Thabo Sindisa Kwinana and Others v Lulama Smuts Ngonyama and Others

The Ngonyama parties instituted action in the Gauteng Division of the High Court against Mr Thabo Sindisa Kwinana and the trustees of the Eyabantu Development Trust. They alleged that in 2005 an oral agreement was concluded in terms of which Mr Kwinana would act as agent and attorney to procure a 6.5% shareholding in Eyabantu Capital Consortium (Pty) Ltd for the benefit of the Khululekile Family Trust. The shares were held by the Eyabantu Trust as nominee. A further oral agreement in 2006 allegedly required the Eyabantu Trust to transfer 50% of income derived from its 13% shareholding to the Khululekile Trust. The Kwinana parties entered an appearance to defend but failed to file a plea despite a notice of bar, resulting in default judgments granted in April 2019. Six months later, they applied for rescission of the default judgments, which was refused by the High Court. They appealed to the Supreme Court of Appeal. Separately, Eyabantu Capital Consortium (Pty) Ltd and Eyabantu Capital (Pty) Ltd sought to intervene in the appeal, alleging rights of pre-emption under a shareholders’ agreement.

The application for intervention was dismissed with costs, including the costs of two counsel. The appeal against the refusal of rescission was dismissed with costs, including the costs of two counsel.

The case reaffirms strict principles governing intervention in appellate proceedings, emphasising the requirement of a direct and substantial legal interest. It also reinforces the narrow scope of rescission under Uniform Rule 42(1)(a) and confirms that a default judgment validly obtained is not rendered erroneous by the later disclosure of a defence. The judgment underscores the importance of proper pleading and procedural compliance in rescission applications.