THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not Reportable
Case No: 050/2016

In the matters between:

DOBSA SERVICES CC

APPELLANT

and

DLAMINI ADVISORY SERVICES (PTY) LTD
FIRST RESPONDENT

ZOLILE ABEL DLAMINI

SECOND RESPONDENT

DLAMINI ADVISORY SERVICES (PTY) LTD
FIRST APPELLANT

ZOLILE ABEL DLAMINI

SECOND APPELLANT

and

DOBSA SERVICES CC

RESPONDENT

Neutral citation:    Dobsa v Dlamini Advisory Services; Dlamini Advisory Services

v Dobsa (050/2016) [2016] ZASCA 131 (28 September 2016)
Coram:
Bosielo, Petse, Mathopo and Mocumie JJA and Schoeman AJA
Heard:
6 September 2016
Delivered:
28 September 2016

Summary:  Civil Procedure ─ Costs ─ Award of costs is at the discretion of the court of
first instance ─ Power of appellate court to interfere with the exercise of such judicial
discretion circumscribed.

ORDER

On appeal from: Gauteng Local Division of the High Court, Johannesburg (Reyneke
AJ sitting as court of first instance):
Both appeals are dismissed with costs.
___________________________________________________________________

JUDGMENT
___________________________________________________________________

Petse JA (Bosielo, Mathopo and Mocumie JJA and Schoeman AJA concurring):

[1] These two appeals are concerned with two costs orders granted in the Gauteng
Local Division of the High Court, Johannesburg (Reyneke AJ) in two interrelated
applications. The appellant in the first appeal is Dobsa Services CC (Dobsa), a close
corporation which carries on business as, inter alia, an auditing and accounting
corporation in Braamfontein, Johannesburg. The first respondent is Dlamini Advisory
Services (Pty) Limited (the company) which is a private company conducting business
as business advisory and consulting services provider in Parktown of which the second
respondent, Mr Zolile Abel Dlamini (Dlamini), is the managing director. In the second
appeal the company and Dlamini are the appellants and Dobsa is the respondent. For
the sake of convenience, I will henceforth refer to the company and Dlamini collectively
as the company unless the context dictates otherwise.

[2] In the first appeal the court a quo awarded costs against Dobsa which had
unsuccessfully opposed an application for an interdict to stay enforcement of the
judgment granted by default in its favour. The company against which the default
judgment had been granted sought an order staying the enforcement of such judgment
pending the outcome of an application to rescind the default judgment. The second
appeal raises the question whether the company which had applied for rescission of the
default judgment sought an indulgence from the court a quo and must therefore bear
the costs of such application even though it was successful in its application as the
court a quo found. These issues arise against the following backdrop.

[3] During November and December 2010 Dobsa, on the one hand, and the
company and Dlamini as the administrator of Bakubung Ba-Ratheo Traditional
Community (Bakubung Ba-Ratheo), on the other hand, concluded a written contract in
terms of which Dobsa undertook to render certain forensic investigation services to
Bakubung Ba-Ratheo on behalf of the company and Dlamini at an agreed remuneration
rate of R1 350 per hour subject to the terms and conditions spelt out in the parties’
written contract. Initially all had proceeded well between the parties. It appears that
some work was done and Dobsa was paid for such work.

[4] During March to May 2011, a dispute arose between the parties in relation to
payments that Dobsa claimed were overdue. So as to induce the company to settle the
alleged overdue amounts, Dobsa withheld its forensic report and insisted that it would
not release it to the company without payment upfront. On its part, the company
asserted that it would not be possible to pay without it being provided with the forensic
report first. The respective positions taken by the parties became entrenched and this
resulted in a stalemate. This led to what appears to have been an irretrievable
breakdown of the parties’ contractual relationship.

[5] As indicated, Dobsa asserted that there were further moneys owing to it. On
6 June 2013 it instituted an action against the company in the Gauteng Local Division of
the High Court, Johannesburg comprising four claims (styled Claims A, B, C and D).
Claim A was for payment of R191 085.87 being the balance of the amount owing in
respect of services rendered in January 2011. Claim B was for payment of R213 034.10
in respect of services rendered in February 2011. Claim C was for payment of
R253 360 in respect of services rendered in March 2011. And Claim D was for payment
of R467 856 which represented the amount that the appellant alleged it would have
earned, but for the respondent’s repudiation, had the contract been allowed to run its
course, ie until May 2011.

