Top Trailers (Pty) Ltd & another v Kotze

The board of Top Trailers (Pty) Ltd resolved in August 2014 to commence business rescue proceedings under s 129 of the Companies Act 71 of 2008, and Sipho Sono was appointed as business rescue practitioner. Johannes Petrus Kotze, a creditor claiming royalties under a licence agreement, was not given notice of the business rescue and had earlier obtained a default judgment against the company. In May 2016 Kotze applied to the Gauteng Division of the High Court to set aside the business rescue resolution, alleging non-compliance with statutory notice requirements. Although the appellants filed a late notice of intention to oppose, they did not deliver an answering affidavit. Without notifying the appellants, Kotze set the matter down on the unopposed roll, and a default order was granted setting aside the business rescue resolution and authorising execution. The appellants later applied for rescission of that default order under rule 42(1)(a), which the high court dismissed, leading to the appeal.

The appeal was upheld with costs, including the costs of two counsel. The order of the high court was set aside and replaced with an order rescinding the default judgment granted on 27 June 2016 and directing the respondent to pay the costs of the rescission application.

The decision clarifies South African civil procedure by reaffirming that default judgments obtained without proper notice after a matter has become opposed are erroneously granted and must be rescinded under rule 42(1)(a). It underscores that an applicant for rescission in such circumstances need not establish a bona fide defence, reinforcing procedural fairness and adherence to notice requirements.