THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case No:  213/2014

REPORTABLE

In the matter between:

FIRSTRAND BANK LIMITED

APPELLANT

and

NOMSA NKATA

RESPONDENT

Neutral citation:
Firstrand Bank Ltd v Nkata (213/14) [2015] ZASCA 44 (26 March
2015)
Coram:
Maya, Cachalia, Majiedt, Willis and Saldulker JJA

Heard:
6 March 2015

Delivered:
26 March 2015

Summary:
National Credit Act 34 of 2005 – interpretation of s 129 (4) – the
rescheduling or restructuring of debt does not ipso facto nullify a
previously obtained writ of execution in relation to the credit agreement
in question –   execution  means sale in execution - appeal upheld.

ORDER

On appeal from: Western Cape High Court, Cape Town (Rogers J sitting as the
court of first instance)

The appeal is upheld with costs, including the costs of two counsel.
The following is substituted for the order of the high court:
„The application is dismissed with costs.‟

JUDGMENT

Willis JA (Maya, Cachalia, Majiedt, and Saldulker JJA concurring):

[1] The appellant appeals, with the leave of the Western Cape High Court
(Rogers J), against the judgment and order which it delivered on 16 January 2014.
The respondent, Ms Nomsa Nkata (the debtor) had brought an application for the
rescission of a default judgment which the appellant, Firstrand Bank Ltd, trading as
First National Bank (the bank) had obtained against her, together with an application
for the cancellation of the sale in execution of an immovable property („the property‟).
It was erf 8832 Durbanville, situated at 35 Vin Doux Street, Durmante,  Durbanville,
Western Cape under deed of transfer no. T42327/2005. A first mortgage bond had
been registered over the property in order to secure a loan that the bank had given
the debtor to assist her to buy it.  The loan is subject to the provisions of National
Credit Act 34 of 2005 (the NCA). Although the high court dismissed the application
for rescission of the default judgment it, mero motu, reinstated the credit agreement,
purportedly in terms of s 129(3) of the NCA. Not only the bank but also the debtor

applied for leave to appeal. Although the bank was given leave to appeal, the debtor
was not.

[2] The rescission application was the second that the debtor had brought in
respect of the property.  The first had been brought in November 2010. Arising from
the first application, the parties settled the matter in terms of which a previously
scheduled sale in execution of the property was cancelled, the debtor agreed to pay
her arrears and that, in the event that the debtor failed to make good her arrears, the
bank would be able to proceed forthwith to sell the property in execution. The
settlement was reflected in a draft order of court. The debtor herself applied for the
draft to be made an order of court but the judge on duty at the time declined to do so
as there had not been notice given to the bank. Neither the debtor nor the bank took
any further steps in this regard.
Nevertheless, in that draft, the debtor clearly
agreed that the property could subsequently be sold in execution should she once
again default in respect of the payments that were due.

[3] The property was undeveloped at the time when the debtor bought it in 2005.
The debtor, who describes herself as a „businesswoman‟, built a house on the
property, taking occupation with her two daughters during 2007. She is a supplier of
hospital equipment. She obtained financial assistance from the bank, which was
secured by a first mortgage bond registered over the property in May 2006 and a
second in 2007. The property is what is colloquially known as „up market‟. From the
time when the debtor bought the property in 2005 until she took occupation in 2007,
she had been living in a block of flats in Rondebosch, known as Devonshire Hill. It
was the address at this flat which she had chosen as her domicilium citandi et
executandi.

[4] Between March and November 2010, the debtor received numerous calls
from the bank concerning her arrears. Two letters were addressed by its attorneys to
the debtor in terms of s 129(1): the first on 1 June 2010 and the second on 4 June
2010. The debtor claims not to have received these notices and the summons in
respect of which the default judgment was obtained. Be this as it may, the debtor
approached a debt counsellor on 4 August 2010 and applied for debt review on 20
August 2010.  The debtor acknowledges that she had learned of the default

judgment and the first pending sale in execution during the first half of October 2010.
This lead to her issuing the first application for rescission on 19 November 2010.
That application was opposed by the bank but, as has already been mentioned, the
matter was settled as reflected in the draft order of court.

[5] The bank debited the debtor‟s account with costs related to the recovery of
the debt. These were R9 050 on 25 October 2010, R14 498 on 21 February 2011
and R4 000 on 1 March 2013. The total was therefore about R28 000 – less than the
sum of approximately R33 000 which the debtor owed in respect of arrears at the
time of the sale in execution.

[6] The summons was issued on 27 July 2010.  Default judgment was granted, in
terms of rule 31(5) of the Uniform Rules of the High Court, by the registrar on 28
September 2010, the property being declared executable. The writ of attachment
was issued on the same day.

