Zanokhanyo Trading CC and Another v Absa Bank Limited

The first applicant concluded an instalment sale agreement with the respondent bank on 4 February 2021 for the purchase of a Mercedes Benz motor vehicle, payable over 60 monthly instalments. The second applicant, as sole director, bound himself as surety and co-principal debtor. The first applicant fell into arrears. The respondent issued a section 129 notice in terms of the National Credit Act 34 of 2005, notifying the applicants of arrears and their rights. Despite negotiations and partial payments, the arrears were not extinguished and continued to increase. Summons was issued on 8 November 2023 seeking cancellation of the agreement and delivery of the vehicle. Default judgment was granted on 16 January 2024 confirming cancellation and ordering delivery. The applicants applied to stay execution of the warrant of delivery and for rescission of the default judgment under Rule 42(1)(a) or the common law, alleging non-service of summons and that arrears had been settled before summons was issued.

The application for rescission and stay of execution was dismissed with costs on Scale A.

The judgment reaffirms the strict requirements for rescission of default judgments under both Rule 42(1)(a) and the common law, particularly in credit agreement disputes. It confirms that proper service at a chosen domicilium entitles a plaintiff to default judgment and that partial or post–section 129 payments do not constitute a defence if arrears persist at the time of judgment.