Case Law[2025] ZAWCHC 367South Africa
Potas and Another v Van Der Merwe Venter 24 (Pty) Ltd (11227/2024) [2025] ZAWCHC 367 (19 August 2025)
High Court of South Africa (Western Cape Division)
19 August 2025
Headnotes
Summary: Recission application under Rule 42, alternatively, the common law. Applicants rely on Rule 42(1)(a), alternatively, the common law. Applicants contend they were not properly served with the Respondents' papers in the money judgment based on an acknowledgement of debt. Requirements for a valid acknowledgement of debt revisited. Loose and imprecise reference to and usage of provisional sentence proceedings, negotiable instruments, and suretyship is not encouraged. There is a limit to which Applicants can attribute blame to the opponent’s legal representatives before it becomes untenable, if not unbelievable. Applicants fail to make out a case for rescission.
Judgment
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## Potas and Another v Van Der Merwe Venter 24 (Pty) Ltd (11227/2024) [2025] ZAWCHC 367 (19 August 2025)
Potas and Another v Van Der Merwe Venter 24 (Pty) Ltd (11227/2024) [2025] ZAWCHC 367 (19 August 2025)
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sino date 19 August 2025
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case no: 11227/2024
In the matter between:
JOHAN LEWIS
POTAS
FIRST APPLICANT
JAYEHMENN LEWIS
POTAS
SECOND APPLICANT
and
VAN DER MERWE VENTER
24 (PTY) LTD
RESPONDENT
Heard
:
08 August 2025
Delivered
:
19 August 2025
Summary:
Recission application under Rule 42,
alternatively, the common law. Applicants rely on Rule 42(1)(a),
alternatively, the common
law. Applicants contend they were not
properly served with the Respondents' papers in the money judgment
based on an acknowledgement
of debt. Requirements for a valid
acknowledgement of debt revisited. Loose and imprecise reference to
and usage of provisional
sentence proceedings, negotiable
instruments, and suretyship is not encouraged. There is a limit
to which Applicants can
attribute blame to the opponent’s legal
representatives before it becomes untenable, if not unbelievable.
Applicants fail
to make out a case for rescission.
ORDER
The application for
recission of the order of 18 June 2024 under case number 11227/2024
is dismissed. The Applicants shall pay the
Respondent’s party
and party costs and Counsel’s fees on scale B as taxed or
agreed.
.
# JUDGMENT
JUDGMENT
Bhoopchand AJ:
[1]
The Applicants apply for recission under
Rule 42 of the Uniform Rules of Court (‘URC’),
alternatively under the common
law, of the order by default granted
on 18 June 2024. They allege that the order was erroneously sought
and/or erroneously granted.
They, in addition, seek leave to oppose
the application instituted by the Respondent for
R810 374.90. The First Applicant deposed to the founding
affidavit.
[2]
The First Applicant explained that the
cause of action was an acknowledgement of debt. He denies that either
he or the Second Applicant
is indebted to the Respondent in their
personal capacities or their capacities as directors of Fulani
Investments (Pty) Ltd (‘Fulani/the
business’), which the
Respondent liquidated. The First Applicant believed that the amount
claimed by the Respondent may have
been extinguished or significantly
reduced by the sale of the business and assets owned by Fulani to
another entity, which continued
operating the business using the
assets and accounting procedures of Fulani.
[3]
Fulani concluded a lease agreement with the
Respondent to rent premises in Paarden Eiland on 23 March 2021. The
Respondent did insist
on security to cover Fulani’s debts.