[7] In May 2012, the debtor informed the bank that she was experiencing
difficulties meeting her monthly instalments. She had several meetings with the bank
concerning the issue but no agreements were concluded as a result thereof. In
October 2012, she approached another debt counsellor. The debtor managed to
continue with her instalments until February 2013. According to the bank, it
attempted, on numerous occasions between February and April 2013, to resolve the
matter, but to no avail. On the debtor‟s own version of events, she was informed by
the bank of the impending sale in execution in March 2013. The property was sold in
execution on 24 April 2013.

[8] At that stage the debtor‟s arrears were R33 716.89. As at 2 July 2013, the
debtor‟s arrears were R66 918.19. The purchaser at the sale in execution was
Kraaifontein Properties and was the third respondent in the motion court. The
second respondent was the sheriff. Kraaifontein Properties renovated the property
and then sold it „on‟.  By agreement between the purchaser at the sale in execution
and the new buyer, registration of the transfer has been suspended, pending the
outcome of this matter. A deeds registry search conducted on 2 July 2013 revealed
that the debtor was the co-owner of two other properties. One of these properties is

in Parklands, which she owns with her attorney. The other property is in Hunters‟
Retreat, which she owns with one Ms Thembile Maxwell Nkata.

[9] Relying on the provisions of s 129(3)(a) of the NCA, the high court declared
that the loan agreements had been reinstated because the debtor made good her
arrears in both March 2011 and March 2012 and that, accordingly, the default
judgment and the writ in execution ceased, by operation of the law, to have any force
and effect. The order also interdicted the transfer of the property which would have
ensued consequent on the sale in execution. By reason of the fact, as will appear
later, the decision of this court is based on its interpretation of s 129(4)(b) of the
NCA, it is not necessary to deal with the high court‟s reasons and its findings in
respect of s 129(3)(a).

[10] Before us, Ms Dzai, counsel for the debtor sought to argue that the high court
was incorrect to refuse the rescission. The high court refused to grant leave on this
point. Moreover, there was no cross-appeal in regard thereto. This question is
therefore not before us. Ms Dzai otherwise supported the judgment of the high court.
She also contended that the settlement agreement concluded between the parties
on 10 December 2010 invalidated the writ that gave rise to the sale in execution.
This submission flies in the face of the express terms of the settlement agreement
providing that in the event that the debtor failed to make good her arrears, the bank
would be able to proceed forthwith to sell the property in execution. Ms Dzai
otherwise supported the judgment of the high court. She also contended that the
settlement agreement concluded between the parties on 10 December 2010
invalidated the writ which gave rise to the sale in execution. This submission flies in
the face of the express terms of the settlement agreement providing that in the event
that the debtor failed to make good her arrears, the bank would be able to proceed
forthwith to sell the property in execution.

[11]  Mr Gautschi, counsel for the bank, submitted that the case turns on the
interpretation of ss 129 (3) and (4) of the NCA. Subsections 129(3) and (4) of the
NCA read as follows:
„(3) Subject to subsection (4), a consumer [ie a person in the position of the debtor] may –

(a) at any time before the  credit provider [ie a person in the position of the bank] 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 re-instatement; and –
(b)  after complying with para (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.‟

[12] The high court concluded that, in order for a consumer to be able to re-instate
a credit agreement, the debtor need not pay the full accelerated debt but merely the
arrear instalments. I agree. This view also has academic support.‟1  Although it had
originally adopted the position that it was the full accelerated debt that had to be
paid, the bank now wisely and correctly accepts that the high court‟s conclusion was
the proper one to make in this regard.

[13]  The high court found that the reasonable costs of enforcing the agreement
must be either taxed or agreed. I agree, but this point is irrelevant because, at the
time of the sale in execution, the aggregate of the charges for recovery of the debt
was less than the amount in respect of which the debtor was in arrears.

[14]   The high court also found that:

„FRB [the bank] in the present case did not present costs to Nkata [the debtor] and invite her
to pay them.  FRB simply debited the amounts to the bond account. If the amounts in

1 See R Brits „Purging mortgage default: Comments on the right to reinstate credit agreements in
terms of the National Credit Act‟ (2013) 24 Stellenbosch Law Review Vol 1, 165 at 178-9.

question were owing by Nkata, it is clear from FRB‟s conduct that the bank was content to
settle the costs by lending her the money through a debit to her bond account.‟
and
„By debiting the legal costs to the account rather than demanding separate payment thereof,
the credit provider indicates to the consumer that the credit provider is content to lend the
corresponding amount to the consumer and to receive payment thereof in instalments as if
the debited costs were part of the capital. For the purposes of s 129(3)(a) the costs, if
properly debited, lose their separate character as costs of enforcing the agreement. Put
differently, the enforcement costs which the consumer must pay as contemplated in s
129(3)(a) in order to obtain reinstatement are those costs of which the credit provider is at
that time requiring payment.‟

[15] Mr Gautschi submitted that this was an impermissible interpretation.  He
contended that this interpretation was not only novel and imaginative but also that it
did not accord with reality and is quite unjustified. Mr Gautschi put forward the
proposition that a customer of a bank necessarily operates an account with it.  By
debiting the account of its customer with charges and costs relating to the recovery
of a debt due – which in any event is permitted in express terms by the mortgage
agreement in this case – the bank is simply claiming the amount. The bank, so the
argument went, says in effect: „This is what we say you owe us.‟ Without further ado,
that does not constitute a payment by the customer. Mr Gautschi submitted that if a
customer were, for example, to continue to make deposits into the bank account,
without protest after receipt of a bank statement reflecting the debit or debits, this
silence may justify the inference that the customer has paid the amounts claimed by
the bank.

