LEGAL TOOL LEARNED ABOUT TODAY: A BRIEF LOOK INTO THE SECTION 17(2)F RECONSIDERATION APPLICATION- THROUGH THE PRISM OF Deon Smith and Others v Sasfin Bank and Another (Case no 507/2024) [2025] ZASCA

As is customary, before we get into why we are here, i like to share a small behind the scenes about how we got to where we are now wherein we discuss a judgement that touches on the jurisprudence of Reconsideration Application. Prior to my focus shifting to the abovementioned judgment, i was reading the book "Life is Short and so it this book" (not a paid promotion). It is a short book that, straight to the point, touches on the importance of living your life. Your time here is short, so make the most of it, as per Peter Atkins writing in the book. I do recommend this book.

Before I read this judgement, I did not know about Reconsideration Application in terms of S 17(2)F. I did not know that's something that can be done. Basically requesting the president of the Supreme Court of Appeal to reconsider a judgment on the basis that its orders was erroneously sought or granted. I always thought, in situations involving grave error from adjudicators, one can just make a review application.

This blog post, is a product of reading the judgment, discovering things i do not know, note them down, researching them, creating the post then publishing with hopes that it can provide you with insights, just as it did with me.

As always, we explore these case through the FILAC legal analysis methodology. We begin with the backgrounds facts of the matter.

1. Facts

The dispute originated from a Master Agreement of Hire (the master rental agreement) concluded on 18 November 2019 between the third applicant, Nadelei CC (represented by Mr. Deon Smith), and Technofin (Pty) Ltd. Under this agreement, the CC rented equipment for 60 months at a monthly rental of R9,829.05. Technofin subsequently ceded its rights to Sunlyn (Pty) Ltd, which in turn ceded them to Sasfin Bank.

Concurrently, Mr. and Mrs. Smith executed deeds of suretyship, binding themselves as sureties and co-principal debtors for the CC's obligations. When the CC breached its payment obligations, Sasfin issued summons. The sheriff served the summons on 3 June 2021 at the Smiths' residence and on a consultant at the CC’s place of business. The applicants failed to enter an appearance to defend, and the registrar granted two default judgments in July and August 2021 for R515,623.78 plus interest and costs.

The applicants launched a rescission application nine months later, on 21 April 2022, claiming they only became aware of the judgments "in passing" in March 2022. However, evidence showed that Sasfin’s attorney had emailed them in September 2021, and the applicants' erstwhile attorney had even filed a notice of intention to defend in October 2021—proving they had knowledge of the litigation much earlier than claimed.

2. Issues

The SCA was tasked with determining two primary layers of legal contention:

• The Threshold Requirement (s 17(2)(f)): Whether the applicants demonstrated "exceptional circumstances"—specifically a grave failure of justice or that the administration of justice would be brought into disrepute—to justify the reconsideration of the previous refusal of leave to appeal.

• The Rescission Requirements: Whether the applicants met the requirements for rescission of a default judgment under Rule 31(2)(b), Rule 42, or the common law, which include providing a reasonable explanation for the default and showing a bona fide defense with a prima facie prospect of success.

  
  

3. Applicable Legal Rules and Principles

The court relied on the following statutory and common law frameworks:

• Section 17(2)(f) of the Superior Courts Act 10 of 2013: This provides a "safeguard to avoid manifest injustice" rather than a regular appeal route. It allows the President of the SCA to refer a refused petition for reconsideration only in exceptional circumstances.

• Uniform Rule 31(2)(b) vs. Common Law Rescission: Under Rule 31(2)(b), an application must be brought within 20 days of obtaining knowledge of the judgment; under common law, it must be within a "reasonable time". In both, the applicant must provide a reasonable and satisfactory explanation for the default and demonstrate a bona fide defense.

• Uniform Rule 42: Allows for the rescission of orders "erroneously sought or erroneously granted".

• The "Sole Memorial" Clause: The court noted that the master rental agreement contained a clause stating no amendments would be binding unless in writing, which restricted the applicants' ability to claim the contract was something other than what was written.

  
  

4. Court's Application of Legal Rules

The SCA found that the applicants failed significantly on both procedural and substantive levels:

• Application of s 17(2)(f): The court held that the applicants did not establish the required "exceptional circumstances". It reiterated that a mere difference of opinion between judicial officers does not meet this threshold.

• Application of Rescission Standards:

  • Wilful Default/Delay: The court found the applicants’ explanation for the delay to be unsatisfactory. They were aware of the default judgments by 19 October 2021 at the latest, yet waited six months to launch the rescission application. No explanation was provided for this "substantial delay".

  • Weakness of Defense: The applicants alleged the transaction was a simulated "refinance agreement" (a loan) rather than a rental. The court found this defense "weak" and "skeletal". It was flatly contradicted by the equipment supplier and Technofin representatives, who confirmed the deal was for the rental of new equipment, not the refinancing of old equipment owned by the CC.

• Rejection of Rule 42: The court dismissed the reliance on Rule 42, finding the judgments were not erroneously granted; they were validly obtained following proper service of summons.

  
  

5. Judgment and Reasoning

The SCA ordered that the reconsideration application be struck from the roll with costs.

The Rationale: The court reasoned that the applicants failed to meet the jurisdictional threshold for reconsideration. Substantively, they were in wilful default because they had knowledge of the legal proceedings through their attorney months before they acted. Furthermore, their defense of a "simulated transaction" lacked any evidentiary weight and was undermined by the clear terms of the written agreement and supporting affidavits from the respondents. The court concluded that even if the delay could be excused (which it wasn't), the merits of the defense were so weak that the application was bound to fail.

6. Influence on Future Cases

This judgment serves as a vital precedent regarding the finality of litigation:

• Restricting s 17(2)(f) Misuse: The SCA sent a clear message that s 17(2)(f) is an extraordinary remedy and not a "mechanism for a disappointed litigant to secure another opportunity for appeal". This will likely discourage parties from using this section to delay the execution of valid judgments.

• Strict Adherence to Timelines: The case underscores that a six-month delay in seeking rescission, without a robust and honest explanation, is fatal to the application. Future litigants must act with extreme urgency once they become aware of a default judgment.

• Contractual Certainty: By dismissing the "simulated transaction" defense due to its skeletal nature and contradiction of written terms, the court reinforced the parol evidence rule and the "sole memorial" principle, protecting creditors from unfounded claims that a clear rental agreement was actually a loan.

  
  

  Lived Realities: 

  For individuals and small businesses (like Nadelei CC), this judgment highlights the danger of ignoring legal summons. Once a sheriff serves a document the legal "clock" begins to tick, and the failure to manage internal communication or oversight by an attorney can lead to irreversible financial liability.

DISCLAIMER: THIS DOES NOT CONSTITUTE LEGAL ADVISE NOR ACT AS LEGAL AUTHORITY FOR THE SUBJECT DISCUSSED. THIS IS BASED ON AN IDEA, A CURIOSITY AND DOOM SCROLLING ON SAFLII. CONSULT YOUR ATTORNEY, PREFERABLY LOCAL ATTORNEY AND TAKE IT FROM THERE