Fulani experienced financial difficulties during 2022 and 2023 and
fell into arrears
with its rental payments. The Respondent instituted
liquidation proceedings against Fulani in 2023. Fulani was indebted
to the
Respondent for R766 877.51 as of 9 May 2023. To prevent
the liquidation, Fulani agreed to sign an acknowledgement of debt
(‘AOD’). The Applicants were included as parties in the
acknowledgement of debt process. The Applicants contend that
they
were not sureties under the lease agreement and, in the absence of a
deed of suretyship, they were not indebted to the Respondent
for any
amount. The Applicants claim that the Respondent’s attorney
placed undue influence on them to sign the AOD. They
allege that the
Respondent’s attorney did not explain to them that the AOD
would bind them personally for the debt owed to
the Respondent
by Fulani. After signing the AOD, Fulani and the Respondent concluded
a settlement agreement under which the
liquidation proceedings were
settled. Still, the Respondent reserved its rights to continue with
the liquidation application should
Fulani fail to discharge its
payment obligations as per the settlement agreement. The
Applicants assert that the underlying
causa
of the settlement agreement was the arrears of rent under the lease
agreement. Neither the Respondent nor Fulani intended to novate
the
lease agreement and the obligations arising thereunder. The latter
was evinced by the Respondent proceeding with the liquidation
of
Fulani based on the lease agreement and the arrears accumulated
thereunder. Fulani was unable to discharge its payment obligations
under the settlement agreement, with the result that the Respondent
proceeded to liquidate Fulani.
[4]
Fulani was placed under provisional
liquidation on 30 November 2023 and finally liquidated on 5 February
2024. After the final liquidation
was granted, the Applicants were
not permitted to enter the leased premises. All Fulani’s assets
and accounting documents
were left in the premises. The Applicants
learnt sometime after that, Fulani’s assets were transferred to
a new entity, which
continued with Fulani’s business. The
Applicants allege that Fulani’s assets were acquired at a value
exceeding R3
million. As of 2023, Fulani’s assets were insured
for R1.6 million. They requested, but did not receive from the
liquidators,
the sale proceeds achieved. They contend that the debt
owed by Fulani would have been discharged in total from the sale of
Fulani.
They were unable to determine whether Fulani’s debt was
discharged in full. The Court notes that the Applicants were unable
to support any of these allegations and relied upon the Respondent to
answer them.
[5]
The default judgment was for R810 374.90.
The application for default judgment was served on Ms Buys, their
secretary, on 15
May 2024. Ms Buys could not have accepted service as
she was on sick leave. On 10 June, the Respondent subpoenaed the
Applicants
to appear at the second meeting of creditors at 09h00 on
18 June 2024. The Applicants suggest that the Respondent, in
collusion
with the liquidators, arranged the second meeting of
creditors for the same day on which the application for default
judgment was
enrolled. They allege that they learnt of the
application a few days before 18 June 2024, but after they received
the subpoena
to attend the creditor’s meeting. The First
Applicant states he contacted the Respondent’s attorney to
inform him of
the situation that required them to attend the Court
and the creditor’s meeting simultaneously. The Respondent’s
attorney
advised him that, as they had failed to enter an appearance
to oppose the application, there was nothing the Applicants could do
to prevent the relief sought in the default application from being
granted. They understood their attendance at Court would be
futile.
They took the advice of the Respondent’s attorney as being
correct. They did not attend Court as they did not want
to attract
criminal sanctions by ignoring the subpoena and avoid contempt
proceedings and incarceration. The Applicants state
they did
not appoint an attorney because of their ignorance of correct legal
procedures. They did not know that they could have
filed an intention
to oppose to stave off the default judgment. Their non-attendance at
Court was not wilful or
mala
fide
.
[6]
The First Applicant states that ‘ the
Respondent’s attorney did not report to him or the Second
Applicant on the outcome
of the proceedings on 18 June 2024. They
were advised for the first time on 7 August 2024 that the order had
been granted. On 7
August 2024, the Sheriff attended to attach
property pursuant to a writ of execution arising from the order
granted on 18 June
2024. They state that there was no correspondence
from the Respondent’s attorneys demanding payment of the
judgment debt
before the Sheriff attended their offices to execute on
it. The Court feels compelled to note the theme that permeated the
Applicants'
papers, whereby they attributed responsibility to
everyone else but themselves and failed to provide a satisfactory
explanation
for their inaction.
