Case Note: Regulatory overeach v judicial overreach: Du Bruyn NO & others v Karsten

• Jurisdiction: South Africa
• Author: Mzukisi Niven Njotini
• Citation: (2018) 30 SA Merc LJ 499
• Pages: 499-510
• Published date: 20 August 2019
• Date: 20 August 2019

Case Notes

REGULATORY OVEREACH V JUDICIAL

OVERREACH: DU BRUYN NO & OTHERS V

KARSTEN

MZUKISI NIVEN NJOTINI

Department of Private Law, University of Johannesburg

I INTRODUCTION

The National Credit Act 34 of 2005 (the NCA) has undergone a number

of developments since its inception on 15 March 2005. These improve-

ments were aimed, inter alia, at addressing some of the drafting

inconsistences and interpretive uncertainties in the legislation. A quick

glance at, for example, section 89(5) of the NCA, reveals these legislative

shortcomings. Specif‌ically, section 89(5)(c) of the NCA required courts

to order the cancellation of the rights a credit provider had, or would

have had, in terms of a credit agreement, or the forfeiture to the state of

such rights by reason merely that the credit agreement is unlawful.

Accordingly, courts had, in terms of this section, no discretion to

establish whether or not it was fair and just to cancel or forfeit these

rights to the state. In turn, this implied that courts had no other option

but to make an order of cancellation or forfeiture of the rights. The

diff‌iculty with this section rested in the fact that its provisions were

considered far-reaching and unfair. For example, Otto had this to say

about the far-reaching effect of section 89(5)(c) of the NCA:

‘Consequently, with this piece of legislation, the legislature has deprived

the courts of their discretion to relax the par delictum rule in so far as it

relates to performance already rendered by one of the parties. This is a

far-reaching arrangement/provision. If one considers the list of prohibited

(ongeoorloofde) contracts is section 89(2), it emerges very clearly that

certain of them, although prohibited by law, attract little, if any, moral

taint. It would be far preferable to declare them void and have left the

courts to relax the par delictum rule in appropriate cases, or to apply the

rule strictly where pubic policy so dictates’ (Otto ‘Die par delictum-reël en

die National Credit Act’ (2009) 3 TSAR 431 (ed trans)).

It is also worth noting that a number of South African courts have

bemoaned the absence of legislative clarity and the presence of countless

499

(2018) 30 SA Merc LJ 499

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