THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Not Reportable
Case no: 103/2021

In the matter between:
THABO SINDISA KWINANA

FIRST APPELLANT
DALIKHAYA RAIN ZIHLANGU NO               SECOND APPELLANT
UNATHI MDODA NO                                             THIRD APPELLANT
and
LULAMA SMUTS NGONYAMA

FIRST RESPONDENT
NOKWAZI NOKWAZELELA
NGONYAMA NO

SECOND RESPONDENT
KHANYA MALUNGELO

NGONYAMA NO                                                  THIRD RESPONDENT
QHAWE HLOMELO
NGONYAMA NO                                              FOURTH RESPONDENT
and
EYABANTU CAPITAL

CONSORTIUM (PTY) LTD                  FIRST INTERVENING PARTY
EYABANTU CAPITAL

(PTY) LTD                                          SECOND INTERVENING PARTY

Neutral citation: Thabo Sindisa Kwinana and Others v Lulama Smuts
Ngonyama and Others (Case no 103/2021) [2022]
ZASCA 48 (8 April 2022)

Coram:
VAN DER MERWE, NICHOLLS and CARELSE JJA
and TSOKA and MATOJANE AJJA

Heard:

24 FEBRUARY 2022

Delivered:
This judgment was handed down electronically by
circulation to the parties’ legal representatives by email,
publication on the Supreme Court of Appeal website and
release to SAFLII. The date and time for hand-down is
deemed to be 10h00 on 8 April 2022.

Summary: Civil procedure – application for intervention on appeal – no
legal interest in subject matter of litigation – application for rescission of
default judgment – sole ground relied upon had been raised in replying
affidavit that was rightly not admitted.

ORDER

On appeal from:  Gauteng Division of the High Court, Johannesburg, (Grenfell
AJ sitting as court of first instance):
The appeal is dismissed with costs, including the costs of two counsel.

JUDGMENT

Matojane AJA (Van der Merwe, Nicholls and Carelse JJA and Tsoka AJA
concurring)

[1] The appellants in this matter are Mr Thabo Sindisa Kwinana and the
(substituted) trustees of the Eyabantu Development Trust (the Eyabantu Trust). For
convenience, I refer to the appellants collectively as the Kwinana parties. They were
the unsuccessful applicants in a rescission application before Grenfell AJ in the
Gauteng Division of the High Court, Johannesburg (high court), and appealed
against its decision refusing to rescind and set aside two default judgments
previously granted by Dosio AJ in favour of the respondents. They are Mr Lulama
Smuts Ngonyama and the trustees of the Khululekile Family Trust (the Khululekile
Trust), collectively referred to as the Ngonyama parties.

Background
[2] During 2018, the Ngonyama parties instituted action in the high court against
the Kwinana parties. Their particulars of claim essentially alleged the following:
during or about 2005, the Ngonyama parties entered into an oral agreement with
Mr Kwinana (the 2005 agreement), in terms of which the latter would act as agent
and attorney for the Ngonyama parties in order to procure a 6,5% shareholding in
Eyabantu Capital Consortium (Pty) Ltd (Eyabantu Consortium). In the execution
of his obligations in terms of the 2005 agreement, Mr Kwinana advised that the
shareholding should be held for the Khululekile Trust by another trust. Mr Kwinana
thus caused the Eyabantu Trust to hold 6,5% shareholding in Eyabantu Consortium
as the agent and for the benefit of the Khululekile Trust. At the time, Mr Kwinana
was one of the trustees of the Eyabantu Trust. The Eyabantu Trust also held a further
6,5% shareholding in Eyabantu Consortium.

[3] Pursuant hereto, so it was alleged, the Eyabantu Trust orally agreed with the
Khululekile Trust during November 2006 that the former would transfer 50% of all
income derived from its 13% shareholding in Eyabantu Consortium to the
Khululekile Trust (the 2006 agreement). The particulars of claim also alleged that
as agents for the Ngonyama parties, the Kwinana parties owed the former a duty to
fully account for all income that accrued to them pursuant to the 2006 agreement.
On the back of these allegations, the Ngonyama parties claimed that the Kwinana
parties render an account for debatement ‘in respect of their shareholding interest’
in Eyabantu Consortium, and the Khululekile Trust claimed transfer of the said
6,5% holding to it from the Eyabantu Trust.

[4] The Kwinana parties filed a notice of intention to oppose the action on 11
January 2019. Despite a notice of bar filed on 21 January 2019, they failed to file a
plea within the period provided for in the notice of bar. Dosio AJ granted default
judgment in terms of the particulars of claim on 15 April 2019 against the first and
second appellants and on 17 April 2019 against the third appellant. The Eyabantu
Trust took a decision ‘not to contest the default judgment’ but to seek to resolve the
matter amicably through dialogue. No doubt the same applied to Mr Kwinana. Six
months later, however, the Kwinana parties launched the rescission application
against the Dosio AJ orders. As I have said, the application failed, hence the appeal.

