Emvelo Holdings (Pty) Ltd and Another v FG Power GMBH (31733/2015) [2018] ZAGPJHC 424 (13 June 2018)

Emvelo Holdings (Pty) Ltd and Another v FG Power GMBH (31733/2015) [2018] ZAGPJHC 424 (13 June 2018)

The court found that the applicants failed to provide a satisfactory explanation for their default and delay in bringing the rescission application. However, the applicants raised bona fide defences with reasonable prospects of success, including the argument that the shareholders' agreements superseded the Heads of Agreement and required disputes to be referred to arbitration with proper notice. The court held that the error in the amount awarded did not fall within Rule 42(1)(a), as the rule is limited to procedural errors. The rescission application was therefore considered under the common law, and the interests of justice required that the applicants be given an opportunity to defend...

Citation
[2018] ZAGPJHC 424
Parties
Applicant: Emvelo Holdings (Pty) Ltd; Applicant: FG Emvelo Energy (Pty) Ltd; Applicant: Karoshoek (Pty) Ltd; Respondent: FG Power GMBH
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
13 June 2018
Case Number
31733/2015
Procedural Posture
Rescission Application / Application for Rescission of Default Judgment
Outcome
Application for rescission granted; applicants to pay costs.
Judges
Nicholls
Legal Topics
Rescission of Judgment, Default Judgment, Shareholders Agreement, Arbitration Clause, Good Cause Requirement
Civil Procedure Commercial and Corporate Rescission of Judgment Default Judgment Shareholders Agreement Arbitration Clause Good Cause Requirement

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Parties

Emvelo Holdings (Pty) Ltd

Applicant

FG Emvelo Energy (Pty) Ltd

Applicant

Karoshoek (Pty) Ltd

Applicant

FG Power GMBH

Respondent

Procedural Posture

Rescission Application / Application for Rescission of Default Judgment

Legal Issues

  1. 1 Whether the applicants have shown sufficient cause for rescission of the default judgment.
  2. 2 Whether the order was erroneously granted under Rule 42(1)(a) or if rescission must be sought under the common law.
  3. 3 Whether the applicants have a bona fide defence with reasonable prospects of success.

Ratio Decidendi

The court found that the applicants failed to provide a satisfactory explanation for their default and delay in bringing the rescission application. However, the applicants raised bona fide defences with reasonable prospects of success, including the argument that the shareholders' agreements superseded the Heads of Agreement and required disputes to be referred to arbitration with proper notice. The court held that the error in the amount awarded did not fall within Rule 42(1)(a), as the rule is limited to procedural errors. The rescission application was therefore considered under the common law, and the interests of justice required that the applicants be given an opportunity to defend...

Court Disposition

Application for rescission granted; applicants to pay costs.

Orders

  • The order of this court dated 13 January 2016 is rescinded.
  • The applicants are to pay the costs of this application.