National Credit Regulator v Nedbank Ltd and Others

JurisdictionSouth Africa
JudgeDu Plessis J
Judgment Date21 August 2009
Citation2009 (6) SA 295 (GNP)
Docket Number19638/2008
Hearing Date02 March 2009
CourtNorth Gauteng High Court, Pretoria
CounselCDA Loxton SC (with MA Chohan) for the applicant. DE van Loggerenberg SC for the first respondent. MD Kuper SC (with JMA Cane) for the first to sixth respondents. GH Meyer for the fourth respondent. No appearances for the seventh, eighth, ninth and tenth respondents. PF Louw SC (with S Gouws) for the eleventh respondent. KJ Kemp SC for the twelfth respondent.

National Credit Regulator v Nedbank Ltd and Others
2009 (6) SA 295 (GNP)

2009 (6) SA p295


Citation

2009 (6) SA 295 (GNP)

Case No

19638/2008

Court

North Gauteng High Court, Pretoria

Judge

Du Plessis J

Heard

March 2, 2009

Judgment

August 21, 2009

Counsel

CDA Loxton SC (with MA Chohan) for the applicant.
DE van Loggerenberg SC for the first respondent.
MD Kuper SC (with JMA Cane) for the first to sixth respondents.
GH Meyer for the fourth respondent.
No appearances for the seventh, eighth, ninth and tenth respondents.
PF Louw SC (with S Gouws) for the eleventh respondent.
KJ Kemp SC for the twelfth respondent.

Flynote : Sleutelwoorde D

Credit agreement — Consumer credit agreement — Debtor's liability, interest, charges and fees — Interest E — Permissible interest, charges and fees accruing whilst debtor in default not to exceed unpaid balance of principal debt as at time of default — No further charges to be levied once permissible interest, charges and fees equal amount of unpaid balance — Once total charges equal amount of unpaid balance, payments made by debtor thereafter during period of default not entitling credit provider to charge further interest whilst default persists — National Credit Act 34 of 2005, s 103(5) F read with s 101(1)(b) — (g).

Credit agreement — Consumer credit agreement — Over-indebtedness — Application for debt review — Debtor found to be over-indebted — Referral by debt counsellor to magistrates' court — Role of magistrate — Magistrate fulfilling judicial rather than administrative role — National Credit Act 34 of 2005, ss 86(7)(c) and 87. G

Credit agreement — Consumer credit agreement — Over-indebtedness — Application for debt review — Debtor found to be over-indebted — Debt counsellor to seek order from magistrates' court — Procedure — In magistrates' court — By necessary implication, debt-rearrangement procedure under H s 87(1) of NCA applying also to cases referred to magistrates' court by debt counsellor under s 86(7)(c) of NCA — Magistrates' court to conduct hearing and, having regard to matters referred to in s 87(1), to make order contemplated in either s 87(1)(a) or (b) of Act — National Credit Act 34 of 2005, ss 86(7)(c) and 87.

Credit agreement — Consumer credit agreement — Over-indebtedness — I Application for debt review — Debtor found to be over-indebted — Debt counsellor to seek order from magistrates' court — Procedure — Of debt counsellor — Words 'must refer the matter to the magistrate's court with the recommendation' in s 86(8)(b) of NCA also implicit in s 86(7)(c) of NCA — Debt counsellor must, after finding that debtor over-indebted, issue proposal for magistrates' court to make order — Debt counsellor must J

2009 (6) SA p296

A assist court by giving evidence or making submissions as to proposal, or answering queries raised by court — National Credit Act 34 of 2005, ss 86(7)(c) and 87.

Credit agreement — Consumer credit agreement — Over-indebtedness — Application for debt review — Debtor found to be over-indebted — Debt counsellor B to seek order from magistrates' court — Rules of Magistrates' Courts governing procedure by which hearing conducted in magistrates' court — Rule 9, pertaining to service, applying to service of process, recommendation and other documents for purpose of referral and hearing contemplated in ss 86(7)(c), 86(8)(b) and 87 of NCA — National Credit Act 34 of 2005, ss 86 and 87.

