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[2018] ZAGPJHC 422
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Musasike and Another v Standard Bank of SA Limited (34170/2014) [2018] ZAGPJHC 422 (31 May 2018)
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REPUBLIC
OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL DIVISION,
JOHANNESBURG
CASE
NO:
34170/2014
REPORTABLE
OF
INTEREST TO OTHER JUDGES
REVISED.
31/5/2018
In the matter
between:
LEWIS
MAXWELL
MUSASIKE
First
Applicant
TSITSI
MUSASIKE
Second
Applicant
and
STANDARD
BANK OF SA
LIMITED
Respondent
SUMMARY
Civil Procedure- Default
Judgment- Rescission of in terms of the common law- requirement of-
“sufficient cause”
and “good cause” used
interchangeably- Applicants seeking to rescind default judgment under
circumstances where the
respondent had valid cause of action against
them to apply and obtain judgment- absence of opposition to
application
for rescission not only ground to grant rescission-
application refused.
JUDGMENT
MOSHIDI,
J
:
INTRODUCTION
[1] This is an application in which
the applicants are applying for the rescission of the default
judgment granted against them
by the court on 24 February 2017.
The application came before me in the unopposed motion court on 21
May 2018.
THE
FACTS
[2] Briefly stated, these are the
facts: the applicants are a married couple. During 2008 the
applicants obtained a bond from
Standard Bank of SA Limited (“
the
respondent
”) for the purchase of Erf […] Pecanwood
Extension […] Township, Registration Division I.Q., Province
of North
West (“
the property
”). Between the
period 2014 and February 2017, the applicants started experiencing
financial problems in respect of
monthly repayments on the bond, in
respect of the property. The applicants periodically negotiated
with the respondent, and
made certain monthly payments.
However, all these payments were insufficient to liquidate the
arrears. In the founding
papers, paragraph twenty (20), the
applicants stated:
“
Even though he had made
substantial payments to the respondent by 6 July 2015 against the
loan account, these payments were not
sufficient and in compliance
with the written agreement.
”
The founding papers proceeded to state
in paragraph 26 that:
“
Importantly, on the 21
st
of February 2017 and still prior to the default judgment being
granted against us, the respondent’s attorneys responded
positively to me advising that even though they were under
instructions to proceed with the application before this Honourable
Court on the 24
th
of February 2017, the
respondent had instructed them that it was willing to afford us an
opportunity to meet and discuss the matter
…
”
The respondent subsequently instituted
action against the applicants based on their default. The
negotiations and short payments
continued. The applicants contended
that they were under the mistaken belief that “…
because
of these pending negotiations with the respondent and/or its legal
representatives I was not required to file a notice of
intention to
oppose the application which was set down for the 24
th
of February 2017, and which failure I admit resulted in a default
judgment against my wife and I
”. The applicants
submitted that they were not in wilful default in any way but
laboured under a mistaken and
bona fide
belief. It is
not in dispute that at the time of the institution of the
application, the applicants were in default and breach
of the loan
agreement. However, the applicants now allege that the arrears
have since been brought up to date. It is
equally common cause
that the respondent did not oppose the present application.
There are additional common cause facts
which require no mention now.
SOME
LEGAL PRINCIPLES
[3] The instant application is
brought, not in terms of rule 31(2), nor rule 42(1) of the
Uniform Rules of Court, but under
the common law.
[4] The principles applicable to the
adjudication of rescission applications based on the common law have
by now become settled
and trite, and require no exclusive exposition
for present purposes. There is also abundant authority for the
proposition
that in matters of this nature, the terms “
sufficient
cause
” and “
good cause
”, are almost
identical or used interchangeably. See
inter alia
,
Colyn
v Tiger Food Industries Ltd t/a Meadow Feed Mills (Cape)
2003 (6)
SA 1
(SCA) at 9C. The principles are succinctly set out in
Erasmus
(B1-307), that:
“
At common law a judgment can
be set aside on the following grounds: fraud, justus error (on
rare occasions), in certain exceptional
circumstances when new
documents have been discovered, when judgment had been granted by
default and, in the absence between the
parties of a valid agreement
to support the judgment, on the grounds of justus causa
.”
