Abstract:
Collotype, although finding on the facts that the credit agreement before the court was an incidental credit agreement, held with reference to other judgments that a credit facility can constitute a so-called “large agreement” in terms of section 9 of the National Credit Act (the NCA). In this case note it is argued that Collotype, and the other decisions referred to by the court, that based their decisions solely on the amounts involved in the respective principal debts concerned, incorrectly categorised a credit facility, one of the main categories of credit agreements subject to the NCA, as a large agreement. This argument is based on a literal reading of the wording of section 9(4) of the NCA, which categorises credit agreements into large agreements and does not even mention the credit facility. It is further based on the fact that there is no compelling reason for the courts to deviate from a literal interpretation of section 9 of the NCA. The case note also points to the fact that an incorrect categorisation of the size of a credit facility (or of any other credit agreement) can have dire consequences and may result in consumers’ forfeiting the important protection afforded in terms of the NCA.
The case note entails a discussion of the credit facility, the provisions in the NCA categorising credit agreements into different sizes and the reasons for the latter, Collotype, my analysis and evaluation of the judgment and conclusions.