[16] Additionally, Mr Gautschi contended that, properly construed, s 129(3)(a)
requires some form of communication by the consumer with the credit provider that
she intends to reinstate, for how else can a determination be made as to what the
„reasonable costs of enforcing the agreement up to the time of re-instatement‟ might
be?

[17] In order to understand the prohibition on re-instating a credit agreement, as
provided for in s 129(4), one needs first to know what the requirements or conditions

for re-instatement are, as set out in s 129(3)(a). At least to this extent, sub-ss
129(3)(a) and s 129(4) must be read conjunctively.  It is not necessary, however, to
decide the matter in terms of the gravamen of the submissions made by Mr Gautschi
relating to the interpretation of s 129(3)(a). I refer, in particular, to those aspects
which, by reference to s 129(3)(a), touch upon the interpretation of what may
constitute payment of default charges and costs and the need, if any, for there to be
a communication by the consumer to the credit provider of an intention to re-instate
the credit agreement. I come to this conclusion by reason of the interpretation of
„execution‟ in s 129(4)(b) which, in my opinion, a court is compelled to make.

[18]   Referring to s 129(4)(b) of the NCA, the high court found that:
„The judgment is only actually „executed‟ when money is raised pursuant to a sale of
attached property and paid to the judgment creditor.‟
In coming to this conclusion, Rogers J referred to the judgment of Peter AJ In
Nedbank Ltd v Fraser & another and Four Other cases2 and the article written by
Reghard Brits, to which I have referred earlier, „Purging mortgage default: Comments
on the right to reinstate credit agreements in terms of the National Credit Act‟.3

[19]  In Nedbank Ltd v Fraser & another and Four Other cases4 the judge said:
„In the case of immovable property, the right of redemption is extinguished only when
registration takes place into the name of the purchaser after the sale in execution.‟5
In coming to this conclusion, he relied on Liquidators Union and Rhodesia Wholesale
Ltd v Brown & Co;6 Simpson v Klein NO & others7 and Shalala v Bowman NO &
others.8 In my respectful opinion, the court misconstrued these authorities.

[20]    The word „execution‟ is not defined in the NCA. First and most significantly,
one needs to understand – as Mr Gautschi correctly submitted – that civil execution
is a process rather than an event. In regard to this understanding there is no dearth
of authority. The topic has vexed many judges both here and abroad: there is no

2 Nedbank Ltd v Fraser & another and Four Other cases 2011 (4) SA 363 (GSJ).
3  Supra, fn 1.
4 Nedbank Ltd v Fraser & another and Four Other cases 2011 (4) SA 363 (GSJ).
5 Para 40.
6 Liquidators Union and Rhodesia Wholesale Ltd v Brown & Co 1922 AD 549 at p558-9.
7 Simpson v Klein NO & others 1987 (1) SA 405 (W) at 409-11.
8 Shalala v Bowman NO & others 1989 (4) SA 900 (W) at 905.

shortage of instances where debt recovery has been troublesome, requiring judicial
attention.

[21]  In Reid & another v Godart & another9 De Villiers JA said:
„…[T]he word “execution” means, as it seems to me, “carrying out” of or “giving
effect” to the judgment, in the manner provided by law; for example, by specific
performance, by sequestration, by the passing of transfer, by issue of letters of
administration, by ejectment from premises, or by a levy under a writ of execution‟.10

[22]   In Liquidators Union v Brown Kotzé JA, after referring to the old common law
authorities, said:
„But although the effect of a pignus judiciale11 is that the control of the property arrested in
execution passes from the judgment debtor, and therefore on his insolvency supervening
does not come under the administration of the curator of the insolvent estate, the dominium
remains in the debtor, who can, up to the last moment before actual sale, redeem his
attached property: that is to say, the property subject to the pignus judiciale, for while the
pignus lasts he remains the owner of the pledge….‟12
For present purposes, the significance of this understanding is that, at common law,
a debtor could redeem his attached property „up to the last moment before the actual
sale‟.

[23]  Section 129(3)(b) read with 129(3)(a), together with s 129(4) of the NCA give
the consumer the right to „re-instate‟ a credit agreement and „resume possession‟ of
the property in question (the equivalent of „redemption‟ at common law) by paying
the credit provider all amounts that are overdue, together with „default charges‟ and
„reasonable costs of enforcing the agreement‟, but does not alter the common law
consequence of „the axe falling‟ upon the sale in execution. At common law one
could, up to the time of the sale, redeem ownership and possession by discharging
the full amount of the debt. Now, under the NCA, ownership and possession can be
redeemed merely by paying the amount overdue, together with charges and costs.
The Rubicon has been and remains the sale in execution. The NCA has not changed

9 Reid & another v Godart & another 1938 AD 511.
10  At 514.
11 An attachment by an officer of a court, consequent upon an order of the court.
12 At 559.

this. On the contrary, it has expressly provided that a consumer may not „re-instate‟ a
credit agreement after the execution of a court order enforcing the agreement.

