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[2018] ZAGPJHC 485
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Absa Bank Limited v Mokebe; Absa Bank Limited v Kobe; Absa Bank Limited v Vokwani; Standard Bank of South Africa Limited v Colombick and Another (2018/00612; 2017/48091; 2018/1459; 2017/35579) [2018] ZAGPJHC 485; 2018 (6) SA 492 (GJ) (12 September 2018)

IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
In
the applications of:
Case
number: 2018/00612
ABSA
BANK
LIMITED
Plaintiff
/Applicant
and
DOKKIE
KENNETH
MOKEBE
Defendant
/ Respondent
Case
number: 2017/48091
ABSA
BANK
LIMITED
Plaintiff
/Applicant
and
REASCAR
LEBOGANG
KOBE
Defendant

/ Respondent
Case
number: 2018/1459
ABSA
BANK
LIMITED
Plaintiff
/ Applicant
and
MALIBONGWE
NOEL
VOKWANI
Defendant

/ Respondent
Case
number: 2017/35579
THE
STANDARD BANK OF SOUTH AFRICA
LIMITED
Plaintiff
/
Applicant
and
ILLAN
SAMSON COLOMBICK
First
Defendant / Respondent
PAMELA
EVLIN KIMBERG
Second
Defendant / Respondent
INVESTEC
BANK
LIMITED
First
Amicus Curiae
NATIONAL
CREDIT
REGULATOR
Second
Amicus Curiae
SOCIO-ECONOMIC
RIGHTS INSTITUTE OF SOUTH AFRICA
Third
Amicus Curiae
LEGAL
AID SOUTH
AFRICA
Fourth
Amicus Curiae
LAW
SOCIETY OF SOUTH
AFRICA
Fifth
Amicus Curiae
LUNGELO
LETHU HUMAN RIGHTS FOUNDATION
Sixth
Amicus Curiae
Coram:
TSOKA ET PRETORIUS ET WEPENER JJ
Heard:
28 August 2018
Delivered:
12 September 2018
Summary:
Foreclosure - The monetary judgment is part of the cause of
action when execution against immovable property is concerned –

the issues are intrinsically connected and must be brought in one
proceeding and not piecemeal. All the facts should be placed
before
the court to sustain the relief sought. A failure to do so,
disentitles a party to relief. When a court is appraised of
all the
facts, a decision whether to place a reserve price on the sale of a
house that may be sold in execution, can be properly
taken. Each
matter will depend on its own facts.
JUDGMENT
THE
COURT:
Introduction
[1]
It is an economic reality that most citizens who acquire immovable
property are unable to afford to pay the cash price of such
property
due to the marked difference in property prices and the wealth, or
lack thereof, of ordinary citizens. The mechanism,
developed over
many centuries, to assist the man in the street to acquire property
is by way of a loan (home loan) from lenders,
usually banks
[1]
,
who grant a loan to the home owner
[2]
and then register a bond over the property purchased by the home
owner. Bond finance is consequently an important socio-economic
tool,
which enables individuals to acquire a home. The corollary of this is
the security given to lenders against the finance afforded
to
borrowers by way of mortgage bond. The lender or mortgagee becomes a
secured creditor in the estate of the home owner
[3]
.
The security and legal benefits bestowed upon a mortgagee
[4]
is not the topic of discussion in this judgment nor are cases where
home loan agreements are cancelled. It is apt to refer to the
words
of Wille
[5]
:
‘
The right of the
mortgagee or pledgee is to retain his hold over the secured property
until his debt is paid and, if the mortgagor
or pledgor is in
default, to have the property sold and obtain payment of his debt out
of the proceeds of the sale.’
[2]
In
Saunderson
it was said:
‘
A mortgage bond is
an agreement between borrower and lender, binding upon third parties
once it is registered against the title
of the property, that upon
default the lender will be entitled to have the property sold in
satisfaction of the outstanding debt.
Its effect is that the
borrower, by his or her own volition, either on acquiring a house or
later, when wishing to raise further
capital, compromises his or her
rights of ownership until the debt is repaid. The right to continued
ownership, and hence occupation,
depends on repayment. The mortgage
bond thus curtails the right of property at its root, and penetrates
the rights of ownership,
for the bond-holder's rights are fused into
the title itself.’
[6]
[3]
It so happens that, and depending on the economic climate at any
given time or financial hardship suffered by the mortgagor
(home
owner), the latter defaults on repayment of the loan secured by the
mortgage bond. When this occurs the mortgagee invariably
exercises
its rights in terms of the agreement of loan, the terms of which are
usually also contained in the mortgage bond, and
forecloses by
seeking to execute against the property. The rights are varied but
generally speaking include the right to call up
the loan, accelerate
payment and claim execution
[7]
against the property which forms the subject matter of the loan and
mortgage bond. Courts have dealt with matters where banks exercise

their rights in terms of the loan agreements and mortgage bonds for
many years. They were dealt with as ordinary commercial matters.

However, since the right to adequate housing is a fundamental human
right enshrined in the Bill of Rights of our Constitution,
[8]
the orders to levy execution against property, which are primary
residences, are required to be in harmony with the Constitution,

which applies to all law.
[9]
Background
[4]
During April 2018 a number of foreclosure matters served in the
motion court before Van der Linde J by way of application. At
that
time several judgments from this and other High Court Divisions had
seen the light. These judgments dealt with foreclosure
and some of
the various aspects that affect the granting of money judgments and
foreclosure.
[10]
In this
Division there is also a Practice Manual, which regulates certain
aspects of cases in which foreclosure is sought
[11]
.
Van der Linde J had regard to the various judgments and the ‘new’
[12]
Uniform Rule 46A in regard to the applications before him based on
the divergent issues and the words of Coetzee J who said the

following
[13]
:
‘
Judicial comity
also lies at its root. And so does common sense. Loyalty to the
higher tribunal in the hierarchy of authority is
essential for the
smooth working of the system. The dignity of the Courts is bound to
suffer irreparable harm if every one of the
34 Transvaal Judges can
go his own merry way.’
That
was some thirty four years ago. Presently, this Division
(Johannesburg and Pretoria) has approximately 80 judges. One can
imagine the harm caused to the dignity of the Courts if everyone is
to go his or her own way.
[5]
Van der Linde J decided to invoke the provisions of s 14(1)(b) of the
Superior Courts Act.
[14]
The
learned judge, however, said:
[15]
‘
I fully accept the
possibility that in the case of one or more of these applications
they may, strictly speaking, be disposed of
without actually engaging
the matters of principle to which I have eluded; but it would be
wholly impractical if not impossible
to wait until a default judgment
is enrolled in the motion court that perfectly fits every aspect of
the relevant statutory and
common law rules that regulate the
foreclosure of a bond over a primary residence, and its interaction
with s 26(3) of the Constitution.’
[6]
Subsequent thereto, the Judge President of this Division issued a
directive
[16]
in terms of s
14(1)(a)
[17]
of the Superior
Courts Act setting out the issues requiring determination as follows:
‘
6. The following
issues have been raised in judgments, and there may be others,
concerning the legal propriety and desirability
of granting a money
judgment for the accelerated full outstanding balance under the bond,
and yet then postponing the application
to declare the property
secured by the bond specially executable:
(a) Does a court have a
discretion, when postponing an application for executability to
afford the mortgagor an opportunity to “…
remedy a
default in such credit agreement by paying to the credit provider all
amounts that are overdue …” under the
NCA
[18]
,
and the mortgagee asks for an immediate money judgment for the
accelerated full outstanding balance under the bond, to decline
that
request and postpone it too so that it too is ultimately dealt with
at the same time and in the same enquiry when the executability

application is dealt with?
(b) If the court does
have such a discretion, meaning that the court may in its discretion
decline immediately to grant a default
money judgment for the
accelerated full outstanding balance, should the Practice Manual
request uniformity of treatment, meaning
uniformity of manner of
exercise of discretion, by the judges in this Division?
(c) If so, what should
that uniformity of treatment be? In particular, is the current
suggested manner of dealing with the issue,
as stated in the latest
version of the Practice Manual, being the postponement of the
application for the money judgment as well,
objectionable/desirable?
(d) Does such an
immediate money judgment for the accelerated full balance qualify as
“any other court order enforcing that
agreement” for
purposes of s.129 (3) and (4) of the NCA? If it does so qualify, does
it have the consequence of prohibiting
the credit provider from
reinstating or reviving the credit agreement – despite the
arrears having been paid up - once the
mortgagee bank, on the
strength of such a judgment for the accelerated full balance, will
have attached and sold in execution movable
property of the
mortgagor?
(e) Even if such a
judgment could be given on the basis that it would be capable of
subsequently being set aside or declared null
and void if the
mortgagor does “… remedy a default in such credit
agreement by paying to the credit provider all amounts
that are
overdue …”, is it desirable that the court makes such an
order, given -
(i) its potential for
attachment and execution of movables in the meantime? and
(ii) that it may be
undesirable to make an order which is not final in that it may
potentially be set aside/declared null and void
later?
7. The Full Court will
also be required to consider under what circumstances should a court
set a reserve price and how this is
to be determined in terms of the
new uniform rule 46A, effective since 22 December 2017.’
[7]
This Court is enjoined to answer the issues referred to it and which
were issues in the matters before Van der Linde J.
[19]
Although the directive of the Judge President refers to other issues
in the preamble of para 6, it is apparent that it is not so
wide as
to include such matters as costs on an attorney and client scale or
the legality of acceleration clauses, as was submitted
by Legal Aid
South Africa in its affidavit. The banks did not deal with these
additional issues and it is not properly before us.
These were also
not issues identified by Van der Linde J as matters requiring
attention in the cases that served before him. The
impact of the
directive is directed at the separation of the money judgment and the
levying of execution against immovable property.
Parties
[8]
The parties appearing in the matter are as follows:
[8.1] The first applicant
is Absa Bank Limited, a public company (with limited liability) duly
registered and incorporated in accordance
with company laws of the
Republic of South Africa and a registered credit provider with
registration number NCRCP7 (hereinafter
referred to as ‘Absa’).
[8.2] The second
applicant is the Standard Bank of South Africa Limited, a company
with limited liability duly registered in terms
of the Company Laws
of the Republic of South Africa, registered as a financial service
provider and credit provider in terms of
the
National Credit Act 34
of 2005
under registration number NCRCP 15 (hereinafter referred to
as ‘Standard Bank’).
[8.3] The first
amicus
curiae
is Investec Bank Limited. Investec Bank is an
international specialist banking and asset management group. It
provides a range
of financial products and services to a client base
in three principal markets: the UK and Europe, Southern Africa; and
Asia-Pacific
(hereinafter referred to as ‘Investec’).
[8.4] The second
amicus
curiae
is the National Credit Regulator. It was established in
terms of
s 12
of the
National Credit Act for
purpose of,
inter
alia
, promoting a fair and non-discriminatory marketplace for
access to consumer credit, to prohibit certain unfair credit and
marketing
practices and to provide for debt re-organisation in cases
of over-indebtedness (hereinafter referred to as ‘NCR’).
[8.5] The third
amicus
curiae
is the Socio-Economic Rights Institute of South Africa.
The Socio-Economic Rights Institute of South Africa (SERI) is a
non-profit
human rights organisation. They work with communities,
social movements, individuals and other non-profit organisations in
South
Africa and beyond to develop and implement strategies to
challenge inequality and realise socio-economic rights (hereinafter
referred
to as ‘SERI’).
[8.6] The fourth
amicus
curiae
is the Legal Aid South Africa. Legal Aid South Africa obtains its
mandate from the Constitution of the Republic of South Africa
[20]
(hereinafter referred to as ‘Legal Aid’)
[8.7] The fifth
amicus
curiae
is the Law Society of South Africa. The Law Society is an
association representing all practising attorneys in the Republic of
South Africa. The constituent members of the Law Society are:
a) The Black Lawyers
Association;
b) The Cape Law Society;
c) Kwazulu-Natal Law
Society;
d) The Law Society of the
Free State;
e) The Law Society of the
Northern Provinces; and
f) The National
Association of Democratic Lawyers
(hereinafter referred to
as ‘Law Society’).
[8.8] The sixth
amicus
curiae
is the Lungelo Lethu Human Rights Foundation. The Lungelo
Lethu Human Rights Foundation is a duly registered private company
with
enterprise number 2014/134433/07 (hereinafter referred to as
‘Lungelo Lethu’).
Granting
of monetary judgment separately from the application for execution
[9]
The banks were unanimous in their argument that a court does not have
a discretion to postpone a money judgment despite a request
to
postpone the executionary relief, save that Standard Bank submitted
that it is preferable that both the money judgment and the

