Absa Bank and Others v Robb

• Jurisdiction: South Africa
• Court: South Gauteng High Court, Johannesburg
• Judge: Boruchowitz J and Molahlehi AJ
• Judgment Date: 14 March 2013
• Citation: 2013 (3) SA 619 (GSJ)
• Hearing Date: 14 March 2013
• Docket Number: A 3030/2012
• Counsel: K Hofmeyr for the appellants.

Boruchowitz J (Molahlehi AJ concurring): D

[1] This appeal deals with the circumstances in which costs may be awarded against a statutory functionary. The appeal arises from the refusal by a magistrate to grant an order of costs against the respondent, a debt counsellor performing a statutory functions in terms of the E National Credit Act 34 of 2005 (the Act).

[2] In July 2011 the respondent, acting in terms of s 86 of the Act, brought an application for debt review in relation to two consumers, Mr and Ms Cassim. The application was made against 21 credit F providers with whom the Cassims had entered into credit agreements. The appellants, who were the third, sixth, seventh and twenty-first respondents, opposed the application, principally on the ground that the respondent's determination that the Cassims were over-indebted was incorrect, because it was based on an erroneous application of reg 24, [1] read with the Guidelines published by the National Credit Regulator for G assessing over-indebtedness. [2]

[3] On the day before the hearing of the matter, the respondent withdrew the application, but refused to pay the appellants' costs. The appellants accordingly sought costs against the respondent, but the magistrate H refused the appellants' application.

[4] In the written reasons for judgment the learned magistrate stated that the court could not order the respondent to pay the costs of the abortive application since her conduct was not 'portrayed or in any other manner evident as mala fide'. What the magistrate had in mind in this regard is to be found in the following passage of the magistrate's ruling delivered I on 26 July 2012:

Boruchowitz J (Molahlehi AJ concurring)

'In the light of the fact that they were debt counsellors and the only A necessary requirement for them to perform their duties is merely a matric qualification. Unfortunately they do not have any tertiary level education especially in the light of the fact that they have not studied law and do not even know the various criteria that is to be applied for, or to determine over-indebtedness. The court is of the opinion that no order in respect of costs should be made.' B

[5] It was contended on behalf of the appellants that the magistrate had applied an incorrect test in considering the order as to costs in circumstances where the application was withdrawn at the last moment, and that, had the correct test been applied, the respondent would have C been ordered to pay the appellants' costs.

[6] Rule 27(3) of the Magistrates' Courts Rules deals, among other things, with the withdrawal of an application by an applicant. It provides as follows:

'(3) Any party served with notice of withdrawal may within 20 days D thereafter apply to the court for an order that the party so withdrawing shall pay the applicant's costs of the action or application withdrawn, together with the costs incurred in so applying: Provided that where the plaintiff or applicant in the notice of withdrawal embodies a consent to pay the costs, such consent shall have the force of an order of court and the registrar or clerk of the court shall tax the costs on the request of the E defendant.'

[7] It is clear from a reading of rule 27(3), read with rule 33(1) [3] of the rules, that an application for costs may be made where a party withdrawing a matter does not tender costs. F

[8] It is trite that a party who withdraws an action or application or who abandons a defence is in the same position as an unsuccessful litigant, and therefore the other party is ordinarily entitled to costs. A departure from the principle, that costs must be awarded to the party which has been put to the expense of defending withdrawn proceedings, is only G warranted in exceptional circumstances. [4]

[9] In the present matter, the only exceptional circumstance which could possibly have formed the basis of a disallowance of costs is the fact that the party which made and withdrew the application was a statutory H functionary acting in fulfilment of a statutory obligation. Adverse costs orders are ordinarily only made against such functionaries where they have acted improperly or with mala fides.

Boruchowitz J (Molahlehi AJ concurring)

A [10] A debt counsellor who refers an application to the court under s 86(8)(b) and s 86(7)(c) is not a litigant in the ordinary sense, but fulfils a statutory obligation. [5]

[11] The general rule as to costs against public officials or statutory functionaries was propounded in Coetzeestroom Estate and GM Co v Registrar of Deeds B 1902 TS 216, where Innes CJ held that —

'(W)ith respect to the question of costs, the Court should lay down a general rule in regard to all applications against the Registrar arising on matters of practice. To mulct that official in costs where his action or his C attitude, though mistaken, was bona fide would in my opinion be inequitable. And it would be detrimental to that vigilance in the administration of the Deeds Office, which it is so essential in the public...