The Supreme Court of Appeal has ended a multi-year legal battle over R500,000 in default judgments. The Supreme Court of Appeal has rejected a final attempt by Mr and Mrs Smith and their company, Nadelei, to overturn default judgments for more than R500,000 owed to Sasfin Bank. The Smiths’ latest attempt to challenge the default judgments was made under a section of the Superior Courts Act that allows the President of the Supreme Court of Appeal to send a case back to the court for another look – but only in very specific situations where there could be serious unfairness.
Cloete AJA, writing for the bench, explained that the section “is not a mechanism for a disappointed litigant to secure another opportunity for appeal but rather a safeguard to avoid manifest injustice”. The Smiths wanted the court to reconsider two default judgments granted against them and Nadelei for unpaid rental equipment. They argued that the High Court had applied the wrong test for rescission, that the judgments were inconsistent, and that their defence of a so-called simulated transaction had not been properly considered.
TheSupreme Court of Appealhas now struck the reconsideration application from the roll with costs, ending a protracted legal battle by Mr and Mrs Smith and Nadelei to undo default judgments worth more than R500,000 in favour of Sasfin Bank. The background is complex. In November 2019, Nadelei, representing the couple, concluded a master rental agreement with Technofin.
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The agreement was for the rental of equipment for over 60 months at nearly R10,000 per month. Ownership of the equipment remained with Technofin, and the agreement allowed Technofin to transfer its rights to a third party. Soon after, the agreement was ceded to Sunlyn, which in turn ceded it to Sasfin Bank.
When Nadelei fell behind on payments, Sasfin applied for, and received, default judgments against the Smiths and the company. The first judgment was granted at the end of July against Mr Smith, and the second shortly after that, which added Mrs Smith to the joint and several liability. The judgments included the principal sum, interest at 11% per annum from April 2020, and costs on an attorney-client scale.
The Smiths argued they had exceptional circumstances to warrant reconsideration. They claimed there had been two conflicting outcomes in related High Court matters and alleged that the test for rescission was incorrectly applied, causing “undue hardship”.
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