REPORTABLE

IN THE HIGH COURT OF SOUTH AFRICA 
(WESTERN CAPE) CAPE TOWN.

CASE NO.: 1254/2003

In the matter between:

and

THRING, J.:

The question which arises for decision in this matter is whether a final judgment of the High Court can be set aside simply because it has been satisfied in full by the judgment debtor, and the judgment creditor consents to its rescission.

This is an application by the applicants for rescission of the judgment. It is brought under Rule 31(2)(b). There is also an application under Rule 27(3) for condonation of the applicants' failure to bring their application for rescission within the period of 20 days referred to in Rule 31(2)(b), which condonation will, in the circumstances, be granted.

"We will not appose (sic) the rescission of judgment.

	2.         We give condonation for late bringing of the application.
		3.         We confirm that your bond account is closed and bond cancelled in deeds 				office.
	4.          The cost for the above will be for your own account."
The letter purports to have been written by First Rand Bank, Limited as agent for Saambou, Limited. It can accordingly safely be accepted that the respondent consents to the judgment being rescinded.

The applicants aver that if it is not rescinded they will suffer prejudice, inasmuch as they will in future be unable to secure credit facilities from financial institutions. There is no suggestion anywhere on the papers that the applicants have or have ever had any defence to the respondent's claims against them. Nor is any express explanation proffered for their failure to enter appearance to defend the action, save for their averment

that	"(d)uring 2002/2003 the financial position of the second defendant

and myself [the first applicant] grew increasingly precarious	"   The fact
that they had no defence to the respondent's claims may, of course, have played a role in their decision not to defend the action: indeed, it seems not improbable that this was a material factor in that decision.

Rule 31(2)(b) under which, as I have said, the application is brought, reads as follows:

"A defendant may within 20 days after he or she has knowledge of such judgment apply to court upon notice to the plaintiff to set aside such judgment and the court may, upon good cause shown, set aside the default judgment on such terms as to it seems meet."

Rule 31(5) (d) may also be relevant. It provides:

"Any party dissatisfied with a judgment granted 	  by the
registrar may, within 20 days after he has acquired knowledge
of  such  judgment   	,   set   the   matter   down   for
reconsideration by the court."

An order or judgment may also be rescinded or varied under Rule 42(1), which reads:

(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."

It would be desirable, I think, to commence with some general observations of the common-law power, as I perceive it, of this Court to rescind its own final judgments and orders, as set out and discussed in a number of decisions of the Appellate Division and the Supreme Court of Appeal.

At 1042 F - 1043 A the learned Judge of Appeal continued:

Those grounds do not, for example, cover the case of a litigant, or his legal representative, whose default is due to unforeseen circumstances beyond his control, such as sudden illness, or some other misadventure; one can envisage many situations in which both logic and common sense would dictate that a defaulting party should, as a matter of justice and fairness, be afforded relief."

1)	
2)	Generally speaking, this Court, like the Courts of Holland, is empowered to rescind its judgments and orders given in default of appearance "on sufficient case shown" (at 1042 F-G: the word "case" may be a misprint here for "cause"); this is a discretionary power, the exercise of which is influenced by "considerations of justice and fairness, having regard to all the facts and circumstances of the particular case" (at 1042 H);

It is not sufficient if only one of these two requirements is met; for obvious reasons a party showing no prospect of success on the merits will fail in an application for rescission of a default judgment against him, no matter how reasonable and convincing the explanation of his default. And ordered judicial process would be negated if, on the other hand, a party who could offer no explanation of his default other than his disdain of the Rules was nevertheless permitted to have a judgment against him rescinded on the ground that he had reasonable prospects of success on the merits."

The two essential elements of the "sufficient cause" or "good cause" required for the rescission of a final judgment, both of which must be present, are, with respect, set out with abundant clarity in this passage, and

At 9 C-F (para. [11]) the learned Acting Judge of Appeal continued:

"	it is abundantly clear that at common law any cause of action, which is relied on as a ground for setting aside a final judgment, must have existed at the date of the final judgment.
There must be some causal connection between the circumstances which give rise to the claim for rescission and
the judgment	 "

On the facts of that case the learned Judge of Appeal held at 939 G-H that:

"	when the judgment was granted, no grounds existed for

Consequently, the Court found, the judgment could not properly be rescinded.

