DID YOU KNOW: Debtors beware - the High Court will not rescind judgments even though the judgment de

In the current economic climate, falling foul of creditors and getting a judgment against one’s name is sometimes unavoidable. One of the effects of this is having an adverse listing against one’s name with the various credit bureaux, which affects one’s credit rating. This may have quite a significant impact on one’s life and may affect such areas as renting property and obtaining finance from banks. A listing like this is maintained by the credit bureaux for a period of five years from the date of judgment, after which it is supposed to be removed (practically the credit bureaux often do nothing about this and it is up to the consumer to apply for the listing to be removed). To add insult to injury, while the Magistrates Courts are happy to do it, the High Court refuses to rescind judgments (which is a necessary step towards clearing one’s credit record) if the only reason for the rescission application is the repayment of the judgment debt – even where the judgment creditor consents to the rescission!

The High Court’s rules relating to the circumstances in which judgments may be rescinded are very limited. Essentially a judgment will only be rescinded if the judgement debtor wishes to oppose the case against him (this must be done within 20 court days of default judgment being granted) or in cases where a mistake was made in the granting of the judgment. Unlike the Magistrates Court rules, no provision is made for rescission on the consent of the judgment creditor.

Despite this discrepancy between the High Court and Magistrates Court rules (which some would argue is unconstitutional, as it essentially discriminates between judgment debtors based purely on which court has jurisdiction over the matter), the Cape High Court has on at least two occasions (in the cases of Swart v ABSA Bank Ltd and Vilvanathan and Another v Louw) declined to remedy this situation and rather opted for a very technical approach limited purely to the black and white of the law. The gist of the argument is that, as there was no mistake in the judgment at the time that judgment was granted and the debtor does not seek to oppose the judgment, the court cannot order a rescission. The court can furthermore not make use of its inherent common law jurisdiction (something which Magistrates Courts do not have), as this would amount to retrospectively falsifying the debtor’s credit history – in other words, by granting the rescission, the court would be saying that the debtor was never in default. The court furthermore hid behind the concept that a court, once it has granted a judgment, is functus officio (without further authority) and cannot interfere with its own judgment at a later stage. Both of these arguments are overly technical and quite unconvincing and are cold comfort to debtors who find themselves owing more than R300 000.00, which would bring them within the ambit of the High Court’s jurisdiction.

Time will tell whether the court will shift from this draconian view in the future but in the meantime debtors had better beware.

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