Rescission of Default Judgement | Legal Articles

 

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Rescission of Default Judgement

Debtors often make the big mistake of ignoring summons issued against them for payment. In such a case, the creditor may ask the court for default judgement.

Default judgements remain in effect for 30 years and will result in the blacklisting of the debtor, making it almost impossible to get credit.

How to rescind a default judgement

However, if you are dissatisfied with the default judgement or if you have since paid the outstanding debt and interest in full, you are permitted to apply for a rescission of default judgement. This would annul the previous default judgement that was handed down by the court.

Rescission of default judgement in the High Court

Rule 31(2)(b) of the High Court Rules states that: An Applicant (in this case you as the Debtor) may within 20 days after knowledge of the Default Judgement taken against him/her apply to the court upon the notice to the Respondent (the Creditor) to set aside the Default Judgement.   

The court will only set aside the Default Judgement if the applicant has shown sufficient grounds for rescission of judgement by showing “good cause”. In order to comply with the standards of “good cause”, the Applicant must prove three elements to the court.

Element 1

The Applicant must give a reasonable explanation for the default. It must be shown that the Applicant’s default was not wilful.

Wilful default will exist where the applicant either:

  • Had knowledge that the action was being brought against him/her;
  • Deliberately avoids entering an appearance to defend; or
  • Has a certain mental attitude to the consequences of default.
Element 2

Once the court has been satisfied that the Applicant’s default was not wilful, the Applicant must show the existence of a bona fide (authentic) defence.The applicant must demonstrate a prima facie case against the Respondent (Creditor). This means that the case must be one that, upon first impression, creates a substantial defence and is accepted as correct until proven otherwise.

Element 3

The applicant’s application must be bona fide. Therefore it must be clear that:

  • The applicant intends to use his/her defence and that
  • The reason for the application for Rescission of Judgement is to enable the applicant to have a day in court to do so.

In the event that the judgement was granted for non-payment of a debt which has since been paid in full by the debtor, simple consent given by the Creditor to the Rescission is not enough. The Debtor must comply with the requirements as discussed above.

Rescission of Default Judgement in the Magistrate’s Court

Rule 49(1) of the Magistrate’s Court Rules determines that if a Defendant (Debtor) seeks to rescind a Default Judgement, they have 20 court days (from the date which they were first aware of the Default Judgement) to serve and file an application for the rescission.

Notice of the application must be given to all the parties involved in the proceedings.

The difference between “good cause” and “good reason”

The first requirement is that the Applicant must show “good cause” as to why the judgement should be rescinded. This requirement is the same as discussed above at High Court.

However, Rule 49(1) makes provision for an alternative, which states that the court can be satisfied and judgement can be rescinded if there is “good reason” to do so.  The alternative of “good reason” appears to set a lower standard than that of “good cause” however it does not lower any requirements for the Applicant.

Creditor consent

In the event that judgement was granted for the non-payment of a debt which has since been paid in full, the Debtor can apply to have the judgement rescinded if the Creditor consents to the rescission.

Court Discretion

It is vital to note that the courts have wide discretion in deciding whether or not the applicant has shown “good cause”, but where the applicant was in wilful default Application for the Rescission of Default Judgement will generally fail.

Van Deventer & Van Deventer Incorporated - Rescission of Default Judgements Johannesburg

Contact us for professional legal advice and services.

 

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