Nedbank Limited v Mashaba, Erick and Related Cases [2024] ZAGPJHC (12 January 2024)

In this case, Nedbank Limited, the applicant, sought default judgments against various respondents in separate but related cases. The bank had entered into instalment agreements with each respondent for the financing of motor vehicles. The respondents had defaulted on their obligations under these agreements, prompting the bank to seek legal recourse.

The key issue at hand was whether the registrar of the High Court had the competence to grant default judgments in matters falling under the National Credit Act, 2005 (NCA), or whether such matters had to be enrolled for hearing in open court. There was a conflict of decisions across various divisions of the High Court on this issue, with no binding precedent in the Gauteng Division, where the current matters were being heard.

The applicant bank had not approached the registrar for default judgment as ordinarily would be done under Uniform Rule 31(5). Instead, the bank enrolled the matters for default judgment in the unopposed motion court. The court needed to determine whether this was appropriate or if the registrar should have been approached first.

The Banking Association of South Africa (BASA) was admitted as amicus curiae due to the importance of the issue to the banking industry. Both the applicant bank and BASA made extensive written and oral submissions on the matter.

The court was tasked with deciding whether the registrar could fulfill the role of 'the court' as required by Section 130 of the NCA when granting default judgments, or if such a role was exclusively reserved for a judge in open court. The judgment sought to resolve the conflicting decisions and provide clarity on the proper procedure for obtaining default judgments in NCA matters within the High Court's jurisdiction.

The court held that the registrar of the High Court has the power to grant default judgments in matters that fall under the National Credit Act, 2005 (NCA), where the High Court has jurisdiction. This is based on the interpretation that the oversight function required by Section 130 of the NCA does not exclusively necessitate 'judicial oversight' in the form of a judge in open court. Instead, this function can be adequately performed by the registrar using the prescribed powers in terms of Rule 31(5)(b) of the Uniform Rules of Court.

The court found that the registrar's role in granting default judgments is administrative in nature and that the registrar is suitably skilled to make decisions on procedural compliance. The court also determined that the purposes of the NCA would not be undermined by allowing the registrar to fulfill the role of 'the court' as required by Section 130. Furthermore, the court held that there is no conflict between the NCA and the Superior Courts Act, which empowers the registrar to grant default judgments, and that the NCA does not divest the registrar of these powers.

The court emphasized that the division of labour between open court and the registrar should be respected, and that attorneys representing credit providers in NCA matters should first approach the registrar for default judgment. The registrar should not routinely require matters to be heard in open court simply because they are NCA matters, nor should it do so because it may be over-burdened. The registrar is permitted to consider NCA actions that fall within the ambit of Rule 31(5) and should exercise its powers accordingly.

In summary, the core legal principle established by the court is that the registrar has the competence to grant default judgments in NCA matters, and that the registrar's quasi-judicial functions in this regard are consistent with the administrative and procedural requirements of the NCA and the Superior Courts Act.

 Here are some of the key cases cited by the court along with their full citations:

1. Nedbank Limited v Mollentze 2022 (4) SA 597 (ML) at para 47; Gcasamba v Mercedes-Benz Financial Services SA (Pty) Limited and Another [2023] ZASCA at para 37.

2. Standard Bank of South Africa Limited and Others v Mpongo and Others [2021] ZASCA 403 and subsequently affirmed on appeal to the Constitutional Court in South African Human Rights Commission v Standard Bank of South Africa Limited and Others [2023] ZACC 36.

3. Du Plessis v Firstrand Bank Limited trading as Wesbank [2018] ZAGPPHC 286 (2 May 2018).

4. Theu v First Rand Auto Receivables (RF) Limited [2020] ZAGPPHC 319 (12 June 2020).

5. Seleka v Fast Issuer SPV (RF) Limited and Another [2021] ZAGPPHC 128 (10 March 2021).

6. Xulu v Standard Bank of South Africa Limited and Others [2021] ZAKZPHC 51 (23 August 2021).

7. Nkata v FirstRand Bank [2016] ZACC 257 (CC).

8. University of Stellenbosch Legal Aid Clinic and Others v Minister of Justice and Correctional Services and Others [2016] ZACC 596 (CC).

9. Ngandela v ABSA Bank Limited and Another [2023] ZAECELLC 6 (31 March 2023).

10. Nonyane v Nedbank [2023] ZAGPPHC 367 (6 March 2023).

These cases were instrumental in the court's analysis of whether the registrar had the competence to grant default judgments in NCA matters and whether there was a binding precedent within the Gauteng Division on this issue. The court ultimately found that the registrar does have such competence, aligning with the reasoning in the Mollentze case and distinguishing the statements made by Justice Jafta in the Nkata (Minority) and University of Stellenbosch (Minority) cases as obiter dicta and not binding precedent.