Module 9 Note 1 Debt Collection Section 57

MODULE 9 NOTE 1
DEBT COLLECTION
Topic: Introduction and Overview of Magistrates

DEBT ON Court Rules for Debt Collection
Civil Facilitation Team 2019
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CONTENT FOR THIS MODULE AND NOTE
This Module and Note contains the following documents in order of appearance
CONTENT
1 Relevant Resources
2 Circulars from Commission. Arranged from latest to oldest
3 Rule for discussion of this topic
4 Discussion of Guidance Note on subject matter
5 Quality Assurance Guidelines
6 Checklists
7 Precedents and Suggested Record of Proceedings
8 Resources referred to in this note
9 Bibliography
10 Own Note for making notes
1
RELEVANT RESOURCES
RESOURCES
RELATED LINKS TO RELATED EXPLAINATION WHERE

RELEVANT
RESOURCES RESOURCES NECESSARY
1 Act 1.1 The Magistrates Court 1.1 Section 28, 29, 38, 55, 57, 58,
Act 32 of 1944 59, 109
1.2 The National Credit Act Sections 8, 40, 46, 47, 48, 51,
34 of 2005 81, 86, 92, 93, 101, 103, 106,
124, 125, 126B, 127, 128
129,
30, 131, 132, 133
The National Credit

Amendment Act 7 of
2019
Prescription Act 68 of Section 17
1969 Section 80
2 The General Law 1.2 Section 35
Amendment Act 62 of
1955
3 The Law of Evidence 1.3 Section 3

Amendment Act 45 of
1988
4 The Courts of Law

Amendment Act 7 of
2017
5 Electronic
Communications and
2
Transactions Act 25 of
2002
2 Rules 2.1 The Magistrates Court 2.1

Rules
Regulations 4.1 The National Credit Act, Regulation 28

Regulations Regulation 29
Regulation 30
Regulation 31
Regulation 36
Regulation 39
Regulation 40
Regulation 41
Regulation 42
Regulation 43
Regulation 45
Regulation 46
3 National 3.1 Van Loggerenberg, 2.1 Section 28

Instruments Jones and Buckle: The Section 29
Civil Practice of the Section 38
Magistrates Court in Section 55
South Africa Volume I, Section 57
tenth edition, Service 11, Section 58
2016 Section 59
Section 109
3.2 Van Loggerenberg, 3.2 Rule 1(4)

Jones and Buckle : The Rule 3
Civil Practice of the Rule 4
Magistrates Court in Rule 5
South Africa Volume ll,
3
tenth edition, Service 11, Rule 6
2016 Rule 6A
Rule 9(12)
Rule 12
Rule 17
Rule 60A

Regulation 30
Regulation 31
Regulation 36
Regulation 39
Regulation 40
Regulation 41
Regulation 42
Regulation 43
Regulation 45
Regulation 46
4 FORMS 4.1 Form 5 of Annexure 1 Annexure
Form 5A of Annexure 1
Form 5B of Annexure 1
4
CIRCULARS
Note : Circulars are arranged from the most recent as uppermost to earliest. Kindly
double click to open document
CIRCULARS
1. Circular 17 of 2018
4. Annexure A to
Circular
60 of 2015
5. Annexure to Circular
60 of 2015
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RULE 3
3. Duties and office hours of registrars and clerks of the court in civil matters
RULES
(1) The registrar or clerk of the court shall sign (manually or by machining a facsimile of his or her
signature) and issue all such process of the court as may be sued out by any person entitled
thereto or, at the request of any party by whom process was sued out, to reissue such process
after its return by the sheriff.
(2) The first document filed in a case or any application not relating to a then pending case shall be
numbered by the registrar or clerk of the court with a consecutive number for the year during
which it is filed.
(3) Every document that has been served or delivered in an action or application referred to in subrule
(2) or in any subsequent matter in continuation of any such application or action shall be marked
with the relevant number by the party delivering it and shall not be received by the registrar or
clerk of the court until so marked.
(4) All documents delivered to the registrar or clerk of the court to be filed and any minutes made by
the court shall be filed under the number of the respective action or application.
(5) Copies of the documents referred to in rule 3(4) may be made by any person in the presence of
the registrar or clerk of the court.
(6) The registrar or clerk of the court shall notify the plaintiff forthwith in writing of-
(a) the defendant’s consent to judgment before the filing of any notice of intention to defend;
(b) a defective memorandum of notice of intention to defend by a defendant who is not