[7]
The Applicants contended that a judgment is
erroneously granted if there existed at the time of its issue a fact
of which a Court
was unaware which would have precluded the granting
of the judgment and which would have induced the Court, if aware of
it, not
to grant the judgment. If the facts of the matter disclose
that it was not legally competent for the Court to have made the
order,
or if the capital claimed by the Respondent may have already
been paid. The Applicants submitted that their case falls within
these
categories.
[8]
They assert that their
bona
fide
defence is that they were not at
any stage indebted to the Respondent in their personal capacities,
and the absence of a deed of
surety means they are not liable for the
debt of the company. The AOD records that the Applicants are indebted
to the Respondent
for R766 877.51. They assert that an
acknowledgement of debt cannot be used to create a liability
retroactively. They contend
that the AOD lacks the necessary elements
to impose personal liability upon them. They did not have the
necessary
animo contrahendi
to bind themselves personally for the discharge of Fulani’s
obligations. They submit that the AOD can only be viewed as an
undertaking to facilitate payment on behalf of Fulani. There was no
prior personal debt for them to acknowledge. The AOD was either
a
mistake or a deliberate misrepresentation. The AOD did not meet the
legal requirements for a deed of suretyship.
[9]
Fulani’s indebtedness under the lease
agreement amounted to R766 877.51. The deposit paid to the
Respondent was also
not considered. The Applicants contend that they
will suffer severe prejudice if the application for recission is not
granted.
They will be held liable for a debt they did not incur in
terms of an AOD for which there is no underlying cause. The
Respondent
may recover more from them than they could recover from
Fulani. They seek the opportunity to place their defences
before
this Court. The only prejudice the Respondent can suffer is a
delayed hearing of its case after pleadings have been exchanged. The
legal costs it incurs would have been anticipated by the
Respondent when it instituted these proceedings.
[10]
Tyrone Kleinjan, a director of the
Respondent, deposed to the answering affidavit. He averred that the
AOD constitutes a liquid
document entitling the Respondent to apply
for a provisional sentence under Rule 8 of the URC. The liquidity of
the AOD was not
affected by the underlying
causa
.
The
causa debitii
does not have to appear
ex facie
the document. The Respondent asserted that the AOD was in effect akin
to a suretyship as it complied with all the legal requirements
of a
suretyship.
[11]
The Respondent admitted that the Applicants
were not indebted to the Respondent in their personal capacities
before the signing
of the AOD. Still, they, to gain an advantage for
Fulani, accepted liability jointly and severally with Fulani. The
latter constituted
an indebtedness by them to the Respondent and
constituted a cause of action against them. The AOD was secured after
a provisional
liquidation order was granted against Fulani. The
Applicants met with the Respondent as they wished to negotiate to
halt the liquidation
proceedings. The Respondent agreed to negotiate,
provided the Applicants signed the AOD and thus accepted
responsibility for Fulani’s
debt. The Applicants had to pay
R150 000 immediately as part payment of Fulani’s debt. He
met with the Applicants on
9 May 2024. The Applicants agreed to the
Respondents' terms and conditions.
[12]
The AOD was specifically worded as the
Applicants failed to sign a deed of suretyship when Fulani entered
into the lease agreement.
The Respondents then prepared a settlement
agreement in the liquidation application, which would have the effect
of postponing
the liquidation
sine die
.
The settlement agreement was concluded on 12 May 2023. The
Applicant's attorney denied speaking to the Applicant about the AOD
before it was signed. The Applicants trade as Accountants in
Malmsbury. They cannot claim ignorance of an AOD. The Respondent
proceeded with the liquidation application as the Applicants and
Fulani had breached the AOD and the terms of the settlement
agreement.
Fulani was finally liquidated on 5 February 2024.
[13]
The liquidators valued Fulani’s
assets at R453 350. They sold the assets for R230 000. The
Liquidators hold the
funds. Fulani’s business was not sold. An
entity conducting a similar business operates from the same premises.
The insurance
valuation of Fulani’s assets contained stock and
other assets that did not exist when Fulani was liquidated. The
Master of
the High Court approved the sale of Fulani’s assets.
The Applicants declined the opportunity to object thereto, apply to
set it aside, or to participate in liquidating Fulani’s assets.
