Firstrand Bank Limited v Nkata

Firstrand Bank obtained default judgment against Ms Nkata and a writ declaring her mortgaged immovable property executable under a credit agreement regulated by the National Credit Act 34 of 2005 (NCA). After earlier settlement attempts and intermittent payment of arrears, the debtor again defaulted. The property was sold in execution on 24 April 2013. Ms Nkata then applied to the Western Cape High Court for rescission of the default judgment and cancellation of the sale in execution, arguing that by paying arrears at various stages she had reinstated the credit agreement in terms of s 129(3) of the NCA, which allegedly nullified the writ and sale. The High Court dismissed rescission but mero motu held that reinstatement had occurred and that the writ and sale were void. Firstrand Bank appealed to the Supreme Court of Appeal.

The appeal was upheld with costs. The High Court’s order reinstating the credit agreement and setting aside the sale in execution was substituted with an order dismissing the debtor’s application with costs.

This case provides authoritative interpretation of ss 129(3) and 129(4) of the National Credit Act, clarifying that reinstatement of a credit agreement is not possible after a bona fide sale in execution. It protects certainty in execution sales and the interests of third-party purchasers, and limits the scope of post-judgment debtor relief under the NCA.