represented by an attorney and in what respect such notice is defective as envisaged by
rule 12(2)(a); and
(c) a request for a judgment by default having been refused.
(7)
(a) The registrar or clerk of the court shall note on a certified copy of a judgment at the request
of the party to whom such copy is issued-
(i) particulars of any other judgment by the court or any other court, stating the relevant
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court in that case; and
(ii) any costs incurred after judgment and payable by the judgment debtor.
(b) A second or further certified copy of a judgment may be issued upon the filing of an
affidavit confirming the loss of the certified copy of a judgment which it is intended to
replace.
(8) The registrar or clerk of the court shall assist litigants by explaining these rules of procedure and
providing such further assistance as is reasonably possible in accordance with section 9(6)(b)(ii)
of the Jurisdiction of Regional Courts Amendment Act, 2008 (Act No. 31 of 2008).
(9) ..........
[Subrule (9) deleted by GN R507/2014 w.e.f. 28 July 2014]
(10) Any act to be performed or notice to be signed by the registrar or clerk of the court in terms of
these rules may be performed or signed by a judicial officer, provided that no judicial officer shall
write out any affidavit, pleading or process for any party or tax any bill of costs.
(11) When a court imposes upon a person any fine such person shall forthwith pay such fine to the
registrar or clerk of the court.
(12) Except on Saturdays, Sundays and public holidays, the offices of the registrar or clerk of the court
shall be open from 8:00 to 13:00 and from 14:00 to 16:00, save that, for the purpose of issuing
any process or filing any document, other than a notice of intention to defend, the offices shall be
open from 8:00 to 13:00, and from 14:00 to 15:00: Provided that the registrar or clerk of the court
may in exceptional circumstances issue process and accept documents at any time, and shall do
so when directed by a magistrate.
4. Applications in terms of sections 57 and 58 of the Act
(1)
(a) The letter of demand referred to in sections 57 and 58 of the Act shall contain particulars
about the nature and amount of the claim.
(b) Where the original cause of action is a credit agreement under the National Credit Act,
2005, the letter of demand referred to in section 58 of the Act must deal with each one of
the relevant provisions of sections 129 and 130 of the National Credit Act, 2005, and allege
that each one has been complied with.
(2) A request in writing referred to in section 59 of the Act shall be directed to the registrar or clerk of
the court by means of Form 5A or 5B, as the case may be, supported by an affidavit containing
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such evidence as is necessary to establish that all requirements in law have been complied with.
(3) A consent to judgment in terms of section 58 of the Act shall be signed by the debtor and by two
witnesses whose names shall be stated in full and whose addresses and telephone numbers shall
also be recorded.
(4) Rules 12(5), (6), (6A) and (7) apply to a request for judgment in terms of sections 57 and 58 of the
Act.
[Subrule (4) substituted by GN R507/2014 w.e.f. 28 July 2014]
5. Summons
(1) Every person making a claim against any other person may, through the office of the registrar or
clerk of the court, sue out a simple summons or a combined summons addressed to the sheriff
directing the sheriff to inform the defendant among other things that, if the defendant disputes the
claim and wishes to defend, the defendant shall-
(a) within the time stated in the summons, give notice of intention to defend; and
(b) after complying with paragraph (a), if the summons is a combined summons, within 20
days after giving such notice, deliver a plea (with or without a claim in reconvention), or an