The debt owing to the Respondent increased until the premises
were
re-let.
[14]
The Respondent asserted that the
provisional sentence application was served on the Applicants at
their offices in Malmesbury. The
Sheriff would not have known the
surname of the Applicants’ secretary unless she told them so.
The Respondent did not serve
the subpoena to attend the creditors'
meeting of Fulani. The Registrar grants the Court date. The Master
determines the date for
appearance at a creditor’s meeting. The
First Applicant told the representative of the Respondent’s
attorney that he
was aware of the application in the High Court. It
was simply by coincidence that these two events fell on the same day.
The Respondent's
attorney denied that he ever had a conversation with
any of the Applicants. The only conversation he had was when he was
phoned
and asked whether he was prepared to accept an arrangement to
pay the outstanding amount in instalments.
[15]
The Respondent submits that the Applicants
do not have a
bona fide
defence or a defence that has any prospect of success. The deposit
paid on behalf of Fulani was taken into account in calculating
the
outstanding debt. Respondent denies that the Applicants will suffer
any prejudice if the recission application is unsuccessful,
as their
defence is without merit.
[16]
In reply, the Applicants denied that the
AOD is akin to a surety agreement. The agreement signed by them does
not comply with the
legal requirements of a surety agreement. They
state that the liquidation application was addressed in the
settlement agreement,
which was signed and obliged Fulani to pay the
Respondents' debt to postpone the liquidation. Fulani was also
required to pay the
agreed instalments on the debt. Fulani did make
the first payment of R150 000. The Respondent reserved the right
to continue
with the liquidation if the terms of the settlement
agreement were breached. It was incorrect for the Respondent to state
that
it reserved the right to continue with the liquidation if the
terms of the AOD were breached.
[17]
The Applicants deny that the valuation
placed on Fulani’s assets and the sale thereof was for fair
value. They deny that there
was any rental payable post-liquidation.
The new company started trading before the liquidation was finalised.
The Applicants admit
that they sent an email to the Respondent to
suggest a payment plan for the amount ordered by the Court to avoid
their property
being sold. They reassert that they did not have legal
knowledge and did not know their options. It was only after
consulting their
legal representatives that they realised they could
apply for rescission. They reassert that they were advised it was too
late
for them to do anything to stave off the default judgment. They
were made to understand that appointing an attorney would be futile.
Had they known that they could oppose the application, they would
have done so. They rejected the accusation that they were guilty
of
fraud. They reiterated that they did not pay any amount under the
AOD, and any payments made to the Respondent were by Fulani
in terms
of the settlement agreement. The new entity used their equipment,
accounting software and even their VAT number for a
period, and their
invoice numbers continued where Fulani’s ended. Some
of Fulani’s invoices were paid to
the new entity. The
Applicants did not provide any documents to support the latter
contentions.
[18]
The Applicants insisted that they could
explain their failure to defend the main application. The Respondent
misrepresented the
agreement it sought to enforce against them. It is
unclear as to whether they refer to the agreement underlying the AOD
or that
of the settlement agreement. The Applicants’ mistake as
to the true character of the agreement resulted in an
iustus
error
, which they contend is a
bona
fide
defence to the main application.
The defence of
iustus error
was pleaded as a sustainable
prima facie
defence that the Applicants sought to advance in the main application
if granted leave to do so. They asserted that they would
suffer
greater prejudice than the Respondent, should the default judgment
not be rescinded, hence the balance of prejudice favoured
the
rescission of the default judgment.
EVALUATION
[19]
The first issue of precedence in this
evaluation is to address the loose, imprecise, and incorrect usage of
terminology in the Respondent’s
answering affidavit. Respondent
referred to its entitlement to apply for a provisional sentence under
Rule 8 of the URC. The Respondent
later denied that the AOD is
without any legal force and that it could not be relied upon to
obtain provisional sentence against
the Applicants. Concerning the
AOD, the Respondent stated that although it is headed AOD, it is in
effect akin to a suretyship
as it complies with all the legal
requirements of a suretyship. Further in the founding affidavit, the
Respondents state that the
AOD was worded as it is because the
Applicants failed to sign a deed of suretyship when Fulani entered
the lease agreement. These
themes prevailed in the Respondent’s
written and oral submissions. Apart from causing confusion, the
procedure adopted by
the Respondent that led to the order of 18 June
2024 and the instrument upon which the application was premised is
clear from those
papers.