application to declare property specially executable should be heard
and decided together. Standard Bank also conceded that
‘
(O)rders granting
a money judgment and executability do naturally form part of the same
process. But for a default on a repayment
obligation, a creditor
cannot obtain an order for executability.’
Absa
too conceded that it would be appropriate for the application for a
money judgment to be heard at the same time as the application
of
foreclosure.
[10]
However, that is not the end of the matter. But for the monetary
judgment, a creditor cannot obtain an order for executability.
In its
affidavit, the Law Society referred to the sale of properties for a
consideration far less than the market value of the
property as a
result of collusion during the auction process and supported the
contention that both aspects of the matters be heard
together
[21]
.
Collusion aside, there are ample examples of cases where properties
are sold for trifling prices. Legal Aid and the NCR submitted
that
the money judgment and the order of executability are both part of
the same process and they are inextricably linked
[22]
.
Although all the parties approached the matter on the basis of a
postponement of a case – this issue will eventually become

moot, should both issues be heard and determined together as a
mortgagee will be obliged to place all facts before the court from

the outset of the matter, based on all the relevant evidence in order
to obtain both a money judgment and an order for execution.
[11]
In order for a court to exercise its judicial oversight, it is
incumbent upon a mortgagee to disclose whether it holds security
and
the nature of the security in all matters where a claim is made
pursuant to a home loan
[23]
,
when the mortgagee claims or intends to claim for execution against
the property. If it fails to do so, it risks being denied
the relief
for special executability, if such is sought separately, due to the
well-established rule of practice that the money
judgment and the
executability of immovable property should be dealt with together.
[12]
Prior to the amendment of  Uniform Rule 46 and the promulgation
of Rule 46A, the execution procedure that lenders followed
was
prescribed by the former Rule 46, the latter which did not
per
se
require the intervention of a court. It was an administrative process
controlled by the judgment creditor with the assistance of
the
Sheriff and the Registrar. The substitution of Rule 46 in 2010
[24]
introduced specific and detailed provisions applicable to court
oversight. This, in turn, requires full disclosure of all relevant

facts to the Court when judgment is sought as any monetary judgment
may impact on the discretion which a court is required to exercise

when execution is sought. The executionary relief has become an
integral part of the lender’s cause of action and is required

to be set out when it makes its claim or, at least, it forms part of
the relief when it makes a claim.
[25]
[13]
That, as far as the institution of a claim is concerned. Furthermore,
to grant judgment for the repayment of the accelerated
money debt and
postpone the relief to declare the hypothecated immovable property
specially executable, is a course which gives
rise to an undue
protraction of the proceedings and piecemeal handling of the matter
with a resultant increase in costs.
It is a trite rule of
practice that piecemeal adjudication of applications should be
discouraged.
[26]
It is, as was
said by Howie JA in
Guardian
National Insurance Co Ltd v Searle
[27]
,
although in the context of ‘the piecemeal appellate disposal of
the issues in litigation’, not only ‘unnecessarily

expensive’, but ‘generally it is desirable, for obvious
reasons, that such issues be resolved by the same Court and
at one
and the same time’.
[28]
Piecemeal adjudication of applications is the exception, not the
rule.
[29]
[14]
In our view, the money judgment is an intrinsic part of the cause of
action and inextricably linked
[30]
to in the
in
rem
claim for an order for execution, the latter which is non-existent
without the money judgment. The default of the debtor and the
money
judgment is a pre-condition for the entitlement of the mortgagee to
foreclose.
[31]
[15]
It is also intrinsically linked because the claim for execution is
accessory in nature and is dependant for its existence on
the
obligation which it secures. In
Klerck
N.O. v Van Zyl and Maritz
[32]
it was held:
‘
A convenient
starting point for the consideration of this issue is an analysis of
the nature of the real right which is constituted
by a mortgage bond.
A mortgage bond may be defined as an instrument hypothecating landed
property to secure a debt, existing or
future.
Lief NO v Dettmann
1964 (2) SA 252
(A) at 259B;
Thienhaus NO v Metje & Ziegler
Ltd and Another
1965 (3) SA 25
(A) at 31F. At 259E of the former
case the following appears:
“
The only real
rights in favour of the mortgagee created by the registration of a
bond are rights in respect of the mortgaged property,
eg the right to
restrain its alienation and a right to claim a preference in respect
of its proceeds on insolvency of the mortgagor.
The real rights,
however, can only exist in respect of a debt, existing or future, and
it follows that they cannot be divorced from
the debt secured by
them.”
At
264 and 265 it was said that a mortgage bond is an acknowledgment of
debt and at the same time an instrument hypothecating landed
property
or other goods and that the object of a mortgage bond is not merely
hypothecation, but the settlement of the terms of
the obligation it
secures. See, too,
Thienhaus'
case supra at 38. It follows
therefore that the real right created by a mortgage bond is
accessory
in nature and is dependent for its existence on the existence of the
obligation which it secures.
If
there is no valid principal obligation for the mortgage bond to
secure, there can be no valid mortgage bond and no real right
of
security in the hands of the mortgagee. See, too,
Kilburn v Estate
Kilburn
1931 AD 501
where the following was said at 505 - 6:
“
... (Y)ou cannot
have a settlement of a security apart from the thing which is
secured, be it a money debt or the performance of
an act.
The
settlement of a security divorced from an obligation which it secures
seems to me meaningless....
It
is therefore clear that by our law there must be a legal or natural
obligation to which the hypothecation is accessory.
If there is no
obligation whatever there can be no hypothecation giving rise to a
substantive claim.
Now the Court below has found as a fact that
there was no serious promise of £500 and no intention to pay
the wife that sum,
but that the whole intention of the spouses was
that the wife should claim £500 if and when the husband became
insolvent.
There was therefore no obligation secured by this bond,
and therefore in a
concursus creditorum
the appellant cannot
claim on the bond.”
Reference
may further be had to
Thienhaus'
case supra at 32 where, after
stating, with reference to Kilburn's case
supra
, that it is
clear that a mortgage bond as a deed of hypothecation must relate to
some obligation, Williamson JA added:
“
If on a
concursus
creditorum
a mortgagee, or a pledgee fails to establish an
enforceable claim which it was intended should be secured by the
hypothecation,
the bond, or the pledge, as the case may be, falls
away.”
At
43 and 44, in the minority judgment of Wessels JA, the following
passages appear:
“
When the mortgagor
causes a mortgage bond to be registered in favour of the mortgagee he
does so to give effect to an antecedent
agreement between them -
which may be either in writing or verbal - in terms of which the
former bound himself to grant to the
latter, as security for a debt,
a real right in the immovable property concerned....
It is of the essence of
the real right which is constituted by the registration of a mortgage
bond that it should be related to
a debt, and the substantial reason
why the antecedent agreement must of necessity refer to the debt
which it is intended to secure
is so that the nature and extent (ie
the content) of the real right, which it is intended to constitute by
the registration of
a mortgage bond, may be exactly determined. It
follows from this that the obligation resting upon the debtor is to
effect the constitution
of a real right in the immovable property
concerned in favour of the creditor in accordance with the definition
thereof in the
agreement in question.”
Although
these last two passages appear in the minority judgment and in a
context different from that which obtains in
casu
,
reference to the principles set out therein is apposite in this
judgment. Reference may finally be had to Wille Mortgage and Pledge

3rd ed at 4 and Lubbe on 'Mortgage' in Joubert (ed)
Law
of South Africa
vol 17 para 398, and the authorities there cited.’
[33]
(own underlining)
[16]
Lamont J held in
FirstRand
Bank v Stand 949 Cottage Lane Sundowner (Pty) Ltd and Another
[34]
that:
‘
It is a long
standing practice for the creditor to claim judgment for the money
debt and for executability of the pledged goods
in one action.’
The
learned judge referred to
Barclays
Nasionale Bank Bpk v Registrateur van Aktes, Transvaal, en ‘n
Ander
[35]
for the proposition that
[36]
:
‘
. . . it is open
to the creditor to raise the personal’ money judgment ‘and
the hypothetical action’ execution
‘together and lump
both of them in a single statement of claim.’
[17]
We are, however, of the view that it is obligatory for a mortgagee
seeking execution to find a cause of action based on execution
to
allege and prove its entitlement to the money judgment which, in
turn, is a necessary averment in order to sustain the action
to
obtain an order for execution. Coetzee J said in
Barclays
Nasionale Bank
[37]
that when the mortgagor is sued it is really both actions that are
instituted, the personal action aims at recovery of the debt
and the
other for utilising the property to pay the debt.
[18]
We do not regard this as a sanction for the executionary judgment to
be sought separately but indeed as support for the view
that personal
action for a money judgment goes hand in hand with the claim
in
rem
based on the bond.
[19]
The difficulty foreseen in para 16 of the judgment of Lamont J has
fallen away.
[38]
The creditor
who does not rely on its security and who obtains a monetary judgment
against the home owner is subject to Rule 46A
in the same manner as a
secured creditor, save that it does not have the advantages that a
bondholder has in terms of its security.
Since the introduction of
Rule 46A, the judgment of Lamont J cannot be followed.
[20]
Arguments that the money judgment stands on a different footing,
misses the fact that it is the cornerstone of the order for

