Judicial oversight for sales in execution of residential property and the National Credit Act

• Published date: 01 January 2012
• Author: Elmien Du Plessis
• Pages: 532-555
• Date: 01 January 2012
• DOI: 10.10520/EJC131285

532

Judicial oversight for sales in execution of

residential property and the National

Credit Act*

Elmien du Plessis

BA (International Relations), LLB, LLD (Stell)

Senior Lecturer in Private Law, University of Johannesburg

OPSOMMING

Geregtelike toesig by eksekusieverkope van residensiële eiendom en die

Nasionale Kredietwet

Praktiese uitvoering word gegee aan ’n hofbevel wanneer ’n huis in eksekusie

verkoop word. Verkope in eksekusie stel ’n party in staat om ’n hofbevel teen

’n skuldenaar af te dwing. So ’n afdwinging is belangrik vir regswerking. Die

Nasionale Kredietwet 34 van 2005** is uitgevaardig om (meestal)

prosedurele beskerming te bied aan skuldenaars, terwyl sake soos

Jaftha v

Schoeman

en

Gundwana v Steko Development

verg dat howe geregtelike

toesig het by bevele wat lei tot verkope van huise in eksekusie. Die pad tot

hier was lank en soms deurmekaar. Howe het geworstel met die vraag of ’n

bevel om ’n h uis te verkoop in eks ekusie sonder ’n h ofbevel inbreuk maak op

die grondwetlike reg tot toegang tot genoegsame behuising. Verskillende

howe het tot verskillende gevolgtrekkings gekom. Alhoewel die probleem

meestal opgelos is deur die

Jaftha

en

Gundwana

beslissings, is die sake

waarin die howe met die vraagstuk geworstel het steeds belangrik om in die

toekoms die howe te help om ’n balans te vind tussen die regte van die

skuldeiser om haar hofbevel af te dwing, en die skuldenaar se grondwetlike

regte.

In die artikel word die impak van die Nasionale Kredietwet op die skuldeiser

se vermoë om ’n hofbevel te bekom teen ’n skuldenaar, sowel as die mees

belangrike sake tot

Gundwana

wat handel oor die skuldeiser se vermoë om

so ’n bevel af te dwing, bespreek. Die fokus is op hoe die hof die

mededingende regte moet opweeg.

* This article is based on a paper that was prepared for, and presented at, the

Annual Banking Law Update of the University of Johannesburg, held in

Johannesburg 2012-05-23. I thank Prof Jannie Otto for clarifying the NCA

and the process (and leading me to the “aha!” moment); Elizabeth de

Stadler for making sure that I’m not talking too much nonsense as far as the

NCA is concerned and Bafana Ntuli for his enthusiastic research assistance.

Any remaining faults and shortcomings can only be attributed to my own

stubbornness.

** ’n Nie-amptelike vertaling van die Nasionale Kredietwet 34 van 2005 is

beskikbaar by http://www.vra.co.za/index.php?option=com_content&view

=category&layout=blog&id=3&Itemid=3 (red).

Judicial oversight for sales in execution of residential pro perty and the NCA

533

1Introduction

Practical effect is given to the terms of a court order through the process

of execution. When property is sold in execution, there must be a

preceding judgment and an attachment in execution of that judgment.1

Execution is therefore the procedure whereby a successful litigant (called

the judgment creditor) can follow to enforce a judgment against the

judgment debtor, and is regarded as crucial to the legal process.

During the past decade, this process has become more intricate with

the introduction of the National Credit Act2 (NCA) and the judgements of

Jaftha v Schoeman; Van Rooyen v Stoltz

3

and

Gundwana v Steko

Development CC

.4 This article will start by highlighting the procedural

and substantive protection a debtor receives in terms of the NCA when a

home is sold in execution, after which the process before the

Jaftha

judgment will be explained. A chronological discussion of the cases from

Jaftha

to

Gundwana

will follow. In conclusion the interaction between the

NCA,

Gundwana

or

Jaftha

will be explained.

The purpose of this article is to discuss the most important cases in

chronological order and to highlight what each case added to the issue.5

Even though most of the uncertainties surrounding execution in terms of

the high court rules were mooted by

Gundwana v Steko Development

CC

,6

the cases leading up to

Gundwana

would serve as guidelines as to

when a court can declare immovable property executable.

2 The National Credit Act

The NCA was enacted:

[t]o promote and advance the social and economic welfare of South Africans,

promote a fair, transparent, competitive, sustainable, responsible, efficient,

1

Campbell v Botha

2008 ZASCA 126.

2 34 of 2005.

3 2005 2 SA 140 (CC).

4 2011 8 BCLR 792 (CC).

5 This article will not discuss the possible theoretical explanations or

validations for the courts’ decisions. This has been done elsewhere. See Van

der Walt “Property, social justice and citizenship: property law in post-

apartheid South Africa” 2008

Stell LR

325 (drawing on Fox’s study on the

“home interest of occupiers”, where, in terms of a new organising

framework in property theory, it should be possible to balance the home

interest of occupiers with the commercial interest of the creditors); Davis &

Klare “Transformative constitutionalism and the common and customary

law ” 2010

SAJHR

403 (on the fundamental changes that

Jaftha

made to

common-law understandings).

6 2011 8 BCLR 792 (CC).