Nedbank Limited v Mashaba and related matters

In six matters before the court, the applicant (“Nedbank”) sought default judgment against the respective respondents, on instalment agreements concluded between the bank and the respondent for the financing of motor vehicles. The instalment agreements fell within the ambit of the National Credit Act, 2005. As credit provider, Nedbank sought cancellation of the particular instalment agreement and the return of the motor vehicle that had been financed under the agreement or, where the term of the instalment agreement had already expired, payment of the outstanding balance by the consumer.

As the claims were each for a debt or a liquidated demand, ordinarily application would be made to the registrar for default judgment in terms of Uniform Rule 31(5). Instead of seeking default judgment from the registrar, Nedbank enrolled the applications in the unopposed motion court. The registrar had not, in the exercise of his powers in terms of rule 31(5)(b)(vi), required the applications to be set down for hearing in open court. The court therefore questioned whether the registrar should have been approached, as provided for in rule 31(5), rather than enrolment for hearing in open court.

Held that although each of the claims fell within the jurisdiction of the magistrates’ courts, the High Court, as it has concurrent jurisdiction, could not decline to entertain the matters. What was not clear was whether the registrar may grant default judgment in terms of rule 31(5) where the proceedings fall within the ambit of the debt enforcement procedures prescribed in the National Credit Act. Sections 130(1) and (2) provide for the circumstances in which a credit provider can approach the court to enforce a credit agreement. Section 130(3) provides for what the court must be satisfied of before it determines the matter, and section 130(4) provides for what the court either may do if it makes certain determinations. As section 130(3) requires that the “the court” be satisfied, the question was whether the registrar can fulfil the role of the court’, and so determine the matter and grant default judgment, or whether it is an open court that is required to do so.

Having regard to case law on the subject, the court concluded that the purposes of the Act will not be undermined by the registrar fulfilling the role of the court as required in section 130, and that the powers conferred upon the registrar in terms of rule 31(5)(b) are sufficient to enable it to effectively fulfil that role. The kind of oversight required is not the kind of judicial supervision such as is required over the granting of execution orders and the purposes of the Act can be advanced without requiring every application for default judgment in such matters to be heard in open court. The registrar can therefore, in terms of rule 31(5), grant default judgments, or otherwise deal with applications for default judgment as provided for in rule 31(5)(b), in those National Credit Act matters where the High Court has jurisdiction.

The matters were removed from the roll to enable the applicant to approach the registrar in terms of rule 31(5)(a).