execution; it is a necessary averment that forms part of the cause of
action to obtain an order for execution.
[21]
A concern expressed by Van der Linde J
[39]
is relevant:
‘
If such a money
judgment is given, what often occurs is that the creditor bank, armed
with the judgment for the accelerated full
outstanding balance under
the bond, proceeds immediately to attach and sell in execution
movable assets of the debtor, such as
a motor vehicle, in partial
satisfaction of the judgment debt for the accelerated full
outstanding balance.’
[22]
To this can be added the prospects of the attachment of a debtor’s
income and a resultant garnishee order which would
affect his or her
ability to repay the judgment amount. This, of necessity, adversely
affects the debtor’s ability to make
further arrangements
regarding the debt and a future foreclosure should both the issues
not be dealt with simultaneously
[40]
.
It is consequently both desirable and necessary for the
in
personam
and
in
rem
claims to be heard simultaneously as is envisaged in the Practice
Manual of this Division. Judgments to the contrary should not
be
followed as the failure to do so results in consequences detrimental
to debtors, which consequences can be avoided by the simultaneous

hearing of both issues. It will remove the obstacle for a debtor to
search and apply for financial assistance from another source
without
the judgment having recorded against his or her name. Van der Linde J
said in
Zwane
the following
[41]
:
‘
[23] It is true
that if a default judgment were granted at the outset, that judgment
might in any event ultimately be rendered nugatory
if the debtor pays
the arrears; why then refuse the judgment? The only difference is
that if in the interim period there is no
default judgment for the
accelerated full outstanding capital amount, the creditor is
precluded from seeking execution against
movables during the period
when the debtor will be trying to pay the arrears. That is a far more
preferable situation and, as the
Practice Manual says, it fits the
purpose of the postponement of the application for a declaration of
executability.
[24] There is another way
of reaching the same result. The inherent power and obligation under
s 173 ‘(of the Constitution)’
to regulate own process,
taking into account the interests of justice, justifies the court
postponing also the applications for
default judgment for the
accelerated full balance, for the reasons advanced above.’
[42]
This
accords with the purpose of the NCA as set out in s 3 thereof
[43]
.
[23]
It was argued that Rules 46 and 46A anticipate the possibility,
though not necessarily, of a money judgment preceding an order
of
executability.
[44]
However,
the submission that Rule 46(1)(a)(i) presupposes that a money
judgment may be obtained separately from and prior to, an
order of
executability, cannot be upheld. The very fact that both the money
judgment and the order for executability are given
at the same time,
is not in conflict with the Rule which requires certain steps against
movables prior to execution against the
immovable property. It is
purely a prior procedural step before a writ against the immovable
property is issued. It is a step separate
from the monetary judgment
and the order declaring the immovable property executable.
[24]
All the banks alleged that legal proceedings and the execution
processes are reached as a last resort. If all the information
is
then placed before the court, it can consider the matter properly as
there would be no reason to postpone either part of the
application.
We return to the aspect of the information that is available, below.
[25]
The banks did not argue that they would suffer any prejudice, should
the money judgment and order for execution be granted
at the same
time. No such prejudice is apparent and the banks remain secured in
their claim by virtue of the mortgage bond, should
a matter be
postponed.
[26]
Lastly, we are of the view that Legal Aid correctly submitted that
costs would be substantially less when orders are sought
and given at
the same time and not at separate hearings.
[27]
In addition, a claim for the accelerated full outstanding balance is
a claim seeking specific performance. It is well established
that a
court has a discretion to grant or refuse an order for specific
performance.
[45]
We agree with
the argument put forward by counsel for Lungelo Lethu that a court
has the greater power to decline to grant the
remedy, and, therefore
the lesser power to postpone the hearing of the application at which
it will consider whether to grant specific
performance.
[28]
We do not deal herein with a matter where a lender sues for money
lent and advanced and does not rely on the security of a
bond. Such
lender who abandons reliance on its security, cannot introduce it at
a future date to obtain a judgment for special
executability and its
execution will be without the benefits afforded by a mortgage bond
due to the bar to bring matters piecemeal.
The banks argued that the
unsecured creditor is in a better position than a secured creditor
because the former is able to obtain
a money judgement without any
baggage, should the claim be pleaded correctly whilst the mortgagee
has an additional onus. The argument
does not pass muster. Rule 46A
is not confined to secured creditors. The unsecured creditor armed
with its judgment without security,
has an obligation to satisfy the
Court of its entitlement to have a primary home declared executable,
and not specially, in the
same manner that is provided for in Rule
46A. It has a more onerous process to follow. This obligation arises
at a next court proceeding,
after executing against other property of
the debtor. The comparison and perceived more onerous obligation on
the mortgagee is
consequently not valid.
[29]
There is, therefore, a duty on banks to bring their entire case
including the money judgment, based on a mortgage bond, in
one
proceeding simultaneously
[46]
.
Should the matter require postponement for whatever reason, the
entire matter falls to be postponed and piecemeal adjudication
is not
competent.
[47]
[30]
All factors hitherto required by statute or precedent to be included
in applications for foreclosure remain unaffected.
Question
6(a)
[31]
As a result of our finding that the claim for payment and the claim
for execution must be heard simultaneously, it stands to
reason that
in the event of the claim for execution not being  finalised and
being postponed, the monetary claim should be
dealt with in the same
way. There was no argument against the court’s power to
exercise its discretion to postpone the granting
of an order
declaring property executable or to defer its operation where the
property is a debtor’s primary residence because
the order
implicates a constitutional right - the Constitutional s 26 right to
adequate housing. Section 172(1)(b) of the Constitution
empowers
courts with a broad discretion when deciding a constitutional matter
within its power to grant just and equitable relief.
Question
6(b)
[32]
In so far as this judgment binds single judges of our Division, we
are of the view that a uniform approach is established herewith
and
that the Practice Manual  of both Divisions, should be amended,
to remove the reasons therein stated why the money judgment
must be
heard together with the claim for executability. The reason furnished
in the Practice Manual is not in accordance with
the judgment in
Nkata
[48]
.
Most, if not all, parties who appeared before us recognised the
need for a degree of uniformity, which takes into account
the facts
and circumstances of each case and the remarks of Coetzee J in
1984
[49]
remain as relevant
today as it was then.
Question
6(c)
[33]
The postponement of the money judgment is both desirable and
necessary and is to be heard together with the question of
executability,
should any part of the matter be postponed.
Question
6(d)
[34]
This issue has partially been resolved by the critical finding in
this matter. However, the question whether a money judgment
for the
accelerated full balance qualified as ‘any other Court order
enforcing that agreement’ for purposes of s 129(3)
and (4) of
the NCA is implicit in the directive issued by the Judge President
and requires consideration.
The proper
interpretation of section 129(3) and (4) of the National Credit Act
34 of 2005 (‘NCA’)
[35]
The interpretation of ss 129(3) and (4) must evidently be the
promotion of the principles of the NCA. The purpose of the Act,
in
the main, is to balance the rights and obligations of consumers and
credit providers. This balancing act is difficult as the
rights of
the credit providers are driven by profit, while that of consumers
are driven by the ability to access the credit market.
Difficult as
it might be, courts are however enjoined by the provisions of s 2
[50]
of the Act to promote the purpose of the Act as spelled out in s
3
[51]
: to level the playing
field in the credit market and to advance the social and economic
welfare of all South Africans.
[36] Sections 129 (3) and
(4) previously provided that –
‘
(3)
Subject to subsection (4), a consumer may –
(a)
at any time before the credit provider has
cancelled the agreement re-instate a credit agreement that is in
default by paying to
the credit provider all amounts that are
overdue, together with the credit provider’s permitted default
charges and reasonable
costs of enforcing the agreement up to the
time of reinstatement; and -
(b)
after complying with paragraph (a), may
resume possession of any property that had been repossessed by the
credit provider pursuant
to an attachment order.
(4) A consumer may not
re-instate a credit agreement after –
(a) the sale of any
property pursuant to –
(i) an attachment order;
or
(ii) surrender of
property in terms of section 127;
(b)
the execution of any other court order
enforcing that agreement; or
(c)
the termination thereof in accordance with
section 123’.
[37] It is evident from
subsection (3) that a consumer, who is in financial distress and
arrears with his/her mortgage obligations,
may reinstate a credit
agreement. The reinstatement is subject to certain conditions. First,
the reinstatement must not be a victim
of the provisions of
subsection (4); secondly, the agreement must still be alive in that
it has not been cancelled by the credit
provider; thirdly, all
amounts that are overdue, together with the credit provider’s
default charges and the reasonable costs
incurred in the enforcement
of the agreement up to the time of reinstatement, must be paid. In
other words, the mortgage bond repayments
must be up to date with the
arrears and costs, and the credit provider must not be owed any
moneys at the time of reinstatement.
The parties must be in the same
position as they had been prior to the default. This will promote the
purpose of s 3 of the NCA:
advancement of ‘social and economic
welfare of South Africans’.
[38] The difficulty with
the reinstatement of a mortgage bond has been the ‘default
charges and reasonable costs’ incurred
by the credit provider
when the reinstatement of the agreement occurs. Credit providers,
invariably, add the default charges and
their reasonable charges to
the monthly instalments payable by credit consumers which may result
in the latter’s obligation
being higher than it was at
commencement of the agreement. This results in the consumers being
burdened with charges that they
were not aware of and did not consent
to. The reasonableness of such charges was not determined.
[39]
Fortunately, the majority judgment in
Nkata
v Firstrand Bank and Others
,
[52]
resolved this issue. The Constitutional Court reasoned that the
credit provider’s legal and reasonable costs of enforcement

would become due and payable
‘
only
when they are reasonable, agreed or taxed, and on due notice to the
consumer’
[53]
Once the arrears are paid
in full, and the consumer having been given no notice of the legal
and enforcement charges which he has
not agreed to, and such costs
have not been taxed, it cannot be said that such costs are
reasonable. They are not at that stage
due and payable as the
reasonableness has not been agreed to or determined. The non-payment
of only these costs cannot prevent
the reinstatement of the
agreement.
[40]
The difficulty that arises in this matter that is required to be
answered by the Judge President, is s 129(4)(b) of the NCA,
which
prohibits the reinstatement of the agreement by a consumer
[54]
– now credit provider- after the execution of any other court
order enforcing that agreement.
[41]
Does the fact that the money judgment and the order for executability
had been given, amount to any such other court order,
which prevents
the reinstatement – or now reinstatement or revival - of the
credit agreement?
[42] Similarly, this
issue has been authoritatively resolved by the
Nkata
judgment.
At para 131 of that judgment, Moseneke DCJ reasoned thus –
‘…
The
provision amounts to a statutory remedy for rendering a default
judgment and attachment order ineffectual’.
At para 136, Moseneke DCJ
went on to say -
‘
Although
there had been an attachment of the bonded property, no sale in
execution of the property occurred and no proceeds of sale
realised
at any time…’
[43]
Cadit
quaestio
.
What prevents the reinstatement in terms of s 129(4)(b) is only the
sale in execution of the immovable property and the realisation
of
the proceeds of such sale.
[55]
Prior to the realisation of the proceeds of the sale, the mere
attachment is no hindrance to the reinstatement of the agreement.
The
fact that the mortgaged property has been attached pursuant to a
default judgment and an order declaring the mortgaged property

