CHANGUION v TRAM HOLDINGS (PTY) LTD 2007 (2) BLR 495 (HC)

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Citation: 2007 (2) BLR 495 (HC)
Court: High Court, Lobatse
Case No: Civ App 3103 of 2004
Judge: Nganunu CJ
Judgment Date: May 11, 2007
Counsel:
Flynote
Practice and procedure - Rescission of judgment - Rescission of judgment erroneously sought or granted -  Requirements for - Application to be brought within reasonable period of time - Applicant not required to disclose bona fide defence.

Headnote
The applicant sought rescission of a default judgment on the basis that the respondent's summons had not been served on him and the judgment had thus been 'erroneously sought or erroneously granted without notice to any  party affected thereby', as contemplated in Order 48 rule 1(a). The respondent raised the points in limine that the application had not been brought within a reasonable time, to wit, it had been launched five months after the applicant became aware of the judgment; and the applicant had failed to disclose a bona fide defence to the respondent's claim.
Held: (1) An application for variation or rescission of a judgment had to be made expeditiously and within a  reasonable period of time of the applicant's acquiring knowledge of the judgment. What was a reasonable period of time depended on the facts of each case.
(2) Whether a delay was reasonable depended on the length of the delay and the reasons for the delay, taking into account the background to the case and the gravity of the issues at stake.
(3) On the facts of the present matter, the length of the delay and the

2007 (2) BLR p496
reasons for the delay were not such as to render the delay unreasonable and thus a bar to the application for  rescission.
(4) Where rescission was sought under Order 48 rule 1(a), the applicant was not required to show a bona fide defence to the plaintiff's claim. It was sufficient that he did not have notice and knowledge of the action against him and that judgment was erroneously sought or erroneously granted.
(5) The respondent's points in limine therefore had to fail.
Case Information
Cases referred to:
Bakoven v G J Howes (Pty) Ltd 1992 (2) SA 466 (E)
De Sousa v Kerr 1978 (3) SA 635 (W)
Topol and Others v L S Group Management Services (Pty) Ltd 1988 (1) SA 639 (W) Application for rescission of default judgment. The facts are sufficiently stated in the judgment.
Judgment
NGANUNU CJ:
By notice of motion dated 14 December 2006, the applicant hereof sought an order of this court rescinding and  setting aside a judgment obtained by the respondent on 21 March 2006 in default of the applicant's filing an appearance to defend the summons. The applicant also seeks cancellation of the writ of execution obtained thereafter, and costs of the application on the attorney and client scale and leave to defend the original action brought by the respondent. The respondent has raised points in limine to this application as follows:
    (i)    that the application for rescission is not brought within a reasonable time from the date of the grant of the default judgment and the accompanying writ of execution;
    (ii)    that the applicant has failed to establish a bona fide and valid defence to the respondent's (plaintiff's)  claim.
With these points, the respondent hoped to have the application dismissed with costs.
This application is brought under the terms of Order 48 rule 1(a) of the Rules of the High Court (Cap 04:02) (Sub Leg) which read as follows:     '1.    The court may in addition to any other powers it may have mero motu, or upon the application of any party affected, rescind or vary -
        (a)    an order or judgment erroneously sought or erroneously granted without notice to any party affected thereby;
        (b)    an order or judgment in which there is an ambiguity or a patent error or omission, but only to the extent of such  ambiguity, error or omission;
        (c)    an order or judgment granted as the result of a mistake common to all parties.'
The applicant based his application squarely in terms of para (a) of the above rule 1. He should therefore prove that the judgment was erroneously

2007 (2) BLR p497
NGANUNU CJ
sought or erroneously granted, and that this was done without notice to himself. The respondent argues that  even if this criteria were met, an application to rescind a judgment ought, in addition, to be made expeditiously, and without delay; and it argues that this application was made late and not within a reasonable time. In support of this argument, the respondent pointed out that the judgment sought to be rescinded was granted by the  registrar on 21 March 2006 and the applicant became aware of it on 17 July 2006 but did not launch its application for rescission until 14 December 2006. The intervening period of delay is two days short of five months.
It is argued that this period is unreasonably long and that, therefore, the application ought to be rejected. In the  affidavit supporting the application, the applicant sought to explain away the time he had taken before making this application. But, first, he confirmed that he had reached a sales agreement with the respondent as alleged by it in its summons commencing action. That agreement, he said, was entered on 17 April 2004. The applicant's story is to the effect that, although he had bought 51 per cent of fully paid and issued shares in Hippo Holdings (Pty) Ltd, trading as Netstar Botswana (Hippo), the respondent, as seller of such shares, failed to deliver them  when applicant was ready and willing to pay the purchase price thereof. Furthermore, the applicant stated that, to the knowledge of the respondent, he had entered into the agreement of sale on the basis and understanding that Hippo had an exclusive franchise from Netstar South Africa to use the Netstar motor vehicle tracking system in Botswana. And he maintained that at the time of the agreement, it was understood that the franchise was the  only lucrative asset Hippo held. The applicant emphasised that the respondent had made the representation that it held the franchise exclusively, but that soon after the signature of the agreement, it turned out that Hippo had no such franchise and was not entitled at all to use the Netstar tracking system in Botswana. He mentioned that, as a result of the misrepresentation, it turned out that he had bought an empty shell and was unable to use the  Netstar tracking system. He said that this was confirmed by Netstar South Africa when it warned him that he could not use such system.
The applicant complained that, as a result of this misrepresentation and breach of the agreement, he was totally unable to use Hippo as a business vehicle and he became impoverished. He said that, in consequence of his ruin, he decided to relocate to South Africa. However, he took care to let the respondent know that he was  relocating and he gave the respondent his address in South Africa.
The applicant's case for rescission is that, whilst he was in South Africa, the respondent launched its action against him for recovery of the purchase price of the shares in Botswana, and that the court was informed that the applicant had been served with the summons and other supporting documents at a place in Botswana. He  said that this was, in fact, not true, because, at the time the alleged service was effected, he was no longer in Botswana, and this was known to the respondent. The applicant pointed out to this court that the deputy sheriff who made the return of service had in fact rendered two such returns, alleging that he had served the applicant at two different locations in Gaborone at the same time. The applicant thus