3)	The requirement that the applicant must satisfy the Court that there is some reasonably satisfactory explanation why the judgment was allowed to go by default; and
4)	

"The meaning of 'good cause' in the present subrule, like that of the practically synonymous expression 'sufficient cause'

definition",

"The term 'sufficient cause' (or 'good cause') defies precise or comprehensive definition, for many and various factors require to be considered "

"If a plaintiff has consented to rescission of judgment it can be inferred that he or she no longer wishes to execute on that judgment; it no longer serves any purpose.  Presumably the defendant has settled the debt or the plaintiff has forgiven the debt and there is no longer any need for the judgment. The procedure laid down in the Magistrates' Courts Rules also encompasses the situation where the plaintiff might incorrectly have obtained judgment by default and wishes either to initiate proceedings to rescind the judgment or to accommodate the defendant in doing so. All of this falls within the ambit of 'justice and fairness', which lies at the root of the 'good cause' requirement. The only consideration which might militate against such an interpretation is that the court must be astute to ensure that its Rules are not flouted. Since the Rules are intended to protect the plaintiff, the fact that he or she has consented to the rescission reduces the risk to such an extent that it seems unnecessary to require the courts to act as policeman in this situation."

(i)     that the party seeking relief must present a reasonable and acceptable explanation for his default; and

"In short, in my opinion, on the evidence, the respondent has only himself to blame for the fact that judgment was taken against him.
In my opinion, a contention that there is sufficient cause for rescission of a lawfully granted judgment where the judgment debt has been discharged, simply because the fact that the judgment was granted is prejudicial to the former judgment debtor in relation to his 'business activities', is unsound. The short answer to such contention is that, if one is concerned that there should be no judgment against one because its existence would be prejudicial to one in one's 'business activities', then one should promptly discharge the related indebtedness and thereby prevent the issue of summons against one, or otherwise conclude, if possible, some appropriate agreement with one's creditor. It follows that the evidence contained in para. 14 of the applicant's affidavit does not assist him.
The suggestion that it would be just and equitable to rescind the judgment is without substance. It is neither unjust nor inequitable to the applicant that the judgment should continue to exist where, as I have endeavoured to indicate, the fact that it was granted is to be attributed entirely to the applicant's own
fault.
Accordingly, in all the circumstances, I consider that the applicant has signally failed to establish sufficient cause for rescission of the judgment."

Furthermore, it seems to me that the public has a legitimate interest in what happens in the Courts, and, in particular, in what judgments and orders are handed down by them. Justice and fairness must also be extended to members of the public other than the judgment debtor, including his or her potential future creditors; it cannot be properly served, I do not think, by expunging from the Court's records judgments and orders which have been correctly and lawfully granted.

"If there is a commercial need for judgments properly sought and granted in the courts to be rescinded it is for the legislature to provide the necessary enactment. It is certainly not the function of the courts to make themselves a party to a fiction to satisfy what may be commercial needs."

"The matter of the credit reputation being the only explanation of the present application, I must also recognise that it is known that for several years these credit bureaus have been pushing for procedures for rescission of judgments to readily help a debtor who settled the debt after judgment had been granted. What they are seeking is that courts participate in falsifying a true perspective of the past. To them the only way to say that a judgment should no longer weigh (or weigh too much) against creditworthiness is to require court records to create the false impression that the person never had any adverse default. For that purpose it is sought to prod courts into saying that the judgment was wrong and a defence is available although the judgment was in fact correctly granted."

I agree, with respect.

Finally, as was said in that case at 786 E - F:

"I further question the morality of a commercial system which considers a default judgment (whether satisfied or not) to be an absolute bar to the obtaining of credit facilities, but which countenances support of an application for the rescission of such a judgment by the creditor once he has been paid. The predicament in which members of the public such as the present applicants find themselves is not the making of the Courts nor does the solution lie with the Courts."

"It should therefore no longer be necessary to seek adaptations to the common law, arguably by uncomfortable and artificial contrivance, to address the sort of unhappy predicament that the applicants in this case find themselves in. In future persons who find themselves in this predicament through failure to make responsible use of the machinery which the Act provides should, in my view, have to wait out the five year period provided under the regulations to the Act, after which default judgments fall automatically and compulsorily to be expunged from the records maintained by credit bureaux."

So that, whatever equitable need may in the past have been felt to exist for departing from the long-established principles of law to which I have referred, has now been more or less effectively dealt with by the legislature. I hasten to add that the mere expungement of certain information about debtors from the statutory records maintained by debit bureaux is, of course, something entirely different from and far less radical than the expungement from Court records of judgments and orders which have been lawfully, competently, regularly and properly handed down by the Courts.

For the above reasons I conclude that the applicants have failed to establish a valid basis at common law for the rescission of the default judgment granted against them in this matter.

at 785 B - D:

The application is refused.

I agree

I agree