C Credit agreement — Consumer credit agreement — Over-indebtedness — Application for debt review — Debtor found to be over-indebted — Debt counsellor to seek order from magistrates' court — Rules of magistrates' courts governing procedure by which hearing conducted in magistrates' court — Court entitled to 'award such costs as may be just', under rule 33 — National Credit Act 34 of 2005, ss 86 and 87.

D Credit agreement — Consumer credit agreement — Over-indebtedness — Application for debt review — Debtor found to be over-indebted — Debt counsellor to seek order from magistrates' court — Rules of magistrates' courts governing procedure by which hearing conducted in magistrates' court — Referral by debt counsellor being treated as application in terms of rule 55 — National Credit Act 34 of 2005, ss 86 and 87.

E Credit agreement — Consumer credit agreement — Over-indebtedness — Application for debt review — Debtor found not to be over-indebted, but to be experiencing, or likely to experience, difficulties satisfying obligations — Procedure — In magistrates' court — Where parties unable to agree on voluntary rearrangement and debt counsellor referring matter to F magistrates' court, court to conduct hearing and, having regard to matters referred to in s 87(1) of NCA, to make order contemplated in either s 87(1)(a) or s 87(1)(b) of NCA — Magistrates' courts rules governing procedure by which hearing to be conducted — National Credit Act 34 of 2005, ss 86(7)(b) and 86(8)(b).

G Credit agreement — Consumer credit agreement — Over-indebtedness — Application for debt review — Debtor found not to be over-indebted, but to be experiencing, or likely to experience, difficulties satisfying obligations — Procedure — Debt counsellor — Where parties unable to agree on voluntary rearrangement, debt counsellor 'must', in terms of s 86(8)(b) of NCA, refer H matter to magistrates' court — Court to conduct hearing, having regard to matters referred to in s 87(1) of NCA — Debt counsellor to assist court by giving evidence or making submissions as to proposal, or answering queries raised by court — National Credit Act 34 of 2005, ss 86(8)(b) and 87(1).

I Credit agreement — Consumer credit agreement — Over-indebtedness — Application for debt review — Judicial rearrangement of debtor's obligations — Jurisdiction — No monetary limit on jurisdiction of magistrates' courts to hear referral — National Credit Act 34 of 2005, s 87.

Credit agreement — Consumer credit agreement — Over-indebtedness — Application for debt review — Reckless credit — Competent orders — Court being J entitled to make orders contemplated in s 83(2) of NCA where credit

2009 (6) SA p297

provider failing to comply with ss 80(1)(a) and 80(1)(b)(i) of NCA, and to A make orders referred to in ss 83(3)(b)(i) and 83(3)(b)(ii) of NCA where credit provider failing to comply with s 80(1)(b)(ii), and consumer being found to be over-indebted at time of those court proceedings — National Credit Act 34 of 2005, ss 86(9) and 87(1)(b)(i).

Headnote : Kopnota

The applicant approached the court seeking various declaratory orders aimed at B clarifying interpretational difficulties experienced by persons working with the National Credit Act 34 of 2005 (the Act). The respondents represented South African banks, organisations representing credit providers and members of the national executive.

Held, in order to give effect to the express purpose of the Act in respect of C debt-review procedures, the term 'the magistrate's court' where it appears in ss 86(7)(c), 86(8)(b) and 87 of the Act must be interpreted to mean 'the magistrate's court having jurisdiction in respect of the person of the consumer'. (At 313F - H.)

Held, further, that the magistrates' court that finds credit agreement to be D reckless only has the powers provided for in the Act. It does not have a general power to interfere with the contractual obligations and rights of any party to a credit agreement. (At 316B.)

Held, further, that:

1.

Properly interpreted, s 86(8)(b) of the Act applied in the circumstances contemplated in s 86(7)(c). E

2.