[5] Two parties filed an application in this Court to be joined as parties in the
appeal (the intervening parties). They were Eyabantu Consortium and Eyabantu
Capital (Pty) Ltd (Eyabantu Capital). Eyabantu Capital holds 46,56% shareholding
in Eyabantu Consortium. The Ngonyama parties opposed the application. After
hearing counsel on 24 February 2022, we dismissed the application for intervention
with costs, including the costs of two counsel. We indicated that reasons for this
order would be furnished in due course. In what follows, I firstly give reasons for
the dismissal of the intervention application and thereafter consider the appeal.

Intervention application
[6] The intervening parties principally averred that in terms of the written
shareholders agreement between Eyabantu Consortium and its shareholders,
including the Eyabantu Trust, Eyabantu Capital held a right of pre-emption in
respect of the shares in question and Eyabantu Consortium had an obligation to see
to the enforcement of that right. This constituted direct and substantial interests, so
it was contended, that afforded the intervening parties the right to be joined and to
seek relief in the appeal.

[7] In Pheko and Others v Ekurhuleni City1, Nkabinde J set out the test for
joinder as follows:
‘The test for joinder requires that a litigant have a direct and substantial interest in the subject-
matter of the litigation, that is, a legal interest in the subject matter of the litigation which may be
affected by the decision of the Court. This view of what constitutes a direct and substantial interest
has been explained and endorsed in a number of decisions by our courts.’2
These decisions include Amalgamated Engineering Union v Minister of Labour,3
Aquataur (Pty) Ltd v Sack and Others4 and Bowring NO v Vrededorp Properties
CC and Another.5

[8] Therefore, the intervening parties had to show a legal interest in the subject
matter of the appeal that could be prejudiced by the order on appeal. The subject
matter of the appeal was whether the Kwinana parties had made a case for the
rescission of the Dosio AJ orders in the court a quo. The intervening parties had no
legal interest therein. They only had an indirect interest, in the sense that for the
appeal of the Kwinana parties to succeed would suit their interests.

[9] What the intervening parties sought to do, was to obtain a rescission of the
Dosio AJ orders at their own instance and on their own grounds, without ever
having applied for that relief. That constituted an impermissible attempt to have this
Court determine a matter as court of first instance. The remedy of the intervening
parties was to institute proceedings for the rescission of these orders, in which the

1 Pheko and Others v Ekurhuleni Metropolitan Municipality (Socio-Economic Rights Institute of South Africa as
Amicus Curiae) [2015] ZACC 10; 2015 (5) SA 600 (CC); 2015 (6) BCLR 711 (CC).
2 Ibid para 56.
3 Amalgamated Engineering Union v Minister of Labour 1949 (3) SA 637 (A) at 659.
4 Aquataur (Pty) Ltd. v Sack and Others [1988] ZASCA 86; 1989 (1) SA 56 (A) at 62.
5 Bowring NO v Vredendorp Properties CC [2007] ZASCA 80.

reasons for their delay and their grounds for the rescission would be ventilated and
the Ngonyama parties would be afforded a proper opportunity to respond thereto.
For these reasons, we dismissed the application for intervention with costs,
including the costs of two counsel.

The appeal
[10] I turn to the consideration of the appeal. The sole submission of the Kwinana
parties before us was that the Dosio AJ orders should have been set aside under
Uniform rule 42(1)(a), on the basis that the particulars of claim did not disclose a
cause of action against any of them. Rule 42(1)(a) provides:
‘(1) 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:
(a) an order or judgment erroneously sought or erroneously granted in the absence of any party
affected thereby.’
In Lodhi 2 Properties Investments CC v Bondev Developments (Pty) Ltd6 this Court
held that where a plaintiff is procedurally entitled to a judgment in the absence of
the defendant, that judgment cannot be said to have been granted erroneously in the
light of the subsequently disclosed defence. The existence or non-existence of a
defence on the merits was found to be an irrelevant consideration and, if
subsequently disclosed, cannot transform a validly obtained judgment into an
erroneous judgment.7

[11] Mr Kwinana argued that the particulars of claim did not disclose a legal basis
upon which he could be ordered to account or to transfer the shares. The Eyabantu

6 Lodhi 2 Properties Investments CC v Bondev Developments (Pty) Ltd [2007] ZASCA 85; 2007 (6) SA 87 (SCA)
(Lodhi).
7 Lodhi paras 25 and 27. See also Freedom Stationery (Pty) Limited and Others v Hassam and Others [2018]
ZASCA 170; 2019 (4) SA 459 (SCA) para 18.