specially executable, is of no moment. It is only when the mortgaged
property has been sold and the proceeds of the sale have been

realised that there can be no reinstatement. This is self-evident as
there is nothing to reinstate. The agreement is at an end.
It is no
more. Accordingly, the granting of the money judgment and the
executionary order is not a bar to reinstatement of the
agreement. It
is only when the mortgaged property is sold and its proceeds realised
that reinstatement is impermissable. In the
words of
Nkata
,
the reinstatement ‘would be of no use to either party’.
[44] However, s 129(3)
has been substituted by s 32(a) of  the National Credit
Amendment Act No. 19 of 2014 which came into
effect on 13 March 2015.
The amended subsection 3 now speaks of a consumer remedying the
default under the agreement instead of
a consumer reinstating the
agreement.
[45]
It seems to us that the Legislature in effecting the amendment,
intended to remedy the impression created that a credit agreement

that has not been cancelled, could be reinstated. Prior to
cancellation of the agreement, the agreement is extant. There is
therefore
nothing to reinstate. That being the case it makes sense to
speak of remedying the default rather than reinstating the extant
agreement.
The prohibition of reinstatement of the agreement in
subsection (4) must be read in conjunction with the Constitutional
Court judgment
in
Nkata
where it was stated that the provisions of s 129(4)(b) must be
narrowly interpreted. This accords with the submission of counsel
for
Absa who, in argument, submitted that a narrow interpretation
[56]
would accord with the clear purpose of the NCA.  This argument
was adopted by all the banks, as well as Legal Aid. A wider

interpretation, so the submission went, would not be businesslike. It
would defeat the purpose of the NCA which is to grant relief
to the
consumers who have fallen on hard times but are able to save their
primary homes. We adopt and agree with the interpretation
given to
the section by Rogers J, which interpretation was endorsed by the
Constitutional Court. The interpretation which was argued
by the
banks, accords with the provisions of the Constitution and the
purpose of the Act: that is that the reference in s 129(4)(b)
of the
NCA, narrowly interpreted, is a reference to execution against the
security given under the bond. A wider interpretation
- that it
refers to any other court order - would lead to obvious anomalies.
The result is that execution against movables would
not be execution
of any other court order as contemplated by s 129(4)(b) of the NCA. A
narrow interpretation would promote the
values of fairness, good
faith, reasonableness and equality
[57]
.
This is indeed a compelling reason why the meaning of ‘execution’
in s 129(4)(b) should be given the narrow meaning
contended for by
the parties, thus removing the barrier to remedy the default.
[58]
[46] In conclusion, with
regard to question 6(d), it is necessary to have regard to the
provisions of s 39(2) of the Constitution
which enjoins courts when
interpreting any legislation, such as the NCA, and in particular the
provisions of s 129(3) and (4) of
the NCA, to promote the spirit,
purport and objects of the Bill of Rights. Foreclosure of immovable
property, which is the primary
residence of a consumer, has a major
impact on the right contained in s 26(1) of the Constitution: the
right to have access to
adequate housing. Section 129(3) and (4) of
NCA must therefore be interpreted to promote this right.  A
default judgment and
declaration of the immovable property as
specially executable, and the sale of immovable property in
satisfaction of such default
judgment should not be a bar to revival
of the agreement. What militates against the revival of the
agreement, is inter alia, the
sale and receipt of the proceeds of
such sale. Before then, a consumer may revive or reinstate the
agreement. In order to ensure
that the home owner understands
his or her right, we are of the view that the following statement
must be incorporated in
a document initiating the proceedings where a
mortgaged property may be declared executable, such statement to be
made in a reasonably
prominent manner:
‘
The
defendants’ (or respondent’s) ‘attention is drawn
to
section 129(3)
of the
National Credit Act No. 34 of 2005
that he /
she may pay to the credit grantor all amounts that are overdue
together with the credit provider’s permitted default
charges
and reasonable agreed or taxed costs of enforcing the agreement prior
to the sale and transfer of the property and so revive
the credit
agreement.’
[47] Having decided that
piecemeal hearing of applications for foreclosure are undesirable and
not cost effective, the issue of
granting money judgments separately
from the order of executability, does not arise.
[48] A final word needs
to be said about
s 129(4).
Thus far we have discussed the right to
reinstate an agreement with reference to the wording of
s 129(3)
and
(4) in its unamended form. Subsection (3) and (4) now reads as
follows:
‘
(3)
Subject to subsection (4), a consumer may at any time before the
credit provider has cancelled the agreement, remedy a default
in such
credit agreement by paying to the credit provider all amounts that
are overdue, together with the credit provider’s
prescribed
default administrative charges and reasonable costs of enforcing the
agreement up to the time the default was remedied.
(4) A credit provider may
not re-instate or revive a credit agreement after –
(a) the sale of any
property pursuant to –
(i) an attachment order;
or
(ii) surrender of
property in terms of
section 127
;
(b)
the execution of any other court order
enforcing that agreement; or
(c)
the termination thereof in accordance with
section 123.
’
The amendment of
subsection (3) seems to recognize the difficulty with the
terminology: How does a consumer reinstate something
that has not
been cancelled? Therefore the term ‘remedy’ may be more
appropriate.
[49]
The amendment of subsection (4) to replace a consumer with a credit
provider is more perplexing. What follows may not be the
last word on
this issue but for purposes of this judgment, we accept that the
right to reinstate or revive the agreement, remains
with the
consumer. We adopt the reasoning of Dr R. Brits
[59]
in his article in De Jure [2015]:
‘
The
second option is to assume that the amendments made to
section 129(4)
should not be taken literally and, for all practical purposes, might
have to be ignored. A strong indication of this possibility
is the
fact that the first draft amendment bill proposed no amendments to
this subsection, and therefore the final version is probably
the
result of last-minute drafting confusion. Since the legislature also
provided no explanation for the amendment, one must assume
that it
was never the intention to bring about the kind of substantive change
that the literal wording of the modified subsection
appears to
indicate.
It
is regrettable that the legislature leaves one with little choice but
to disregard the actual wording of the NCA on this point,
because the
alternative would simply be too nonsensical. The bizarre reality is
that one is compelled to interpret
section 129(4)
as if it has not
been amended at all. Therefore, one must simply read
section 129(4)
as still providing for the limitations upon the
consumer’s
right
of “reinstatement” (or to “remedy a
default”), regardless of the fact that the subsection now
literally
refers to the limitations on the
credit provider’s
ostensible ability to reinstate or revive the agreement. What the
legislature probably intended to do with the amendments to
section
129(4)
was to emphasise that the credit provider must
allow
reinstatement if the consumer remedies his default prior to any of
the events listed in the subsection. After these events, the
credit
provider may (or must?) refuse to accept late payment. Not allowing
reinstatement after property has been sold generally
makes sense,
because the alternative would create too much uncertainty for
purchasers of property at sales in execution.’
Question
6(e)
[50]
The attachment of movables after judgment and before the realisation
of the sale in execution of the mortgaged property is
of no
consequence due to the interpretation of
s 129(4)(b)
of the NCA.
[60]
Reserve
price
[51]
Judges’ involvement or the duty of courts when dealing with
certain matters serving before courts, are not novel.
[61]
The duty and the source of the duty are to prevent unjust or
inequitable outcomes, which duty is based in the Constitution. Fisher

J referred to this function as a ‘rigorous investigation
function’.
[62]
Navsa and
Snyders JJA said in
Mkhize
v Umvoti Municipality and Others
[63]
:
‘
[24] We detect no
ambiguity in the order in
Jaftha
. In that case and later in
Gundwana
the Constitutional Court made it clear that in all
cases of execution against immovable property judicial oversight is
required.
Confusion was caused by a multitude of judgments seeking to
come to terms with
Jaftha
. Determining whether s 26(1) rights
are implicated is a fact-based enquiry. In
Gundwana
Froneman J
said the following:
“
Some preceding
enquiry is necessary to determine whether the facts of a particular
matter are of the
Jaftha
-kind.”
Only once that enquiry
has been undertaken can the question asked by Wallis J in the latter
part of the quotation in para [23] above
be answered. The principle
as described in our opening paragraph has already clearly been
established in
Jaftha
.
[25] It is clear from
Gundwana
that insisting on judicial scrutiny in every case
should hold no terrors. The level of enquiry will vary from case to
case and
will always be dependent on the circumstances. As was
pointed out in
Gundwana
the rule established in
Jaftha
'caution[s] courts that in allowing execution against immovable
property due regard should be taken of the impact that this may
have
on judgment debtors who are poor and at risk of losing their homes'.
[26] The object of
judicial oversight is to determine whether rights in terms of s 26(1)
of the Constitution are implicated. In
the main a number of cases
grappling with
Jaftha
sought to arrive at that determination
without accepting that judicial oversight was required in every case.
How, it must be asked,
can a determination be made as to whether s
26(1) rights are implicated, without the requisite judicial
oversight? We are unable
to understand the difficulty of applying the
principle that it is necessary in every case to subject the intended
execution to
judicial scrutiny to see whether s 26(1) rights are
implicated. To not undertake such an enquiry would in fact render the
procedure
unconstitutional. Following that simple principle would
have avoided the confusion caused by a number of judgments.’
[52]
Although it was argued that much of the inequities caused to home
owners when properties are sold well below their values still
exist,
this question has, to some extent, been remedied by the requirement
in this Division’s Practice Manual
[64]
that proceedings against a defaulting home owner, where the action
involves such a home owner’s primary residence, must be
served
personally on such a home owner
[65]
.
This requirement is now partially echoed in Rule 46A and is
applicable countrywide. It should go some way to address the
complaint
that defaulting parties only discover that the judgment had
been granted against them sometime thereafter.
[53]
The determination of a reserve price is an issue which is provided
for in the Rules of Court
[66]
.
The sale of a property and in particular of a primary residence, for
nominal amounts of money occurs to the detriment of the defaulting

