Legal Magazine

You would only be entitled to apply for the rescission of a Judgment^* that was granted against you if you can show that at the time that the Judgment was entered, you were not in wilful default and that you had a valid and bona fide defence to the action instituted against you.

^*If a defendant in a court action does not reply to a summons within the specified time limit, the plaintiff will generally be entitled to obtain judgment in his or her favour by default.

1. Wilful Default

   Before a person can be said to be in wilful default, he must have known that an action was being brought against him, but deliberately refrained from entering an Appearance to Defend, although he was free to do so, because he really could not care less about the consequences of not dealing with the matter.

   Accordingly, if the summons did not come to your attention and the first you learnt about the Judgment was when the Sheriff arrived at your house to make an attachment, you could not be said to have been in wilful default. At present, the rules of our Courts do not require personal service, so that a summons is deemed to have been served, even if it is served on someone else on your behalf or is merely affixed to the front gate of your house. In these circumstances, it is possible and often likely that the summons will not be brought to your attention.

   Another example would be where you dealt with the summons timeously by handing it to your attorney, but he inadvertently and not negligently misplaced the file in his office and it was through no fault of your own that Judgment was entered against you.

2. Bona fide defence

   Once you have satisfied the Court that you were not in wilful default in allowing the Judgment to be entered against you, you must demonstrate that a substantial defence exists. It would be sufficient to show that you have a prima facie defence that is likely to succeed at trial.

A creditor is always entitled to abandon a Judgment that he may have obtained against you, in terms of the common law. The effect of such abandonment is that the judgment will not be deleted from the Court records and will remain intact. However, by virtue of the abandonment, the creditor will not be entitled to execute upon the Judgment at any time in the future.

Similarly , although the records of the credit bureaus will reflect that the Judgment has been abandoned in terms of the common law, the Judgment will, nevertheless, remain in their records.

Any party to an action in which a Default Judgment is given, may apply to the Court to rescind such Judgment provided that the application shall be set down for hearing on a date within 20 days after such Judgment has come to his knowledge.

There is authority for the proposition that if the creditor agrees to the setting aside of the Judgment (where his claim has been paid in full), that the normal requirements that a formal application be made to Court for the rescission of the Judgment, may be waived and the Court may rescind without following the laid down procedure. This approach has been adopted in some of our Courts around the country, but most Courts do not agree with this submission and would require a formal application to be launched. Because of that attitude, even though a debt may have been paid in full, it would still be necessary for you to demonstrate that at the time that the Judgment was entered against you, you had a good defence to the action. As was probably the case, you definitely owed the money at that time, but paid it off only later . In those circumstances the Court would not entertain the application and would refuse to set aside the Judgment.

If that were the case, the only other option open to you would be to prevail upon your creditor to agree to formally abandon the Judgment, either in terms of the common law (discussed above) or under the provisions of the Law.

In the Magistrates’ Court , there is a provision that allows a creditor to abandon a Judgment, either in whole or in part, that was entered in his favour. Unfortunately, the Act, as it presently reads, goes on to say that the Judgment in respect of the part abandoned shall be entered for the defendant with costs. What this means, in effect, is that the creditor would be put in the same position as if he had lost the action that he had launched against you, resulting in his having to pay your costs.

For that reason, creditors are extremely reluctant to agree to a formal abandonment in terms of the Act.

Even if you could persuade a creditor to abandon the Judgment in terms of the Act, it would then be necessary to have such Judgment deleted from the Court records before the credit bureaus would be prepared to remove the Judgment from their records. Unfortunately, the attitude of the Courts is that the abandonment is something that has taken place inter partes (between the parties themselves) and has no bearing upon the Court or its records. In other words, the Judgment will remain intact, but the creditor will waive his rights to execute upon that Judgment. Accordingly, the Notice of Abandonment of Judgment is merely placed in the Court file, but the Judgment is not deleted.

In short , therefore, what I have stated is as follows :

1. if , at the time that the Judgment was entered against you, you had a defence, you would be entitled to apply for rescission, if you could show that you were not in wilful default at the time that the Judgment was granted and had a good and bona fide defence against the action instituted against you;
2. if you have paid the debtor in full and want to have it removed from the Court records, this is not possible if you did not have a defence when the Judgment was granted;
3. you and your creditor can, nevertheless, agree that it abandon the Judgment. Notice of the abandonment may be filed in the Court file but this will not have the effect of deleting the Judgment. Similarly, the abandonment can be recorded in the records of the credit bureaux, but this will not remove the judgment itself.
4. Even though there are Judgments against you, this is not an automatic bar to obtaining credit. I have discussed the matter with a number of financial institutions. Some adopt the attitude that if there are Judgments against you, they will never lend you money. Others look at the application on its merits. If you can show the bank (or other institution) that you have paid the amounts for which Judgments were obtained, in full, and if your financial position has satisfactorily improved, they may well extend you credit.
5. Finally, because of a lack of space on the data base of the credit bureaus, Judgments and adverse reports are deleted automatically after the lapse of 5 years or until a 5-year period has elapsed during which no further references to any defaults have been added to the record. Detail concerning Insolvencies and rehabilitations are retained for a minimum of 10 years

1. According to the CONSUMER CODE FOR CREDIT BUREAUS Credit bureaus are businesses, which procure, record, maintain and make available to contracted subscribers and/or the consumer concerned, information concerning the manner in which consumers conduct their credit and business dealings.
2. The bureaus will record adverse listings in their records of individuals who have been handed over for collection, in instances where debts have been written off as bad, if a creditor has agreed to accept a compromised amount in settlement of its claim, where a creditor is reflected as a poor payer or for other good cause.
3. To have the adverse listing removed, at the very least you will have to pay the amount owing in full and then prevail upon the creditor to write a letter to the bureau concerned to delete the blacklisting. Creditors are not obliged to assist you, so do not offer to pay the balance outstanding unless you have an undertaking in writing from the creditor that it agrees to remove the adverse report.
4. To be on the safe side, rather use an attorney to assist you. Although he cannot gurantee results, you do have the protection of the Law Society to back up his promises.
5. There are many so-called credit repair organizations who will promise you the world, take your money and then fail to produce the goods. REMEMBER: THESE ARE NOT LEGALLY TRAINED INDIVIDUALS.
6. If you feel that you have been unfairly blacklisted you can complain tor the Business Practices Committee by writing to to:

   The Secretary
   Business Practices Committee
   Private Bag X84
   Pretoria
   0001

7. Or else write to the Credit Bureau Association for the attention of:

   The Executive Director
   Credit Bureau Association
   P O Box 41887
   Craighall Park
   2024