Summary of Judgment

1. Introduction

The proceedings concerned an application for rescission of a default judgment granted in favour of the respondent bank, together with an application for condonation for the late filing of the rescission application. Although the rescission itself ultimately became uncontentious, the dispute before the court crystallised into a narrow contest about liability for costs.

The parties were Raymond Cebon Mncwanga (the applicant and judgment debtor) and Absa Bank Limited (the respondent and judgment creditor). The applicant sought rescission of a default judgment obtained by the respondent on 29 January 2019, as well as condonation for late filing and a costs order against the respondent.

The procedural history reflected that correspondence was exchanged in April and May 2020 in which the applicant’s attorneys sought the respondent’s consent to rescind the default judgment. The respondent’s attorneys replied that the file had been closed and that the vehicle had already been sold. The applicant thereafter launched a formal rescission application on 18 May 2022. The respondent filed a notice indicating it would abide the court’s decision on the substantive relief (condonation and rescission), but it opposed the application on costs. In court on 1 August 2022, the respondent consented to rescission (save as to costs), leaving only the costs issue for determination on the opposed roll.

The general subject-matter arose from a financing arrangement relating to a motor vehicle, and the resulting default judgment against the applicant. The applicant’s case was that he neither applied for the finance nor took possession of the vehicle, and that the transaction was connected to the conduct of his former spouse.

2. Material Facts

The default judgment forming the subject of the rescission application was granted against the applicant on 29 January 2019 in relation to a motor vehicle. The applicant’s foundational version was that he never applied for finance, never signed the relevant documentation, and was never in possession of the vehicle. He stated that his former wife informed him that she had won the vehicle in a competition. He further stated that when he left the matrimonial home, the vehicle remained in his former wife’s possession. He also relied on the fact that the parties were married out of community of property by antenuptial contract, and that they were later divorced on 23 October 2019.

In April and May 2020 the applicant’s attorneys wrote to the respondent seeking consent to rescind the default judgment, setting out the above history. The respondent’s attorneys replied that the respondent’s file had been closed and later indicated that the vehicle had been sold about three years previously, and that the respondent could not consent to rescission without seeing the applicant’s affidavit.

The applicant only launched the rescission application on 18 May 2022. On the papers, the respondent stated that it did not admit the applicant’s factual allegations, but it did not meaningfully engage with, deny, or counter them. The respondent also did not pursue return of the vehicle and did not oppose rescission on that basis.

The court expressly recorded that there was no material dispute of fact on the papers regarding the applicant’s account of the vehicle transaction, because the respondent did not answer those averments beyond a non-admission and did not provide a version explaining why the applicant’s allegations were incorrect.

3. Legal Issues

The central legal question the court was required to determine was who should bear the costs of the rescission application in circumstances where the respondent ultimately consented to rescission but opposed costs. The issue was not whether rescission should be granted (as that relief became unopposed/consented to), but whether the conduct of the applicant or the respondent caused the matter to become opposed and to incur additional costs.

The dispute was primarily a value judgment and discretionary costs determination, involving the application of general costs principles to a particular procedural sequence. It required an evaluative assessment of responsibility for the incurrence of costs, rather than determination of substantive contractual liability under the underlying vehicle finance transaction.

4. Court’s Reasoning

The court approached the matter on the basis that the substantive rescission relief was no longer in contest and that the remaining live issue was the allocation of costs. In that context, the court assessed the parties’ conduct before and after the launching of the application to determine whether the opposition on costs, and the procedural posture adopted by the respondent, caused the application to proceed in a manner generating unnecessary expense.

A key factual foundation for the court’s reasoning was the respondent’s earlier stance that the file had been closed and that the vehicle had been sold years earlier. The court reasoned that, given these circumstances, it was apparent that the judgment was no longer being pursued by the respondent and that the respondent would not have suffered prejudice had it provided consent to rescission at the time consent was requested in 2020. The court also reasoned that, at that earlier stage, there would have been no costs implications adverse to the respondent if it had consented, because the rescission could have proceeded in a more streamlined fashion.

The court accepted that, had the respondent provided consent (including as to condonation and rescission) before the application was launched, the applicant could have brought a simpler application relying on Rule 31(6)(a). The court contrasted that position with what transpired: because of the respondent’s approach, the applicant launched a substantive application, the respondent delivered an answering affidavit, a replying affidavit followed, and the matter ultimately proceeded to an opposed hearing on the costs question.

The court placed particular emphasis on the respondent’s decision to file a notice that it would abide the court’s decision in respect of the substantive prayers, while contesting costs. The court reasoned that by adopting this posture the respondent effectively ensured that the matter still had to be placed before the court for determination, rather than being resolved purely by consent. In the court’s view, this stance prevented the granting of rescission and condonation purely by agreement and contributed to the matter being heard on an opposed basis, at least insofar as costs were concerned.

In evaluating submissions based on the principle that a party seeking an indulgence should bear the costs, and the authorities relied upon by the respondent, the court concluded that those decisions did not assist the respondent on the facts as presented. The court’s evaluative conclusion was that the respondent was responsible for the matter being heard on an opposed basis on the issue of costs, and that fairness required the respondent to bear the extra costs incurred as a result of that procedural course.

5. Outcome and Relief

The court made an order directed solely at costs. It ordered that the respondent pay the applicant’s costs from the date of filing of the respondent’s answering affidavit, namely 8 July 2022. The costs order was stated to include reserved costs and the costs of the opposed application.

The rescission of the default judgment (and associated condonation) was, on the papers and as recorded in court, not the subject of opposition at the stage the matter was determined, and the judgment is directed at finalising the only remaining dispute: costs.

Cases Cited

Phillips t/a Southern Cross Optical v SA Vision Care (Pty) Ltd 2000 (2) 1007 (C)

Minnaar v Van Rooyen NO 2016 (1) SA 117 (SCA)

Legislation Cited

No legislation was cited in the judgment.

Rules of Court Cited

Rule 31(6)(a)

Held

The court held that, although the applicant sought rescission and condonation, the remaining dispute concerned the appropriate allocation of costs after the respondent consented to rescission but opposed costs. On the court’s assessment, the respondent’s stance—particularly its approach after the application was launched and its decision to abide on the substantive relief while contesting costs—caused the matter to proceed in a way that generated additional costs and necessitated an opposed hearing on costs. The respondent was therefore held liable for the applicant’s costs incurred from 8 July 2022, including reserved costs and the costs of the opposed application.

LEGAL PRINCIPLES

The judgment applied the principle that costs are a discretionary matter, to be determined with regard to the circumstances that caused litigation steps to be taken and the fairness of attributing responsibility for the incurrence of costs.

The judgment also applied the procedural principle that where a party’s approach prevents a matter from being resolved by consent and thereby causes additional affidavits, further procedural steps, and an opposed hearing, that party may be ordered to bear the additional costs attributable to that stance, even if it does not actively oppose the substantive relief.

Within the context of rescission proceedings (including reliance on Rule 31(6)(a)), the judgment recognised that an earlier consent to rescission may allow a more streamlined process and avoid unnecessary costs; where consent is withheld or qualified in a manner that necessitates fuller proceedings, the costs consequences may follow the party whose conduct led to that outcome.