Aspects of debt enforcement in terms of the National Credit Act 34 of 2005

Abstract

The Usury Act 73 of 1968 and the Credit Agreements Act 75 of 1980 have governed consumer credit regulation in South Africa for more than 25 years. When South Africa became of democracy, it was clear that the financial credit market was ill suited to the country’s post-apartheid economy and, by extension, society. Kelly-Louw states that the financial credit market was “… characterised by discrimination, a lack of transparency, limited competition, high costs of credit, and limited consumer protection. The mechanism to prevent over-indebtedness that were in place at the time, could also not adequately promote the rehabilitation of consumers, and the available debt relief could also not assist already over-indebted consumers to deal with their debt.” This dissertation considers the prescriptions laid down in section 129(1)(a) of the National Credit Act 34 of 2005 (“NCA” or “Act”), which are pivotal in the debt enforcement of credit agreements. Section 129(1)(b), read with sections 130(1) and 130 (3)(a) of the Act, in essence encumbers a credit provider with the duty to deliver a section 129(1)(a) notice to the consumer prior to debt enforcement. It is noteworthy that debt enforcement is a lengthy, two-pronged procedure. This dissertation considers both aspects of debt enforcement; however, the focus is on the first stage of the process, which pertains to the required procedures prior to debt enforcement. The Act does not expressly define “delivered”, and, as such, inferences are taken from other sections to give effect to sections 129 and 130 of the Act. It is the very lack of a definition that has resulted in courts burdened with cases served before them for interpretation of the delivery of the statutory notice. In this dissertation, the Act’s varying provisions on “delivery” are considered and analysed, to determine and recommend, firstly, harmonisation of the conflicting sections within the Act and, secondly, other legislative enactments that have a bearing on the delivery of legal documents and, in particular, those that are mandatory for procedures in court, Lastly, the dissertation addresses the plethora of stare decisis that has served before the highest courts in the land, with a focus on landmark case.