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NGANUNU CJ
maintained that these returns were not true; and it was most likely that no attempts were actually made even to  serve him in Botswana. He said he only became aware that a case had been sued against him on 17 July 2006 in Johannesburg, after the judgment had been granted against him, when a deputy sheriff of the courts of South Africa served upon him the writ of execution and other documents which demanded satisfaction of the judgment granted by the High Court of Botswana. The applicant's explanation for the delay in approaching the Botswana courts for rescission of the judgment, once he had knowledge of the judgment, was that he had first to approach the South African courts to stay execution of the writ of execution that had been served on him. He says that this process took a long time and during the intervening period, his house burned down and he was hospitalised for more than one day. He admits  that some delay was experienced before he could come to Botswana and instruct lawyers to take up his case for rescission. In the circumstances, he explained that it was not until 14 December 2006 that an application for rescission was filed with the courts in Botswana. It is this application that I am now dealing with.
Normally, a judgment granted by a court becomes res judicata and the court that granted it is not entitled to  review, vary or rescind it. Applications to set aside or vary such judgments are permitted only in exceptional instances as allowed under Orders 31 or 48 of the Rules of the High Court and under the common law. These exceptions are narrowly prescribed and are subject to conditions in those rules and or at common law. Such conditions must be met before the same court can entertain an application to vary and or rescind its judgment. In terms of Order 48, the applicant for variation or rescission of a judgment must, in addition to meeting the conditions of that order, take his ease to court expeditiously and within a reasonable time after knowing that a judgment against him has been granted in court. What should be emphasized is that a judgment grants  remedies to the person in whose favour it is made. Action to deny the fruits of the judgment to the beneficiary must of necessity be expedited in view of the fact that the judgment could be enforced and potentially prejudice the winner. What is a reasonable time is a question of degree and will depend on the circumstances of each case.
In the present case, the period between 17 July 2006 to 14 December 2006 is a long time since the grant of the judgment. Whether such delay is unreasonable so as to deny the applicant to argue his case depends primarily  on the length of the period of delay and the reasons given for it by the applicant, taken against the background of the circumstances of the case including the weight of the issues involved. Faced with a writ of execution served on him in South Africa, the applicant had of necessity to react to it; and he says he did so by court action in the South African courts. And he says this took a while. I do believe, however, that he should not have  approached the Botswana courts only after he had finished with the South African courts. Action in both courts could have been simultaneous. Nevertheless, action was taken within five months, and taking into account the recent relocation of the respondent into another jurisdiction, the fact that the plaintiff knew of such relocation, but still attempted to serve the applicant only in Botswana,

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his explanation of what caused the delay, this period is not so unreasonable that it must constitute a bar to this  application.
The next question is what the applicant needs to prove under Order 48 rule 1 so as to succeed. The wording of the rule is simple. Unlike the provision of Order 31 rule 13(2) where leave to rescind a judgment will be given 'only ... on good and sufficient cause', Order 48 rule 1 only requires that the judgment should have been  erroneously sought or erroneously granted, and without notice to any party affected by it. There is no requirement under this rule for the applicant to prove that he had a good defence to the claim of the plaintiff or show any other good and sufficient cause. It is enough to succeed that the applicant did not have notice and knowledge of the action against him and that judgment was either erroneously sought or erroneously granted. I accept as also  reflecting the meaning of our Order 48 rule 1 what Van Winsen in the Civil Practice of the Supreme Court of South Africa (4th ed), says as follows at p 697:
    'An applicant who seeks to set aside in terms of Rule 42 (1) (a) a judgment granted in his absence is not required to establish good cause. If the court holds that an order or judgment was erroneously granted in the absence of any party  affected by it, the order should without further enquiry be rescinded or varied.'
He quotes for the above proposition the following cases:
    (i)    Topol and Others v L S Group Management Services (Pty) Ltd 1988 (1) SA 639 (W) at pp 648E-659C.     (ii)    De Sousa v Kerr 1978 (3) SA 635 (W) at p 638A-B.
    (iii)    Bakoven v G J Howes (Pty) Ltd 1992 (2) SA 466 (E).
The respondent's point in limine must therefore fail. There was no other opposition to the application for the rescission of this judgment. Therefore, this court rescinds and sets aside the judgment granted by the registrar  on 21 March 2006, together with all other writs issued in consequence thereof, and grants leave to the defendant to defend the action. The case will then proceed according to the rules. Costs will be in the cause.
Application granted.

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