exception, or an application to strike out.
(2)
(a) In every case where the claim is not for a debt or liquidated demand the summons shall be
a combined summons similar to Form 2B of Annexure 1, to which summons shall be
annexed a statement of the material facts relied upon by the plaintiff in support of plaintiff’s
claim, and which statement shall, amongst others, comply with rule 6, but in divorce
matters a combined summons substantially compliant with Form 2C shall be used.
[Para. (a) substituted by GN R507/2014 w.e.f. 28 July 2014]
(b) Where the claim is for a debt or liquidated demand the summons may be a simple
summons similar to Form 2 of Annexure 1.
(3)
(a)
(i) Every summons shall be signed by an attorney acting for the plaintiff and shall bear the
attorney’s physical address at which plaintiff will accept service of all subsequent documents
and notices in the suit. In places where there are three or more attorneys or firms of attorneys
practising independently of one another, the physical address shall be within 15 kilometres of
the courthouse. The summons shall also bear the attorney’s postal address, and, where
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available, the attorney’s facsimile and electronic mail address. The State Attorney may appoint
the office of the registrar or clerk of the civil court as its address for service.
[Subpara. (i) substituted by GN R507/2014 w.e.f. 28 July 2014]
(ii) If no attorney is acting for the plaintiff, the summons shall be signed by the plaintiff. The
summons shall bear the plaintiffs physical address at which the plaintiff will accept service of
all
subsequent documents and notices in the suit. In places where there are three or more
attorneys
or firms of attorneys practicing independently of one another, the physical address shall be
within
15 kilometres of the courthouse. The summons shall also bear the plaintiff’s postal address,
and,
where available, the plaintiff’s facsimile and electronic mail address.
[Subpara. (ii) substituted by GN R507/2014 w.e.f. 28 July 2014]
(iii) After subparagraph (i) or (ii) has been complied with, the summons shall be signed and issued
by the registrar or clerk of the court and shall bear the date of issue by the registrar or clerk as
well as the case number allocated thereto.
(b) The plaintiff may indicate in a summons whether the plaintiff is prepared to accept service
of all subsequent documents and notices in the suit through any manner other than the
physical address or postal address and, if so, shall state such preferred manner of service.
(c) If an action is defended the defendant may, at the written request of the plaintiff, deliver a
consent in writing to the exchange or service by both parties of subsequent documents and
notices in the suit by way of facsimile or electronic mail.
(d) If the defendant refuses or fails to deliver the consent in writing as provided for in
paragraph (c), the court may, on application by the plaintiff, grant such consent, on such
terms as to costs and otherwise as may be just and appropriate in the circumstances.
[Subrule (3) substituted by GN R611/2011]
(4) Every summons shall set forth-
(a) the surname and first names or initials of the defendant by which the defendant is known to
the plaintiff, the defendant’s residence or place of business and, where known, the
defendant’s occupation and employment address and, if the defendant is sued in any
representative capacity, such capacity; and
(b) the full names, gender (if the plaintiff is a natural person) and occupation and the residence
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or place of business of the plaintiff, and if the plaintiff sues in a representative capacity,
such capacity.
(5)
(a) Every summons shall include a form for notice of intention to defend.
(b) Every summons, except a divorce summons, shall include:
(i) a form for consent to judgment;