[24]  Insofar as redemption is concerned, s 129(4)(b) necessarily alters the
common law only to the extent that redemption (re-instatement in the terms of the
NCA) may occur not necessarily by payment of the full debt but merely to the extent
of arrears, together with related charges. This takes account of the fact that
nowadays many consumers borrow money over a protracted period of time in order
to finance the acquisition of large purchases such as a home or a motor vehicle.
Less affluent citizens may avail themselves of extended credit to purchase
household appliances, for example.

[25] In Simpson v Klein NO & others13 Kriegler J referred to Liquidators Union v
Brown.  Although he did say that:
„…(T)he words “actual sale” in the quoted passage from the judgment of Kotzé JA… were
not intended to relate to the act or moment of the sale as such (ie when the property was
knocked down to the highest bidder) but to delivery pursuant to and in terms of the sale‟,14
he nevertheless observed that:
„Neither Judge was concerned with the point in issue in this case, namely at which precise
point in time fixed property, which has been attached and sold in execution, passes from the
estate of the judgment debtor.‟15
and
„In the case of immovables, however, ownership in the attached property can not pass
during the sale in execution. It only passes subsequently upon formal transfer of the property
by the deputy sheriff to the purchaser in execution.‟16
In my respectful opinion, this reasoning of Kriegler J is unassailable. The context to
which he was referring was, however, very different from that with which this court is
now dealing. As Kriegler J was careful to point out:
„In so far as we are now dealing with s 20 of the Insolvency Act of 1936, whereas the learned Judge
[Kotzé JA] had been commenting on the relevant provisions of Act 32 of 1916, care should be taken

13 Simpson v Klein NO & others 1987 (1) SA 405 (W).
14 At 411C-D.
15 At  411B.
16 At 411C.

to ensure that the comments relating to the former Insolvency Act are equally valid with regard to the
current Insolvency Act‟.17

[26]  The context of a debtor‟s supervening insolvency, after a sale in execution of
immovable property, but before transfer thereof, is very different from that with which
we have to do in this case. Here the debtor is seeking to set aside a bona fide sale in
execution to redeem for herself the property in question. The two situations cannot
be considered to be coextensive or in pari materia. In the case of insolvency, the
interests of a single creditor are in competition with the concursus creditorum. In the
situation with which we are now dealing, it is the interests of the debtor which are in
competition not only with a single creditor, the bank, but also an innocent third party,
the purchaser of the immovable property.  Furthermore, as Kriegler J was astute to
indicate, the consequence of his judgment was not that the sale in execution was
invalid or fell to be set aside but that the proceeds of the sale in execution did not fall
outside of the estate of the debtor.18

[27] Moreover, as Kriegler J noted:
„It is, however, clear from the passage quoted that execution is a process for the
enforcement of a judgment and entails a number of successive steps. Such execution is
perfected eventually by a number of different procedures to be performed by the officer of
the court. They include delivery to the purchaser of the goods attached and sold in
execution, receipt of the price obtained at the sale in execution for such goods, the
accounting for such receipts (including the calculation of the costs of execution), the
payment to the judgment creditor or creditors of what is his or their due and the payment
over to the judgment debtor of any balance which may then still remain. The whole of that
process is embraced under the concept of execution.‟19 (Emphasis added.)
Section 129(4)(b) does not refer to the completion or perfection of a sale in
execution.  To infer that this is so would lead to absurd results. What if the deputy
sheriff‟s fees and charges are to be taxed? What if the taxing master‟s decision is
subject to review in the high court? What if that review is subject to an appeal? If one
has regard to s 129(4) as a whole, it is clear that some kind of final, irrevocable step
is envisaged, beyond which a consumer may not return. A bona fide sale in

17 At p410H.
18 At p412D-G.
19 At 411I-312A.

execution is precisely such a step. Besides, even a perfected sale in execution may
not be the end-game. What if the proceeds of the sale in execution of the immovable
property are insufficient to discharge the debt but the debtor has other immovable
properties? These could then be sold in execution until the debt has been
discharged. When it refers to „execution‟, s 129(4)(b) cannot have envisaged
complete, absolute, perfect finality in the process of execution.

