National Credit Regulator Versus Nedbank Ltd and the Practice of Debt Counselling in South Africa

Authors

  • Dawid de Villiers University of Pretoria

DOI:

https://doi.org/10.17159/1727-3781/2010/v13i2a2643

Keywords:

National Credit Regulator, National Credit Act 34 of 2005, Magistrate’s Court Act 32 of 1944, Magistrate’s Court, Declaratory order, Judicial discretion, Jurisdiction, Service, In duplum rule, Emoluments, attachment order, Debt review, Debt counsellor, C

Abstract

 

The National Credit Regulator approached the then Transvaal Provincial Division of the High Court in 2008 by way of a notice of motion. In this application the Regulator prayed in terms of section 16(1)(b) of the National Credit Act 34 of 2005 (the "NCA") for the proper interpretation of mainly sections 86 and 87 of the same Act. Due to uncertainty and confusion the Regulator lodged an application to obtain clarity on some of the difficulties that debt counsellors experience in practice.  The matter was heard in the High Court (TPD) on 02/03/2009 and judgment was handed down by Du Plessis J on 21/08/2009.

 

This article discusses the fifteen prayers and the impact of the orders granted by the Court under three logical headings, namely:

 

  • those that deal with the NCA and the Magistrate’s Court; 

 

Order 1 (on section 86(7)(c)), order 2 (an obligation to conduct a hearing), order 3 (the judicial role of the Magistrate’s Court) and order 4 (the application procedure of the Magistrate’s Court) defined the interaction between the NCA and the Magistrate’s Court Act (the “MCA”) very clearly.  Since there is no sui generis procedure provided for in the NCA, it is submitted that the Court’s approach is correct. However, the end result is that the over-indebted consumer is not supported to the degree the NCA envisages. For example: a rule 55 procedure of the MCA can be cumbersome and costly, while the NCA envisaged a fast and relatively inexpensive process.

 

  • those that deal with the role of the debt counsellor in debt restructuring;

 

 

Order 5 (costs), order 6 (statutory function) and order 8 (the unique role of the debt counsellor),  granted under this heading, are important.  They define the role of the debt counsellor to be different from the run-of-the-mill applicant in terms of rule 55.  He/she is even protected against some cost orders due to a statutory function. Because of this special function a question arises: should this difference in treatment not be even greater than custom presently permits or proposes?  Since this function brings great responsibility and much paper work, should it not affect the fees that a debt counsellor may charge?

 

  • those that deal with the court procedures.

 

Orders 7, 9, 10 and 11 in this section are welcomed, namely those that deal with the service of documents, the geographical jurisdiction and monetary limit of the court, reckless credit and the in duplum rule.  However, the Court preferred to stay on the safe side with respect to emoluments attachments orders and the application of section 86(2) to section 129(1). The lack of direction on the question when formal debt enforcement in fact begins, is regrettable.  

 

However, the declarator is a milestone in the history of the NCA.  The orders impact significantly on the practice of debt review and will continue to shape the credit industry.  Despite some disappointments it can be concluded that the declarator on the whole adds value to the practice of debt counselling in South Africa. It is now for the industry, the NCR, the legislators and scholars to take matters further.    

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References

Bibliography

Du Plessis JJS

Du Plessis MA "The National Credit Act: Debt counselling may prove to be a risky enterprise" 2007 JJS 32(2) 76–94.

Logan S "Presentation on the Declaratory Order (Case No. 19638/2008)"

(Unpublished paper delivered at the NCR on 27 Aug 2009 at Midrand).

Loots "Proposed changes"

"Proposed changes to the MCA" (Unpublished paper delivered at a Conference on Debt Enforcement 21 October 2009 Johannesburg).

Meiring "Respondents' story"

Meiring I "The respondents' story on the NCR Declaratory order" (Unpublished paper delivered at a Conference on Debt Enforcement 21 October 2009 Johannesburg).

Monty "Section 129"

Monty S "Section 129 of the NCA – What constitutes 'steps contemplated in terms of Section 129' ?" (Unpublished paper delivered at a Conference on Debt Enforcement 21 October 2009 Johannesburg).

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Otto, JM "Over-indebtedness and applications for debt review in terms of the National Credit Act: Consumers beware! FirstRand Bank Ltd v Olivier: Case comments" 2009 SA Merc LJ 21(2) 272–278.

Roestoff et al PER

Roestoff M et al "The debt counselling process – closing the loopholes in the National Credit Act 34 of 2005" 2009 PER 12(4) 247–360.

Scholtz et al Guide

Scholtz JW et al Guide to the National Credit Act (LexisNexis Durban 2008).

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Stadler, S "NCA: Debt review process in the Magistrate's Court" 2009 De Rebus November 46–47.

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Van Heerden CM and Otto JM "Debt enforcement in terms of the National Credit Act 34 of 2005" 2007 TSAR 4 655–684.

Van Loggerenberg, Dicker and Malan De Rebus

Van Loggerenberg D, Dicker L and Malan J "Aspects of debt enforcement under the National Credit Act" 2008 De Rebus January/February 40–42.

Register of legislation

Constitution of the Republic of South Africa, 1996

Magistrate's Courts Act 32 of 1944

National Credit Act 34 of 2005

Promotion of Administrative Justice Act 3 of 2000

Register of government publications

National Credit Act, 2005 Debt Counselling Regulations GN R503 in GG 32229 of 15 May 2009.

Regulations made in terms of the National Credit Act, 2005 GN R489 in GG 28864 of 31 May 2006.

Register of court cases

Old Mutual Life Assurance Co SA Ltd v Pension Funds Adjudicator and Others 2007 3 SA 458 (C).

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

Register of internet resources

Da Silva et al www.ncr.org.za

Da Silva M et al Debt Counselling – Principles and Guidelines (University of Pretoria Law Clinic Pretoria 2009) http://www.ncr.org.za/pdfs/Guidelines/Principles%20&%20Guidelines/DEBT%20COUNSELLING%20%20%20PRINCIPLES%20GUIDELINES%20%20-%20BASA%20training%202008.pdf [date of use 28 June 2010]

Haupt, Roestoff and Erasmus www.ncr.org.za

Haupt F, Roestoff M and Erasmus M 2009The debt counselling process: Challenges to consumers and the credit industry in general http://www.ncr.org.za/The_debt_counselling_process.php [date of use 28 June 2010]

Published

15-06-2017

Issue

Section

Articles

How to Cite

de Villiers, D. (2017). National Credit Regulator Versus Nedbank Ltd and the Practice of Debt Counselling in South Africa. Potchefstroom Electronic Law Journal, 13(2), 127-160. https://doi.org/10.17159/1727-3781/2010/v13i2a2643

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