home owner. Such a person, whether the poorest of the poor
[67]
or otherwise, not only loses his or her home but remains indebted to
a mortgagee for a substantial amount - even in cases where
the
on-sale of the property occurs to buyers at substantially higher
prices than the prices realised during the sale in execution.
[54]
The lender banks or mortgagees argued that by setting a reserve price
the interest of prospective purchasers would be reduced
and therefore
make it less likely for them to find a buyer. The allegation appears
to be without foundation, but even if it is
so, we can see no reason
why the court cannot be approached for a variation of an existing
order making it more likely to find
a buyer, should the perceived
difficulties arise. According to the affidavit filed by the banks,
the information is readily available.
They employ external valuers to
do an analysis of the sale price of a property, which valuation also
takes into account the distressed
property value. It will therefore
not increase costs to place the facts so gathered before the court by
way of affidavit.
[55]
The banks argued that it is indeed applying a reserve price
mechanism. The principle of a reserve price is therefore not in

issue, at least not as far as the banks are concerned. The manner in
which Standard Bank applies the principle is as follows: a

possibility to rehabilitate the borrower; payment holidays;
rescheduling of instalment; debt review; debt consolidation;
surrender
of collateral and private sales prior to the legal process
being commenced. Absa and all the other banks have set out its manner

of dealing with defaulting home owners and the process of reaching
execution as a last resort. It may be necessary to set out the

complete process to understand why the information that is required
when seeking a judgment for execution, is available. We utilise
the
summary contained in Absa’s heads of argument:
‘
Absa’s
processes can be summarised as follows:
12.1 Before any default
occurs, Absa attempts to prevent and pre-empt any defaults at various
stages. First, it engages with its
customers when the bond is
originated to advise them of their rights under the
National Credit
Act and
section 26 of the Constitution; then during the currency of
the loan, when its monitoring system detects a danger or default, it

once again reaches out to its customers to devise possible loan
restructures or catch-up plans, or it refers the customer to debt

counselling.
12.2 If a customer does
default, the account will not be referred for legal recovery until it
is in arrears in an amount equivalent
to six months of instalments.
During this time, Absa will engage with the customer in an attempt to
reach an agreement on a repayment
arrangement or debt restructuring.
12.3 In order to stave
off sales in execution, which on average fetch a much lower sale
price, Absa offers the Help U Sell programme
that assists customers
in selling their homes privately.
12.4 Absa has a committee
of dedicated professionals that consider every case individually and
the circumstances surrounding the
default, before proceeding with a
sale in execution. The committee checks that the bank has taken all
reasonable measures to avoid
a foreclosure and to treat the customer
fairly. The committee will consider the personal circumstances of the
customer, whether
there are any factors that render the customer
vulnerable and whether there may be some transient impediment to the
repayment of
their loan obligations. Absa sends a representative
known as a Risk Mitigation officer to ascertain a customer’s
individual
circumstances. This information will be used by the
committee in making an informed decision to proceed with a sale in
execution.
12.5 Once the legal
recovery process has been instituted, Absa continues to engage with
its customers and will entertain offers
to settle the arrears right
up until a sale in execution.
12.6 Absa’s
comprehensive engagement with its customers prior to approaching a
court for default judgment is illustrated by
the facts of the three
cases that are before the Full Court in this matter. The three Absa
customers had been defaulting on their
home loans for 19 months;
three years; and 10 months, respectively, before summons was issued.
In each case, Absa’s collections
department had made many
attempts to contact the debtor telephonically. In the three cases,
Absa’s Risk mitigation Officer
was deployed to investigate the
customer’s personal circumstances. In all three cases, the
customers were offered the use
of the Help U programme. Absa is
persisting in pursuing judgment against only one of the debtors. The
other two debtors reached
a repayment agreement with Absa and settled
their arrears.’
[56]
We have had no argument from any party, as to why this process cannot
be disclosed to a court which has to consider the order
for it to
grant executability, based on all available facts, including the
evidence regarding the attempts to avoid a distressed
sale, the
latter, which is common cause does usually not fetch the same price
that a private sale would realise. It is common cause
that a bank’s
commercial interests are always better served by arranging for a sale
on a voluntary basis.  Legal Aid
argued that due to the high
costs of foreclosure proceedings it often results in no amount being
left to the debtor after the sale
in execution had taken place. Legal
Aid submitted that a reasonable reserve price is to be set by judges
so that debtors are not
left with a debt after their homes have been
sold in execution. The consequences foreseen by this argument may, in
some circumstances,
be unavoidable. It all depends on the size of the
debt and in particular the amount in arrears or owing. Whatever
mechanisms may
be employed, judges cannot ensure that a debtor is not
left with a debt after a sale in execution. Courts can ensure that
the sale
is at a just and equitable price by taking the factors of
each specific matter into account.
[68]
Counsel for Lungelo Lethu submitted that the setting of a reserve
price is a welfare enhancing rule which also protects the investment

of the debtor that may have been built up over many years. There is
much force in this argument.
[57]
The courts’ power and duty to impose a reserve price is
founded, inter alia, in s 26(3) of the Constitution.
[69]
The process of granting judgment against the home owner is the first
step that may lead to his or her eviction from the property.
Thus a
court is to consider all the relevant factors when declaring a
property specially executable
[70]
at the behest of a bondholder. It is thus incumbent upon the bank or
bondholder to place ‘all relevant circumstances’
before
the court when it seeks an order for execution.
[71]
This, in our view, includes a proper valuation of the property (under
oath)
[72]
, the outstanding
arrears, municipal accounts and the like information. This is not to
thwart the mortgagee’s right to execution,
to which it may be
entitled
[73]
, but to secure a
just and equitable outcome. It is not a prohibition to realise a
bank’s security as is suggested in the
affidavit filed by
Investec. The oversight duty is a far cry from such perceived
prohibition. This is based on s 1 of the Constitution
which places an
obligation on all to promote the value of human dignity, the
achievement of equality and the advancement of human
rights and
freedoms which would include the application of s 26 of the
Constitution by a court, having regard to all the relevant

circumstances, before sanctioning the process that may lead to the
ultimate eviction from a home. This is not to hamper the ability
of
the mortgagee to execute but that very process requires oversight.
Fisher J in her judgment in
ABSA
Bank v Njolomba and Another
[74]
referred to a dictum of Moseneke DCJ in the
Nkata
matter
[75]
as follows:
‘
The Act seeks to
infuse values of fairness, good faith, reasonableness and equality in
the manner actors in the credit market relate.
Unlike in the past,
the sheer raw financial power difference between the credit giver and
its much-needed but weaker counterpart,
the credit consumer, will not
always rule the roost. Courts are urged to strike a balance between
their respective rights and responsibilities.
Yes, debtors must
diligently and honestly meet their undertakings towards their
creditors.  If they do not, the credit market
will not be
sustainable. But the human condition suggests that it is not always
possible — particularly in credit arrangements
that run over
many years or decades, as mortgage bonds over homes do. Credit givers
serve a beneficial and indispensable role in
advancing the economy
and sometimes social good. They too have not only rights but also
responsibilities. They must act within
the constraints of the
statutory arrangements. That is particularly so when a credit
consumer honestly runs into financial distress
that precipitates
repayment defaults. The resolution of the resultant dispute must bear
the hallmarks of equity, good faith, reasonableness
and equality. No
doubt, credit givers ought to be astute to recognise the imbalance in
negotiating power between themselves and
consumers. They ought to
realise that at play in the dispute is not only the profit motive,
but also the civilised values of our
Constitution.’
[58]
Fisher J further said:
‘
There have, of
late, been salutary moves in the statutes, case law, rules and
practice directives to introduce a measure of flexibility
into the
execution process where it is sought to execute against the home of a
debtor. These laws and rules emanate from an accepted
need to promote
the objects of our Bill of Rights and especially the requirement that
all relevant circumstances be considered
before depriving a person of
his or her home. They include the requirement that immovable property
not be executed against without
judicial oversight being brought to
bear thereon and the recent introduction of rule 46A into the Uniform
Rules which requires
that the court “consider  alternative
means of satisfying the judgment debt, other than execution against
the judgment
debtor’s primary residence”. The cases have
required stringent adherence to notices and service requirement and
the
furnishing of details in relation to the steps taken to manage
the indebtedness of the debtor. Recent amendments to Rule 46 of the

Uniform Rules require the consideration by the court of alternative
means of satisfying the judgment debt. These changes impose
an even
more rigorous investigative function on a court faced with an
application for a declaration of executability and require
still more
information to be forthcoming in relation to the debtor’
circumstances and the value of the property. This assists
in setting
appropriate reserve prices and other sale conditions in the event of
execution against the property becoming necessary.
However, the
process has, as its main endeavour, to maintain the mortgage loan and
the rehabilitate the debtor if at all possible.’
[59]
What has been set out, thus far, results in a court being placed in a
position to determine the imposition of a reserve price
that would
not necessarily result in the debtor being left with no debt, but
rather in a position resulting from a just and equitable
process, and
the application of the law. That may leave a debtor with or without a
debt or even a balance in his or her favour.
The capital growth of an
investment such as a home, is a factor that should be weighed up with
all the other facts. The Full Court
held in
Firstrand
Bank  v Folscher: and Another, and similar matters
[76]
‘
. . . Bond finance
is an important socio-economic tool, enabling individuals to acquire
their own home, to make the most important
investment of their lives,
to build up a nest egg, and to eventually enjoy the fruits of capital
growth, quite apart from acquiring
an asset that may provide security
for further access to capital. . .  .’
It
is therefore necessary for a court to determine whether a reserve
price should be set based on all the factors placed before
it by both
the creditor and the debtor when granting an order declaring the
property to be specially executable. If a debtor fails
to place facts
before the court despite the opportunity to do so, the court is bound
to determine the matter without the benefit
of the debtor’s
input. We cannot stress enough that this matter concerns and applies
only to those properties which are primary
homes of debtors who are
individual consumers and natural persons. Rule 46A(8)(e), in
operation since December 2017, now empowers
the court to set a
reserve price for the property at the sale in execution.
[77]
It would, in our view, be expedient and appropriate to generally
order a reserve price in all matters depending on the facts of
each
case. That will serve to curb the inequities of the matters such as
those in
Jaftha,
[78]
Ntsane,
[79]
Maleka,
[80]
Gundwana,
[81]
Nxazonke
[82]
and
Nkwane
[83]
.
The facts of a particularly case may, however, convince a court to
depart from the general practice of setting reserve prices.
It may
well be that the debtor’s obligations regarding the property
can be so great that the equity in the property is close
to zero or
even has a negative value. This fact too, should be taken into
account in order to decide whether to impose the reserve
price in a
particular matter. It will always be
‘
. . . in the
interests of both the Banks and the judgment debtor to realise as
much value in the property as reasonably possible.’
[84]
[60]
The banks submitted that the actual number of properties that are
sold in execution is small compared to the total number of
mortgage
accounts. Without further evidence, it seems unlikely that such a
small fraction of the total mortgage matters can threaten
the
stability of the entire home loan market. So much more the reason to
ensure proper court oversight in these matters. The oversight
is not
to preclude sales in execution, but to regulate it. Arguments which
perceive the oversight role as being aimed at hampering
the rights of
mortgagees to exercise their rights are misplaced. There is no reason
to believe that courts will act in such a way
or why an unreasonable
delay will be caused by such oversight.
[61]
The directive by the Judge President in terms of which this matter is
heard requires of this court to consider under ‘what