(ii) a notice drawing the defendant’s attention to the provision of section 109 of
the Act; and
(iii) a notice in which the defendant’s attention is directed to the provisions of
sections 57, 58, 65A and 65D of the Act in cases where the action is based
on
a debt referred to in section 55 of the Act.
(6) A summons shall also-
(a) where the defendant is cited under the jurisdiction conferred upon the court by section
28(1)(d) of the Act, contain an averment that the whole cause of action arose within the
district or region, and set out the particulars in support of such averment;
(b) where the defendant is cited under the jurisdiction conferred upon the court by section
28(1)(g) of the Act, contain an averment that the property concerned is situated within the
district or region; and
(c) show any abandonment of part of the claim under section 38 of the Act and any set-off
under section 39 of the Act.
(7) Where the plaintiff issues a simple summons in respect of a claim regulated by legislation the
summons may contain a bare allegation of compliance with the legislation, but the declaration, if
any, must allege full particulars of such compliance:
Provided that where the original cause of action is a credit agreement under the National Credit
Act, 2005, the plaintiff seeking to obtain judgment in terms of section 58 of the Act shall in the
summons deal with each one of the relevant provisions of sections 129 and 130 of the National
Credit Act, 2005, and allege that each one has been complied with.
(8) A summons for rent under section 31 of the Act shall be in the form prescribed in Annexure 1,
Form 3.
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(9) Where the plaintiff sues as cessionary the plaintiff shall indicate the name, address and
description of the cedent at the date of cession as well as the date of the cession.
(10) A summons in which an order is sought to declare executable immovable property which is the
home of the defendant shall contain a notice in the following form:
“The defendant’s attention is drawn to section 26(1) of the Constitution of the Republic of South
Africa which accords to everyone the right to have access to adequate housing. Should the
defendant claim that the order for eviction will infringe that right it is incumbent on the defendant to
place information supporting that claim before the Court”.
(11) If a party fails to comply with any of the provisions of this rule, such summons shall be deemed to
be an irregular step and the opposite party shall be entitled to act in accordance with rule 60A.
6. Rules relating to pleadings generally
(1) Every pleading shall be signed by an attorney or, if a party is unrepresented, by that party.
(2) The title of the action describing the parties thereto and the number assigned thereto by the
registrar or clerk of the court, shall appear at the head of each pleading: Provided that where the
parties are numerous or the title lengthy and abbreviation is reasonably possible, it shall be so
abbreviated.
(3) Every pleading shall be divided into paragraphs (including sub-paragraphs) which shall be
consecutively numbered and shall, as nearly as possible, each contain a distinct averment.
(4) Every pleading shall contain a clear and concise statement of the material facts upon which the
pleader relies for his or her claim, defence or answer to any pleading, as the case may be, with
sufficient particularity to enable the opposite party to reply thereto.
(5) When in any pleading a party denies an allegation of fact in the previous pleading of the opposite
party, he or she shall not do so evasively, but shall answer the point of substance.
(6) A party who in such party’s pleading relies upon a contract shall state whether the contract is in
writing or oral, when, where and by whom it was concluded, and if the contract is in writing a copy
thereof or of the part relied on in the pleading shall be annexed to the pleading.
(7) It shall not be necessary in any pleading to state the circumstances from which an alleged implied
term can be inferred.
(8) A party claiming division, transfer or forfeiture of assets in divorce proceedings in respect of a
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marriage out of community of property, shall give details of the grounds on which such party
claims entitlement to such division, transfer or forfeiture.
(9) A plaintiff suing for damages shall set them out in such manner as will enable the defendant
reasonably to assess the quantum thereof: Provided that a plaintiff suing for damages for personal
injury shall specify plaintiff’s date of birth, the nature and extent of the injuries, and the nature,
effects and duration of the disability alleged to give rise to such damages, and shall as far as
practicable separately state what amount, if any, is claimed for-
(a) medical costs and hospital and other similar expenses and how these costs and expenses
are made up;
