Mokoalakoala v Absa Bank Ltd
| Jurisdiction | South Africa |
| Judge | Rabie J |
| Judgment Date | 01 April 2011 |
| Docket Number | 19196/08 |
| Court | North Gauteng High Court, Pretoria |
| Hearing Date | 01 March 2011 |
| Citation | 2011 JDR 1078 (GNP) |
Rabie J:
This is an application in terms of Rule 42 of the Uniform Rules of Court, alternatively under the common law, for the rescission of a summary judgment granted against the applicant on 15 August 2008. The applicant also applied for condonation for the late filing and non-service of the application on the respondent.
On 14 April 2008 the respondent, as plaintiff, issued summons against the applicant, as defendant, for payment of the amount of R858 803,29 plus interest and costs and for an order declaring certain immovable property specially executable in favour of the respondent. The respondent's claim was
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for monies lent and advanced to the applicant, which loan was secured by a mortgage bond over the plaintiffs aforesaid immovable property.
The applicant gave notice of his intention to defend the action whereupon the respondent applied for summary judgment. The application for summary judgment was not opposed and the court granted the order mentioned above.
On 3 September 2008 a warrant of execution in respect of the immovable property was issued and on 21 January 2009 the property was sold in execution. A portion of the proceeds of the sale was used to pay off the applicant's debt to the respondent and the balance was paid to the applicant.
Slightly more than one year and two months later, namely on 8 April 2010, the applicant served the present application for the rescission of the aforesaid summary judgment on the respondent.
In the affidavit supporting the application for a rescission, the applicant, inter alia, stated that he obtained the loan from the respondent in order to purchase the immovable property mentioned above. The monthly bond repayments amounted to R7 609,00. On 16 April 2006 the property was registered in both his and his wife's names. On 3 November 2006 his wife issued a divorce summons against him. The applicant stated that on 20 November 2007 his wife obtained an interim order for payment of maintenance against him in the amount of R20 000,00 per month and that he was advised by his attorney to immediately cease the monthly bond repayments to the respondent. The applicant stated that he followed this advice and that this resulted in the summary judgment which was granted against him in favour of the
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respondent. The applicant did not say why it was decided that he should cease his bond repayments. He also did not say why he initially opposed the application for summary judgment but the inference is that it was merely a delaying tactic.
The applicant further stated in his affidavit that at the time of the summary judgment against him, his estate was worth "several million rands". From this statement the inference can be drawn that he probably decided to cease his bond repayments in order to prejudice his wife in one way or the other. He then added that he became disillusioned with his erstwhile attorney and terminated his mandate. The applicant then proceeded to say the following in his affidavit from paragraph 4.12:
The said judgment, as reflected against my record at the credit bureau is not a true reflection of my financial position. The said judgment hampers me in conducting business, whereas the said judgment no longer serves any purpose for the respondent (in whose favour it was granted).
(sic) The rescission of the said judgment will not negate accurate debt and credit records as my estate was (as stated hereinbefore) and still is worth several million rands.
Submissions:
In the premises, it is respectfully submitted that it would be fair and just to rescind the judgment:
in that I am prevented from again accessing credit;
as I was not at the time when the judgment was granted against me and I am still financially not a risk, the rescission of the judgment will not deter the commercial need for reliable debtor and credit information.
the judgment also no longer serves any purpose for the respondent who has agreed to the rescission of same and who is in fact eager to once again do business with me.
The Honourable Court is respectfully referred to a copy of the letter from the respondent addressed to my attorney dated 15 June 2009, attached hereto and marked annexure "KM2".
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In the premises, it is respectfully submitted that the requirement of 'good cause' as encompassed under the rubric of 'justice and fairness' have been met and that the Honourable Court, under the wide discretion conferred on this Honourable Court in respect of rescinding judgments, grants the relief as set out in the notice of motion." (sic)
Annexure KM2, referred to by the applicant, is a letter from the respondent dated 15 June 2009 which was signed by the Customer Bureau Specialist: Consultant, Retail Bank Collections, which reads as follows:
"We refer to the aforementioned case and confirm that judgment was taken against Mr K Mokoalakoala.