[5] In a Full Court decision in
Vilvanathan and Another v Louw NO
2010 (5) SA 17
, it was held
that a final judgment of the High Court cannot be set aside simply
because it has been satisfied in full by the judgment
debtor, and the
judgment creditor consents to the rescission. It was further held
that:
“
The Appellate Division and
the Supreme Court of Appeal have laid down that at common law ‘it
is clear that in principle and
in the long-standing practice of our
courts’ that there are two ‘essential elements of
“sufficient cause”
for rescission of a judgment by
default’.
These are –
(i)
that the party
seeking relief must present a reasonable and acceptable explanation
for his default; and
(ii)
that on the merits
(i.e. of the action) such party has a bona fide defence which, prima
facie, carries some prospect of success.
Both
these elements must be present.
”
A third requirement was also
suggested, being that the circumstances which are relied on as a
ground of setting aside a final judgment
must have existed at the
date of the judgment, and not have arisen subsequently (see
RFS
Catering Supplies v Bernard Biyara Enterprises CC
2002 (1) SA 896
(C), which was overruled). See also
Marais v Standard Credit
Corporation Ltd
2002 (4) SA 892
(W), and
National Director of
Public Prosecutions v Phillips
2005 (5) SA 265
(SCA) at paragraph
[21] for the proposition that a court may always set aside its own
final judgment in certain limited circumstances,
as well as the
requirements of setting aside a default judgment under the common
law.
APPLICATION
OF LEGAL PRINCIPLES
[6] In applying the above legal
principles to the facts of the instant application, it is plain that
the applicants have not met
the requirements for the rescission of
the default judgment under the common law, nor under the rules of
court. At the time
of the default judgment, they were in breach
of the loan agreement. The respondent had a valid cause of action
against them.
This much was admitted in closing argument.
The applicants knew in advance that the respondent had enrolled the
matter for
default judgment on 24 February 2017. The fact that
the respondent offered no opposition to the rescission application is
of no assistance to the applicants, since rescission is not there
simply for the taking.
[7] I must mention that in support of
their application, the applicants’ counsel relied on,
inter
alia
, the unreported case of
Teressa Antonette du Plessis and
Absa Bank Limited
(Case Number 56974/2013 – delivered in
the Gauteng North High Court on 28 November 2017). I have had
due regard to
that case. It is distinguishable from the facts
of the present matter, on several grounds. Firstly, there the
applicant
was not aware of the launching of the default judgment
application, as was the case in the instant matter. Secondly,
there
were debt review proceedings pending, which was not the case in
the present application. Thirdly, in that case, the applicant
application for rescission was found to have established a
bona
fide
defence to the respondent’s (
Absa Bank Limited
),
which was clearly not the case in the present matter. The
applicants filed no practice notes or written heads of argument.
CONCLUSION
[8] Based on all the circumstances of
this matter, as well as the applicable legal principles, I therefore
conclude that the applicants
have not made out a case for the
rescission of the default judgment granted against them on 24
February 2017. There should be no
order as to costs.
ORDER
[9] In the result the following order
is made:
9.1 The application for rescission is
refused.
9.2 There shall be no order as to
costs.
________________________________________
D S S MOSHIDI
JUDGE OF THE HIGH COURT
GAUTENG LOCAL DIVISION,
JOHANNESBURG
COUNSEL
FOR THE APPLICANTS
ADV L LEEUW
INSTRUCTED
BY
NINGIZA HORNER ATTORNEYS
COUNSEL
FOR THE RESPONDENT
JASON MICHAEL SMITH INC
DATE
OF HEARING
21 MAY 2018
DATE
OF JUDGMENT
31 MAY 2018