IN THE HIGH COURT OF LESOTHO
HELD AT MASERU CCT/23/2010
In the matter between:
SENETTAM SUPPLIERS (Pty) Ltd 1st Applicant
TŠEHLA MAKARA 2nd Applicant
And
STANDARD LESOTHO BANK 1st Respondent
THE DEPUTY SHERIFF 2nd Respondent
In application for
rescission of judgement
JUDGEMENT
Delivered by the Hon. Mr Justice T. E. Monapathi
On the 13th Day of July 2011
1. In this application Applicants applied for rescission of a default judgement. The application was founded on the grounds that Applicant was not in willful default and that he had a bona fide defence.
2. The facts of the matter can be summarized as follows:
The Senettam had applied for a loan with First Respondent bank amounting to M247,528.93 in order to start a business. It fell into arrears in its payments by installments to the bank. Applicant would and did purchase a car wash equipment in Bloemfontein. And Applicant says that but due to unforeseen circumstances to start the project, it could not take delivery of this equipment ad left in custody of the seller while it sorted out logistics.
3. Applicant said while pursuing negotiations with the bank (about the loan) it was informed by the said supplier of equipment that the bank had removed the equipment and it was stored in a warehouse in Bloemfontein. While the bank contended that by agreement (clause 3) the goods still belonged to the bank (as true purchaser). It is important to note the aspect that in paragraph 6 and paragraph 7 of the banks answering affidavit, the bank said:
“It is admitted that the First Applicant failed to take delivery of the equipment because it experienced problems with the location of its business and it could not receive equipment for installation because the property was not ready to receive installation.”
And that later negotiations resulted in the supplier agreeing to release equipment to the Applicant. Significantly it was submitted that this could not be a defence to Applicant’s failure to pay the said areas. Around May 2010 Senettam was served with summons by the bank. Applicant averred that after receiving the summons, the parties had been negotiating settlement of that debt that arose due to arrear payments which were due and which he acknowledged.
4. It was the Applicant’s case that during the negotiations the bank did not indicate to him that it would proceed with the matter. Applicant had not indicated intention to defend because in his words “to a certain extent I did not deny liability”. On the 30th August 2010 the Respondent then as aforesaid, took a default judgement against the Applicant without notice. It was for this reason that Applicant submitted that he was not in willful default. Respondent does not accept and refutes that.
5. So that it became common cause that whilst the negotiations were going on the First Respondent as aforesaid took possession of the property which was the subject matter of the loan. To date the property is still with the First Respondent and never released to the Applicant hence why the Applicant said he had as bona fide defence. Applicant averred that he is not indebted to the First Respondent as he had already taken possession of the property. It was submitted that this had become irrelevant and/or it was a side issue.
6. Counsel further submitted that the application was fatally defective because the Applicants had failed, in the circumstances of this case, to explain their default of entry of appearance to defend and also failed to establish a bona fide defence. Mr. Mpaka for Respondent argued that a bona fide defence means averments which if proved, would constitute a defence to the claim. According to him, Applicant does not have a bona fide defence for the simple reason that he acknowledges his indebtedness to the Respondent. This is manifestly a situation where Applicant does not have bona fide dispute in that: “the defendant honestly intends to pursue before a court a set of facts which, if true, will constitute a defence” (see Saphula v Nedcor Bank Ltd 1999 (2) SA 76 at79B.
7 It is clear that, in principle and in the long-standing practice of our courts, the applicant for rescission, who bears the onus in this regard has to satisfy the court, inter-alia, that there was some reasonably satisfactory explanation why the judgement was allowed to go by default. In other words he has to show that there “sufficient cause or good cause”. It is a common requirement which must be shown because the object of rescinding a judgement is to restore to applicant an opportunity “to air a real dispute.” See again Saphula v Nedcor Bank 1992 (2) SA (1) at79B.
8. It is also clear, as it was submitted, that in principle there are three elements of sufficient cause for rescission of judgement by default namely: that the party seeking relief must present a reasonable and acceptable explanation for his default; and secondly, that on the merits such party has a bona fide defence which, prima facie carries some prospect of success. Thirdly, that the application was not merely for dilatory purposes. See the following cases; P. E. Bosman Transport Works Committee and Others v Piet Bosman Transport (Pty) Ltd 1980 (4) SA 794, Smith No v Brummer No and Another 1954 (3) SA 325 at 357-358 andGrant v Blumbers (Pty) Ltd 1949 (2) SA 740 (o).
9. It is sufficient if only one of these two requirements is met. For obvious reasons a party showing no prospect of success on the merits if the matter is sent for trial will fail in application for rescission of a default judgement against him, no matter how reasonable and convincing the explanation of his default. I emphasize that the Applicant must show that on the “set of facts” he has a bona fide defence which prima facie carries some prospect of success. This court emphasizes that the two of those requirements are the most important because both of them are centrally relevant in this matter.
10. I saw no need to deal with the issues of urgency, whether Rule 27 (6) or Rule 45 or Common Law was applicable except the above issue which Counsel focused on in argument.
11. For the above reasons I conclude that the Applicants have clearly not established a valid basis for the rescission of the judgement granted against them in this matter. Consequently the application must fail.
12. I would have inclined to a say that the Applicants shall pay the costs this application if their attitude had been that they were not indebted to the Respondent. I order that they pay the costs of this application.
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T. E. Monapathi
Judge
For Applicant : Adv. L Molapo
For Respondent : Adv. M Mpaka