(b) pain and suffering, stating whether temporary or permanent and which injuries caused it;
(c) disability in respect of-
(i) the earning of income (stating the earnings lost to date and how the amount is made
up and the estimated future loss and the nature of the work the plaintiff will in future
be able to do); and
(ii) the enjoyment of amenities of life (giving particulars and stating whether the
disability concerned is temporary or permanent); and
(d) disfigurement, with a full description thereof and stating whether it is temporary or
permanent.
(10) A plaintiff suing for damages resulting from the death of another shall state the date of birth of the
deceased as well as that of any person claiming damages as a result of the death.
(11) If a claim is founded on any cause of action arising out of or regulated by legislation, the plaintiff
shall state the nature and extent of plaintiff’s compliance with the relevant provisions of the
legislation.
(12) Where the plaintiff sues as cessionary the plaintiff shall indicate the name, address and
(13) If a party fails to comply with any of the provisions of this rule, such pleading shall be deemed to
be an irregular step and the opposite party shall be entitled to act in accordance with rule 60A.
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1 INTRODUCTION AND GENERAL OVERVIEW
DISCUSSION
1.1. A request for default judgment refers to a judgment entered into or given in the absence of
the party against whom it is entered or made. This is usually done when a party failed to
defend the matter, either by failing to enter an appearance to defend the summons or by
failing to file a plea timeously.
1.2. In order to understand and apply default judgments, it is important for one to know and
understand a few Rules of the Magistrates Court See (Resource 41.1) that are important to
default judgments RDJ).
1.3. Rule 3(2) See (Resource 41.1) provides the first document in any case or application shall
be numbered by the clerk of the court with a consecutive number for the year which it is
filed.
1.4. Rule 3(3) provides all documents subsequently served shall be marked with this relevant
number by the party delivering the documents and shall not be received by the clerk until
so marked.
1.5. Rule 6(10) See (Resource 41.1) provides any act to be performed or notice to be signed by
the clerk may be performed or signed by a judicial officer. Proviso is that no judicial officer
shall write out any affidavit, pleading or process for any party or tax any bill of costs.
1.6. Rule 6(12) provides for issuing of documents with the exception of appearance to
defend, are done from 8:00 to 13:00 and from 14:00 to 15:00 unless in exceptional
circumstances and directed to do so by a judicial officer.
1.7 Rule 4 deals with applications in terms of Sections 57 See (Resource 41.3) and 58 See
(Resource 41.4). The rule sets out additional requirements that must be complied with
to enable the granting of judgments. The request for judgment must be in writing and is
directed to the clerk of court. Note the following:
1.7.1. Form 5A (section 57) See or Form 5B (section 58) must be used. The form must be
accompanied by an affidavit which contains evidence as is necessary to establish that all
requirements in law have been complied with.
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1.7.2. Note that rule 4(1) (a) provides that where a letter of demand as referred to in section
59 of the Act is used it must ‘contain particulars about the nature and the amount of
the claim.’
1.7.3. Rule 4(1)(b), refers specifically to the NCA and reads as follows:‐ “Where the original
cause of action is a credit agreement under the National Credit Act, 2005, See
(Resource 41.5) the letter of demand referred to in section 58 of the Act must deal with
each one of the relevant provisions of sections 129 and 130 of the National Credit Act,
2005, and allege that each one has been complied with.” This rule follows from the
decision in African Bank Limited v Additional Magistrate Myambo NO and Others
(34793/2008) [2010] ZAGPHC 60; 2010 (6) SA 298 (GNP) (9 July 2010); See
(Resource 41.6)
1.7.4. In terms of Rule 4(2) and (3), the request must be directed to the Clerk, by means of
form 5A or 5B, supported by an affidavit containing such evidence as is necessary to
establish that all requirements in law have been complied with. These requirements will
be dealt with under section 57 and 58.
1.7.5. Rule 4(4) makes some of the provisions of rule 12 namely rules 12(6), (6A) and (7)
apply to a request for judgment in terms of sections 57 and 58 of the Act. Rule 12(6)
requires that if the claim is based on a liquid document or any agreement in writing, then
such agreement must be filed with the request. Rule 12(6A) requires that evidence
confirming compliance with any legislative requirement be filed with the request. The
effect of the reference to Rule 12(7) is that the clerk may refer the application to a
