With the current prescribed interest rate being 8.75%, the lowest it has been in the last decade, obtaining credit from a financial institution is more affordable than it has been for many years. An application for credit could however be frustrated if a judgement has been recorded against your name by a court order and registered at the credit bureau without you having any knowledge of these events. This can and does happen frequently. A common cause is as a result of a summons being served on an address where the debtor no longer resides.
A default judgment is attached and registered against your name when a court finds that you are liable for a debt or if you have failed to act in accordance with the Uniform Rules of Court. South African law allows you to approach a court, on application, to rescind the judgment (set it aside) against you. Typically, default judgement for payment of debt will be granted against you if you have failed to appear at court and prove to the Magistrate that you do not owe the money for whatever reason.
It is necessary to know the procedure to follow to rescind the default judgement. You are entitled, in terms of Rule 49(1) of the Magistrate’s Court Rules, to serve and file an application at court within 20 days after obtaining knowledge of the judgment, and on notice to all parties to the proceedings, for a rescission or variation of the judgment and the court may, upon good cause shown, or if it is satisfied that there is good reason to do so, rescind or vary the judgment on such terms it deems fit. This application must be supported by an affidavit setting out the reasons for the party’s absence or default and the grounds of the party’s defence to the claim. The court will be reluctant to rescind a judgment if it is found that the party was aware of the legal action against him or if the default was due to his own negligence.
There are three grounds on which one may apply for rescission of a judgment in the Magistrate’s Court:
- If you have valid defence to the claim that you did not raise, as a result of having no knowledge to the legal action;
- If the judgment debt has been fulfilled within a reasonable time of having knowledge of the judgment; or
- If the party who obtained judgment against you (judgment creditor) consents to the rescission.
In respect of judgments which were obtained in the High Court, the position prior to 11 March 2019 was that you had to prove good cause to apply for a rescission of judgment. This meant that you were required to prove that you have a reasonable explanation for the default, that the application is brought bona fide and not with the intention to delay the claim against you and that you have a bona fide defence.
Thankfully, the position has changed since 11 March 2019 in that you are entitled to bring an application for rescission of judgment in the High Court without having to show good cause. Once the court has rescinded the judgment, the credit bureau needs to be informed thereof in order for them to update their records.
Please note that this article has been generated to serve as a general information sheet and should not be used or relied on as legal advice. Each case is dealt with on a case by case basis and you should always contact your legal adviser for specific and detailed advice on your particular matter.
Author: Delia Chamberlain