[6] Dobsa’s summons was served on the company on 19 June 2013. Despite having
been served with the summons, the company, through inadvertence, failed to defend
the action. It bears mentioning that upon service of the summons on the company,
Dlamini transmitted it by email to his attorney with whom he had had an attorney and
client relationship for some 15 years for the latter to defend the action. It was

uncontested that the email address to which the summons was sent by Dlamini was
incorrect and therefore the summons did not reach his attorney, hence the failure to
defend the action. Upon the expiry of the dies induciae, Dobsa applied for and obtained
default judgment against the company on 1 August 2013. On 28 October 2013 Dobsa
caused to be issued a writ of execution against the company.

[7] On 23 October 2013 the company ascertained that default judgment had been
granted against it. On 29 October 2013, and unbeknown to them that a writ of execution
had already been issued on 28 October 2013, the company’s attorneys addressed a
letter to Dobsa’s attorneys proposing that they stay further action against the company
pending the outcome of a rescission application that they were instructed to launch,
stating that:
‘Given that it [appeared] that the judgment was granted . . . some three months ago, there
[could] be little prejudice to [Dobsa] in holding off.’
They went on to indicate that in the event that Dobsa was not prepared to provide an
undertaking to hold further enforcement of the judgment in abeyance, the company
would bring an urgent court application for its stay. Thereafter a series of letters were
addressed to Dobsa’s attorneys which elicited no response. In the event, no
undertaking was given by Dobsa’s attorneys. On 12 November 2013 the company
launched an application to rescind the judgment granted against it by default.

[8] But, Dobsa was unrelenting. It proceeded to instruct the sheriff to remove the
company’s goods pursuant to the attachment. Consequently, on 28 November 2013,
the company launched an urgent application for an interdict restraining Dobsa from
removing the company’s goods pursuant to the attachment effected on 26 November
2013 and ancillary relief. Dobsa opposed the application. It contested not only the issue
of urgency but also questioned the company’s bona fides in bringing such application,
contending that the application was a stratagem merely to delay and frustrate Dobsa’s
attempts to obtain satisfaction of its judgment. It is apparent from the record that Dobsa
essentially adopted the attitude that: (a) the company was indubitably indebted to it in
the amount of the judgment; (b) the rescission application was contrived and that the
company had no bona fide defence to its claim; and (c) it was entitled to enforce the
judgment that was properly granted in its favour until and unless it was rescinded.

[9] On 3 December 2013, the interdict application came before Victor J whose
judgment was delivered on 5 December 2013, granting the interdict sought. The learned
judge reserved the costs of the application for determination in the rescission
application. In the course of her judgment the learned judge made the following
observations: (a) the company had done everything possible to avoid instituting the
application; (b) it was clear that Dobsa was not amenable to accommodate the
company whilst its rescission application was pending; (c) the company had not been
wilful in failing to defend the action; (d) it appeared that the acrimony between the
parties had spilt over to their attorneys; and (e) the company had a bona fide defence to
the claim particularly in relation to the arbitration clause as contained in the parties’
written contract.

[10] In due course the application for rescission came before Reyneke AJ who, on
9 June 2014, delivered a judgment rescinding the judgment. The learned judge ordered
that the costs of the application for rescission be paid by the company (as applicants).
And that the costs of the application for the stay of the enforcement of the judgment
reserved by Victor J for determination in the application for rescission be borne by
Dobsa.

[11] The court a quo expressed similar views as those of Victor J in relation to the
conduct adopted by Dobsa. It also took note of the fact that the company had made out
a case for rescission. Apropos the costs relating to the interdict application, the court a
quo considered various judgments dealing with the interpretation of rule 49(11)1 of the
Uniform Rules of Court that are discordant. One view2 was that  to the extent that rule
49(11) provides that the operation and execution of a judgment is automatically
suspended when, inter alia, an application for rescission is made it was ultra vires and
of no force and effect. The contrary view was that the rule was not ultra vires.3 The

1 Since repealed by Department of Justice and Constitutional Development Regulations, GN R317,
GG 38694, 17 April 2015, with effect from 22 May 2015. Presumably Uniform rule 49(11) was
repealed because it was inconsistent with s 18 of the Superior Courts Act 10 of 2013 which in
essence provides that the operation and execution of a decision which is the subject of an application
for leave to appeal or an appeal is suspended pending the decision of the application or appeal. An
application for rescission is not mentioned in this section.
2 See in this regard: United Reflective Converters (Pty) Ltd v Levine 1988 (4) SA 460 (W) at 463J-
464C; see also Nel v Le Roux NO & others 2006 (3) SA 56 (SE) at 59I-J.
3 Khoza & others v Body Corporate of Ella Court 2014 (2) SA 112 (GSJ); Peniel Development (Pty)
Ltd & another v Pietersen & others 2014 (2) SA 503 (GJ).

