The Registrar’s role in Default Judgment Applications in respect of matters falling within the ambit of the National Credit Act, 2005
Whilst Rule 31(5) of the Uniform Rules gives the Registrar of the Court the authority to grant judgment by default in respect of a claim for a debt or liquidated demand, there have been conflicting judgments regarding the role of the Registrar, specifically in relation to matters emanating from the National Credit Act, 2005 (“NCA”).
Section 130 of the NCA is titled “Debt Procedures in a Court”, and throughout this section there are numerous references to “the court”. Naturally, the question that arises is whether the Registrar is suitably skilled and competent to fulfil the role of “the court”?
In the recent decision of the Gauteng Division of the High Court[1], which saw the combination of a number of cases, all of which involved applications for default judgments being sought due to non-compliance of instalment agreements, Acting Judge Gilbert (“Gilbert AJ”) took on the challenge of deciding the issue.
Nedbank Limited was the Applicant in all of the matters and the Banking Association of South Africa (“BASA”) obtained leave to be admitted as amicus curiae.
In arriving at a conclusion, Gilbert AJ discussed the divergent views expressed in the cases dealing with this question across the various Divisions of the High Court. I have set these out in the table below, and divided them into cases for and against the Registrar granting default judgments:
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Cases for: |
Cases Against:
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Du Plessis v Firstrand Bank Limited trading as Wesbank[2], Tlhapi J found that the Registrar was competent to grant default judgment.
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In the matters of Nkata v Firstrand Bank[3] and University of Stellenbosch Legal Aid Clinic and Others v Minister of Justice and Correctional Services and Others[4], Jafta J in his minority judgment found that it was only for a court, and not the Registrar, to determine NCA claims as required by section 130 of the NCA.
Whilst this was statements made in a minority judgment, a number of judgments that followed placed great reliance on the words of Jafta J.
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Nedbank Limited v Mollentze[5], the full court decision found that the Registrar was both able and competent in terms of section 130 of the NCA to grant default judgments pursuant to rule 31(5) of the Uniform Rules.
It is prudent to note that whilst this is a decision of the full court, this was not a decision that was binding on other Divisions. Hence many other judgments, which followed this on, was of a different view.
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Theu v First Rand Auto Receivables (RF) Limited[6] Matebese AJ, with particular reference to the statements made by Jafta J in his minority judgement in Nkata, ruled that the oversight function required by section 130 of the NCA could not be done by the Registrar and must be done by the court.
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Seleka v Fast Issuer SPV (RF) Limited and Another[7], Mabuses J, relying on the statement of Jafta J, agreed that the Registrar did not have the authority to grant default judgment.
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Xulu v Standard Bank of South Africa Limited and Others[8], Nkosi J, with reference to Jafta J’s minority judgment in Nkata as well as the matters of Theu and Seleka, settled that the Registrar was not competent to grant default judgments in NCA actions as section 130 required that “the court” determine the matter.
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Gcasamba v Mercedes-Benz Financial Services SA (Pty) Limited and Another[9], Snellenburg AJ agreed that it is only a court, and not the Registrar, that may carry out the section 130(3) determination.
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Ngandlea v ABSA Bank Limited and Another[10], Dreyer AJ agreed with Gcasamba and found that the statements of Jafta J in Nkata were binding.
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Nonyane v Nedbank[11], the court, relying on the statements of Jafta J in Nkata, agreed that the Registrar could not grant default judgement.
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The reason for Gilbert AJ’s expansive discussion of the aforementioned decisions was to elaborate on the differing views of the courts as well as to highlight the amount of emphasis, in arriving at these decisions, that has been placed on the two minority judgments of Jafta J.
Gilbert AJ’s analysis
In considering the question, Gilbert AJ did note two reservations that he had, being: (i) if section 130 of the NCA required judicial oversight, that had to be done by the court and not the Registrar, and (ii) whether the obligations and powers of the court referred to in section 130(4) could meaningfully and appropriately be undertaken and exercised by the Registrar.
To elaborate further, section 130(4)(a) provides that if the court determines that the credit agreement is reckless, the court must then make an order as such and together with that order set aside all or part of the consumer’s rights and obligations under that credit agreement, based on the circumstances.
Gilbert AJ found that these reservations were adequately addressed in BASA’s arguments.
Findings of the court
The court confirmed that the Registrar can in terms of Rule 31(5) grant default judgments, or otherwise deal with applications for default judgment as provided for in Rule 31(5)(b), in those NCA matters where the High Court has jurisdiction. The court went on to state:
The division of labour mandated between open court and the Registrar must be respected, including by the attorneys representing the credit providers in NCA matters and by the Registrar.
The attorneys are first to approach the Registrar for default judgment – not because the court does not have jurisdiction or competence to hear applications for default judgment but because of the described division of labour between open court and the Registrar. Should the applicant for default judgment seek to approach open court directly, without first placing the matter before the Registrar in terms of Rule 31(5), it must have good reason to do so…
Conclusion
It appears that this decision has now created precedent that a default judgment application, where the NCA is applicable, must first be placed with the Registrar before approaching open Court.
[1] Netbank Limited v Mashaba; Netbank Limited v Mamadi; Netbank Limited v Mashaba; Netbank Limited v Tshofela; Netbank Limited v The Marketing and Media Guys (Pty) Limited; Netbank Limited v Mdladla (2023-034575; 2023-047197; 2023-047199; 2023-048901; 2023-053583; 2023-059144) [2024] ZAGPJHC 28 (12 January 2024)
[2] [2018] ZAGPPHC 286 (2 May 2018).
[3] 2016 (4) SA 257 (CC).
[5] 2022 (4) SA 597 (ML).
[6] [2020] ZAGPPHC 319 (12 June 2020).
[7] [2021] ZAGPPHC 128 (10 March 2021).
[8] [2021] ZAKZPHC 51 (23 August 2021).
[9] 2023 (1) SA 141 (FB)
[10] [2023] ZAECELLC 6 (31 March 2023).
[11] [2023] ZAGPPHC 367 (6 March 2023).
About the author
Stephanie Chetty
Senior Associate
LLB (University of KwaZulu-Natal, 2008)
LLM (University of KwaZulu-Natal, 2009)