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IN THE KWAZULU-NATAL HIGH COURT

DURBAN AND COAST LOCAL DIVISION

REPUBLIC OF SOUTH AFRICA

CASE NO: 4562/2009

In the matter between:

INDREES KHAN …..............................................................................................PLAINTIFF

and

A1 SCRAP METALS CC ….................................................................FIRST DEFENDANT

JASWIND SINGH ….......................................................................SECOND DEFENDANT

REENA SAHADEW …........................................................................THIRD DEFENDANT

Delivered: November 2010

JUDGMENT

HUGHES-MADONDO AJ

In these motion court proceedings the first and second defendant seek to rescind and set aside the default judgement granted against them on 6 May 2009.

The second defendant is a member of the first defendant. The third defendant is the mother in law of the second defendant.

On 10 June 2009 the attorney for the first and second defendants allegedly perused the court file and advised them of the judgment taken against them. This was the very first time they became aware of the judgment. The second defendant states that he consulted with his attorney and counsel on the 11 June 2009 in order to launch these rescission proceedings.

The second defendant alleges that he is a citizen of India. Further that during the period 3 or 4 November 2008 until 26 May 2009 he was not in South Africa, but was in India attending on his mother who was seriously ill in hospital having undergone bypass surgery.

The second defendant states that he was advised that the plaintiff had instituted an action and the summons was served all three defendants on 27 March 2009. The first defendant was served the summons at its registered address. The second defendant’s summons was received by the third defendant.

The second defendant consulted with his attorney and established that his attorney had called the Deputy Sheriff and told him that the second defendant was in fact the sole member of the first defendant and was currently out of South Africa. According to the second defendant the Deputy Sheriff undertook to amend the return of service, but to date this has not been done.

To demonstrate that he was not in the country when these proceeding were taking place the second defendant put up extracts from his passport, indicating the necessary boarder control stamps showing exist and entry into South Africa and India.

The second defendant stated that from June 2008 to October 2008 the third defendant held 80% membership within the first defendant. However as at October 2008, she has relinquished her membership and the second defendant is now the sole member.

The second defendant alleges that the plaintiff invested an amount of R235 000.00 in the first defendant’s business. At that time the third defendant held 80% membership. The first defendant ceased trading on or about November /December 2008 and has been dormant todate. The second defendant alleges that on 26 August 2008 the plaintiff borrowed monies and a scale, the aforesaid being property of the first defendant. The plaintiff is therefore indebted to the first defendant in respect of those monies and scale.

On the other hand the plaintiff alleges that the second defendant knew of the summons however he opted to do nothing about it. The plaintiff alleges that there was a verbal agreement between him and the second defendant. The plaintiff further alleges that the second defendant on behalf of the first defendant loaned an amount of R302 000.00. The plaintiff did so because it was agreed that he would share in the profits of the first defendant at the end of the month and at the end of the financial year. He also travelled and visited businesses in Bethlehem, QwaQwa, Bloemfontein and Estcourt in order to source scrap metal with the second defendant. He alleges further that he advanced an amount of R50 000.00 to the first defendant in order to purchase this scrap metal.

These are the salient background facts relevant in the adjudication of this application.

Rule 42 of the Supreme Court Rule of Court sets out the three circumstances under which a court may rescind or vary a judgment:

1. An order or judgment erroneously sought or erroneously granted in the absence of any affected party;

2. An order or judgment wherein there is ambiguity, or a patent error or omission...;

3. An order or judgment granted as a result of a mistake common to the parties.

In these proceeding the first and second defendants seek rescission on the ground that the judgment was erroneously sought or granted in their absence. In terms of the common law the court has the power to rescind a judgment obtained by default of appearance. However there needs to be sufficient cause shown to do so, as was stated in Chetty v Law Society, Transvaal 1985 (2) SA 756 (A) 764J- 765 D, this encompasses presenting a reasonable and acceptable explanation for the default and illustrating that on the merits one had a bona fide defence, that prime facia, had prospect and probability of success.

In the founding affidavit of the second respondent paragraph 39 to 41, the second defendant makes mention that a query was raised by the registrar prior to judgment being granted. The query posed the following question:

‘Was part of the oral agreement that the defendants would be liable jointly and severally? If not then liability is joint only.’

The applicant responded in a letter:

‘2. ....the specific term of the verbal agreement was that the second defendant, Jaswind Singh would represent himself and the first and second defendants in securing a loan on behalf of the first defendant, A1 Scrap Metals CC.

3...the understanding between the parties in concluding the verbal agreement was that in the event of any of the defendants failing to effect payment the plaintiff would look to any one of the defendants jointly, the one absolving the other for payments.

4. We humbly request that you grant default judgment against the first and second defendants jointly and severally, the one paying the other to be absolved for.’

The explanation advanced as is set out above, was clearly not pleaded by the plaintiff in its papers. Therefore to my mind the plaintiff would not have been entitled to the relief it was granted. At no stage did the plaintiff cause the necessary amendments to his pleadings. The evidence in the form of an explanation put up by the plaintiff constituted material terms to the verbal agreement relied upon by the plaintiff.

A court is entitled to grant rescission of a judgment granted, where on the papers before the court, the pertinent material terms of a verbal agreement upon which the plaintiff relies where not even before those granting the judgment.

Further, the summons in the main action was receipted by the third defendant on behalf of all three defendants. The third defendant was the only one who filed an appearance to defend in her personal capacity. This coincides with the second defendant’s submissions that he was out of the country and the sole member of the first defendant. The plaintiff’s representative took issue with the extract that appeared in the second defendant’s passport. My view is that this does not take the plaintiff’s case anywhere as the plaintiff was at liberty to inspect the second defendant’s passport at any time. He failed to do so.

The first and second defendants have demonstrated that they were not in wilful default when the erroneous order was sought and granted.

The costs are to follow the successful litigant.

I make the following order:

The Default Judgment granted against the first and second defendants on the 6 May 2009 is hereby rescinded with the plaintiff to pay the costs of this application.

HUGHES-MADONDO AJ

1. osts of such procee

APPEARANCES:

Counsel for the plaintiff: S.K. Dayal

Attorneys for plaintiff: Reg Thomas Attorneys

Counsel for the defendants: H. Gunase

Attorney for defendants: Chetty & Kistan Attorneys

Heard on: 19 October 2010

Delivered on: 19 November 2010

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