FirstRand Bank Limited t/a First National Bank v Modingwana Harry Makaleng

FirstRand Bank and the respondent entered into a facility agreement on 7 August 2007, where the appellant granted the respondent a credit facility of R432,000 to purchase immovable property, secured by a mortgage bond registered on 13 September 2009. The respondent fell into arrears with bond repayments. On 6 July 2015, the appellant delivered a letter informing the respondent of arrears of R12,945.53. On 23 July 2015, the appellant sent a notice under s 129(1)(a) of the National Credit Act. When the respondent remained in arrears, summons was issued on 20 August 2015 claiming R262,331.23 plus interest and declaring the immovable property executable. The summons was served on the respondent's wife (respondent 'temporarily absent'). The respondent did not defend the action. On 28 September 2015, the appellant applied for default judgment. The high court (Weiner J) postponed the application sine die on 8 October 2015, directing that the matter not be set down for less than six months and requiring the appellant to file an affidavit detailing efforts to negotiate settlement to prevent foreclosure.

• Whether the high court's order postponing a default judgment application sine die and directing the filing of an affidavit detailing settlement efforts is appealable
• Whether such an order constitutes a 'decision' appealable under s 16(1) of the Superior Courts Act 10 of 2013
• Whether the order has the attributes of finality required for appealability under the test in Zweni v Minister of Law and Order
• Whether the change from 'judgment or order' in the old Supreme Court Act to 'decision' in the Superior Courts Act altered the requirements for appealability

The appeal was struck from the roll for lack of jurisdiction with no order as to costs (majority decision).

An order by the high court postponing an application for default judgment sine die and directing the appellant to file an affidavit detailing attempts to prevent foreclosure is not appealable. Such an order amounts to no more than a procedural direction as to the manner in which the matter should proceed before the main action can be entered into. It does not constitute a refusal of default judgment, does not directly bear upon or dispose of any issues in the main action, and therefore cannot be said to be tantamount to a dismissal of the action. The order lacks the three attributes required for appealability under the Zweni test: (1) it is not final in effect as the court of first instance can alter it; (2) it is not definitive of the rights of the parties; and (3) it does not dispose of at least a substantial portion of the relief claimed in the main proceedings. The use of the word 'decision' in s 16(1) of the Superior Courts Act 10 of 2013, as opposed to 'judgment or order' in the old Supreme Court Act, did not change the established requirements for appealability.

Shongwe JA noted that the fact that a decision may cause a party inconvenience or place them at a disadvantage in litigation which only an appeal can correct is not taken into account in determining appealability. The court observed that accepting such orders as appealable could result in virtually every refusal to enter default judgment, including those for want of proper service, being appealable, which would open the door to fractional disposal of actions and piecemeal hearing of appeals. The majority also commented that the high court granting leave to appeal could not assist the matter, as its power to grant leave arises only in respect of 'a judgment or order' within the meaning of that expression. Willis JA, in dissent, observed that the NCA requires courts to look at enforcement of ordinary consumers' debt in new ways, and that the situation presented a conundrum frequently arising in the high court regarding how best to deal with situations governed by the NCA where granting judgment would not be in the interests of justice but dismissing the claim would also fall short of justice's demands. Willis JA noted this was a situation 'crying out' for guidance from the Supreme Court of Appeal and the uniformity of practice that such a judgment would provide.

This case provides important guidance on the appealability of interlocutory orders in the context of credit enforcement proceedings under the National Credit Act. It confirms that the change from 'judgment or order' in the old Supreme Court Act to 'decision' in the Superior Courts Act 10 of 2013 did not fundamentally alter the requirements for appealability. The majority applied the established Zweni test requiring finality, definitiveness of rights, and disposal of substantial relief. The case is significant for credit providers and consumers in clarifying that postponement orders directing settlement negotiations before default judgment are procedural directions rather than appealable decisions. However, the strong dissent by Willis JA highlights ongoing tension about how courts should handle NCA cases and whether procedural mechanisms that may significantly affect parties' rights should be subject to appellate review. The case is relevant to understanding judicial case management in debt enforcement proceedings and the boundaries of appealable decisions.