Magistrate. The impact of this provision on sections 57 and 58 judgments is that proper
consideration is given to the request by ensuring that all necessary facts and evidence is
provided and judicial intervention is sought where necessary.
1.7.6 Rule 5 introduces the model of a simple summons and a combined summons from the
High Court. In essence rule 5(1) provides for what should be contained in a summons.
The summons is issued and signed by the clerk of court which is addressed to the
sheriff. The sheriff is directed to inform the defendant that the claim may be disputed and
defended. The defendant has a stated time within which to give notice of intention to
defend and file a plea, or exception or strike out.
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1.7.7. Where the claim is not for a debt or liquidated demand the summons must be a combined
summons. In so far as a claim for a debt or liquidated demand is concerned it may also
be claimed by using a combined summons. A combined summons is a summons to
which is “annexed a statement of the material facts relied upon by the plaintiff in support
of plaintiff's claim, and which statement shall, amongst others, comply with rule 5. In other
words, the annexed statement is the former particulars of claim which is a pleading. A
plaintiff for example who claims for damages must use a combined summons consisting
of an annexure setting out the particulars of claim. In so far as a claim for a debt or
liquidated demand is concerned it may also be claimed by using a combined summons.
1.7.8. A simple summons is used usually where the quantum is already determined can be
easily ascertainable usually without leading evidence. Rule 5 (2)(b) provides that where a
claim is for a debt or liquidated demand a simple summons Form 2 of Annexure 1) may
be used. Accordingly the plaintiff may choose to use a simple summons or a combined
summons Form 2B when the claim is for a ‘debt or liquidated demand.’ Rule 5(2) (b) is
not peremptory. A simple summons consists only of the summons form and a brief
description of the claim and the relief claimed is contained in the very same form. It is
only when the defendant enters an intention to defend that the plaintiff becomes duty
bound to file full particulars of claim which is called a declaration, which then becomes
known as a pleading which must comply with the provisions of Rule 6.
1.7.9. The plaintiff must deliver within 15 days after receipt of a notice of intention to defend a
declaration. Rule 15(1).A declaration is similar to particulars of claim that is annexed to
a combined summons. Rule 15(2) provides that a declaration must contain the nature of
the claim, the conclusions of law and a prayer for relief. The declaration must contain full
details to enable the defendant to respond by way of plea.
1.7.10. A simple summons must set out the nature of the claim, the grounds on which it is based
and the relief claimed. Some concerns arising out of a simple summons is whether the
defendant can except to a simple summons on the ground that it does not disclose a
complete cause of action. In Icebreakers No.83 (Pty) Ltd v Medi Cross Health Care
Group (Pty) Ltd (5551/10) [2011] ZAKZDHC 15; 2011 (5) SA 130 (KZD) (18 February
2011) See (Resource 41.7) the court held that the summons serves the function of
commencing the litigation and bringing the defendant before court and the summons is
not a pleading. A defendant cannot have a plaintiff’s simple summons set aside on the
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ground that it does not disclose a complete cause of action. An exception can be taken
only against a pleading and a simple summons is not a leading. It is evident where a
simple summons does not disclose fully a cause of action it will prejudice the plaintiff
seeking default judgment or summary judgment.
1.7. 11. Rule 5(7) provides that when a simple summons is issued, a bare allegation of
compliance with legislation will be sufficient but full particulars of compliance must be
pleaded in the declaration. Rule 12(6A) provides that if judgment is applied for on the
basis of the simple summons which is regulated by any legislation, evidence of such
compliance must be filed with the application for default judgment. This would usually be
in the form of an affidavit.
1.7. 12. Rule 5(3) (a) provides that an address must be furnished by the plaintiff which is within
15km from the Court having jurisdiction. The summons must contain a physical or
business address that is within 15km of the court. It also provides for the summons to be
endorsed where available with the plaintiff’s fax and e‐mail address.
1.7.13. Rule 5(3)(b) also requires the summons to indicate whether the plaintiff is prepared to
consent to the delivery of documents and notices subsequent to the initial process other
than by physical or postal address and if so, shall state such preferred manner of service.
1.7.14. Rule 5(3)(c) provides that if an action is defended the defendant may, at the written