court a quo adopted the latter view. In the event, it took note of the following: (a) that the
writ was issued after the rescission application had been launched (which is factually
incorrect); (b) the company could not be faulted for resorting to litigation given Dobsa’s
unpreparedness to suspend its execution proceedings against the company despite the
pending rescission application in the face of the decisions in Khoza and Peniel. As to
the costs in relation to the rescission application, the court a quo relied on authorities
such as Meintjies NO v Administrasieraad van Sentraal-Transvaal 1980 (1) SA 283 (T);
Iveta Farms (Pty) Ltd v Murray 1976 (1) SA 939 (T) and Zarug v Parvathie NO 1962 (3)
SA 872 (D). The first two of these decisions are to the effect that in an application for
rescission of default judgment the applicant seeks an indulgence and must therefore
bear the costs reasonably incurred in opposing the application. And the latter of the
three decisions is to the effect that a party opposing a rescission application ought not
to be required to do so at their peril even if rescission is ultimately granted.

[12] Motivated by the considerations outlined above (para 9 and 11), the court a quo
made the costs orders which are now the subject of present appeals. Both parties were
aggrieved by the costs orders granted against them by Reyneke AJ. Consequently, they
sought and were granted leave to appeal against the respective costs orders to this
court. What is therefore before this court on appeal are the following orders: (a) the
order awarding costs against Dobsa in the application for an interdict staying execution;
and (b) the order awarding costs against the company in relation to the rescission
application.

[13] But counsel contended that the ambit of the appeal is much wider and that
Uniform rule 49(11) was the central issue on appeal. Thus, counsel argued, it was
necessary for this court to settle the controversy generated by the discordant judgments
mentioned earlier (para 11) by interpreting Uniform rule 49(11) so as to offer guidance
for the future. I am not persuaded that there is any justification in embarking on such a
course on the facts of this case. As already indicated, Uniform rule 49(11) has since
been repealed. And in light of the enactment of s 18 of the Superior Courts Act 10 of
2013, I am not persuaded, contrary to what counsel contended for, that the controversy
generated by Uniform rule 49(11) is likely to arise again.

[14] Accordingly, these being appeals in relation to awards of costs, it is necessary to
briefly set out the principles relating to the nature and proper exercise of the discretion
vested in a judicial officer when making an order as to costs and the circumstances in
which an appellate court can interfere with the exercise of that discretion. The discretion
of the nature under consideration in these appeals has been described as ‘a discretion
in the strict or narrow sense’.4 Accordingly, the appellate court’s power to interfere on
appeal is limited to instances where it is found that the court of first instance did not
exercise the discretion judicially, or acted upon a wrong principle, or exercised its
discretion capriciously, or did not bring its unbiased judgment to bear on the question or
did not act for substantial reasons.5 And as the Constitutional Court put it, albeit in a
different context:
‘. . . the lower court had not exercised its discretion judicially, or that it had been influenced by
wrong principles or a misdirection on the facts, or that it had reached a decision which in the
result could not reasonably have been made by a court properly directing itself to all the
relevant facts and principles.’6
That the appellate court would probably have come to a different conclusion had it sat
as a court of first instance is of no moment. The appellate court would still not be
entitled to interfere solely on that ground.7

[15] In the present appeals there was no suggestion that the learned judge in the
court a quo was not mindful of the parameters of the discretion vested in her. Counsel
for Dobsa sniped at the judgment8 of the court a quo in which the learned judge said
that Dobsa had heedlessly went ahead to issue a writ after the company had launched
its rescission application. Whilst this statement was clearly incorrect, it was not the sole
consideration that weighed in the court a quo’s mind.

[16] Before us, it was contended on behalf of the company that the court a quo
committed a misdirection or did not bring its unbiased judgment to bear on the question

4 Ganes & another v Telecom Namibia Ltd 2004 (3) SA 615 (SCA) para 21; Beinash v Wixely 1997
(3) SA 721 (SCA) at 739G-I.
5 See for eg: Benson v SA Mutual Life Assurance Society 1986 (1) SA 776 (A) at 781I-782B and the
authorities therein cited; Kruger v Le Roux 1987 (1) SA 866 (A) at 871F-G; Cronje v Pelser 1967 (2)
SA 589 (A) at 592H-593C.
6 National Coalition for Gay and Lesbian Equality & others v Minister of Home Affairs & others 2000
(2) SA 1 (CC) para 11.
7 Penny v Walker 1936 AD 241 at 260; Molteno Bros v South African Railways 1936 AD 408 at 417;
Cronje v Pelser at 592H-593A.
8 Para 26.

of costs in adopting the view that the company was essentially seeking an indulgence.
To my mind, neither of the contentions advanced by Dobsa and the company can be
sustained. That an applicant in a rescission application is in essence seeking an
indulgence has often been affirmed in a number of decisions.9

[17] More importantly, in relation to Dobsa’s appeal, is the fact that both in the
application for an interdict and the application for rescission, the company explained
how it came about that default judgment was granted. Significantly, it asserted that it
had at the outset intended to defend the action and to that end had instructed attorneys
to enter an appearance to defend. But, inadvertently, the summons was sent to an
incorrect email address. This mishap was only discovered when the company was
informed of the default judgment by Dobsa on 23 October 2013. These assertions were
not and could not be seriously contested by Dobsa.