[28]  Shalala v Bowman, the other case to which the court refers in Nedbank v
Fraser, follows Simpson v Klein. In Shalala v Bowman Blum AJ deals with a
company in liquidation. This does not add, in any significant way, beyond Simpson v
Klein, to the issues to be decided in this case. The other case to which the court
referred was Syfrets Bank Ltd & others v Sheriff of the Supreme Court, Durban
Central, & another; Schoerie NO v Syfrets Bank Ltd & others.20 Like Shalala v
Bowman, it deals with the effect of a company‟s liquidation on a sale in execution.
Combrink J disagreed with Blum AJ‟s reasoning in Shalala v Bowman and found that
a bona fide sale in execution of immovable property which had taken place not only
before a company had been placed in liquidation but also before registration of
transfer is unaffected by the order of liquidation.21 Combrink J quoted approvingly22
from the judgment of Booysen J in Strydom NO v MGN Construction (Pty) Ltd &
another: In re Haljen (Pty) Ltd (in Liquidation),23 which, in turn, quoted from Rennie
NO v Registrar of Deeds & another24 with approval.25

[29]  In Rennie v Registrar of Deeds Schock AJ said:
„Execution is, in my view, “put into force” within the meaning of those words in the said
section when, in pursuance of a writ of execution, the Sheriff or the messenger of the court,
as the case may be, enters into possession of the property, i.e. when execution is levied.
This has always been the interpretation of those words placed on the corresponding and
substantially similar section in the English Companies Acts from which these words in our
Companies Act (and its predecessors) were taken. Moreover this interpretation has been

20 Syfrets Bank Ltd & others v Sheriff of the Supreme Court, Durban Central, & another; Schoerie NO
v Syfrets Bank Ltd & others 1997 (1) SA 764 (D).
21 At 777B-782F.
22 At 779F-780C.
23 Strydom NO v MGN Construction (Pty) Ltd & another: In re Haljen (Pty) Ltd (in Liquidation) 1983 (1)
SA 799 (D).
24 Rennie No v Registrar of Deeds & another 1977 (2) SA 513 (C).
25 At  803A-G.

applied in our Court by Maasdorp J (as he then was), in the case of In re Cape Cold Storage
and Supply Co Ltd: Hendry v Trollip (1908) 25 SC 502, in construing similar words in the
Cape (pre-Union) Companies Act. It is also in accordance with the interpretation applied by
Clayden J in the case of Pols v. Pols – Bouers en Ingenieurs (Edms) Bpk 1953 (3) SA 107
(T) at 110E-H in construing a similar provision of the 1926 Companies Act. There is a dictum
to the contrary by Jennet J in Ex parte: Flynn In re United Investments & Development
Corporation Ltd (in Liquidation) 1953 (3) SA 443 (E) at 445B-C, but it appears that he did not
have the benefit of the judgment in Pols‟ case, supra. The reasoning of Jennet J seems to
me, with respect, quite unconvincing. An execution is surely put into force once and for all
and not – as Jennett J suggests in the above-cited passage – every time a further step in the
process of execution is taken. The weight of authority thus clearly supports the view that
execution – in terms of the said section – was “put into force” when the messenger of the
Court attached the said erf and this is the meaning which commends itself to me.‟26
(Emphasis added.)
For Schock AJ the „once and for all‟ character of the process of execution came into
operation upon attachment but an awareness of context is, as always, important:
Schock AJ had to determine the critically important step in the process of execution
in relation to the time when an order is made for the winding-up of a company. What
is important for present purposes is that, in Schock AJ‟s reasoning, execution did not
„occur‟ only once there had been a distribution of the proceeds of the sale in
execution – or even after some step after that.

[30]  In Maharaj Brothers v Pieterse Bros Contruction (Pty) Lt & another27  Caney J,
after referring to English authorities as well as Reid v Godart, said:
„Execution in its widest sense means carrying out of or giving effect to a judgment in the
manner provided by law…
In a narrower sense it is the process by which the Sheriff or the messenger of the
magistrate‟s court “procures for a judgment creditor the fruits of his judgment”. In re A.
Company 1915 (1) Ch. 520 (C.A.) at p.527.‟28 (Emphasis added.)

[31] I am fortified in my opinion that civil execution is a „process-oriented‟ concept
rather than one which refers to a single event but that the event of a sale in

26 At 513C-G.
27 Maharaj Brothers v Pieterse  Bros Construction (Pty) Ltd & another 1961 (2) SA 232 (N).
28 At 238C-D.

execution denotes finality and a point of no return, by reference to English cases. In
In re: Overseas Aviation Engineering (G.B) Ltd29 Lord Denning MR said, by
reference to  s 325 of the English Companies Act, 1948:
„The word “execution” is not defined in the Act. It is, of course, a word familiar to lawyers.
“Execution” means, quite simply, the process: for enforcing or giving effect to the judgment
of the court: and it is “completed” when the judgment creditor gets the money or other thing
awarded to him by the judgment…
Applying this meaning of the word “execution”, I should have thought it plain that when a
judgment creditor gets a charge on the debtor‟s property, it is a form of “execution”, for it is a
means of enforcing the judgment.‟30 (Emphasis added.)
In Overseas Aviation Engineering, Lord Denning referred, with approval, to
Blackman v Fysh31 in which Kekewich J said:
„What is the meaning of “taken in execution”? Read irrespectively of authorities, it
means taken by process of law for the enforcement of a judgment creditor‟s right and
in order to give effect to that right.‟32 (Emphasis added.)