Trust contended that ex facie the registration number of the Khululekile Trust as
reflected in the particulars of claim, it was only registered during 2007, that is, after
the 2005 and 2006 agreements had been entered into.

[12] None of this, however, was raised in the founding affidavit in the rescission
application. The Kwinana parties only purported to do so in their replying affidavit,
which the court a quo refused to admit, for sound reasons. The replying affidavit
was filed seven months out of time. The Kwinana parties ignored a notice under
Uniform rule 30 to have the replying affidavit set aside, and also failed to submit
an application for condonation for the late filing of the replying affidavit. Moreover,
it contained what the court a quo aptly termed ‘an entirely new rescission
application’, to the prejudice of the Ngonyama parties. There is no basis to interfere
with the exercise of the discretion of the court a quo in this regard. It follows that it
was not permissible to raise the rule 42(1)(a) argument on appeal.

[13] In the result, the appeal is dismissed with costs, including the costs of two
counsel.

________________________
K E MATOJANE
ACTING JUDGE OF APPEAL

APPEARANCES

For the First Appellants:

D J Combrink
Instructed by:

Du Toit Attorneys
Webbers Attorneys, Bloemfontein

For the Second and Third Appellants:
E van Vuuren SC
Instructed by:

Erasmus de Klerk Incorporated
Webbers Attorneys, Bloemfontein

For the Respondent:

L J Morrison SC and T Scott
Instructed by:

Knowles Husain Lindsay Inc
Claud Reid Attorneys, Bloemfontein

For the Intervening Parties:

R Stockwell SC
Instructed by:

Erasmus de Klerk Incorporated
Webbers 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:
8 April 2022
Status:
Immediate
The following summary is for the benefit of the media in the reporting of this case and does
not form part of the judgments of the Supreme Court of Appeal
Thabo Sindisa Kwinana and Others v Lulama Smuts Ngonyama and Others (Case no
103/2021) [2022] ZASCA 48
Today the Supreme Court of Appeal dismissed an appeal from the Gauteng Division of the
High Court, Johannesburg (high court).
The appellants in this matter were Mr Thabo Sindisa Kwinana and the trustees of Eyabantu
Development Trust (the Kwinana parties). They were the unsuccessful applicants in an
application in the high court to rescind and set aside two default judgment previously granted
in favour of the respondents, Mr Lulama Smuts Ngonyama and the trustees of the Khululekile
Family Trust (the Ngonyama parties).
In 2005, the Ngonyama parties entered into an oral agreement with Mr Kwinana in terms of
which the latter acted as agent and attorney for the Ngonyama parties in order to procure a
6.5% shareholding in Eyabantu Capital Consortium, the latter having been the agent and for
the benefit of the Khululekile Trust. Another agreement was entered into in 2006 where it was
held that Eyabantu Trust would transfer 50% of all income derived from its 13% shareholding
in Eyabantu Capital Consortium to the Khululekile Trust. It was also alleged that the Kwinana
parties owed the Ngonyama parties a duty to account for all income that had accrued pursuant
to the 2006 agreement. The high court granted default judgment against the appellants to
which the Kwinana parties launched a subsequent rescission application.
Eyabantu Consortium and Eyabantu Capital (Pty) Ltd filed an application to be joined in the
appeal, as the latter was a significant shareholder of the former. This application was opposed
by the Ngonyama parties. This Court, after having heard counsel for the parties, dismissed
the application for intervention because this Court found that the intervening parties intended
to obtain a rescission of the high court’s orders at their own instance, without ever having
applied for that relief. This would have required this Court assuming the role of a court of first
instance.
The sole submission of the Kwinana parties before this Court was that the high court orders
should have been set aside under Uniform rule 42(1)(a), on the basis that the particulars of
claim did not disclose a cause of action against any of them. Mr Kwinana argued that the

particulars of claim did not disclose a legal basis upon which he could be ordered to account
or to transfer the shares. The Eyabantu Trust contended that ex facie the registration number
of the Khululekile Trust as reflected in the particulars of claim, had only been registered in
2007, after the 2005 and 2006 agreements had been entered into. However, none of this
information had been raised in the rescission application. The Kwinana parties only sought to
do so in their replying affidavit which the high court refused to admit as it was filed seven
months out of time. This Court found that the Kwinana parties ignored a notice under Uniform
rule 30 to have the replying affidavit set aside and also failed to apply for condonation for the
late filing of the replying affidavit. Accordingly, this Court found no basis to have interfered with
the discretion of the high court and indicated that it was impermissible to have raised the rule
42(1)(a) argument on appeal.
In the result, the SCA dismissed the appeal.
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