circumstances should a court set a reserve price and how this is to
be determined in terms of . . .Rule 46A . . . .’
[62]
We are of the view that setting a reserve price would depend on the
facts of each case. Some facts may indicate that the debt
is so
hopelessly in excess of the value of the property that the reserve
price would be irrelevant compared to the value of the
property but
yet, if the debt is not satisfied by the proceeds of the sale of the
property, a debtor still remains liable for any
balance after
realisation of the property. In all the circumstances, a reserve
price should be set in all matters where facts indicate
it. It will
not be possible to set out a
numerus
clausus
of factors to be considered in each case as the reserve price will
depend on the facts of each individual matter. As was the case
in
Jaftha
,
it would be unwise to set out all the relevant factors for each
matter. Mokgoro J said
[85]
:
‘
[56] It would be
unwise to set out all the facts that would be relevant to the
exercise of judicial oversight. However, some guidance
must be
provided’.
[63]
Lekuku
[86]
expressed, albeit for a different purpose, the factors that are taken
into account as follows:
‘
[34] An important
difficulty raised by the Bank was the issue of low arrears and the
varying approaches by different judges as to
what the benchmark is
for arrears being too low to justify foreclosure. The difficulty with
the differing approaches by the Bench
results in the banks not
knowing in advance whether foreclosure will be granted. A court will
always have a discretion based on
the facts before it as to what
amount is proportional to the final effect and consequence of
foreclosure. In carrying out this
assessment, the court in each and
every case carries out a unique enquiry in exercising its judicial
oversight. To lay down a standard
approach will be contrary to the
constitutional imperative of judicial oversight in foreclosure
matters.’
And:
‘
[36] It would be
inappropriate to define when arrears are low for the purpose of
Practice Directive 10.17.1.6 as this would unduly
restrict a
discretion which a judge must exercise in the particular
circumstances of each case. This Full Bench cannot give guidance
in
this regard as the very purpose of the judicial oversight requires an
enquiry and a strategic engagement with the parties. The
amicus
curiae submitted that the overriding question is whether execution is
proportionate, having regard to all the relevant circumstances.
The
amicus curiae submitted that there is no definitive number or easy
calculation. If there were, claims for execution against
residential
property would be liquidated claims. The underlying basis of the
Jaftha
and
Gundwana
decisions is that they are not.’
[64]
It was argued that factors such as whether the defaulting party is a
serial defaulter or an exceptional one, should play a
role. We need
not consider this now but it is difficult to foreshadow how such a
factor can have a bearing on the value of a property,
whether sold in
the open market or at a forced sale.
[65]
It will be incumbent upon an applicant for execution to set out such
facts relevant to a particular case with due regard to
the provisions
of Rule 46A
[87]
so that a
court can exercise its discretion properly. After all, a court is
obliged to consider whether to set a reserve price.
It can only do so
if all the facts are fully disclosed. A reserve price will balance
the misalignment between the banks and the
debtors where execution
orders are granted. It ensures that the debtor is not worse off due
to unrealistically low prices being
obtained and accepted at sales in
execution. This oversight regarding the imbalance between the
parties, can only effectively be
exercised if the matters are brought
properly to court, setting out all relevant factors so that a court
can decide whether to
set a reserve price in a particular matter.
[66]
We are aware that Rule 46A(8) provides that a court ‘may’
set a reserve price. In order to comply with the constitutional

requirement of just and equitability, it would be an exception rather
than a rule where a reserve price is not set by a court.
In our view,
question 7 should be answered as follows:
‘
Save in
exceptional circumstances a reserve price should be set by a court,
in all matters where execution is granted against immovable
property
which is the primary residence of a debtor, where the facts disclosed
justify such an order.’
Case
number 2017/35579 (Absa Bank v
Dokkie Kenneth Mokebe)
[67]
Absa only sought money judgment before Van der Linde J. Having set
out the history of the matter, Absa has decided not to persist
in its
default judgment in this matter due to the defendants having made
payment.
Case
number 48091/2017 (Absa Bank v
Reascar Lebogang Kobe)
[68]
Absa Bank seeks the monetary judgment only. As a result of our
conclusions herein, such cannot be granted without the order
for
executability.
Case
number 1459/2018 (Absa Bank v Malibongwe Noel Vokwana)
[69]
Absa only sought a money judgment before Van der Linde J. Due to the
defendant having brought up the arrears substantially,
Absa no longer
seeks a default judgment.
Case
number 2017/35579 (Standard Bank v Illan Sampson Colombick and
Another)
[70]
Of the four matters referred to this Full Court the matter of
Standard Bank must be distinguished. In this matter the judgment
and
execution sought is not in relation to a primary residence. The facts
show that the respondents reside in New Zealand and that
they are
letting the property to third parties. They are not indigent,
vulnerable debtors at risk of losing their home. Their constitutional

right to access to adequate housing is not implicated. Indeed, they
appear to be receiving a rental income from the property while

evading their obligations. In such cases the ordinary commercial
consequences should follow and Standard Bank should be entitled
to
judgment for the amounts owing and to have the property declared
specially executable.
Order
1) In all matters where
execution is sought against a primary residence, the entire claim,
including the monetary judgment, must
be adjudicated at the same
time.
2) Execution against
moveable and immovable property is not a bar to the revival of the
agreement until the proceeds of the execution
have been realised.
3) Any document
initiating proceedings where a mortgaged property may be declared
executable must contain the following statement
in a reasonably
prominent manner:
‘
The defendant’s
(or respondent’s) ‘attention is drawn to
section 129(3)
of the
National Credit Act No. 34 of 2005
that he / she may pay to
the credit grantor all amounts that are overdue together with the
credit provider’s permitted default
charges and reasonable
taxed or agreed costs of enforcing the agreement prior to the sale
and transfer of the property and so revive
the credit agreement.’
4) Save in exceptional
circumstances, a reserve price should be set by a court in all
matters where execution is granted against
immovable property, which
is the primary residence of a debtor, where the facts disclosed
justify such an order.
Case number 2017/35579
(Absa Bank v Dokkie Kenneth Mokebe)
5) No order is issued.
Case number 48091/2017
(Absa Bank v Reascar Lebogang Kobe)
6) No order is issued.
Case number 1459/2018
(Absa Bank v  Malibongwe Noel Vokwana)
7) No order is issued.
Case number 2017/35579
(Standard Bank v Illan Sampson Colombick and Another
8) An order is granted in
favour of Standard Bank for:
8.1)  Payment of the
amount of R771 494.43;
8.2) Interest on the
amount referred to in para 2.1 above at the rate of 8.25% per annum,
from 15 August 2017 to date of payment;
8.3) The immovable
property described as PORTION 1 OF ERF 84 MELVILLE TOWNSHIP,
REGISTRATION DIVISION IR PROVINCE OF GAUTENG MEASUIRNG
379 (THREE
HUNDRED AND SEVENTY NINE) SQUARE METRES HELD BY DEED OF TRANSFER
NO. T11534/2006 SUBJECT TO THE CONDITIONS THEREIN
CONTAINED is
declared to be specially executable.
8.4)  A writ of
execution is hereby authorised;
8.5)  Costs of suit
(excluding the costs occasioned by the proceedings subsequent to the
matter serving before Van der Linde
J).
_____________
Tsoka
J
___________
Pretorius
J
__________
Wepener
J
Counsel
for Absa: W. Trengove  SC with N. Luthuli and A. Armstrong
Attorneys
for Absa: Webber Wentzel
Counsel
for Standard Bank: J. Babamia with S. Budlender and M. Mbikwa
Attorneys
for Standard Bank: Norton Rose Fulbright South Africa Inc.
Counsel
for Investec Bank: J.E. Smit with P.G. Louw
Attorneys
for Investec Bank: Werksmans Attorneys
Counsel
for the National Credit Regulator: T.V. Norman SC with P. Jara
Attorneys
for National Credit Regulator: Mafungo Attorneys
Counsel
for Socio-Economic Rights Institute of South Africa: S. Wilson
Counsel
for Legal Aid South Africa: L. Crouse with N. Skibi
Counsel
for Law Society of South Africa: N. Matlala
Attorneys
for Law Society of South Africa: Maluleke Seriti Mkume Matlala Inc.
Counsel
Lungelo Lethu Human Rights Foundation: A. Cockrell SC with Z. Suliman
Attorneys
for Lungelo Lethu Human Rights Foundation: Legal Resources Centre
[1]
The terms ‘bank’, ‘creditor’, ‘in
judgment creditor’, ‘credit grantor’, ‘bond

holder’, ‘lender’ and ‘mortgagee’ are
used interchangeably.
[2]
The terms home ‘owner’, ‘consumer’,
‘borrower’, ‘debtor’ and ‘mortgagor’

are used interchangeably.
[3]
An apt, succinct summary of the background can be found in para 41
of the judgment of Vally J in
Absa
Bank Limited v Lekuku 2014
JDR
2137 (GP): ‘For a considerable time this Court has been
inundated on a weekly basis with hundreds of applications for

default judgments involving the foreclosure of a property which is
the primary residence of the debtor and the debtor’s
family.
The applicant in all cases is a bank which had advanced a loan to
the debtor. The advancing of the loan is crucial for
the debtor/home
owner, for without it she would be unable to purchase the property.
In most cases the loan advancement takes
the form of a bilateral
contract between the debtor/home owner and the creditor/bank. The
contract is in all cases standard one
utilised by the particular
bank for the loans it advances towards the purchase of the property.
To protect its interests the
bank requires that the property be
hypothecated. Absent this, the loan would, in all probability, not
be granted. The debtor
agrees to the condition. The agreement caters
for a monthly repayment of the loan. Failure by the debtor to meet a
monthly repayment
on the due date triggers an acceleration clause in
terms of which the full outstanding amount becomes due. Sometimes
the bank
waits for a few months, during which period it tries to
take steps to avert approaching the Court for relief. However, this
does
not halt the operation of the acceleration clause. When the
bank decides that its only option is to approach the Court it does

