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IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
CASE NO: 3450/2022
In the matter between:
GAIL FRANCIS BUECHEL
and
SOUTH AFRICAN SECURITISATION
PROGRAMME (RF) LIMITED
SASFIN BANK LIMITED
SUNLYN (PTY) LTD
Applicant
First Respondent
Second Respondent
Third Respondent
IN RE:
SOUTH AFRICAN SECURITISATION
PROGRAMME (RF) LIMITED
SASFIN BANK LIMITED
SUNLYN (PTY) LTD
First Plaintiff
Second Plaintiff
Third Plaintiff
and
GAIL FRANCIS BUECHEL
Defendant
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Coram: Bishop, AJ
Dates of Hearing: 15 February 2024
Date of Judgment: 5 March 2024
LEAVE TO APPEAL JUDGMENT
BISHOP, AJ
[1] The Applicant sought the rescission of a default judgment in terms of rule
32(1)(b). I refused the rescission because, while she was not in wilful default, she
failed to establish a bona fide defence. The Applicant seeks leave to appeal my order
dismissing her application.
[2] Leave should be granted if the appeal “would have reasonable prospects of
success” or there is another compelling reason to grant it.
1 Leave to appeal is not there
for the asking. It should be granted “only when there is ‘a sound, rational basis for the
conclusion that there are prospects of success on appeal’.”2
[3] To my mind the prospect of another court coming to a different conclusion from
mine depends on the nature of the discretion that a court exercises when it decides
1 Superior Courts Act 10 of 2013 s 17(1)(a).
2 Four Wheel Drive Accessory Distributors CC v Rattan NO [2018] ZASCA 124; 2019 (3) SA 451 (SCA)
at para 34, quoting S v Smith [2011] ZASCA 15; 2012 (1) SACR 567 (SCA) para 7.
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an application for rescission under rule 31(2)(b) . There is ample authority for the
proposition that a court under rule 32(1)(b) exercises a discretion:
[3.1] Herbstein and Van Winsen cite a Rhodesian and a Namibian case for
the proposition that “[t]he court has a very wide discretion”.3
[3.2] Similarly, Erasmus says: “The court has a wide discretion in evaluating
‘good cause’ in order to ensure that justice is done.”4 It cites a recent Full Bench
decision in Pretoria in support.5
[3.3] The Constitutional Court has held that “The discretion of the Court in
granting rescission at common law is fairly wide.” 6 I understand the discretion
under rule 31(2)(b) to be similar to the common law discretion.
[4] But none of these cases or authorities specifically deal with the nature or type
of the discretion. Beyond these general descriptions , I could find no authority on the
point, and counsel could refer me to none.
[5] The question matters because “the approach of an appellate court to an appeal
against the exercise of a discretion by another court will depend upon the nature of
3 Cilliers, Loots & Nel Herbstein and Van Winsen: Civil Practice of the High Courts and the Supreme
Court of Appeal of South Africa (5th Ed, 2009) ch27- p715, fn 98, citing Du Preez v Hughes NO 1958
(1) PH F17 (SR); Krauer v Metzger (2) 1990 NR 135 (HC) at 139G–140F, 141G–J.
4 D Van Loggerenberg Erasmus: Superior Court Practice (2022, RS 20) D1-365.
5 Ibid fn 66, citing Hossein N.O and Others v Adinolfi and Others [2022] ZAGPPHC 857 at para 19.
6 Occupiers of Erven 87 and 88 Berea v De Wet N.O. and Another [2017] ZACC 18; 2017 (8) BCLR
1015 (CC); 2017 (5) SA 346 (CC) at para 71.
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the discretion concerned.” 7 If it is a discretion in the strict sense 8 – where the court
could legitimately choose from different options – the appellate court will only interfere
if “the discretion has not been exercised judicially or has been exercised based on a
wrong appreciation of the facts or wrong principles of law”.9
[6] But sometimes the term “discretion” is used merely to convey that a court “is
entitled to have regard to a number of disparate and incommensurable features in
coming to a decision”.10 If it is this type of discretion – a discretion in the ordinary sense
– an appellate court is entitled to interfere simply because it disagrees with the
outcome, even if the original court acted judicially.
[7] There is also case law that suggests this neat boundary between discretion in
the strict sense and the ordinary sense is not rigid and binary, but that there are
gradations of discretion. The scope for legitimate appellate interference will depend
on the precise nature of each discretion, rather than its categorization.
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[8] For reasons I set out more fully below, if the discretion to grant or refuse
rescission is one in the strict sense, then I see no reasonable prospects that an
appellate court will interfere with my judgment . The Applicant has not convinced me
7 Giddey NO v JC Barnard and Partners [2006] ZACC 13; 2007 (5) SA 525 (CC); 2007 (2) BCLR 125
(CC) at para 19.