[32] In Fagot v Gaches33  Du Parcq LJ said:
„To my mind, “to proceed to Execution on, “or” to proceed to the enforcement of a
Judgment is only a way of saying “to Execute” or “to enforce”….‟34

[33]  In summary then, there is an almost across-the-board judicial consensus not
only in South Africa but also in England, from which so much of our law of procedure
(our „adjectival law‟ in contrast to our „substantive law‟) derives, that „execution‟
refers to a process. It is also clear that the precise meaning to be given to „execution‟
in a particular statute depends very much on context.

[34]  In the article by Reghard Brits, which was mentioned previously, he
comments on the right to reinstate credit agreements in terms of the National Credit
Act‟.35 He argues that „…section 129(4) qualifications should by and large be

29 In re: Overseas Aviation Engineering (G.B) Ltd [1963] Ch. 24 (C.A.); [1962] 3 All ER 12 (C.A.).
30 At 39-40.
31 Blackman v Fysh [1892] 3 Ch 209 (C.A.).
32 At 217.
33 Fagot v Gaches [1943] 1 KB 10 (C.A.).
34 At 12.
35 R Brits „Purging mortgage default: Comments on the right to reinstate credit agreements in terms of
the National Credit Act‟ (2013) 24 Stellenbosch Law Review Vol 1, 165. See fn 1.

regarded as the boundaries for debtors‟ rights under section 129(3) to reinstate
credit agreements that are in default‟36 and argues that s 129(4)(a) and (b)  should
respectively be construed  „…so that reinstatement is only prohibited once the
judgment had been enforced or the property sold‟.37 (Emphasis added.) Brits goes
on to argue that:
„…[T]o allow reinstatement to occur after sale but prior to registration would render auction
sales very insecure (and hence unpopular) and would cause great inconvenience for auction
purchasers as well as the deeds registration system. The public auction process would not
be able to fulfil its debt recovery function properly. Also, lower prices (which will, no doubt,
accompany the high risk of sales failing due to reinstatement) will in return prejudice
debtor‟s, which is contrary to the NCA‟s core purposes.‟38
I agree.

[35] In ABSA Bank Limited v Van Eeden & others39, after referring to the maxim
quoniam fiscalis hastae fides facile convelli non debeat, to which reference was
made in Sookdeyi & Another v Sahadeo & Another,40 it was said that public
confidence in the process of execution is fundamentally important. The maxim may
be translated as explaining the judicial preference for deference to sales in
execution, once these have taken place, „by reason of the fact that public confidence
in the institutional weapon of execution should not lightly be disturbed‟ (my
translation).41  For obvious reasons, this deference is to be applied with even greater
rigour once there has been delivery (in the case of movables) or transfer registered
in the deeds registry office (in the case of immovable property).42 In any event, sight

36 At p175.
37 At p175.
38 At p177.
39 ABSA Bank Limited v Van Eeden & others 2011 (4) SA 430 (GSJ).
40 1952 (4) SA 568 (A).
41 In Sookdeyi & another v Sahadeo & another 1952 (4) SA 568 (A) at 571H-572A, Van Den Heever
JA said, in a unanimous judgment, that: „It was a principle in the Netherlands that a perfected sale in
execution should after transfer or delivery of the subject matter not be lightly impugned quoniam
fiscalis hastae fides facile convelli non debeat. (Groenewgen de Legib. Abrogate, ad C. 4.44.16; ad C.
8.44 (sibi 45) 13; Neostad Decisiones, Decis.75; Voet 6.1.13 and, dealing with execution in rem,
Bynkershoek Observ. Tumult. Cas 45; Cf Voet 42.1.31 verbis: Et quamvis nec arbiter...). This
reluctance to rescind perfected sales sub hasta has been received in our case law (Lange and Others
v Leisching and Others, 1880 Foord 55; S.A. Association v van Staden, S.C. 95 at 98; Conradie v
Jones 1917 O.P.D. 112). These authorities indicate that in certain exceptional circumstances a sale in
execution may nevertheless be impugned. The rules in regard to this qualified inviolability of a sale in
execution were in so far as magistrates‟ courts are concerned, codified in sec. 70. It has to be
construed in harmony rather than conflict with the Common Law.‟
42 Ibid.

must not be lost of the truth that the higher the price fetched at public auctions, the
better it is for both credit providers and consumers: the higher the price, either the
less the residual indebtedness of the consumer or the greater her surplus.
Whichever of these two possible outcomes ensues, both the credit provider and the
consumer may be said to „win‟. The more interested buyers that attend an auction,
the higher the price is likely to be. Facile judicial intervention in sales in execution will
discourage interested buyers from attending these auctions. Why bid, if it is
considered likely that a court will set the sale aside?

