The Impact of the National Credit Act 34 of 2005 on the Enforcement of a Mortgage Bond: Sebola v Standard Bank of South Africa Ltd 2012 5 SA 142 (CC)

Authors

  • Michelle MM Fuchs NWU

DOI:

https://doi.org/10.17159/1727-3781/2013/v16i3a2377

Keywords:

Consumer in default, Debt enforcement, Delivery, Notice of default, Notice requirements, Track and trace print-out

Abstract

                        

When a mortgagor is in default and the mortgagee wants to enforce the debt the National Credit Act (hereafter the NCA) may apply. A credit agreement may be enforced in court by a credit provider against a defaulting debtor only once the requirements of sections 129 and 130 of the NCA have been adhered to. If a mortgagor (who is a protected consumer in terms of the NCA) is in default, the mortgagee must deliver a section 129(1) notice to the consumer, thereby drawing the default to the attention of the consumer. For a number of years there has been uncertainty about the interpretation of section 129(1) and how it affects the execution procedure in the case of a mortgage bond over immovable property. The recent Constitutional Court judgment of Sebola v Standard Bank 2012 5 SA 142 (CC) overturns, to my mind, the more reasonable approach to such notices in Rossouw v Firstrand Bank Ltd (2010 6 SA 439 (SCA)). It was held in Sebola that before instituting action against a defaulting consumer, a credit provider must provide proof to the court that a section 129(1) notice of default (i) has been despatched to the consumer's chosen address and (ii) that the notice reached the appropriate post office for delivery to the consumer, thereby coming to the attention of the consumer.  In practical terms the credit provider must obtain a post-dispatch "track and trace" print-out from the website of the South African Post Office. There is now a much heavier burden on a bank to ensure that proper proof is provided that the notice was sent and delivered to the correct address. Consequently it places another hurdle in the path of a mortgagee who wishes to foreclose.

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References

Bibliography

Eiselen Unpublished Bulletin

Eiselen GTS Unpublished Bulletin (Department of Private Law, UNISA Pretoria 2012)

Otto and Otto National Credit Act Explained (2010)

Otto JM and Otto RL The National Credit Act Explained 2nd ed (LexisNexis Durban 2010)

Otto and Otto National Credit Act Explained (2013)

Otto JM and Otto RL The National Credit Act Explained 3rd ed (LexisNexis Durban 2013)

Van der Walt and Brits 2012 THRHR

Van der Walt AJ and Brits R "Judicial oversight over the sale in execution of mortgaged property" 2012 THRHR 322-329

Van Heerden and Coetzee 2012 Litnet (Akademies) Regte

Van Heerden C and Coetzee H "Artikel 129(1)(a) van die Nasionale Kredietwet 34 van 2005: verwarrende verwarring oor voldoening" 2012 Litnet (Akademies) Regte 254-297

Register of cases

ABSA Bank Ltd v Mkhize 2012 5 SA 574 (KZN)

Gundwana v Steko Development 2011 3 SA 602 (CC)

Rossouw v Firstrand Bank Ltd 2010 6 SA 439 (SCA)

Sebola v Standard Bank of South Africa Ltd 2012 5 SA 142 (CC)

Standard Bank of South Africa Ltd v Hales 2009 3 SA 315 (D)

Register of legislation

National Credit Act 34 of 2005

Published

03-05-2017

How to Cite

Fuchs, M. M. (2017). The Impact of the National Credit Act 34 of 2005 on the Enforcement of a Mortgage Bond: Sebola v Standard Bank of South Africa Ltd 2012 5 SA 142 (CC). Potchefstroom Electronic Law Journal, 16(3), 376–392. https://doi.org/10.17159/1727-3781/2013/v16i3a2377

Issue

Section

Notes