The Conundrum of the Non-compulsory Compulsory Notice in terms of Section 129(1)(a) of the National Credit Act

• Jurisdiction: South Africa
• Author: Corlia van Heerden
• Pages: 45-63
• Published date: 25 May 2019
• Date: 25 May 2019

The Conundrum of the Non-compulsory

Compulsory Notice in terms of Section

129(1)(a) of the National Credit Act

CORLIA VAN HEERDEN*

University of Pretoria

ANDRÉ BORAINE**

University of Pretoria

1 Introduction

Section 129(1)(a) of the National Credit Act

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plays a pivotal role in the

enforcement of credit agreements. Section 129(1)(b), read together with

ss 130(1) and 130(3)(a) of the Act, essentially compels a credit provider to

deliver a notice in terms of s 129(1)(a) to the consumer prior to enforcement

of a credit agreement to which the NCA applies. These provisions are cast in

mandatory terms.

From a civil procedural perspective, it may therefore be asked whether the

particulars of claim to the summons should indicate that such notice was

given prior to the commencement of enforcement proceedings. It may also be

asked what a defendant’s response should be to a summons that does not refer

to compliance with such procedure and what the consequences of

non-compliance would be. It may also happen that the notice in question was

given, but that the particulars of claim are silent regarding this fact.

The purpose of this discussion is therefore to investigate the procedural

interaction between s 129(1)(a) and s 130(4)(b), which determines the scope

of a court’s powers in the event of non-compliance with s 129(1)(a). We aim

to indicate the necessity of compliance with s 129(1)(a) prior to debt

enforcement.

2 Debt Enforcement in terms of the NCA

2.1 General

The NCA provides for debt enforcement in two stages, namely the required

procedures prior to debt enforcement, and debt procedures in court. It has

introduced a novel procedure prior to debt enforcement by means of

s 129(1)(a). This subsection provides that if a consumer is in default under a

* B Proc LLB LLM LLD. Associate Professor,Department of Mercantile Law, University of Pretoria.

** B Iur LLB LLM LLD. Professor, Department of Procedural Law, University of Pretoria.

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34 of 2005; hereafter the ‘NCA’or the ‘Act’.

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(2011) 23 SA Merc LJ 45

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credit agreement, the credit provider may draw the default to the notice of the

consumer in writing and propose that the consumer refer the credit agreement

to a debt counsellor, alternative dispute resolution agent, consumer court or

ombud with jurisdiction, so that the parties resolve any dispute under the

agreement or develop and agree on a plan to bring the agreement up to date.

Section 129(1)(a) has to be read with s 129(1)(b). The latter provides that,

subject to s 130(2), a credit provider may not commence any legal

proceedings to enforce a credit agreement before f‌irst giving notice to the

consumer as contemplated in s 129(1)(a) or s 86(10),

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as the case may be, and

before meeting any further requirements as set out in s 130.

Section 130 provides for debt procedures in a court and subs (1)

specif‌ically provides that, subject to subs (2), a credit provider may approach

a court only (our emphasis) if, at the time, the consumer is in default and has

been in default under that credit agreement for at least 20 business days and

‘(a) at least 10 business days have elapsed since the credit provider delivered a notice to

the consumer as contemplated in s 86(9)

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, or section 129(1) as the case may be;

(b) in the case of a notice contemplated in section 129(1), the consumer has –

(i) not responded to that notice; or

(ii) responded to the notice by rejecting the credit receiver’s proposals; and

(c) in the case of an instalment agreement, secured loan, or lease, the consumer has not

surrendered the relevant property to the credit provider as contemplated in section

127.’

2.2 The Prerequisites Introduced by the NCA before a Court

may Determine the Matter

Section 130(3) introduces a number of aspects on which a court must be

satisf‌ied before it will determine a matter in any proceedings to which the

NCA applies, for instance that in the case of proceedings to which ss 127, 129

or 131 apply, the procedures required by those sections have been complied

with.

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Within the context of s 129(1)(a), the plaintiff credit provider will therefore

have to make an allegation in the particulars of claim

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regarding compliance

with the said section before the court will determine the matter.

2.3 Powers of a Court when Determining the Matter

Unlike its predecessor, the repealed Credit Agreements Act,

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the NCA,

which is a much more comprehensive piece of legislation, provides for

specif‌ic orders that a court considering a credit agreement in respect of which

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This discussion focuses on s 129(1)(a) of the NCA and does not deal with debt review as envisaged

by s 86 nor with its implications for the enforcement of a credit agreement to which the NCA applies.

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It is submitted that this reference is incorrect and should be to s 86(10). See JW Scholtz, JM Otto, E

van Zyl, CM van Heerden & N Campbell Guide to the National Credit Act (2010 update) in par 12.7.2.

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Section 130(3)(a) of the NCA.

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It should be observed that although a claim will usually be instituted by way of summons,

application by way of notice of motion may, subject to the ordinary rules, be considered in appropriate

instances. However, the s 129(1)(a) notice requirement will apply equally in such instance.

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Act 75 of 1980.

(2011) 23 SA Merc LJ46

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