Dreyer N O and Another v Standard Bank of South Africa Limited; Nedbank Limited and Another v Abrahams and Others

The judgment consolidates two appeals concerning s 127(8) of the National Credit Act 34 of 2005 (NCA). In the first matter (Case No 568/2024), Standard Bank concluded instalment sale agreements with the Doornfontein Trust, which defaulted. Standard Bank obtained a High Court order under s 130 of the NCA for repossession of assets, reserving the right to claim any shortfall after sale. After repossession and auction, a shortfall remained. Standard Bank approached the North West High Court, Mahikeng, for payment. The appellants (the trustees) raised a jurisdictional objection for the first time at the hearing, contending that s 127(8) conferred exclusive jurisdiction on the magistrates' court. The High Court rejected the contention and ordered payment of the shortfall. In the second matter (Case No 387/2024), Nedbank concluded instalment sale agreements with several respondents who voluntarily surrendered their vehicles. Nedbank sold the vehicles in terms of s 127 and shortfalls remained. Nedbank applied to the Gauteng High Court, Pretoria, for payment. None of the respondents opposed. The court, of its own accord, raised the jurisdiction issue, adjourned for argument, and admitted the Banking Association of South Africa (BASA) as amicus curiae. The Gauteng High Court held that s 127(8) ousted the High Court's jurisdiction and struck the six applications from the roll.

• Whether s 127(8) of the National Credit Act 34 of 2005 ousts the jurisdiction of the High Court and confers exclusive jurisdiction on the magistrates' court to hear applications for payment of a shortfall after repossession and sale of goods subject to a credit agreement.
• Whether the word 'may' in s 127(8)(a) should be interpreted as 'must', thereby obliging credit providers to institute shortfall proceedings only in the magistrates' court.
• Whether the phrase 'in terms of the Magistrates' Courts Act' in s 127(8)(a) implies an ouster of the High Court's jurisdiction by necessary implication.
• Whether the Supreme Court of Appeal's obiter remarks in Standard Bank of South Africa Ltd v Mpongo and Others [2021] ZASCA 92 regarding s 127(8) are binding authority.

In case number 568/2024 (Dreyer N O and Another v Standard Bank): The appeal is dismissed with costs, including costs of two counsel. In case number 387/2024 (Nedbank and Another v Abrahams and Others): (1) The appeal is upheld with no order as to costs; (2) The order of the Gauteng Division of the High Court, Pretoria, is set aside; and (3) The six applications are referred back to the Gauteng Division of the High Court, Pretoria, for adjudication on the merits.

Section 127(8)(a) of the National Credit Act 34 of 2005 does not expressly or by necessary implication oust the jurisdiction of the High Court to adjudicate claims for payment of a shortfall following the repossession and sale of goods subject to a credit agreement; the High Court therefore retains concurrent jurisdiction with the magistrates' court over such claims. The word 'may' in s 127(8)(a) is permissive and confers an option, not a duty, to institute proceedings in the magistrates' court. The words 'in terms of the Magistrates' Courts Act' are intended to vest jurisdiction in the magistrates' court without excluding the High Court's concurrent jurisdiction. Where the legislature intends exclusive jurisdiction under the NCA, it does so expressly, and s 127(8) is not one of those provisions.

The Court observed that interpreting s 127(8) as ousting the High Court's jurisdiction would produce the self-evidently absurd result of compelling a credit provider that had obtained attachment and sale orders in the High Court under ss 129–131 to pursue the related shortfall claim in a different court, and that sensible meanings must be preferred to insensible ones. The Court also noted that the matter did not warrant a costs order for three counsel, restricting the award to two counsel in the Standard Bank appeal, and that no order as to costs was appropriate in the Nedbank appeal because the jurisdictional point had been raised by the court of its own accord. Additionally, the Court remarked on the legislative history of s 86(11), which was amended to replace 'the Magistrates' Court' with 'court' following the decision in Collett v Firstrand Bank, illustrating that the NCA generally permits enforcement proceedings in either the High Court or the magistrates' court.

The judgment authoritatively settles that the High Court retains concurrent jurisdiction with the magistrates' court over shortfall claims under s 127(8) of the National Credit Act. It corrects the widely cited but non-binding obiter dictum in Standard Bank v Mpongo that suggested exclusive magistrates' court jurisdiction, thereby restoring a uniform approach to forum selection for credit providers. The decision reaffirms the strong presumption against the ouster of High Court jurisdiction in South African statutory interpretation and clarifies that the phrase 'in terms of the Magistrates' Courts Act' serves to vest jurisdiction in the magistrates' court rather than to oust the High Court's inherent jurisdiction.