request of the plaintiff, deliver a consent in writing to the exchange or service by both
parties of subsequent documents and notices in the suit by way of facsimile or electronic
mail.
1.7.15. Rule 5(3) (d) gives plaintiff a remedy and the court a discretion if the defendant fails or
refuses to give consent. This is usually a cost order.
1.7.16. Rule 5(5)(a) provides every summons must include a form of consent to judgment, a form
of appearance to defend –Rule 5(5)(b), a notice drawing the defendant’s attention to the
provisions of section 109 of the MCA Act – rule 5(5)(c) and a notice in which the
defendant’s attention is directed to the provisions of sections 57,58,65A and 65D of the
MCA Act in cases where the action is based on a debt referred to in section 55 of the Act‐
rule 5(5)(d).
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1.7.17. Rule 5(6) provides where the defendant is cited in terms of section 28(1)(d) of the Act,
the summons must contain an averment that the whole cause of action arose within the
jurisdiction of the court’s district. In addition the new rule 5(6) (a) requires that particulars
in support of such averment must be set out in the summons. Blue Chip 2 (PTY) LTD t/a
Blue Chip 49/Cedric Dean Ryneveldt and 26 other Case no. 5004/13 Bloemfontein
Magistrates Court, See Blue Chip 2 (PTY) LTD t/a Blue Chip 49/Cedric Dean Ryneveldt
and 26 others and National Credit Regulator Case no. A233/2014 Bloemfontein High
Court, See Blue Chip 2 (PTY) LTD t/a Blue Chip 49/Cedric Dean Ryneveldt and 26 other
Case no. 499/2015. See (Resource 41.8)
1.7.18. Rule 5 (6)(b) provides where a defendant is cited in terms of section 28(1)(g) the
summons must contain an averment that the property is situated within the jurisdiction of
the courts district .
1.7.19. Rule 5(6) (c) provides that any abandonment of part of a claim under section 38 of the
Act and any set‐off under section 39 of the Act must be alleged.
1.7.20. Frequently debts are ceded to debt collectors who proceed to recover the debt in their
own name. To ensure that the debtor is fully apprised with the chain of events relating to
the debt recovery, the fact and details of the cession must be communicated in the letter
of demand. When suing by way of summons it is mandatory in terms of Rule 5((9) and
Rule 6(12) that a plaintiff who sues as cessionary must indicate the name, address and
Accordingly, it is imperative that the legal relationship between the parties that alleges
the right to the claim and the grounds for the demand are communicated to ensure that
there is no prejudice faced by the debtor due to ignorance.
1.7.21. Where a claim is for execution of residential property rule 5(10) provides that the
summons must contain a notice drawing the defendant’s attention to section 26(1) of the
Constitution which accords to everyone the right to have access to adequate housing.
Where the defendant claims that the order for eviction will infringe such a right the
defendant is bound to place information before the Court that supports such claim. In a
recent constitutional court decision of Gundwana v Steko Development CC and others
(CCT 44/10) [2011] ZACC 14 (11 April 2011) See (Resource 41.9) the court referring to
the Constitutional Court case of Jafta V Stephanus Schoeman and Various others
[2005] (2) SA 140 (CC) See (Resource 41.10) decision affirmed the need for judicial
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oversight even if a process of execution results from a default judgment. In this case it
was declared unconstitutional for a Registrar of the High Court to grant residential
immovable property executable in a default judgment under uniform rule 31(5). Hence
the importance of this notice in the summons not only reflects an important value
enshrined in the Constitution but its application at grass root level.
1.7.22. Rule 5(11) provides if a party failing to comply with any provisions of the rules relating to
summons, such summons shall be deemed to be an irregular step entitling an
application in terms of rule 60A and a discretion by court.
1.7.23. Rule 60(A) provides that a party who in its pleadings relies upon a contract shall state
whether the contract is in writing or oral, when, where and by whom it was concluded,
and if the contract is in writing a copy thereof or of the part relied on in the pleading shall
be annexed to the pleading.
1.7.24. Rule 11(1) (c) provides that the consent to judgment lodged with the clerk of court be
signed by the defendant and by two witnesses whose names are stated in full and
whose addresses and telephone numbers are recorded.
1.7.25. Where defendant consents to judgment prior to service of summons it is not necessary
to serve the summons and the defendant will not be charged for service fees.
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MODULE 9 NOTE 1
DEBT COLLECTION
Topic: Introduction and Overview to Debt

