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The Latest Debtfree DIGI

Thursday, March 31, 2011

Supreme Court of Appeal re Nedbank V NCR

The Supreme Court of Appeal has dismissed several appeals dealing with the interpretation of the National Credit Act 34 of 2005 and confirmed the judgment and declaratory orders of Du Plessis J in the Pretoria high court.

Three matters were decided.

First, the Supreme Court of Appeal held that a notice in terms of s 129(1)(a) prevented a consumer from applying for a debt review in respect of that specific credit agreement because by giving such notice the credit provider ‘has proceeded to take the steps contemplated in section 129 to enforce that agreement’ 86(2)). It stated that such accounts could only be included if they are heard by a court which makes a section 85 (NCA) ruling to have this then also included in a debt review.

Secondly, the Supreme Court of Appeal held that a debt counsellor must make an application in terms of the Rules of the Magistrates’ Court when he issues a proposal in terms of s 86(7)((c) to the Magistrate’s Court in respect of a consumer who is over-indebted.

Thirdly, the Supreme Court of Appeal held that s 103(5) abolished the common law rule, known as the in duplum rule, in terms of which arrear and unpaid interest runs until it reached an amount equal to the outstanding capital sum. The subsection also did away with the rule that the in duplum rule is suspended pending litigation between the parties. Section 103(50) now governs the position which means that all the charges (and not only interest) ‘that accrue during the time that a consumer is in default under the credit agreement may not exceed the unpaid balance of the principal debt under that credit agreement as at the time that the default occurs.’ Which is good news for consumers.

1 comment:

  1. ....Even though that interest is the “live blood” of finance, the default consumer is better off than the onus person paying his loan/s…..the defaulter’s get protected and not the Credit provider. It will be better to side step your dept and die with it!……the in duplum rule is pathetic and keep the credit provider out of his money!The consumer knows it, and will use it to their own advantage …How can a person lend R3000 and only be accountable after 10 years, or more, for R6000 , cost included???????????