First Rand Bank Ltd v Nolan and Others

First Rand Bank Ltd applied in four separate matters for default judgment, including an order declaring immovable residential properties specially executable. In each matter, when the cases were called on the unopposed motion roll, a member of the public—either a relative or an executrix of a deceased estate—attended court to explain the circumstances. No opposing papers had been filed. In the Nolan matter, the defendant's mother informed the court that her daughter was in hospital with a newborn baby, that the arrears were approximately R186,000 (later over R200,000), and that despite offering R125,000 immediately and seeking four weeks to pay the balance of R60,000, the bank refused the proposal. In the Fakir matter, substantial but erratic payments had been made well above the monthly instalment. The Fredericks and Van As matters involved deceased estates where the executrices appeared to need guidance.

• Whether default judgment and execution orders against residential immovable property should be granted where defendants or their representatives attend court and indicate willingness to make payment arrangements.
• Whether a 'Rogers Order' (suspending execution for six months while requiring payment of arrears) is appropriate in all circumstances.
• To what extent must a credit provider engage in good faith negotiations with a consumer before seeking default judgment and execution.
• What is the proper interpretation of sections 3(d), 3(g) and 3(i) of the National Credit Act regarding the balance of rights and responsibilities between credit providers and consumers.

In all four matters, the applications for default judgment and execution in terms of Rule 46A were postponed to 13 September 2024. The Bank was directed to make contact with the defendants and to enter into reasonable negotiations in an attempt to make payment arrangements or settle the matter. If negotiations failed, the Bank was ordered to file an affidavit setting out the efforts made and steps taken to settle, without disclosing the substance of offers and counter-offers. The order was to be served on the defendants. Costs of the postponement were made costs in the cause.

A credit provider seeking default judgment and execution against residential immovable property must satisfy the court that it has engaged in good faith and economically rational negotiations to rearrange the debt in terms of the National Credit Act, with the point of departure being the purposes set out in section 3, particularly the promotion of equity by balancing the respective rights and responsibilities of credit providers and consumers and the priority placed on the eventual satisfaction of all responsible consumer obligations. The court must be taken into the creditor's confidence through an affidavit detailing steps taken to settle where a defendant has responded to the process. A standard 'Rogers Order' is not necessarily appropriate in all circumstances and requires individualised judicial consideration.

The court expressed a personal dislike for the 'Rogers Order' (an order suspending execution for six months while requiring payment of arrears), stating: 'I'm not the greatest fan of the Rogers' order. I think counsel who appear before me know that.' The court further observed that it would be a salutary practice for creditors in these types of matters to take courts into their confidence by filing an affidavit setting out what steps were taken to settle the matter with a defendant who responded after being served. The court also noted concern that some allegations in particulars of claim 'are simply recited, but may be far from the truth', particularly allegations that a defendant had not agreed to a proposal when it may be the creditor who refused the debtor's good-faith proposal.

This judgment reinforces the protective purpose of the National Credit Act and emphasises that courts have a duty, rooted in the Constitution, to ensure vulnerable consumers are not unjustly deprived of their homes when they demonstrate willingness to meet their obligations. It highlights the need for credit providers to genuinely engage in debt rearrangement negotiations before resorting to execution, and signals that courts will scrutinise claims that defendants have failed to agree to proposals. The case illustrates the tension between standardised debt enforcement practices (the Rogers Order) and the constitutional and statutory mandate to ensure individualised justice in housing-related execution matters.