so on the basis of the full outstanding amount, and not just on the
amount of arrears, being due.’
[4]
See
Standard
Bank of South Africa v Saunderson and Others
2006 (2) SA 264 (SCA); 2006 (9) BCLR 1022.
[5]
Scott and Scott:
Willes’
Mortgage and Pledge in South Africa
3 ed (1987) p5.
[6]
At para 2.
[7]
‘It must be accepted that execution in itself is not an odious
thing. It is part and parcel of normal economic life’
–
per Froneman J in
Gundwana
v Steko Development CC and Others
2011 (3) SA 608
(CC) para 54.
[8]
Section 26 of the Constitution: ‘
Housing
(1) Everyone has the
right to have access to adequate housing.
(2) The state must take
reasonable legislative and other measures, within its available
resources, to achieve the progressive
realisation of this right.
(3) No one may be
evicted from their home, or have their home demolished, without an
order of court made after considering all
the relevant
circumstances. No legislation may permit arbitrary evictions.’
[9]
Section 8 of the Constitution: ‘
Application
(1) The Bill of Rights
applies to all law, and binds the legislature, the executive, the
judiciary and all organs of state.
(2) A provision of the
Bill of Rights binds a natural or a juristic person if, and to the
extent that, it is applicable, taking
into account the nature of the
right and the nature of any duty imposed by the right.
(3) When applying a
provision of the Bill of Rights to a natural or juristic person in
terms of subsection (2), a court—
(a) in order to give
effect to a right in the Bill, must apply, or if necessary develop,
the common law to the extent that legislation
does not give effect
to that right; and
(b) may develop rules of
the common law to limit the right, provided that the limitation is
in accordance with section 36(1).’
[10]
FirstRand
Bank Ltd v Stand 949 Cottage Lane Sundowner (Pty) Ltd and Another
[2014] ZAGPJHC 117 (4 June 2014);
Absa
Bank Ltd v Lekuku
[2014] ZAGPJHC 244 (14 October 2014);
FirstRand
Bank Ltd t/a First National Bank v Zwane
;
FirstRand
Bank Ltd t/a First National Bank v Hyslop and Another
,
Nedbank
v Nkuna and Another
(18581/2016, 19362/2016, 30634/2015)[2016] ZAGPJHC 203;
2016 (6) SA
400
(GJ) (29 July 2016);
ABSA
Bank Ltd v Njolomba, RC and Another
,
Case no. 20321/2017 (5 March 2018).
[11]
Chapter 10.17 of the Practice Manual of the Gauteng Local Division
of the High Court of South Africa.
[12]
Effective since 22 December 2017.
[13]
Trade
Fares and Promotions (Pty) Ltd v Thomson and Another
1984 (4) SA 177
(W) at 187.
[14]
Section 14(1)(b)
of  the
Superior Courts Act 10 of 2013
: ‘A
single judge of a Division may, in consultation with the Judge
President or, in the absence of both the Judge President
and the
Deputy Judge President, the senior available judge, at any time
discontinue the hearing of any civil matter which is
being heard
before him or her and refer it for hearing to the full court of that
Division as contemplated in paragraph (a).’
[15]
At para 17.
[16]
Dated 2 May 2018.
[17]
‘Save as provided for in this Act or any other law, a court of
a Division must be constituted before a single judge when
sitting as
a court of first instance for the hearing of any civil matter, but
the Judge President or, in the absence of both
the Judge President
and the Deputy Judge President, the senior available judge, may at
any time direct that any matter be heard
by a court consisting of
not more than three judges, as he or she may determine’
[18]
The
National Credit Act 34 of 2005
.
[19]
Van der Linde J said at para 17 ‘I suggest respectfully that
even relevant obiter dictum from a full court will provide
guidance
in an area where currently individual judges’ approaches are
so inconsistent.’
No
doubt, due to the hint given by Van der Linde J, some of the parties
attempted to argue several issues which were not referred
to this
Court. We, however, decline the invitation to express our view on
matters not properly before us for consideration and
do not address
the additional issues.
[20]
The Legal Aid South Africa Act 39 of 2014, as reads with the Legal
Aid Regulations (Policy Provisions) and Legal Aid manual (Procedural

Provisions), as well as other national legislation which gives
content to the rights and obligations enshrined in the Constitution.
[21]
See para 59 below. Cases referred to by the parties, show that the
process followed and judgments sought are not necessarily
in harmony
with that set out by the banks. Homes are sold for amounts such as
R14 and R40.
[22]
Van der Linde J, aptly, put it as follows:
‘
[12] The starting
point of the discussion is that the loan agreements all have
acceleration clauses. These, and their having been
triggered, are
essential for the success of the applicants' applications, because
in the light of rule 46(1)(a)(ii) and of s
26(3) of the
Constitution, a court is unlikely to grant executability for a say
mere three months' arrears in a say 240-month
loan repayment scheme.
[13] This last
observation already shows how integrated the claim for default
judgment for the capital amount is with the claim
for a declaratur
for executability. The claim for the full outstanding balance under
the home-loan agreement is only possible
because the acceleration
clause enables it; and in turn the claim for a declaration of
executability would likely not have been
successful had it not been
preceded by a claim for   F  the accelerated full
outstanding balance.’
[23]
Mortinson
v Nedbank Ltd
[2005] ZAGPHC 85
;
2005 (6) SA 462
(W) para 33.1.5.
[24]
Government  Notice 981 of 19 November 2010.
[25]
See also
FirstRand
Bank t/a First National Bank v Zwane and Two Other Cases
2016 (6) SA 400
(GJ) para 20.
[26]
See
Bader
and Another v Weston and Anothe
r
1967 (1) SA 134
(C) at 138D;
Dawood
v Mahomed
1979 (2) SA 361
(D) at 365H.
[27]
1999 (3) SA 296
(SCA) at 301B-C.
[28]
Also see
Health
Professions Council of South Africa and another v Emergency Medical
Supplies and Training CC t/a EMS
2010 (6) SA 469
(SCA) para 16.
[29]
Atterbury
Property Holdings (Pty) Ltd v Municipal Manager: City of Tshwane
2017 JDR 1844 (GP) para 17.
[30]
Atterbury
supra para 25;
Zwane
ibid.
[31]
Scott and Scott: Wille’s Mortgage and Pledge p128.
[32]
1989 (4) SA 263
(SE) at 275.
[33]
And see
Standard
Bank of South Africa Limited v Gordon and others
(2011/6477) [2011] ZAGPJHC 244 (21 September 2011).
[34]
(2014/10545 [2014] ZAGPJHC 117 (4 June 2014) para 6.
[35]
1975 (4) SA 936 (T).
[36]
Stand
949 Cottage Lane
para 6.
[37]
At 940C-D: ‘. . . wanneer die verbandgewer aangespreek word
albei aksies eintlik ingestel word, die persoonlike een gerig
op die
skuldinvordering en die ander vir aanwending van die vasgoed ter
skulddelging.’
[38]
See para 28 below.
[39]
In para 21 (when referring the matters under consideration to the
Judge President).
[40]
See
Zwane
para 17.
[41]
Ibid
,
paras 23-24.
[42]
See also
Nedbank
Ltd v Fraser and Another and Four Other Cases
2011 (4) SA 363
(GSJ) para 42;
Duma
v Absa Bank Limited
(8247/20160 [2017] ZAGPPHC 616;
2018 (4) SA 463
(GP) (2 October
2017) para 24.
[43]
See note 51 below.
[44]
See also
Njolomba
para 17.
[45]
Benson
v SA Mutual Life Assurance Society
1986 (1) SA 776
(A) at 782I-J.
[46]
In applications the applicant must allege all the facts entitling it
to relief. In
Hart
v Pinetown Drive-Inn Cinema (Pty) Ltd
1972 (1) SA 464
(D) it was stated 469C-E  that:
‘
. . . where
proceedings are brought by way of application, the petition is not
the equivalent of the declaration in proceedings
by way of action.
What might be sufficient in a declaration to foil an exception,
would not necessarily, in a petition, be sufficient
to resist an
objection that a case has not been adequately made out. The petition
takes the place not only of the declaration
but also of the
essential evidence which would be led at a trial and if there are
absent from the petition such facts as would
be necessary for
determination of the issue in the petitioner's favour, an objection
that it does not support the relief claimed
is sound.’
[47]
This answers the question in para 24 posed by Van der Linde J when
he invoked the provisions of the
Superior Courts Act.
[48
]
See  note 55 below.
[49]
See also
Camps
Bay Ratepayers’  and Residents’ Association and
Another v Harrison
and Another
2011 (4) SA 42
(CC) para 28 where Brand JA stated:
‘”(C)ertainty, predictability, reliability, equality,
uniformity, convenience:
these are the principal advantages to be
gained by a legal system from the principle of
stare
decisis
.”
Observance of the doctrine has been insisted upon, both by this
court and by the Supreme Court of Appeal. And I believe
rightly so.
The doctrine of precedent not only binds lower courts, but also
binds courts of final jurisdiction to their own decisions.
These
courts can depart from a previous decision of their own only when
satisfied that that decision is clearly wrong.
Stare
decisis
is therefore not simply a matter of respect for courts of higher
authority. It is a manifestation of the rule of law itself,
which in
turn is a founding value of our Constitution. To deviate from this
rule is to invite legal chaos.’
[50]
‘
Interpretation
2. (1) This Act must be
interpreted in a manner that gives effect to the purposes set out in
section 3.
(2) Any person, court or
tribunal interpreting or applying this Act may consider appropriate
foreign and international law.’
[51]
‘
Purpose
of Act
3.
The purposes of this Act are to promote and advance the social and
economic welfare of South Africans, promote a fair, transparent,

competitive, sustainable, responsible, efficient, effective and
accessible credit market and industry, and to protect consumers,
by-
(a) promoting the
development of a credit market that is accessible to all South
Africans, and in particular to those who
have historically been
unable to access credit under sustainable market conditions;
(b) ensuring consistent
treatment of different credit products and different credit
providers;
(c) promoting
responsibility in the credit market by -
(i) encouraging
responsible borrowing, avoidance of over-indebtedness and fulfilment
of financial obligations by consumers; and
(ii) discouraging
reckless credit granting by credit providers and contractual default
by consumers;
(d) promoting equity in
the credit market by balancing the respective rights and
responsibilities of credit providers and consumers;
(e) addressing and
correcting imbalances in negotiating power between consumers and
credit providers by-
(i) providing consumers
with education about credit and consumer rights;
(ii) providing consumers
with adequate disclosure of standardised information in order to
make informed choices; and
(iii) providing
consumers with protection from deception, and from unfair or
fraudulent conduct by credit providers and credit
bureaux;
(f) improving consumer
credit information and reporting and regulation of credit bureaux;
(g) addressing and
preventing over-indebtedness of consumers, and providing mechanisms
for resolving over-indebtedness based on
the principle of
satisfaction by the consumer of all responsible financial
obligations;
(h) providing for a
consistent and accessible system of consensual resolution of
disputes arising from credit agreements; and
(i) providing for a
consistent and harmonised system of debt restructuring, enforcement
and judgment, which places priority on
the eventual satisfaction of
all responsible consumer obligations under credit agreements.
[52]
2016 (4) SA 257 (CC).
[53]
Ibid
,
para 123.
[54]
The amended s 129(4)(b) provides for preclusion of reinstatement by
the credit provider, while the old s 129(4)(b) refers to
‘consumer’.
[55]
In
Nkata
the Constitutional Court said at para 131: There is no compelling
reason why the meaning of “execution” in section

