and the
defendant thereafter engage each other in correspondence.

[5]       
The plaintiff demanded to know how the first defendant had arrived at
R600,000. The
plaintiff sought payment under the undertaking of the
full amount due to it, including that which was due in terms of the
judgment
debt arising from the Acknowledgment of debt. The first
defendant’s position was that it was largely immaterial how the sum
of
R600,000 was computed in that the undertaking, which defined the
full extent of the first defendant’s obligations to the plaintiff
and
or Prinsloo, was in any event limited to the amount of R600,000.

[6]       
In November 2023, the plaintiff instituted action against the first
and second defendants.
The plaintiff sought confirmation that the
undertaking bound the first defendant and sought information
concerning the amount the
RAF awarded to the second defendant and the
deductions made therefrom. The plaintiff also sought payment of the
full balance after
deductions held in trust by the first defendant on
behalf of the second defendant or the R600,000, whichever was the
greater. The
first defendant held the sum of R1 366,200.98 in trust,
which was the net amount received for the second defendant from the
RAF
after the deduction of attorney and client costs, interest, loans
made, and all expenses payable.

[7]       
In its summons, the plaintiff contended that it was entitled to the
full amount held
by the first defendant in trust for the second
defendant. The first defendant filed a notice of intention to defend
the plaintiff’s
claim on 22 November 2023. According to the first
defendant, the second defendant contended that the plaintiff had
failed to comply
with its obligations in terms of the transaction
detailed in the undertaking. As such, there was no amount due
thereunder. The
first defendant pointed out that the undertaking
provided that payment would only be made if there was indebtedness
when the second
defendant’s RAF claim was finalised. Furthermore, the
first defendant contended that the undertaking was only limited to
R600,000.

[8]       
The parties did not agree on the total sum that must be paid to the
plaintiff in terms
of the first defendant’s undertaking. On 13
February 2024, the plaintiff delivered a demand for plea. The first
defendant asserted
that while faced with these competing claims,
which it could not resolve and being of the view that the main action
was a dispute
between the plaintiff and the second defendant and
desiring only to comply with its own undertaking, it (the first
defendant) launched
interpleader proceedings in respect of the funds
on 19 February 2024. According to the first defendant, it took the
view that the
interpleader proceedings would resolve the matter
finally.

[9]       
The first defendant asserted that its understanding was that the
interpleader proceedings
suspended all other legal proceedings in
terms of which the funds were claimed. It accordingly did not file a
plea in the main
action and awaited the outcome of the interpleader
proceedings. The first defendant stated that if it had made an error
in that
a plea should have been filed at that stage, it was a genuine
mistake on its part. Moreover, this did not indicate any intent to

delay the proceedings or hinder the plaintiff’s claim in the
main action. This Court heard the interpleader proceedings on
15
March 2024. The second defendant did not appear and made no claim to
the funds. Accordingly, by an order from this Court, the
funds were
awarded to the plaintiff and subsequently paid in full by the first
defendant. The costs of the interpleader proceedings
were ordered to
be cost in the cause.

[10]     
Subsequently, the plaintiff claimed the costs of the main
proceedings, asserting that it was
substantively successful in all
respects with the relief sought against the first respondent. The
plaintiff also asserted that
in line with the usual rule regarding
costs, the first defendant should be liable for the costs of the
action. On 26 August 2024,
the plaintiff served an application for
default judgment (for costs) on the first defendant. Upon receipt of
the application, the
first defendant brought an application for the
removal of the bar as it argued that it intended to oppose the
plaintiff’s claim
for costs against it. The plaintiff asserts that
the first defendant has, belatedly and many months after the notice
of bar was
served and the interpleader order was granted, brought an
application to uplift the bar for the sole purpose of disputing its
liability
for costs.

[11]     
The plaintiff pointed out that the first defendant’s draft plea is,
in essence, an attempt to
deal with the merits of the capital and
interest claimed by the plaintiff in the main action. The plaintiff
contends that as a
result of the judgment on the interpleader, that
aspect has become res judicata and cannot, therefore, be
placed in dispute at this stage. In the plaintiff’s opinion, it will
serve no purpose to uplift the bar,
only to allow the first defendant
an opportunity to plead facts which, even if established at the
trial, would not provide the
first defendant with a valid defence to
the plaintiff’s claim for costs. According to the plaintiff, it is
evident from the judgment
on the interpleader that the plaintiff is
successful in all aspects. In the premises, the plaintiff believes
there is no reason
why the first defendant’s application to uplift
the bar should not be dismissed with cost and why the costs of the
main action
should not be awarded to the plaintiff as a successful
party. The plaintiff prayed that the application for default judgment
against
the first defendant on costs be granted and that the
application to uplift the bar be dismissed with costs. On the other
hand,
the first defendant prayed for the upliftment of the bar.

Discussion

[12]     
As discussed earlier, there are two applications before this Court.
The plaintiff seeks default
judgment for costs against the first
defendant. In the second application, the second defendant seeks an
indulgence to uplift the
bar to enable it to file a plea attached to
its application. In my view, it is instructive for this Court to
consider the first
defendant’s application to uplift the bar as in
the event the application succeeds, it will follow as a matter of
course that the
application for default judgment must fail.

[13]     
Rule 27 of the Uniform Rules provides for the extension of time,
removal of bar and condonation.
In terms of this rule, the court may,
on good cause shown, condone any non-compliance with the Uniform
Rules. In other words, good
cause is a requirement for any extension
or abridging of time and for the condonation of non-compliance with
the court rules. A
party seeking condonation for non-compliance with
the rules must show good cause.