[18] Whilst Dobsa was perfectly within its rights to enforce its judgment, this does not,
however, mean that in so doing it was not at risk of an adverse costs order in the event
that its opposition to the interdict was unsuccessful as it happened. In light of the
circumstances of this case as outlined above (paras 9 and 11) its stance was not only
ill-conceived but also unreasonable. It ought to have reflected dispassionately on the
merits of the rescission application. But, lo and behold, it allowed its better judgment to
be clouded by the obdurate attitude it adopted that the company had no triable defence
to its claim. In these circumstances, it cannot be said, by any stretch of the imagination,
that the court a quo did not exercise the discretion vested in it properly.

[19] Before concluding there is another issue that requires mention. As indicated,
these appeals are essentially about the costs orders made by the court a quo. That
being so, I cannot discern why it was thought necessary to grant leave to this court as
the appeals could have been dealt with by the full court. Hence the company belatedly
attempted to have the appeals withdrawn from this court and determined in the full
court. This court has on occasions lamented the frequency with which leave is granted

9 Phillips t/a Southern Cross Optical v SA Vision Care (Pty) Ltd 2000 (2) SA 1007 (C) at 1015G-H;
Greeff v Firstrand Bank Ltd 2012 (3) SA 157 (NCK) para 49; Minnaar v Van Rooyen NO [2015]
ZASCA 114; 2016 (1) SA 117 (SCA) para 20.

to this court in respect of matters not deserving of its attention.10 The unfortunate
consequence of this tendency is that complex cases deserving of the attention of this
court wait longer for enrolment than would otherwise have been the case as they have
to compete with cases that are not.

[20] For all the aforegoing reasons, therefore, there is no basis to interfere with the
costs awards made by the court a quo. Thus, both appeals cannot succeed.

[21] In the result the following order is made:
Both appeals are dismissed with costs.

_________________
X M PETSE
JUDGE OF APPEAL

10 Shoprite Checkers (Pty) Ltd v Bumpers Schwarmas CC & others 2003 (5) SA 354 (SCA); [2003] 3
All SA 123 para 23; MTN Service Provider (Pty) Ltd v Afro Call (Pty) Ltd [2007] ZASCA 97; 2007 (6)
SA 620 (SCA) para 24.

APPEARANCES:

For the appellant in the Dobsa appeal: R Ram

(with him I Monnahela)

Instructed by:

DMS Attorneys, Sandton

Molefi Thoabala Attorneys, Bloemfontein

For the respondents:

G G M Quixley

Instructed by:

Barry Aaron & Associates, Johannesburg

Honey Inc, Bloemfontein

For the appellants in the Dlamini
Advisory Services appeal:

G G M Quixley

Instructed by:

Barry Aaron & Associates, Johannesburg

Honey Inc, Bloemfontein

For the respondent:

R Ram

(with him I Monnahela)

Instructed by:

DMS Attorneys, Sandton

Molefi Thoabala Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

FROM

The Registrar, Supreme Court of Appeal

DATE

28 September 2016

STATUS

Immediate

Please note that the media summary is for the benefit of the media and does not form part of
the judgment.

Dobsa v Dlamini (20458/2014); Dlamini Advisory Services v Dobsa

(19729/2013) [2016] ZASCA 131 (28 September 2016)

MEDIA STATEMENT

The Supreme Court of Appeal today dismissed two appeals against a judgment of the Gauteng Local
Division of the High Court, Johannesburg, concerning two separate costs orders granted against the
parties separately in two interrelated applications. In the court a quo, costs were ordered against
Dobsa in its unsuccessful opposition of an application by Dlamini, for an interdict to stay execution of
the judgment granted by default in Dobsa’s favour, and the second, against Dlamini in respect of its
successful application for rescission of the default judgment. The question was whether the appellate
court had the power to interfere with the discretion vested in a judicial officer when making an order
as to costs. The Supreme Court of Appeal held that there was no suggestion that the judge a quo
was not heedful of the bounds of the discretion vested in her and thus, it could not interfere with either
costs orders. In the result both appeals were dismissed with costs.

--- ends ---