In circumstances where s 86(8)(b) of the Act applied, a debt counsellor was obliged to refer his or her recommendation to a magistrates' court and the magistrate to whom the matter is allocated is, under s 87, obliged to conduct a hearing and make an order contemplated in either s 87(1)(a) or s 87(1)(b) of the Act.

3.

The power of a magistrates' court to conduct a hearing in terms of F s 87 of the Act and to make appropriate orders in consequence thereof was derived from s 87, read with s 86, of the Act, and the Magistrates' Courts Act 32 of 1944 and the rules of the magistrates' courts governed the applicable procedure.

4.

A referral by a debt counsellor to a magistrate's court under ss 86(7)(c) and 86(8)(b) of the Act was an application as intended in the G Magistrates' Courts Act and the rules of the magistrates' courts, and fell to be treated as such under rule 55 of the rules.

5.

Rule 33 of the Magistrates' Courts Rules is applicable to applications under ss 86 and 87 of the Act. Rule 33 provides that: 'The court in giving judgment or in making any order, including any adjournment or amendment, may award such costs as may be just.' H

6.

Bearing in mind that the debt counsellor fulfilled a statutory obligation, rule 33 of the magistrates' courts rules was applicable to applications under ss 86 and 87 of the Act.

7.

The rules pertaining to service contained in rule 9 of the magistrates' courts rules were applicable to the service of process, any recommendation I and other documents for the purpose of the referral and hearing contemplated in ss 86(7)(c), 86(8)(b) and 87 of the Act, but service of any such documents could, with the agreement of the affected parties, be by way of fax or e-mail.

8.

A debt counsellor who referred a matter to the magistrates' court under s 86(7)(c) and 86(8)(b) of the Act had a duty to assist the court and had J

2009 (6) SA p298

A to be available and able to render such assistance by way of furnishing evidence or making submissions as to his or her proposal, or to answer any queries raised by the court.

9.

There was no monetary limit upon the jurisdiction of the magistrates' courts to hear a referral under s 87 of the Act.

10.

Where a debt counsellor...