[14]     
To demonstrate good cause, an applicant should at least satisfy two
requirements. First, the
applicant must file an affidavit
satisfactorily explaining the delay. In this regard, the defendant
must at least explain his default
sufficiently fully to enable the
court to understand how it came about and assess his conduct and
motives.[1] The application must
be bona fide and not made with the intention of delaying the opposite
party’s claim.[2] The
second requirement is that the applicant should satisfy the court on
oath that he has a bona fide defence or that his
action is
clearly not ill-founded, as the case may be.[3] The
minimum that the applicant must show is that his defence is not
patently unfounded and that it is based upon facts which,
if proved,
would constitute a defence.[4]

[15]     
In the present matter, it is common cause that the first defendant
delivered its notice of intention
to defend and did not file a plea.
According to the first defendant, the failure to file a plea in the
main action was because
it was of the bona fide belief that having
launched interpleader proceedings, the main action, including the
need to file a plea,
was suspended. In addition, the first defendant
asserted that when the interpleader was finalised, and the funds were
paid to the
plaintiff, it was of the view that the matter was
finalised and that a plea was unnecessary.

[16]     
To the extent that the plaintiff is prejudiced, the first defendant
stated that such prejudice
could easily be cured by having the first
defendant pay any wasted costs associated with the late filing of the
first defendant’s
plea. In my view, the explanation the first
defendant proffered is plausible. In fact, the plaintiff also
suspended all proceedings
after the interpleader summons was issued.
It is important to note that a notice of bar was served upon the
first defendant on
11 February 2024, requesting that the first
defendant file its plea within five days. The dies for filing
a plea expired on 18 February 2024. After the interpleader
proceedings were instituted, the plaintiff did not apply
for default
judgment against the first defendant.

[17]     
Distinctly, from the conduct of both parties, it can be reasonably
inferred that they both accepted
that the interpleader proceedings
suspended further proceedings in the main action that the plaintiff
instituted against the first
and second defendants. This conclusion
is borne out by the following: Instead of applying for default
judgment after the 5 days
set out in the notice of bar expired, the
plaintiff waited for six months and only applied for default judgment
on 26 August 2024.
In my view, the error on the part of the first
defendant not to file its plea in time is bona fide and must be
condoned. It is
an error that was sincere and corroborated by the
plaintiff’s conduct. Accordingly, it was reasonable for the first
defendant to
labour under the mistaken belief that the matter was
settled and not to proceed with filing a plea.

[18]     
The plaintiff contended that based on the judgment on the
interpleader proceedings, the question
whether the plaintiff was
entitled to payment by the first defendant of monies that were held
in trust on behalf of the second
defendant is res judicata as
between the plaintiff and the defendants. That may be the case;
however, the inquiry does not end there. This aspect is relevant
to
determining the costs of the main action. For instance, if it is
found that the plaintiff did not have locus standi as it is
alleged by the first defendant in its application, then the plaintiff
will not be entitled to costs. Evidently, the issues
raised by the
first defendant in the founding affidavit and the draft plea are
relevant in determining costs in the main action.

[19]     
Furthermore, as far as the prospects of success in the main action
are concerned, the first defendant
asserted in his founding affidavit
that it acted reasonably at all times in balancing the interests of
the plaintiff and the second
defendant as competing claimants. The
first defendant further stated that it had no interest or stake in
the disputes between the
second defendant and the plaintiff. The
first defendant contended that it intended to argue the limitation of
the undertaking.
Furthermore, the right to argue the limitation of
the undertaking was reserved in the order granted by consent during
the interpleader
proceeding.

[20]     
I firmly believe that the interpretation of the undertaking is
relevant in the determination
of costs in the main action. If the
court finds that indeed the undertaking limits the first defendant’s
liability to R600 000,
that will mean that the action
proceedings instituted by the plaintiff would not have been
necessary. This issue is therefore relevant
on the determination of
costs.

[21]     
In summary, the first defendant gave a bona fide defence to the
plaintiff’s claim. If the defence
raised by the first defendant is
proved at trial, it will constitute a defence to the plaintiff’s
case. If the plaintiff does not
have locus standi to institute
proceedings against the first defendant, that defence will ordinarily
be dispositive of the plaintiff’s claim. Accordingly,
the first
defendant has given a satisfactorily explanation for its default and
indeed raised a bona fide defence to the plaintiff’s
claim. It cannot
be said that the first defendant’s application to uplift the bar is
made with the intention of delaying the plaintiff’s
claim.

[22]     
Finally, from the correspondence exchanged between the parties, the
first defendant persisted
in disputing the plaintiff’s claim for
costs against it. It is my firm view that a court should be slow to
refuse a defendant who
has a valid defence the opportunity to hear
his defence in court. To deny a party who has raised a plausible
defence in an application
for rescission or condonation application,
as is the case in the present matter, will violate a constitutional
right of access
to court as envisaged in section 34 of the
Constitution.

[23]     
I appreciate that the plaintiff had to issue summons to enforce its
right against the defendants.
However, the dispute on the
interpretation of the undertaking, particularly the extent to which
the undertaking limits or does
not limit the first defendant’s
liability, is relevant in determining costs. A meaningful
determination in this regard can only
be made once the bar is lifted.

Order

[24]     
Given all these considerations, the following order is granted:

24.1   
The application for the upliftment of the notice of bar is granted.

24.2   
The first defendant is ordered to file its plea (should it wish to
defend the matter) within five (5) days
from date hereof.

24.3   
The application for default judgment on costs is hereby dismissed. 

24.4   
The costs of both applications will be costs in the cause.

LEKHULENI JD

JUDGE OF THE HIGH
COURT

Appearances

For
plaintiff:             
LN Wessels

Instructed
by:           Couzyn
Hertzog & Horak

For
respondent:       A Maher

Instructed
by:           Kruger &
CO Inc