[20]
The Respondent did not institute action
proceedings for provisional sentence. The Respondent proceeded on
application for a money
judgment based on the AOD. The
terminology used by the Respondent is not merely semantic, as it
determines the nature of
the remedy available to the Applicants. A
provisional sentence is a specialised summons-based procedure for
enforcing liquid documents
like an AOD. There is no procedural
irregularity in applying for a money judgment based on an AOD.
Although the answering affidavit
loosely refers to provisional
sentence, that reference need not be fatal. The reference to
provisional sentence was not indicative
of an intention to invoke
Rule 8 of the URC. The Respondent therefore obtained default judgment
on an application for a money judgment
on notice of motion and no
further explanation or analogy was required. In the absence of
factual contestation, the issue of a
dispute of fact on application
proceedings did not arise. The Court proceeds to assess the
rescission application under Rule 31
and the common law. The court
must be guided by substance rather than form, and where no prejudice
is occasioned, a mischaracterisation
of the procedural label is not
fatal to the relief sought.
[21]
The
Respondent, having obtained an acknowledgement of debt (AOD) signed
jointly and severally by Fulani and the two Applicant directors
for
outstanding rental under a lease agreement, was entitled to pursue
enforcement of the AOD independently of the company’s
liquidation. The AOD did not novate the original obligation but
suspended the remedy until the AOD matured or was dishonoured,
following the principles articulated in
Adams
v SA Motor Industry Employers Association
[1]
.
The Respondent’s election to proceed against the Applicants
personally, and culminating in a default judgment, was procedurally
sound given their failure to oppose despite notice. The directors’
liability under the AOD was not contingent upon the finalisation
of
the liquidation, and the Respondent was not obliged to await the
outcome of that process before seeking judgment.
[22]
However, the Court notes that the
Respondent did not disclose the status of the liquidation process or
the likely yield in its papers
informing the application for a money
judgment. The Respondent’s omission to disclose the ongoing
liquidation, and the anticipated
dividend from the insolvent estate
raises concerns of procedural candour and equitable accounting. While
such omissions do not
vitiate the judgment
per
se
, they may be material to a
rescission application. The onus is on the Respondent to account for
any yield from the liquidation
to avoid double recovery and must
reconcile the interdependent remedies flowing from the original
obligation and the AOD. The enforcement
of the AOD, though valid, had
to be tempered by the overarching duty of good faith and the
equitable imperative to prevent unjust
enrichment.
[23]
The Respondent’s submission that the
AOD constituted a deed of suretyship is also incorrect. The Court
does not agree with
the Respondent when it characterises the AOD as a
deed of suretyship. The surrounding circumstances that led to the
conclusion
of the AOD are part of a process that validates the AOD
and not a deed of suretyship. The process in concluding a deed of
suretyship
differs materially from that of an AOD, but this does not
constitute a ground that could find favour for the Applicants. The
document
is a valid AOD. The Court can, in the circumstances, do
nothing further than warn against the loose reliance on and usage of
terminology.
It could well be material in an application of this
nature.
[24]
The Applicants rely on Rule 42(1)(a) or, in
the alternative, the common law in their application for recission of
the order of 18
June 2024. Under Rule 42(1)(a), a Court may, on
application, rescind an order obtained in the absence of any affected
party if
it was erroneously sought or erroneously granted. The two
other sub-rules allow for rescission if there is an ambiguity or a
patent
error or omission to the extent of such ambiguity or omission,
or in the circumstances of a mistake common to the parties. The
Applicants undertook to provide sufficient or good cause to
substantiate the application for rescission under the common law.