8 As O’Regan J notes in Giddey at fn 17, various terms are used to describe this type of discretion – a
“strong” discretion a discretion “in the narrow sense” or a “true” discretion. I use her descriptor of a
discretion “in the strict sense”.
9 Giddey (n 7) at para 19.
10 Knox D'Arcy Ltd and Others v Jamieson and Others 1996 (4) SA 348 (A) at 361H-I.
11 Giddey (n 7) at para 19, referring to S v Basson 2007 (3) SA 582 (CC); 2005 (12) BCLR 1192 (CC)
at paras 110-1.
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that my decision to refuse the application for rescission was based on wrong
application of law or facts, or that I did not act judiciously.
[9] However, if I exercised a discretion in the ordinary sense, then I can readily see
another court coming to a different conclusion. I refused to grant rescission because,
in my view, the Applicant had failed to establish a bona fide defence in her founding
papers. However, an appellate court may legitimately take a broader view, consider
the allegations in reply, venture into possible defences not made out in the application,
and decide to rescind.
[10] As I do not think there is a clear answer on the nature of the discretion, and as
the Applicant will have reasonable prospects of success if it is a discretion in the
ordinary sense, there are reasonable prospects of success . I intend to grant leave to
appeal for that reason.
[11] As it may aid the appellate court, I intend to nonetheless briefly set out my own
view on the nature of the discretion, and on the merits of the various arguments raised
in the application for leave to appeal.
The Nature of the Discretion
[12] Whether a discretion is on in the true or the ordinary sense appears to depend
on the type of issue a court is deciding (procedural or substantive), whether policy
should encourage or discourage appeals, and the nature of the factors the court must
consider and the question it must answer.
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[13] Issues that go primarily to a court’s process are ordinarily regarded as
discretions in the strict sense – costs,12 condonation,13 postponement,14 the admission
of evidence,15 and just and equitable remedy16 are classic examples. Questions that
determine the substantive outcome of a dispute, are generally discretions in the
ordinary sense. So the grant or refusal of an interim interdict, 17 or an eviction 18 is
subject to full appellate re-evaluation.
[14] The decision to grant or refuse rescission has elements of both. It is a
procedural issue – should a case that was finalized be re- opened? That is an issue
that affects the operation of the court that granted it. That is why a decision to grant
rescission is not appealable. But an order refusing rescission is also a decision that
can finally close the door to a party and so can be determinative of their substantive
rights and obligations. If rescission is refused, the judgment stands.
[15] Judgments on this issue refer to the question of whether, as a matter of policy,
appeals should be allowed.19 This is particularly the case with interlocutory decisions.
While the grant of rescission is unappealable because it is not final, the refusal of
12 Giddey (n 7).
13 Mabaso v Law Society of the Northern Provinces [2004] ZACC 8; 2005 (2) SA 117 (CC); 2005 (2)
BCLR 129 (CC) at para 20.
14 National Coalition for Gay and Lesbian Equality and Others v Minister of Home Affairs and Others
[1999] ZACC 17; 2000 (2) SA 1 (CC); 2000 (1) BCLR 39 (CC) at para 11.
15 Basson (n 11)
16 Trencon Construction (Pty) Limited v Industrial Development Corporation of South Africa Limited and
Another [2015] ZACC 22; 2015 (5) SA 245 (CC); 2015 (10) BCLR 1199 (CC).
17 Knox D’Arcy (n 10).
18 Ndlovu v Ngcobo; Bekker and Another v Jika 2003 (1) SA 113 (SCA) at para 18.
19 See, for example, Giddey (n 7) at para 22.
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rescission is final. It does not seem to me that there is any policy reason to avoid
appeals against the refusal of rescission.
[16] Finally, the nature of the issues to be considered – was there wilful default and
is there a bona fide defence – are issues where a court can either be right or wrong.
The Court must apply the appropriate test. It seems that a court may have some
discretion where the scales are finely balanced – where it is debatable whether there
was wilful default, and the bona fides of any defence is uncertain. But where an
applicant shows she is not in wilful default and establishes a bona fide defence, a court
has limited if any scope to refuse rescission for other reasons.
[17] On balance, despite the cases and academic authorities that describe it as a
“wide discretion”, in my view it is a discretion in the ordinary sense. But that is
ultimately an issue the court on appeal will need to determine.
Grounds of Appeal
[18] With regard to the Applicant’s grounds of appeal, I address them only briefly .
As I intimated above, I am not convinced that any of them demonstrate that I acted
injudiciously or on wrong facts or law. But I do accept that an appellate court may
evaluate the pleadings and the facts differently. The reasons arise from the Applicant’s
grounds of appeal.