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36 practice notes
  • Nedbank Ltd and Others v National Credit Regulator and Another
    • South Africa
    • Invalid date
    ...769 (A): referred to Naidoo v Absa Bank Ltd 2010 (4) SA 597 (SCA): C referred to National Credit Regulator v Nedbank Ltd and Others 2009 (6) SA 295 (GNP): confirmed on Nelson Mandela Bay Metropolitan Municipality v Nobumba NO and Others 2010 (1) SA 579 (ECG): referred to Niekerk v Niekerk (......
  • Absa Bank and Others v Robb
    • South Africa
    • Invalid date
    ...Transkei 1993 (3) SA 197 (Tk):referred toABCDEFGHIJ619© Juta and Company (Pty) Ltd National Credit Regulator v Nedbank Ltd and Others 2009 (6) SA 295 (GNP):referred toPotter and Another v Rand Townships Registrar 1945 AD 277: dictumat 292–293 appliedProtea Assurance Co Ltd v Matinise 1978 (......
  • Absa Bank Ltd v Petersen
    • South Africa
    • Invalid date
    ...Financial Services (SA) (Pty) Ltd and Another 2010 (1) SA 549 (KZD): referred to National Credit Regulator v Nedbank Ltd and Others 2009 (6) SA 295 (GNP): referred to Nedbank Ltd and Others v National Credit Regulator and Another D 2011 (3) SA 581 (SCA): referred to Nedbank Ltd v Binneman a......
  • FirstRand Bank Ltd v Mvelase
    • South Africa
    • Invalid date
    ...Financial Services South Africa (Pty) Ltd v Dunga 2011 (1)SA 374 (WCC): referred toNational Credit Regulator v Nedbank Ltd and Others 2009 (6) SA 295 (GNP):dictum at 311D–E appliedABCDEFGHIJ470© Juta and Company (Pty) Ltd Rossouw and Another v FirstRand Bank Ltd 2010 (6) SA 439 (SCA): refer......
  • Request a trial to view additional results
25 cases
  • Nedbank Ltd and Others v National Credit Regulator and Another
    • South Africa
    • Invalid date
    ...769 (A): referred to Naidoo v Absa Bank Ltd 2010 (4) SA 597 (SCA): C referred to National Credit Regulator v Nedbank Ltd and Others 2009 (6) SA 295 (GNP): confirmed on Nelson Mandela Bay Metropolitan Municipality v Nobumba NO and Others 2010 (1) SA 579 (ECG): referred to Niekerk v Niekerk (......
  • Absa Bank and Others v Robb
    • South Africa
    • Invalid date
    ...Transkei 1993 (3) SA 197 (Tk):referred toABCDEFGHIJ619© Juta and Company (Pty) Ltd National Credit Regulator v Nedbank Ltd and Others 2009 (6) SA 295 (GNP):referred toPotter and Another v Rand Townships Registrar 1945 AD 277: dictumat 292–293 appliedProtea Assurance Co Ltd v Matinise 1978 (......
  • Absa Bank Ltd v Petersen
    • South Africa
    • Invalid date
    ...Financial Services (SA) (Pty) Ltd and Another 2010 (1) SA 549 (KZD): referred to National Credit Regulator v Nedbank Ltd and Others 2009 (6) SA 295 (GNP): referred to Nedbank Ltd and Others v National Credit Regulator and Another D 2011 (3) SA 581 (SCA): referred to Nedbank Ltd v Binneman a......
  • FirstRand Bank Ltd v Mvelase
    • South Africa
    • Invalid date
    ...Financial Services South Africa (Pty) Ltd v Dunga 2011 (1)SA 374 (WCC): referred toNational Credit Regulator v Nedbank Ltd and Others 2009 (6) SA 295 (GNP):dictum at 311D–E appliedABCDEFGHIJ470© Juta and Company (Pty) Ltd Rossouw and Another v FirstRand Bank Ltd 2010 (6) SA 439 (SCA): refer......
  • Request a trial to view additional results
11 books & journal articles
  • Consumer Debt Relief in South Africa; Lessons from America and England; and Suggestions for the Way Forward
    • South Africa
    • Juta South Africa Mercantile Law Journal No. , May 2019
    • 25 May 2019
    ...(available at http://www.ncr.org.za/archieves/The_debt_counselling_process.php).143National Credit Regulator v Nedbank Ltd and Others 2009 (6) SA 295 (GNP).144The title of the proposed provision is confusing, because it could mistakenly be interpreted torequire a composition as a preconditi......
  • The Statutory in duplum Rule as an Indirect Debt Relief Mechanism
    • South Africa
    • Juta South Africa Mercantile Law Journal No. , May 2019
    • 25 May 2019
    ...operated in a similar manner to the common-law rule.97See Commissioner for SA Revenue Service v Woulidge supra note 33 at 611J.982009 (6) SA 295 (GNP) (for a discussion of this case, see DW de Villiers ‘National CreditRegulator versus Nedbank Ltd and the Practice of Debt Counselling in Sout......
  • Analyses: Notices in terms of the National Credit Act: Wholesale National Confusion
    • South Africa
    • Juta South Africa Mercantile Law Journal No. , August 2019
    • 16 August 2019
    ...has made use of this provision in the past to goodeffect (see, for instance, National Credit Regulator v Nedbank Ltd & Others2009 (6) SA 295 (GNP), where a large number of problems experienced inpractice were solved in an authoritative decision by a High Court at theinstance of the Regulato......
  • The application of section 85 of the National Credit Act in an application for summary judgment
    • South Africa
    • Sabinet De Jure No. 45-1, January 2012
    • 1 January 2012
    ...especially those dealingwith over-indebtedness, should be interpreted to give effect to this12National Credit Regulator v Nedbank Ltd 2009 6 SA 295 (GNP). Thisjudgment was taken on appeal: see Nedbank Ltd v The National CreditRegulator 2011 3 SA 581 (SCA).13 See Otto & Otto The National Cre......
  • Request a trial to view additional results

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