[25]
Rule
42 allows for the expeditious correction of a wrong judgment or
order.
[2]
The elapse of time
since the delivery of the judgment or knowledge of the judgment would
influence the Court’s discretion
in granting or refusing the
application.
[3]
The Applicants
instituted this application eleven weeks after the order was granted,
asserting that they obtained knowledge of
the order only when the
Sheriff arrived to attach their belongings. They contended that it
was incumbent upon the Respondent’s
attorney to inform them of
the order. As alluded to earlier in this judgment, these types of
excuses hold no water. The Applicants
were aware of the application
and the order. The concurrence of the application and the insolvency
hearing was not of the Respondent’s
making. The Applicants did
not have to be present at the application proceedings. They attempted
settlement of the order before
consulting a lawyer who advised
seeking rescission. The Respondent asserted that it is common cause
that the Applicants were physically
absent when the order was
granted, but that was by their own election. The words ‘granted
in the absence of any party affected
thereby’ in sub-rule 1(a)
were to protect litigants whose presence had been precluded and not
those who had been afforded
regular judicial process but opted to be
absent or whose absence was elected.
[4]
[26]
The
submission that service was not properly effected as Ms Buys was on
sick leave is unsustainable. How would the Sheriff have
known that
the person accepting service at the office of the Applicants was Ms
Buys if the latter did not give her name? The Applicants
do not
dispute that service was effected at their office. This period
between service and the granting of the order is characterised
by
their inactivity. They sought to evade responsibility for their
inactivity by, once again, attributing blame to the Respondent’s
attorney. The Applicants are Accountants, professional people, and
businessmen who managed a substantial business, Fulani. It is
untenable for them to contend that they relied upon the opponent’s
attorney to inform them of the process and that they were
ignorant of
the law. The procedure they had to follow was set out in the Notice
of Motion. The Applicants rendered an unsatisfactory
account of how
they became aware of the application for the money judgment that was
subsequently granted by default. The Respondent
submitted that a
return of service of a duly appointed Sheriff constituted
prima
facie
proof of the matter stated therein.
[5]
[27]
The Respondent’s attorney denied
giving the Applicants any advice or consulting with them during the
times material to this
application. All the Applicants had to do was
notify the Respondent’s attorney that they intended to oppose
the application,
appoint a service address, and file their answering
affidavit. They did nothing. There is no merit in this peripheral
ground raised
by the Applicants to justify the recission of the
order. The delay in instituting the rescission application would, on
its
own, have been fatal to the application. Still, the Court shall
consider the merits of the grounds raised by the Applicants under
Rule 42 and the common law.
[28]
Once
one of the grounds is established, e.g., that the judgment was
erroneously sought in the absence of a party affected by it,
the
recission of the judgment should be granted.
[6]
In
Zuma
,
the apex Court tempered the latter
ratio
by stating that once an Applicant has met the requirements for
recission, a Court is merely endowed with a discretion to rescind
the
order. It does not compel the Court to do so.
[7]
Absence and error are two separate requirements.
[29]
The
Applicants' defences are based on mistakes committed by them and
misrepresentations made to them. To the extent that the Applicants
relied upon Rule 42(1)(a), the only question is whether the judgment
was erroneously sought or granted. Rule 42 caters for mistakes.
[8]
The Applicants assert that to constitute
iustus
error
relating to the conclusion of the AOD, a mistake implies a
misunderstanding, misinterpretation, and resultant poor judgment
and
exacts a weaker standard of scrutiny than an error in imputing blame
or censure.
[9]
The Applicants
suggest that they laboured under a mistake that forms the basis to
resile from the contract. The contract referred
to concerns the AOD.
[30]
The Applicants contend that the wording of
the AOD, which states that they acknowledged that they were truly and
lawfully indebted
to the Respondent jointly and severally, the one
paying the other to be absolved, for the amount of R766 877.51
instead of
arrears, rentals and services, under certain terms, was
false. The Applicants did not provide surety for the lease, and their
evidence
that they did not do so was uncontested. They submit that,
against this, there is an untrue acknowledgement that the Applicants
were jointly and severally liable to the Respondent.