ABSA Bank Limited confirms that the aforementioned client has fully settled the outstanding sum due and owing to the Bank in respect of the aforesaid judgment.
Writer confirms that the Bank agrees to the rescission of the civil judgment, consents to the short service of the application and condones the late filing of the application for the judgment to be rescinded.
Please serve all relevant documentation at ….".
Judgements and orders of the High Court may be rescinded in terms of Rule 31 and Rule 42 of the Uniform Rules of Court or the common law, depending on the circumstances of the particular the matter. Cf De Wet and Others v Western Bank Ltd 1977 (4) SA 770 (T) at 776D-F. Our law draws a distinction between the rescission of default judgments which had been granted without going into the merits of the dispute between the parties, and the rescission of final and definitive judgments, whether by default or not, after evidence had been adduced on the merits of the dispute. (Cf De Wet and Others v Western Bank Ltd 1979 (2) SA 1031 (AD) at 1040C-1043B and the authorities there quoted). In the former instance the Court enjoyed relatively wide powers of rescission, whereas in the latter event the Court was, generally speaking, regarded as being functus officio, and judgments could
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only be set aside on the limited grounds mentioned in Childerley Estate Stores v Standard Bank of SA Ltd 1924 OPD at p163, namely in cases of fraud and certain very exceptional instances of iustus error.
In casu the judgment sought to be rescinded was one granted by default without the court going into the merits of the dispute and thus the discussion below would relate to that type of situation.
Rule 31(2)(b) applies to default judgements envisaged in Rule 31. Such judgements may be set aside upon good cause having been shown. In Lazarus and Another v Nedcor Bank Ltd; Lazarus and Another v Absa Bank Ltd 1999 (2) SA 782 (W), Cloete J, as he then was, stated the following at 785B-D:
"So far as Rule 31 is concerned, a long line of cases, commencing with Grant v Plumbers (Pty) Ltd 1949 (2) SA 470 (O), has laid down the requirement that in order to show 'good cause' as required by Rule 31(2)(b), or 'sufficient cause' as was required by previous Rules of Court which governed the position, an applicant for rescission of a default judgment must show inter alia that he has a bona fide defence to the plaintiffs claim. On that approach, which seems to be universally adopted by Provincial and Local Divisions in South Africa and by other Courts in neighbouring States, the applications could not succeed under Rule 31(2)(b). There would also be no basis upon which a judgment granted by the Registrar could be reconsidered under Rule 31(5)(d) - if a judgment granted by a Court can only be set aside if a bona fide defence is disclosed, the same must surely apply to a judgment granted by the Registrar."
The requirement of "good cause" is the same as is required under the common law and I shall deal with that requirement below in the discussion of the common law requirements. As the present application does not relate to a default judgement envisaged in Rule 31, it is not necessary to refer further to Rule 31.
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In a matter such as the present, the applicant is potentially entitled to approach the Court in terms of Rule 42 and the common law.
Rule 42 provides as follows:
"42 Variation and Rescission of Orders
(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;
(b) an order or judgment in which there is an ambiguity, or a patent error or omission, but only to the extent of such ambiguity, error or omission;
(c) an order or judgment granted as the result of a mistake common to the parties.
(2) Any party desiring any relief under this rule shall make application therefor upon notice to all parties whose interests may be affected by any variation sought.
(3) The court shall not make any order rescinding or varying any order or judgment unless satisfied that all parties whose interests may be affected have notice of the order proposed."
Rule 42 is confined by its wording and context to the rescission or variation of judgments and orders of the kind mentioned in Rule 42. The trend of the Courts over the years is not to give a more extended application to the Rule to include all kinds of mistakes or irregularities. In Colyn v Tiger Food Industries Ltd t/a Meadow Feed Mills (Cape) 2003 (6) SA 1 (SCA) the plaintiff obtained summary judgment against the defendant who was in default. The Court had to decide whether the facts upon which the defendant...
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