Wednesday, April 22, 2015

Firstrand Bank Ltd v Nkata

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 reinstatement 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.