[31]
The Applicants allege that the Respondent’s
attorney misrepresented the document to them, and the issue of
whether the misrepresentation
is true is not a matter before this
Court. The Trial Court will determine that issue. The Applicant’s
intention was to assist
Fulani in meeting its obligations, not to
bind themselves personally for Fulani’s obligations. The
Applicants then proceeded
to justify the reasonableness of their
mistake. They raised, among others, their vulnerability as lay
litigants, the ambiguous
wording of the AOD, and the context of the
liquidation of Fulani and the purpose of the negotiations between the
parties.
[32]
An examination of the AOD indicates that
the Applicants admission of liability for the debt is unambiguous and
express, not contingent
or qualified. It was signed by both parties
in the presence of witnesses. The AOD specifies the exact amount
owed, the origin of
the debt, i.e., the lease agreement, the interest
rate payable, repayment terms, and default consequences. It reflects
the full
names of the debtors, including their identity numbers and
the registration number of Fulani. On the face of it, it is a
properly
executed AOD and thus a liquid document that can serve as
prima facie proof of indebtedness, permitting the Respondent to act
on
it in certain prescribed ways.
[33]
The Respondent answered that the Judge who
granted the default judgment order would not have known whether the
Applicants signatures
were appended to the document or not. This had
to be accepted at face value. The Court did not err in this regard.
The Applicants
were prepared to accept liability in their personal
capacity jointly and severally for the debt of their company owed to
the Respondent.
The Applicants did not dispute the debt owed to the
Respondent.
[34]
The
Applicants persisted with their untenable contentions that they were
unrepresented and susceptible to influence and that they
placed
reliance on the Respondent’s legal representative throughout.
The Respondent’s attorney denied any interactions
with the
Applicants relating to the AOD. The Respondent’s director
discussed the AOD with the Applicants, and the wording
of the
document, which they signed, is clear in its meaning and is
distinguishable from being a trap for the unwary as contended
by the
Applicants.
[10]
There is a
limit to which the Applicants can point a finger at their opponents
before these excuses become untenable and unbelievable.
As for the
alleged misrepresentation, the conclusion of the AOD occurred in
circumstances where the Applicants attempted to avoid
the liquidation
of Fulani, and they agreed to sign the AOD under the understanding
that the liquidation would be deferred, provided
they paid the
amounts agreed to. The circumstances leading to the signing of the
AOD belie the Applicant’s contentions regarding
misrepresentation. The Applicants do not suggest that the Respondent
committed any irregularity in the process.
[35]
As for the Applicants contention that
the claim may have been settled through the liquidation process and
the takeover of their
business by another entity, the Respondents
provided proof that there was no substance to these contentions. The
Applicants assets
were sold in a forced sale, and the Respondent
denied that the new entity that took over the Applicant’s
business or benefited
from the Applicants name, assets, or accounting
procedures.
[36]
The
Applicants have failed to establish that the order to be rescinded
was granted erroneously, nor that any good or sufficient
cause exists
for the order to be rescinded. They do not have a reasonable or
acceptable explanation for their default, or a
bona
fide
defence which carries any prospect, let alone on even a
prima
facie
basis, for succeeding with the application for recission of the order
of 18 June 2024. There was no mistake in the proceedings,
no
procedural irregularity, and no mistake in respect of the issue of
the order. The Applicants purported to introduce a defence,
but the
existence of a defence is, in any event, an irrelevant consideration
after the fact of the order being granted, as it cannot
transform a
validly obtained judgment into an erroneously granted judgment.
[11]
The order was not erroneously sought or erroneously granted.
[37]
An
application for recission of judgment on common law grounds includes
fraud,
iustus
error,
the discovery of new documents, default judgment and the absence of a
valid agreement and
iustus
causa
.
An application on common law grounds must be brought within a
reasonable time.
[12]
The test
for recission under the common law is that the Applicants must
establish that they had a reasonable and satisfactory explanation
for
their failure to oppose the proceedings, and that they had a
bona
fide
case
that carries some prospects of success.
