Southern Africa Touring Services (Private) Limited v Halam Enterprises (Private) Limited

The respondent obtained a default judgment against the applicant on 29 March 2010 for the sum of US$17,116.00 with interest. The judgment arose from a debt acknowledged by the applicant in correspondence between February and December 2009, relating to services in the tourism industry. The summons was served on the applicant on 3 February 2010, but the applicant claimed it only became aware of the default judgment on 4 May 2010 when served with a writ of execution. The applicant explained that its office orderly failed to advise management of the summons through oversight. The applicant then sought rescission of the default judgment, disputing the amount and raising issues about foreign exchange control legislation compliance and interest rates.

• Whether the applicant had locus standi despite the order being against its trading name
• Whether the application complied with Rule 230 of the High Court Rules, 1971
• Whether the applicant's default was wilful or due to reasonable oversight
• Whether the applicant had bona fide defences with prospects of success
• Whether the requirements for rescission of a default judgment were met

The application for rescission of the default judgment was dismissed with costs.

For an application for rescission of a default judgment to succeed, the applicant must satisfy three requirements: (1) provide a reasonable explanation for the default; (2) demonstrate bona fides in the application to rescind; and (3) show bona fide defences with prospects of success. Where an applicant's explanation for default is implausible and unsupported by evidence, and where the applicant has previously acknowledged the debt in writing, the application for rescission will fail. Technical objections about trading names will not succeed where the parties' identities are clear and known to each other.

The court observed that the prescribed interest rate of 5% per annum gazetted on 23 October 2009 under S.I. 164 of 2009 would be the applicable prescribed rate from the time of gazetting, and that there was no applicable prescribed rate prior to that date. The court noted this was an administrative issue relating to calculation of figures. The court also commented on the practice in the tourism industry of using US dollars in transactions as far back as January 2006, indicating this was an issue long settled between the parties and could not be used as a defence based on foreign exchange control legislation.

This case demonstrates the strict approach Zimbabwean courts take to applications for rescission of default judgments, particularly where the explanation for default is implausible and contradicted by documentary evidence. It reinforces that applicants seeking rescission must provide credible explanations for default and demonstrate bona fide defences with reasonable prospects of success. The case also illustrates that prior acknowledgment of debt in correspondence will be fatal to subsequent attempts to dispute the debt when seeking rescission.