EH Hassim Hardware (Pty) Ltd v Fab Tanks CC

The respondent, Fab Tanks CC, supplied and installed a water tank for a construction project. EH Hassim Hardware (Pty) Ltd became the purchaser and paid a 50% deposit but withheld the balance due to late delivery and alleged defects. Fab Tanks sued for the outstanding balance and obtained default judgment after the appellant’s attorneys failed to file a notice of intention to defend while the responsible attorney was hospitalised. The appellant applied for rescission of the default judgment, explaining the default and alleging a bona fide defence based on late and defective performance and a counterclaim for penalties and repair costs. The High Court refused rescission, finding no bona fide defence. The appellant appealed to the Supreme Court of Appeal.

The appeal succeeded with costs. The High Court order was set aside and replaced with an order granting rescission of the default judgment, with costs to be costs in the cause. The appellant was directed to file a notice of intention to defend within seven days.

The case clarifies the approach to rescission of default judgment under Rule 31(2)(b) and confirms that an unliquidated counterclaim arising from the same contract may constitute a bona fide defence. It reinforces the principle that rescission aims to allow genuine disputes to be ventilated and that courts must exercise their discretion judicially.