129(4)(b) should be given extended meaning preferred by the Bank.
The extended construction would render the section unuseful.
The
High Court was correct that the barrier to a revival of the credit
agreement applies only when proceeds from a sale in execution
have
been realised. Only then would revival be of no use to either
party.’
[56]
That execution against movables would not satisfy the requirement of
the section. See
Nkata
v FirstRand Bank Ltd and Others
2014
(2) SA 412
(WCC) para 48 (Rogers J).
[57]
Nkata
paras 94-96.
[58]
Nkata
para 131.
[59]
The Reinstatement of Credit Agreements: Remarks in response to the
2014 amendment of
section 129(3)
-(4) of the
National Credit Act
(2015
) 48(1)
De
Jure
75 at p89-90.
[60]
Supra
note 56.
[61]
See
Occupiers,
Berea v De Wet N.O.
and Others
2017 (5) SA 346
(CC) para 39-51; Jaftha v Schoeman and
Others; Van Rooyen v Stoltz and Others
[2004] ZACC 25
;
2005 (2) SA 140
(CC);
Gundwana
v Steko Development CC and Others
2011 (3) SA 608 (CC).
[62]
Absa
Bank Limited v Njolomba and Another
ZALCJHB 122 (5 March 2018); [2018] JDRO 372 (G-J) para 3.
[63]
2012 (1) SA 1
(SCA) paras 24-26.
[64]
See
Lekuku
note
10.
[65]
See
De
Paul Albert and Another v Standard Bank of South Africa Ltd
(21841/14 [2015] ZAGPPHC 727 (11 September 2015) para 12;
Adegbuyi
v Firstrand Bank Limited and Others
(19958/2014) [2016] ZAGPPHC 703 (16 August 2016) para 19. The
requirement does not exclude substituted service in appropriate

cases –
Lekuku
at prayer 1 para 39.
[66]
Uniform
Rule 46A.
[67]
See the cases referred to in para 59  below.
[68]
‘Credit givers serve a beneficial and indispensable role in
advancing the economy and sometimes social good. They too have
not
only rights but also responsibilities. They must act within the
constraints of the statutory arrangements.  That is

particularly so when a credit consumer honestly runs into financial
distress that precipitates repayment defaults. The resolution
of the
resultant dispute must bear the hallmarks of equity, good faith,
reasonableness and equality.’ Per Moseneke
DCJ in
Nkata
v Firstrand Bank Ltd
2016 (4) SA 257
(CC) at para 94.
[69]
‘No one may be evicted from their home, or have their home
demolished, without an order of court made after considering
all the
relevant circumstances. No legislation may permit arbitrary
evictions.’
[70]
Uniform
Rule 46(1)(a)(ii).
[71]
See also Uniform
Rule 46A:
‘
Execution
against residential immovable property
(1) This rule applies
whenever an execution creditor seeks to execute against the
residential immovable property of a judgment
debtor.
(2)(a) A court
considering an application under this rule must—
(i) establish whether
the immovable property which the execution creditor intends to
execute against is the primary residence
of the judgment debtor; and
(ii) consider
alternative means by the judgment debtor of satisfying the judgment
debt, other than execution against the judgment
debtor’s
primary residence (b) A court shall not authorise execution against
immovable property which is the primary residence
of a judgment
debtor unless the court, having considered all relevant factors,
considers that execution against such property
is warranted.
(c) The registrar shall
not issue a writ of execution against the residential immovable
property of any judgment debtor unless
a court has ordered execution
against such property.
(3) Every notice of
application to declare residential immovable property executable
shall be—
(a) substantially in
accordance with Form 2A of Schedule 1;
(b) on notice to the
judgment debtor and to any other party who may be affected by the
sale in execution, including the entities
referred to in
rule
46(5)(a):
Provided that the court may order service on any other
party it considers necessary;
(c) supported by
affidavit which shall set out the reasons for the application and
the grounds on which it is based; and
(d) served by the
sheriff on the judgment debtor personally: Provided that the court
may order service in any other manner.
(4)(a) The applicant
shall in the notice of application—
(i) state the date on
which the application is to be heard;
(ii) inform every
respondent cited therein that if the respondent intends to oppose
the application or make submissions to the
court, the respondent
must do so on affidavit within 10 days of service of the application
and appear in court on the date on
which the application is to be
heard;
(iii) appoint a physical
address within 15 kilometres of the office of the registrar at which
the applicant will accept service
of all documents in these
proceedings; and
(iv) state the
applicant’s postal, facsimile or electronic mail address where
available.
(b) The application
shall not be set down for hearing on a date less than five days
after expiry of the period referred to in
paragraph (a)(ii).
(5) Every application
shall be supported by the following documents, where applicable,
evidencing:
(a) the market value of
the immovable property;
(b) the local authority
valuation of the immovable property;
(c) the amounts owing on
mortgage bonds registered over the immovable property;
(d) the amount owing to
the local authority as rates and other dues;
(e) the amounts owing to
a body corporate as levies; and
(f) any other factor
which may be necessary to enable the court to give effect to subrule
(8): Provided that the court may call
for any other document which
it considers necessary.
(6)(a) A respondent,
upon service of an application referred to in subrule (3), may—
(i) oppose the
application; or
(ii) oppose the
application and make submissions which are relevant to the making of
an appropriate order by the court; or
(iii) without opposing
the application, make submissions which are relevant to the making
of an appropriate order by the court.
(b) A respondent
referred to in paragraph (a)(i) and (ii) shall—
(i) admit or deny the
allegations made by the applicant in the applicant’s founding
affidavit; and (ii) set out the reasons
for opposing the application
and the grounds on which the application is opposed.
(c) Every opposition or
submission referred to in paragraphs (a) and (b) shall be set out in
an affidavit.
(d) A respondent
opposing an application or making submissions shall, within 10 days
of service of the application—
(i) deliver the
affidavit referred to in paragraph (c);
(ii) appoint a physical
address within 15 kilometres of the office of the registrar at which
documents may be served upon such
respondent; and
(iii) state the
respondent’s postal, facsimile or electronic mail address
where available.
(7) The registrar shall
place the matter on the roll for hearing by the court on the date
stated in the Notice of Application.
(8) A court considering
an application under this rule may—
(a) of its own accord or
on the application of any affected party, order the inclusion in the
conditions of sale, of any condition
which it may consider
appropriate;
(b) order the furnishing
by—
(i) a municipality of
rates due to it by the judgment debtor; or
(ii) a body corporate of
levies due to it by the judgment debtor;
(c) on good cause shown,
condone—
(i) failure to provide
any document referred to in subrule (5); or
(ii) delivery of an
affidavit outside the period prescribed in subrule (6)(d); (d) order
execution against the primary residence
of a judgment debtor if
there is no other satisfactory means of satisfying the judgment
debt;
(e) set a reserve price;
(f) postpone the
application on such terms as it may consider appropriate;
(g) refuse the
application if it has no merit;
(h) make an appropriate
order as to costs, including a punitive order against a party who
delays the finalisation of an application
under this rule; or
(i) make any other
appropriate order.
(9)(a) In an application
under this rule, or upon submissions made by a respondent, the court
must consider whether a reserve
price is to be set.
(b) In deciding whether
to set a reserve price and the amount at which the reserve is to be
set, the court shall take into account—
(i) the market value of
the immovable property;
(ii) the amounts owing
as rates or levies;
(iii) the amounts owing
on registered mortgage bonds;
(iv) any equity which
may be realised between the reserve price and the market value of
the property;
(v) reduction of the
judgment debtor’s indebtedness on the judgment debt and as
contemplated in subrule (5)(a) to (e), whether
or not equity may be
found in the immovable property, as referred to in subparagraph
(iv);
(vi) whether the
immovable property is occupied, the persons occupying the property
and the circumstances of such occupation;
(vii) the likelihood of
the reserve price not being realised and the likelihood of the
immovable property not being sold;
(viii) any prejudice
which any party may suffer if the reserve price is not achieved; and
(ix) any other factor
which in the opinion of the court is necessary for the protection of
the interests of the execution creditor
and the judgment debtor.
(c) If the reserve price
is not achieved at a sale in execution, the court must, on a
reconsideration of the factors in paragraph
(b) and its powers under
this rule, order how execution is to proceed.
(d) Where the reserve
price is not achieved at a sale in execution, the sheriff must
submit a report to the court, within 5 days
of the date of the
auction, which report shall contain—
(i) the date, time and
place at which the auction sale was conducted;
(ii) the names, identity
numbers and contact details of the persons who participated in the
auction;
(iii) the highest bid or
offer made; and
(iv) Any other relevant
factor which may assist the court in performing its function in
paragraph (c).
(e) The court may, after
considering the factors in paragraph (d) and any other relevant
factor, order that the property be sold
to the person who made the
highest offer or bid.’
[72]
There is an established industry for property valuations, witph
well-established methodologies for valuing properties.
[73]
Gundwana
supra note 7.
[74]
[2018] ZAGPJHC 94 para 5.
[75]
Nkata v
Firstrand Bank Limited
2016 (4) SA 257
(CC) para 94.
[76]
2011 (4) SA 314
(GNP) para 39; And see
Nedbank
Ltd v Fraser and Another and Four Cases
2011(4)
SA 363 (GSJ) para 21.
Jaftha
at para 58 said that ‘. . . The need to ensure that homes may
be used by people to raise capital is an important aspect
of the
value of a home which courts must be careful to acknowledge.’
[77]
Uniform
Rule 46A(8)(e)
– ‘(8) A court considering an
application under this rule may—
(a) . . .
(b) . . .
(c) . . .
(d) . . .
(e) set a reserve price.
. . .’
[78]
Jaftha
v Schoeman and Others; Van Rooyen v Stoltz and Others
[2004] ZACC 25
;
2005 (2) SA 140
(CC).
[79]
Absa
Bank v Ntsane and Another
2007 (3) SA 554 (T).
[80]
Firstrand
Bank Limited v Maleke
;
and
three similar cases
2010 (1) SA 143 (GSJ).
[81]
Supra, note 7.
[82]
Nxazonke
and Another v Absa Bank Ltd and Others
[2012] ZAWCHC 184
(4 October 2012).
[83]
Nkwane
v Nkwane and Others
936700/2016) [2018] ZAGPPHC 153 (22 March 2018).
[84]
Per Keightley J in
Mouton
v Absa Bank Ltd
17922/2014;
Haylock
v Absa Bank Ltd
24820/2015
(14 July 2017).
[85]
At para 56.
[86]
At paras 34 and 36.
[87]
Uniform
Rule 46A(9)(a)
(New Rule).