Rescinding Judgments: An Overview

Having dealt with numerous requests to rescind judgments against companies listed on credit bureaus, it is evident that a detailed examination of the laws concerning rescission of judgments is necessary.

 

In the Magistrate’s Court, defendants or debtors with judgments against them can approach the court to rescind the judgment in certain situations:

1.      If the judgment order has been settled.

2.      If the judgment creditor consents to the rescission.

However, the High Court did not historically have provisions for rescission under the same circumstances.

Specifically, if a debt was settled, the judgment creditor could not automatically apply for rescission based on the uniform court rules. Instead, rescission in the High Court was only possible if:

1.      The judgment creditor claimed that they were not in lawful default at the time of the judgment.

2.      The judgment creditor had a defense at the time of the judgment.

 

This created a significant discrepancy between the processes in the Magistrate’s Court and the High Court.

The amendment to the Superior Courts Act has introduced Section 23A, which addresses this anomaly. This new section allows for the rescission of a judgment debt once the debt has been paid.

This legislative advancement provides significant benefits for judgment debtors.

 

Previously, once a judgment was granted and listed on the credit bureau, it would remain on the records for years, even if settled.

This could severely impact the debtor’s ability to obtain financing, credit, or engage in contracts due to the negative listing.

Now, with the ability to apply for rescission of the judgment upon settlement of the debt, debtors can avoid the prolonged negative impact on their credit records, thereby protecting their financial reputation and opportunities.

 

The amendment of the Superior Courts Act to include Section 23A is a positive step forward, ensuring that debtors are not unduly prejudiced by settled judgments remaining on their credit records.

This change aligns the High Court processes more closely with those of the Magistrate’s Court, promoting fairness and accuracy in credit reporting.

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