Lodhi 2 Properties Investments CC and Another v Bondev Developments (Pty) Ltd

The appellants, two close corporations with the same sole member, purchased two erven from the respondent property developer in March 2001. The agreements required the purchasers to erect buildings within 18 months of proclamation of the township, failing which the seller was entitled to claim retransfer of the properties against repayment of the purchase price. The appellants failed to build within the stipulated period and for two years thereafter. In March 2005 the respondent applied for retransfer of the properties and obtained default judgments after service at the appellants’ registered address. The appellants only became aware of the judgments after they were granted and applied for rescission under Rule 42(1)(a), alleging the judgments had been erroneously granted.

The application for leave to appeal was dismissed with costs.

The case is a leading authority on the scope of Rule 42(1)(a), confirming that a default judgment to which a party is procedurally entitled cannot be rescinded merely because the absent party later discloses a defence on the merits. It clarifies the distinction between procedural error and substantive defences in rescission applications.