[13]
[38]
The
Applicants must detail a reasonable explanation for the sequence of
events that led to the default. If the default was due to
gross
negligence, the Court should not come to the Applicants assistance.
Their case must be based on good faith, with a genuine
defence, and
not instituted for delay.
[14]
Under the common law, the Applicants are only required to make out a
prima
facie
defence by setting out averments which, if established at the trial,
would establish a defence.
[15]
The Applicants rely on the same assertions supporting their
application for recission under Rule 42(1)(a) to found their case for
recission under the common law. They have not made out a case for
rescission under either Rule 42 or the common law.
[39]
It follows that the application must fail.
The Respondents sought their party and party costs with
Counsel’s fees on
scale C. The defence of this application was
not complex enough to warrant the Court granting Counsel’s fees
on the C scale.
The Court shall grant the appropriate order
incorporating costs.
ORDER
The application for
recission of the order of 18 June 2024 under case number 11227/2024
is dismissed. The Applicants shall pay the
Respondent’s party
and party costs and Counsel’s fees on scale B as taxed or
agreed.
BHOOPCHAND AJ
Acting
judge
High
Court
Western
Cape Division
Judgment was handed down
and delivered to the parties by e-mail on 19 August 2025.
Applicant’s
Counsel: A J Van
Aswegan
Instructed by: Bester and
Lauwrens Attorneys
Respondent’s
Counsel: J C Tredoux
Instructed
by: Jordaan & Ferreira Inc
[1]
1981 (3) SA
1189
(AD) at 1190 C-E
[2]
Bakoven
Ltd v G J Howes (Pty) Ltd
1992 (2) SA 466 (E ) at 471 E-F
[3]
First
National Bank of Southern Africa Ltd v van Rensburg NO: in re: First
National Bank of Southern Africa Ltd v Jurgens
1994(1)
SA 677 (T) at 681 B-G,
Promedia
Drukkers & Uitgewers (Edms) Bpk v Kaimowitz
1996
(4) 411 (C ) at 421 G
[4]
Zuma
v Secretary of the Judicial Commission of Inquiry into Allegations
of State Capture, Corruption and Fraud in the Public Sector
Including Organs of State and Others
(CCT 52/21)
[2021] ZACC 28
;
2021 (11) BCLR 1263
(CC) (17 September
2021) at para 56(‘Zuma’)
[5]
S43(2)
of the Suoperior Courts Act 10 of 2013, Rule 4(6)(a),
Greef
v First Bank Ltd
2012 (3) SA 157
(NCK) at 160D.
[6]
Mutebwa
v Mutebwa
2001 (2) SA 193
(Tk) at 199 I-J
[7]
Zuma
supra at para 53
[8]
Colyn
v Tiger Food Industries Ltd t/a Meadow Feed Mills (Cape)
2003 (6) SA 1
(SCA) (‘
Colyn
’)at
para 5,
[9]
Sonap
Petroleum (SA) (Pty) Ltd v Pappadogianis
[1992] ZASCA 56
;
1992 (3) SA 234
(A) at 238 H
[10]
Brink
v Humphries & Jewell (Pty) Ltd
2005 (2) SA 419
(SCA) at 426 B-F
[11]
Lodhi
2 Properties Investments CC v Bondev Developments (Pty) Ltd
2007 (60 SA 87
(SCA0at paras 17 and 27.
[12]
Money
Box Investmnents 268 (Pty) Ltd v Easy Greens Farming and Farm
Produce CC
case number: A221/2019 GP, 16 September 2021 qat para 7
[13]
Zuma
at para 71
[14]
Colyn
v Tiger Food Industries Ltd t/a Meadow Feed Mills (Cape)
2003 (6) SA 1
(SCA) at para 11,
Greenberg
v Meds Veterinary Laboratories (Pty) Ltd
1977 (20 SA 277
(T) at 279
[15]
RGS
Properties (Pty) Ltd v Ethekwini Municipality
2010
(6) SA 572
(KZD) at para 10
sino noindex
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