DEVELOPMENTS ON THE THIRD PARTY PROCEDURE – PUMZO MBANA

Tuesday, April 29, 2008
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In Christa Steyn v P Steyn[1] (“Steyn”), a recent unreported judgment of the Witwatersrand Local Division (“WLD”), the court ordered the rescission of a default judgment obtained under Rule 13 of the Uniform Rules of Court holding that the judgment could not be competently obtained under Rule 31(2)(a).
 
The claim
 
In the main action the first and second respondents claimed damages from the third respondent (the defendant in the main action) arising from a motor vehicle accident. The third respondent denied liability alleging that the sole cause of the accident was the negligence of a third party, the applicant in the rescission application. Consequently, the third respondent joined the applicant into the main action utilising the third party procedure provided for in Rule 13.
 
Through the third party procedure, the third respondent sought from the first and second respondents an indemnity and an order for payment of damages. On receipt of the third respondent’s third party notice the applicant did not file a notice of intention to defend in terms of Rule 13(4). Rule 13(4) provides as follows:
 
“If the third party intends to contest the claim set out in the third party notice he shall deliver notice of intention to defend, as if to a summons. Immediately upon receipt of such notice, the party who issued the third party notice shall inform all other parties accordingly.”
 
As a result of this failure by the applicant, the third respondent applied for default judgment in terms of Rule 31(2) (a), which judgment was entered against the applicant.
 
The rescission application
 
The applicant sought to rescind the default judgment in terms of Rule 42 on the basis that it was erroneously sought or granted as envisaged by the rule. In terms of Rule 42 the court may mero motu or upon the application of any party affected, rescind or vary an order or judgment that has been erroneously sought or granted.
 
The applicant argued that the default judgment was erroneously sought and granted because Rule 31(2)(a) is not applicable to proceedings instituted by means of a third party notice. The Rule applies only to actions as defined in terms of Rule 1. Secondly, Rule 13 allows only for the grant of a declaratory order and cannot be used for a claim sounding in money. Thirdly, the relief sought in the third party notice was only conditional upon the third respondent being found liable to the first and second respondents, an event that has not yet occurred.
 
Analysis
 
On the applicability of Rule 31(2)(a) to proceedings instituted by means of a third party notice, Boruchowitz J was of the view that the applicability of Rule 31(2)(a) falls to be determined by a proper construction of Rule 13.
   
Sub-rule 1 of Rule 13 provides for two alternative bases upon which a litigant may join a third party. Sub-rule 1(a) provides for a joinder where a contribution or indemnification from the third party is sought. Where a party employs sub-rule 1(a) all that can be sought where a third party is a joint wrongdoer is an apportionment of fault in the form of a declaratory order. Sub-rule 1(b) on the other hand provides for joinder where any question or issue in the main action is substantially the same as a question or issue as between the third party and the litigant who seeks to join such third party. Where this sub-rule is employed a judgment sounding in money may be obtained.[2] Sub-rule 1(b) and the judicial decisions interpreting it show that a party may obtain a judgment sounding in money under Rule 13.
 
The court dealt with the question of whether a third party procedure was an action as contemplated in Rule 1. Boruchowitz J stated that in terms of Rule 13(5) the “mere fact of service of the third party notice effects a joinder of the third party as a party to the action…” Therefore, the failure to file a notice of intention to defend does not entitle a party to apply for default judgment in terms of Rule 31(2)(a). Rule 31(2)(a) applies only to ‘actions’. Rule 1 defines an ‘action’ as “a proceeding commenced by summons or by writ in terms of Rule 9.” Rule 13 does not constitute a summons. The rule merely incorporates “the rules relating to the filing of pleadings which are necessary to delineate the issues between the parties.”
 
On the conditionality of a default judgment granted under Rule 13, the court stated that Rule 13 is similar to consolidation of actions in Rule 11 in that issues which are substantially similar should be tried at a single hearing so as to avoid the disadvantages attendant upon a multiplicity of actions and the danger of the same question being tried twice with possible different results.[3] In Participation Bond Nominees (Pty) Limited v Mouton and Others the WLD stated the purpose of Rule 13 in the following terms:
 
“…[t]hird party procedure is complementary to those Rules which deal with joinder of parties and causes of action and intervention of persons as plaintiffs or defendants, which are calculated to ensure as far as possible, that all parties who are directly, or sometimes even indirectly, concerned in the dispute could be brought before court at the trial thereof, so as to avoid a multiplicity of actions.”[4]
 
Boruchowitz J was of the view that the obtaining of a default judgment against a third party flies in the face of the rule against multiplicity of actions. Such multiple actions create the possibility of the same question being tried twice with different results. A default judgment effectively anticipates an issue which the trial court ought properly to decide.  For example, the trial court may conclude that the sole cause of the collision was the negligent conduct of the third respondent in which event the latter would have no legal entitlement to claim damages from the applicant. Such a finding would result in different conclusion reached by the court in relation to the same matter.
 
Rule 13(5) deals with the consequences of third party’s failure to deliver a notice of intention to defend. In terms of that rule the third party is not entitled to further documents or to be given notice as a party. Rule 13 and settled case law provide that whether or not the third party contests the defendant’s claim the notice given under Rule 13 serves effectively to join the third party as a party to the action and the third party will be bound by the Court’s judgment.[5]
 
The court held that the entry of default judgment as occurred in the present matter would anticipate an issue which the trial court is required to decide and unduly restrict or fetter its discretion in relation to matters such as costs. Therefore, the failure of a third party to deliver a notice of intention to defend does not entitle the third respondent to apply for default judgment against the third party.
 
Conclusion
 
This decision shows that default judgment cannot be taken on a third party procedure due to a party’s failure to enter a notice of intention to defend. Significantly, a third party procedure is not an action as contemplated by Rule 1. A third party enters a notice of intention to defend if it seeks to receive documents or notices in the main action. However, a third party who failed to defend the main action it is bound by the decision of the court.
 
Pumzo Mbana is a candidate attorney at Bowman Gilfillan.

[1] 3761/05

[2] IPF Nominees (Pty) Limited v Nedcor Bank Limited (BASFOUR 130 (Pty) Limited, Third Party) 2002 (5) SA 101W at 118

[3] See Erasmus Superior Court Practice at B1-107; Nel v Silicon Smelters (EDMS) Bpk en ‘n Ander 1981 (4) SA 792A at 802A-C; and IPF Nominees (Pty) Limited supra at 118.

[4] Participation Bond Nominees (Pty) Limited v Mouton and Others 1978 (4) SA 498 (W) at 501b-d

[5]Duraan v Maritz 1973 (4) SA 39 (SWA) at 40.