[36] Sight should also not be lost of the fact that, as Mr Gautschi correctly
submitted, a re-instatement of a credit agreement, necessarily entails a revisiting, a
revision thereof and, consequently, its amendment. The credit provider‟s „permitted
default charges and reasonable costs of enforcing the agreement up to the time of
re-instatement‟ are added to the amount which the consumer must pay. In terms of s
116 of the NCA, a change or amendment to a credit agreement (unless it reduces
the consumer‟s liabilities or increases the credit limit) is void unless „the change is
recorded in writing and signed by the parties‟.43  Not only is formality required when
an agreement is re-instated but any change or amendment to a credit agreement
after a sale in execution would generate a conflict between the purchaser at a sale in
execution, on the one hand and the credit provider and the consumer, on the other.
No such formalities occurred in the present case.

[37]  As Innes J keenly recognised long ago in Walker v Syfret NO, 44 when it
comes to finding the point of no return in matters concerning the enforcement of a
transaction, the interests of innocent third parties are paramount.45 He said: „[N]o
authority directly in point has been quoted to us, but the matter seems clear upon
principle‟. This provides another clue in the process of analysis of what „execution‟ in
s 129(4)(b) might mean.

[38]  Yet another pointer to the fact that „execution‟ in s 129(4)(b) refers to the
moment of sale at the public auction is to be found in the fact that, in terms of s

43 Subsection 116(c) of the NCA.
44 Walker v Syfret NO 1911 AD 141.
45 At 166.

129(4)(a)(i), re-instatement may not occur after the sale of any property pursuant to
an attachment order. (Emphasis added). An order of attachment differs from a writ
issued from the office of the registrar, in terms of Rules 45 and 46 of the Uniform
Rules of Court, after a court has given judgment requiring a litigant to make a
payment of money. An order of attachment commonly arises where the court grants
it in order to protect a litigant‟s interest in property that is the subject of a dispute.  In
this regard, the judgment of Millin J in Loader v De Beer,46 which has been followed
in numerous instances thereafter, is instructive. The order is often called an
attachment pendent lite. The judgment of Margo J in Van Rhyn v Reef
Developments A (Pty) Ltd47 provides a good example.48 An order of attachment of
property need not, of course, be confined to a situation where there is a lis pending
between the parties. Therefore it would seem, if s 129(4)(b) is read not only
consecutively but also in harmony with s 129 (4)(a)(i), that the mischief at which
these two subsections were directed was re-instatement after a sale in execution.

[39]   Furthermore, if the high court‟s conclusion that execution only takes place
when the proceeds of the sale in execution are paid over to the judgment creditor is
correct, it would mean that the provisions of s 129(4)(a)(i) are not only nugatory but
also superfluous. If it was the legislator‟s intention that it is the transfer of immovable
property, followed by payment to the credit provider of the proceeds – and, by parity
of reasoning, delivery and then payment to the credit provider in the case of
movables – which is decisive, why then have a provision that prohibits re-
instatement after the „sale of any property pursuant to an attachment order‟?

[40]  There is still further reason why the construction which the bank wishes to
place on the interpretation of „execution‟ in s 129(4)(b) is correct. Rule 46(13) of the
Uniform Rules of Court provides that:
„The sheriff conducting the sale shall give transfer to the purchaser against payment of the
purchase money and upon performance of the conditions of sale and may for that purpose
do anything necessary to effect registration of transfer, and anything so done by him or her

46 Loader v De Beer 1947 (1) SA 87 (W).
47 Van Rhyn v Reef Developments A (Pty) Ltd 1973 (1) SA 488 (W).
48 At 492B-F.

shall be as valid and effectual as if he or she were the owner of the property.‟49 (Emphasis
added.)
As Hoexter JA said in Finbro Furnishers (Pty) Ltd v Registrar of Deeds, Bloemfontein
& others:50
„It is usual to credit the Legislature with a knowledge of the existing law on the subject dealt
with. In order properly to interpret a statute a court is entitled, and in some cases bound, to
look at earlier statutes dealing with the same subject-matter. That for purposes of judicial
construction of a more recent statute an examination of earlier statutes dealing with like
topics affords a useful aid is an established principle of our law.‟51
The high court‟s interpretation of „execution‟ runs contrary to the peremptory
provisions of Rule 46(11) relating to the effecting of transfer upon payment by the
purchaser who was at a sale in execution.

[41]  In his concluding remarks, Brits says:
„One can accordingly conclude that reinstatement is possible in the mortgage context and
that foreclosure will be prevented and reversed if the debtor purges the default (along with
the permitted charges). However, reinstatement can only occur up until the point that the
auction sale is concluded. After this point, and up until registration takes place, only
redemption (paying the full outstanding debt) can save the debtor‟s home.‟52
I disagree that after the sale in execution but before registration of transfer has taken
place, redemption can occur by paying the full amount of the debt. No such inference
is possible from reading the NCA and the proposition is contrary to the common law.
I otherwise agree with what Brits has said in this passage.

