I need to clear my name! The rescission of a judgment.


Ever applied for credit only to be rejected because you have a judgment against your name? And you did not even know about it! For many people this is a common experience. We thought we would explain a little of the background to this and how to try and solve it.

When a Court decides that you are liable for a debt a judgment is recorded against your name. This can be after a trial or by default when you fail to do something in terms of the Court rules, like give notice that you intend to defend the case. Companies like TransUnion, ITC or Experian then record these judgments and add it to your credit profile. These profiles are used by businesses to decide whether they will lend money to you and to decide how much of a risk there is that they will lose their money if they lend to you.

If you want to "clear your name" you have to ask the Court to remove the judgment, or have it rescinded. This is done by making an application to Court for Rescission of Judgment.

For a Court to grant a rescission it will look at a number of factors. Among them are:

• Has the Plaintiff, the person or company who obtained the judgment, given their consent to the rescission?
• Has the Defendant, the person who owes the money, paid or settled the debt?
• Was the judgment granted after trial, where the parties could present their cases, or by default?
• If the judgment was granted by default, what were the circumstances in which it was given? Did you for instance receive the Summons, but didn't do anything about it i.e. were you in willful default? Or did you in fact never receive the Summons?
• And if the judgment was granted by default and you were not in willful default, what is your defence? Is there any point in defending the claim or are you simply trying to delay the inevitable?
• How long have you known about the judgment? You should apply for rescission as soon as you find out about the judgment.

The Rules of the Court say that you must apply for rescission within twenty (20) days of finding out about the judgment. As a couple of general comments it is worth noting the following points:

• You cannot assume that a rescission will be granted. It is not just a formality. The creditor / plaintiff may oppose your application. Make sure that your reasons for applying for rescission are good.
• Many default judgments are granted because people choose a specific address for receiving legal papers (where the document said you have to choose your domicilium citandi et executandi or just your domicilium) and then move without informing their creditors of the change in address. While this might be a deliberate attempt by a debtor to avoid creditors, the judgment will eventually catch up with the debtor.
• A default judgment might be applied for by any number of creditors. It might be the clothing company, city council, municipality, or the telephone or cellphone provider, or others.
• Once you have settled a judgment or reached an agreement to settle a debt, consider applying for a rescission of judgment to keep your name, and therefore your credit record, in the clear.
• Remember to notify the credit profiling companies when you clear your name so that they know to update their records.
• When you receive a Summons, read it and respond to it. Don't put it in the drawer and hope it will go away!

It might be useful to see the above in the context of some practical examples:

• X opened a clothing and chemist account. X then moved to another part of the country. X did not pay their debts or tell the companies what their new address was. The clothing shop or chemist got a default judgment against X after serving the Summons at the address chosen by X as their domicilium when signing up for an account. X applied for a loan to buy a home but their application was rejected. Their credit record showed that they were bad payers and had a judgment against their names. Now X had to pay not only the accounts, but also interest and legal costs, and had to apply for rescission of the judgments to clear their name. They also had to apply for the rescission in the Court in the part of the country where they took out the accounts but now no longer live. And because X didn't inform creditors of a change of address, missed the chance to buy the home that they wanted.
• Y received a Summons. Y's lawyer entered a Notice of Intention to Defend, but failed to enter a Plea despite being reminded of this. Default judgment was given against Y. Y applied for rescission but it was after the twenty (20) days allowed by the Court. Y did not have a good explanation for not entering a Plea, did not have a good reason for not bringing the rescission application within the twenty (20) days, and did not have a good defence. The application was successfully opposed. This meant that Y either had to take the matter on appeal, or accept liability and pay the debt, or face Execution by the Sheriff.
• Z had failed to pay their income tax to SARS. SARS obtained judgment and was ready to execute the judgment. Z paid the amount owed to SARS, but still had a judgment recorded against their name. Z obtained written confirmation from SARS that the debt was paid and that they had no objection to the application for rescission. Z applied for rescission with consent by the creditor. The rescission application was granted and after making sure that the credit unions were informed of the rescission, Z's name was cleared.

So if you have a judgment against your name and need to have it cleared, consult with a lawyer, and, if possible, take steps to have it removed. Conversely, as a creditor, give some thought as to how you deal with your debtor's, both when you issue Summons and, if they apply for Rescission, how best to respond.

From the team
MA Cooper Attorneys
With Energy and Experience, giving you Expression