[19] First, the Applicant submitted that the Court ought to have considered that she
was sued as a guarantor, not as a principl debtor. This did not affect the nature of her
defences; but, she argued, it meant that she was only placed in a position to fully
analyse the facts when she received the answering affidavit. I was therefore wrong to
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insist that the case should have been made in founding, and could not be made in
reply. I do not think this ground has merit. An applicant for rescission either has a bona
fide defence or she does not. She can either make out that defence in founding papers
or she cannot. If she does not know facts that would establish a bona fide defence,
then rescission should be refused. It is of course true that sometimes defendants only
identify a defence through pleading and discovery. But rescission is for parties who
already have a bona fide defence, not for those who have none but hope to identify
one at trial.
[20] Second, the Applicant pointed out that I erred in concluding that it was not clear
when Gragood was placed in business rescue. I admit the error, but I do not see how
it affects my evaluation of the Applicant’s defences. She also alleged I was wrong
about the date on which the agreements were cancelled. I do not believe I erred in this
regard, but in any event I fail to see why it would matter if I had.
[21] Third, the Applicant contends that I failed to adequately consider the role of Kalt
in insisting she sign as a guarantor, and in approving the transaction for “astronomical”
amounts. Neither argument addresses my fundamental difficulty – there is no basis
laid in the founding papers to explain how the Respondent was involved in any fraud.
These two facts – that the applicant was a guarantor and that the prices were high –
would not justify an inference of fraud even if proved at trial. They do not give rise to
a bona fide defence.
[22] Fourth, the Applicant alleges that I wrongly sought to enter into the probabilities.
I do not believe that I did so. Where a defence relies on inference, a court must
inevitably consider some degree of probabilities in order to assess whether it is a bona
fide defence or not. It must ask whether, if the facts alleged are established, the
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inference the applicant seeks to draw would follow. Here the argument was that the
rates were exorbitant, therefore there was fraud. The difficulty I saw was that even if
the Applicant could establish that the rates were exorbitant, that could not , without
more, lead to an inference of fraud. As no additional fact was alleged – that the rates
were increased for her specific transaction – there was no bona fide defence.
[23] Fifth, I was wrong, the Applicant claims, to hold her to her founding papers on
the basis that Kalt had been denied an opportunity to provide an answer because he
had given his full version in answering papers. But he answered the case that was
made. The case was that one of Sunlyn’s agents was directly involved in the fraud. As
the Applicant accepted in reply, that was not the case. Kalt and the Respondents were
not called to answer a case that, despite Kalt having never met the Plaintiff or
Koegelenberg, fraud could be inferred from other facts. That is also the reason that,
despite alleging the rentals were exorbitant, the Respondents were not afforded a fair
opportunity to answer – because the fraud was not inferred from the exorbitant rentals
but directly alleged through the connivance of an unnamed agent. That allegation was
abandoned. It was not necessary, given the nature of the case in the founding papers,
for the R espondents to have shown that their rentals were not increased for the
Applicant. And it would have been unfair to grant rescission in those circumstances.
[24] Sixth, the Applicant referred to various judgments that rely on ubuntu or good
faith in contracts. But the law on this is clear – parties must be held to their contracts
unless to do so would be contrary to public policy, or unconstitutional.20 The Applicant
did not raise, as one of her defences, that the leases or her guarantees were contrary
20 Beadica 231 CC and Others v Trustees for the time being of the Oregon Trust and Others [2020]
ZACC 13; 2020 (5) SA 247 (CC); 2020 (9) BCLR 1098 (CC).
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to public policy, or unconstitutional. Nor did she argue that enforcing them in these
circumstances would violate the Constitution or public norms. She cannot , in an
application for leave to appeal, seek to introduce a new defence.
[25] Seventh, the Applicant pointed out that the letter of 19 January 202 3 arrived
just a day before she launched her application for rescission. That is so. But the same
allegation – that “the cost of sale of the goods exceeded the amount the goods were
sold for” – appeared in the particulars of claim. The Applicant knew this fact, yet sought
to advance a defence that failed to take it into account.
[26] For these reasons, I see no fundamental error in my judgment. Rescission
demands fairness to both parties. A party that properly served a summons and
obtained a default judgment is entitled to rely on the finality of that judgment unless a
case is made for rescission. I took the view that it would be unfair to the Respondents
– and almost certainly of no benefit to the Applicant – to reopen a case which would
still end in her being liable as guarantor, however unfair that may seem.
[27] But I accept that another court may be more lenient to the way the Applicant’s
case morphed from founding to reply, or may see the equities differently. Therefore,
as an appellate court may have the ability to reconsider how I exercised my discretion,
I grant leave to appeal.
[28] I make the following order:
[28.1] Leave to appeal is granted to the Full Bench.
[28.2] Costs of this application will be costs in the appeal. If the Applicant does
not prosecute the appeal, she shall pay the Respondents’ costs in this
application.
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M J BISHOP
Acting Judge of the High Court
Counsel for Applicant: Adv M Nowitz
Attorneys for Applicant STBB|Smith Tabata Buchanan Boyes
Counsel for Respondents: Adv L Wessels (heads of argument
prepared by Adv S Aucamp)
Attorneys for Respondents Smith Jones & Pratt Inc