[42]  There is yet another reason that the high court‟s interpretation of „execution‟
is, in my respectful opinion, incorrect: it would mean that whenever a credit provider
settles a matter to allow a debtor a rescheduled arrangement for repayment, after an
execution order has been obtained, the execution order ipso facto lapses. This would
entail such a disincentive for settling on such a basis that it would be unlikely that

49 See the remarks in Erasmus‟ Superior Court Practice Service Edition 32 (2009) at B1 333-334
concerning the formulation of this rule.
50 Finbro Furnishers (Pty) Ltd v Registrar of Deeds, Bloemfontein & others 1985 (4) SA 773 (A).
51 At 805G. See also Falcon Investments Ltd v CD of Birnam (Suburban) (Pty) Ltd & others 1973 (4)
SA 384 (A) at 401B and the judgment of Van Winsen J in Bellville-Inry (Edms) Bpk v Continental
China (Pty) Ltd 1976 (3) SA 583 (C) at 588C-D.
52 At p182.

credit providers would enter into such arrangements. The rescheduling or
restructuring of debt is, however, one of the features of modern credit provision,
which the NCA is designed to promote.53 The impracticality of the high court‟s
interpretation must weigh heavily against its being correct.54

[43]  In Ferris & another v FirstRand Bank Limited & another 55 Moseneke ACJ,
delivering the unanimous judgment of the Constitutional Court, affirmed the principle
that the NCA does not exist merely to advance the interests of consumers but also of
credit providers as well.56 Endless cat-and-mouse games between credit providers
and consumers serve the interests of neither class. Indeed, they undermine the
whole system of credit provision in the country. Added to Moseneke‟s ACJ‟s
judgment in Ferris, is the fact that the interests of the general public, when they bid
at public auctions, are relevant as well.

[44] The provisions of s 129(4)(b) of the NCA are peremptory. In clear terms they
provide that a consumer may not re-instate a credit agreement after the execution of
any court order enforcing that agreement.  Reinstatement can only occur prior to a
sale in execution at a public auction. The debtor fell foul of this provision. The short
answer for a consumer in distress is that she must timeously re-instate the credit
agreement and, where this is required by the circumstances, apply for and
successfully obtain a rescission of the judgment and the setting aside of the writ of
attachment and a stay of execution before that sale has taken place in order to avoid
the fall of the axe.

[45]  Accordingly, the high court‟s conclusion that execution only takes place when
the proceeds of the sale in execution are paid over to the judgment creditor is
erroneous. The order of the high court was wrongly made. The appeal must
succeed.  The appeal has dealt with weighty matters. The costs of two counsel are
justified.

53See for example ss 86(8) and 87(1)(b)(ii) of the NCA.
54 See for example Bothma-Batho Transport (Edms) Bpk v Bothma & Seun Transport (Edms) Bpk
2014 (2) SA 494 (SCA) para 12, read with Natal Joint Municipal Pension Fund v Endumeni
Municipality 2012 (4) SA 593 (SCA) para 18.
55 Ferris& another v FirstRand Bank Limited & another 2014 (3) SA 39 (CC).
56 Paras 14 to 17.

[46] The following order is made:
1 The appeal is upheld with costs, including the costs of two counsel.
2 The following is substituted for the order of the high court:
„The application is dismissed with costs.‟

_________________________
N P WILLIS
JUDGE OF APPEAL

APPEARANCES:

For the Appellant:
A Gautschi SC (with him D Van Reenen)
Instructed by:
Cohen Shevel & Fourie, Cape Town
c/o Honey Attorneys, Bloemfontein

For the Respondent:
L Dzai
Instructed by:
Nolundi Nyati, Cape Town
c/o Maduba Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF
APPEAL

FROM

The Registrar, Supreme Court of Appeal

DATE

26 March 2015

STATUS

Immediate

Firstrand Bank Limited v Nkata  (213/2014)[2015] ZASCA 44
Please note that the media summary is for the benefit of the media and does
not form part of the judgment.

Today the Supreme Court of Appeal (SCA) upheld an appeal against the order of the
high court which had re-instated a credit agreement, relying on the provisions of
s 129(3) of the National Credit Act 34 of 2005 (the NCA).

The SCA, after an extensive review of the case law in South Africa and England, as
to the meaning of civil execution, held that re-instatement was prohibited in terms of
s 129(4) of the NCA after a sale in execution had taken place. The meaning of
‘execution’ had not been defined in the NCA.

Referring to the fact that execution referred to a process rather than a single event,
the SCA held that, in terms of s 129(4) of the NCA, the decisive event was the sale
in execution at a public auction. Contrary to the high court, the SCA found that re-
instatement in terms of s 129(3) had to occur prior to the sale in execution and not
prior to the transfer of immovable property, consequent upon a sale in execution.

The SCA found that this interpretation was required, inter alia, in order to ensure
public confidence in auctions held in execution and that it was in the interest of both
consumers and credit providers generally that this confidence be maintained in order
to maximise the prices for which purchasers would bid at these auctions.