Nedbank Foreclosure Applications Derailed by Court Over Legal and Ethical Violations
Last week brought a serious legal blow to Nedbank, its valuation specialists, and legal teams in the Johannesburg High Court. Acting Judge Fiona Southwood issued a powerful judgment halting the bank’s attempts to foreclose on twelve separate residential properties, each owned by different individuals. She found multiple and significant breaches of court procedure and professional ethics.
Foreclosures Stopped Over Repeated Protocol Breaches
Judge Southwood’s ruling centered on Nedbank’s repeated failures to comply with Rule 46A, which governs the execution of a public auction against residential property, especially primary residences. She described the infractions as “numerous instances of non‑compliance with court rules and ethical standards.”
Among her concerns was the credibility of the arrears figures quoted by Nedbank in multiple cases. In five instances, evidence showed the homeowners were continuing to make mortgage payments. As the judge emphasized, that “raises a concern that the amount certified as being in arrears is not credible.” Nedbank’s counsel was unable to alleviate this concern, prompting the judge to suggest the bank file an affidavit explaining the static or inconsistent loan balances.
Alleged Misrepresentations to the Court
More troubling, the court determined that Nedbank’s attorneys and counsel intentionally misled the court in at least one case. They claimed the property owner had been properly served, only to withdraw that assertion under cross-examination. Judge Southwood found no proof that personal service occurred at the respondent’s address. She wrote:
“At face value, the submissions in counsel’s practice note constitute misrepresentations to the court. Furthermore, the attorney’s incorrect allegation as to what appeared in the sheriff’s return also constitutes, at face value, a misrepresentation to the court.”
Due to these findings, the Legal Practice Council (LPC) has received referrals to investigate both the bank’s attorneys and counsel. Additionally, the counsel who represented Nedbank may face further scrutiny from the Pretoria Society of Advocates.
The “Big Bang Week” Hearings
During what the court termed the “Big Bang Week,” 15 Johannesburg courts processed roughly 70 cases per day from June 18 to 20, 2025. The 12 contested foreclosure matters were unopposed applications brought under Rule 46A. This rule requires strict judicial oversight to prevent wrongful foreclosures, especially when a person’s main home is at stake.
Judge Southwood noted a pattern of recurring deficiencies in these applications:
- Document mishandling: Critical paperwork was missing, improperly completed, or incorrectly uploaded to the CaseLines electronic system, impeding judicial review.
- Unqualified valuations: The same property valuer was used in all cases, with no evidence of her qualifications or independence.
- Service failures: Notices under Section 129 of the National Credit Act were improperly served, sometimes sent to wrong addresses or emails.
- Misleading affidavits: Verification documents for security (mortgage) agreements were insufficient, lacking originals or complete statutory attestations.
Independent Valuations Called into Question
Valuations underpin foreclosure applications under Rule 46A to ensure properties are not sold well below market value, protecting homeowners’ equity. The court criticized the single valuer responsible for all twelve properties. Judge Southwood pointed out that she failed to demonstrate professional credentials, claimed independence without evidence, and did not inspect one of the homes before appraising it. In that case, she “relied on assumptions about the number and sizes of the rooms, as well as the quality of finishes.”
Given these failings, the South African Council for the Property Valuers Profession (SACPVP) has been asked to investigate the valuer’s conduct.
Section 129 Notices Mishandled
Under the National Credit Act, Section 129 requires lenders to alert debtors about their rights to settle arrears before initiating legal proceedings. Nedbank failed to meet this obligation in several cases. The court flagged errors such as sending notices to incorrect email addresses, undermining the statute’s protective intent. Nedbank’s counsel admitted to these procedural lapses during testimony.
A Forceful Judicial Warning
Acting Judge Southwood’s ruling sends a powerful message to South Africa’s banking and legal industries: sloppy processes and ethical breaches in foreclosure actions will not stand. Her judgment underscores the judiciary’s essential role in safeguarding the right to housing, particularly when enforcing foreclosures on primary residences.
Consumer legal advisor Leonard Benjamin praised the outcome, stating:
“We’ve seen far too many instances of banks selling peoples’ homes using judgments that should not have been granted in the first place. Here’s a ruling that I hope draws a line in the sand. Judge Southwood must be commended for rejecting outright sub‑standard presentation of cases by Nedbank.”
He added that while high case volumes strain the courts, such pressure “is no excuse and of little comfort to consumers because, in many cases, judges are all that stand between judgments that should not have been granted in the first place and possible homelessness.”
What’s at Stake for Nedbank
Now, Nedbank must overhaul its foreclosure procedures. The bank will need to thoroughly revise its applications to meet Rule 46A’s rigorous standards. This includes re-issuing proper Section 129 notices, securing independent and certified valuations, ensuring accurate court document submissions, and maintaining full audit trails in CaseLines.
As professional bodies, the LPC and SACPVP conduct their investigations, the judgment underscores a demand for accountability and ethics in the financial and legal sectors. It may also set a precedent—raising the bar for future foreclosure proceedings in South Africa.
How Debt Counsellors Can Help Consumers in Financial Distress
For consumers struggling to keep up with home loan repayments, debt counselling can be a lifeline. As highlighted in the Nedbank court case, many homeowners facing foreclosure are not necessarily unwilling to pay, they may simply be overwhelmed or unaware of their options. This is where registered debt counsellors play a crucial role.
Debt counsellors assess a consumer’s full financial situation and develop a manageable repayment plan under the National Credit Act. Once a person enters the debt review process, legal action on credit agreements, including home loans, is paused, giving the consumer breathing space and legal protection against foreclosure.
In situations like those described in the recent court ruling, a debt counsellor can help homeowners engage with the bank to restructure the loan, negotiate reduced instalments, or delay legal action altogether. They also ensure that all legal notices, like Section 129 notices, are properly handled and that the consumer’s rights are protected throughout the process.
By acting early and working with a registered debt counsellor, consumers may avoid the devastating loss of their homes and regain financial stability with dignity and legal oversight.
In Closing
Last week’s judgment represents more than just twelve halted foreclosures; it marks a turning point in legal enforcement of homeowners’ rights. With this ruling, Johannesburg’s High Court made clear that:
- Banks must substantiate arrears claims with credible evidence and affidavits.
- Legal counsel must present truthfully and adhere to ethical duties.
- Property valuations must come from independent, qualified professionals.
- Consumer protection measures like Section 129 notices cannot be overlooked.
Nedbank now faces the task of rebuilding trust and credibility, not only by rebuilding its processes, but also by proving its commitment to procedural integrity. This landmark ruling serves as a reminder: foreclosures are not mere legal formalities, they carry profound human consequences and must be handled with utmost care and fairness.