Case Notes: Interpretation, credit reinstatment and judicial disagreement: Nkata v First Rand Bank Ltd

• Jurisdiction: South Africa
• Citation: (2017) 29 SA Merc LJ 403
• Pages: 403-417
• Author: Thulani Nkosi
• Date: 20 August 2019
• Published date: 20 August 2019

INTERPRETATION, CREDIT

REINSTATMENT AND JUDICIAL

DISAGREEMENT: NKATA V FIRST RAND

BANK LTD*

THULANI NKOSI

Attorney, Socio-Economic Rights Institute

I INTRODUCTION

The recent judgment by the Constitutional Court in Nkata v FirstRand

Bank Ltd & Others 2016 (4) SA 257 (CC) (‘Nkata’) dealt with the

complex process to be undertaken when reinstating credit agreements

under the National Credit Act 34 of 2005 (‘NCA’). The reinstatement of

credit agreements under section 129(3) is a novel creation of the NCA

with no known roots at common law. This is the case even though the

preceding Hire-Purchase Act 36 of 1942 and Credit Agreements Act 75

of 1980 both provided for the possibility of reinstating credit agreements

in sections 13(1) and 12(1) respectively. The difference between the

preceding Acts and the NCA, however, is that the terms under which

credit agreements could be reinstated under the preceding Acts were

materially different from the terms specif‌ied in section 129 of the NCA

(Brits, ‘The ‘‘reinstatement’’ of credit agreements: Remarks in response

to the 2014 amendment of section 129(3)–(4) of the National Credit

Act’ 2015 De Jure 76). The lack of common-law sources dealing with the

reinstatement of credit agreements meant that the Constitutional Court

in Nkata had no point of reference when reaching its decision. Neverthe-

less, section 129(3) of the NCA is unambiguous in providing that credit

agreements can be reinstated if certain conditions are met. What was not

clear before Nkata, however, was whether the section conferred any

duties or responsibilities on credit providers in the event that credit

consumers attempted to reinstate their credit agreements. The Nkata

judgment, properly construed, raises many independent yet interrelated

issues ranging from the circumstances under which credit agreements

could be reinstated under section 129(3), to the role credit providers are

to play when credit consumers attempt to reinstate credit agreements, as

well as the conditions that must be met before credit agreements could

*Although the Socio-Economic Rights Institute acted as an amicus in this matter, this was

before I joined the Institute and this note is based solely on my reading of the judgment.

403

(2017) 29 SA Merc LJ 403

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