Collection
19
RELEVANT RESOURCES

RESOURCES
RELEVANT
1 Act 1.1 The Magistrates Court 1.1 Section 28, 29, 38, 55, 57, 58,
Act 32 of 1944 59, 109
1.2 The National Credit Act Sections 8, 40, 46, 47, 48, 51,
34 of 2005 81, 86, 92, 93, 101, 103, 106,
124, 125, 126B, 127, 128
129,
30, 131, 132, 133
1.3 NCA Amendment Act 19

of 2014
1.4 The National Credit
Amendment Act 7 of
2019
1.5 Prescription Act 68 of Section 17
1969 Section 80
2 The General Law 1.2 Section 35
Amendment Act 62 of
1955
3 The Law of Evidence 1.3 Section 3

Amendment Act 45 of
1988
4 The Courts of Law

Amendment Act 7 of
2017
20
5 Electronic
Communications and
Transactions Act 25 of
2002

Rules

Regulation 30
Regulation 31
Regulation 36
Regulation 39
Regulation 40
Regulation 41
Regulation 42
Regulation 43
Regulation 45
Regulation 46

2016 Section 59
Section 109

21
South Africa Volume ll, Rule 6
tenth edition, Service 11, Rule 6A
2016 Rule 9(12)
Rule 12
Rule 17
Rule 60A

Regulation 30
Regulation 31
Regulation 36
Regulation 39
Regulation 40
Regulation 41
Regulation 42
Regulation 43
Regulation 45
Regulation 46
22
1. INTRODUCTION AND GENERAL OVERVIEW
DISCUSSION
1.1. WHAT IS DEBT COLLECTION?
1.1.1 Debt collection includes the steps a creditor may take in order to obtain payment of a
debt owed to him by a debtor. The Magistrates’ Courts Act 32 of 1944 (Resource 41.2)
makes provision for different procedures by which a creditor can recover a debt owed to
him. These procedures make provision for claims for liquidated as well as unliquidated
amounts of money. For purposes of this note emphasis will be placed on the recovery of
liquidated debts. The recovery of debts consists of procedures, which the creditor may
follow before judgment, as well as procedures through which payment of the judgment
debt can be obtained after judgment.
1. 2. THE SEQUENCE OF THE DEBT COLLECTION PROCEDURE
1.2.1 The debt collection procedure is usually initiated in the form of a demand sent to the
debtor. If the debtor doesn’t react to the creditors claim within the period mentioned in
the demand, the creditor may proceed to issue a summons or, if the claim was for a
liquidated amount, make use of the alternative procedure provided for in sections 57 and
58 of the Magistrates’ Courts Act. See (Resource 41.2)
1.2.2 Since the majority of debt collection cases are unopposed (the debtor doesn’t give notice
of his intention to defend after receiving the summons), the next step for the creditor is to
request default judgment. The alternative procedures in sections 57 and 58 See
(Resource 41.2) also make provision for a request for judgment under certain
circumstances.
1.2.3 The fact that a creditor was successful in obtaining a judgment in his favour is no
guarantee that he will recover the money owed to him. It is no secret that only a small
number of judgment debtors voluntarily comply with a judgment against them. The next
logical step in the debt collection process after judgement is obtained, is the
enforcement of civil judgment or orders. This procedure is known as the execution
procedure and entails attachment of property, garnishee orders, emoluments
attachment orders and section 65 A-M procedures.
23
1.3. OBJECTIVES OF NATIONAL CREDIT ACT, ACT 34 OF 2005
1.3.1 The purpose of the National Credit Act is to promote a fair and non- discriminatory
market place for access to consumer credit; regulate consumer credit and improve
standards of consumer information; prohibit certain unfair credit and credit marketing
practices; promote responsible credit granting and use; prohibit reckless credit granting;
provide for debt re-organization in case of over-indebtedness; to regulate credit
information; and establish recourse for unfair credit practices.
1.3.2. The NCA does this by simplifying and standardising credit agreements and Information
disclosure; providing for the use of simple language that is easy to understand for
comparing credit agreements from different credit providers.
1.3.3. It ensures all credit products are handled in the same way by credit providers;
1.3.4. To assist over-indebted consumers to restructure their debt with the help of a debt
counsellor and encourage responsible lending;
1.3.5. Regulates credit bureaux in terms of their consumer information and records;
1.3.6. Establishes the National Credit Regulator to regulate the entire credit market; and
establish the National Consumer Tribunal to adjudicate on consumer complaints and
disputes with credit providers, contraventions of the act and decisions of the Regulator.
1.4 THE NATIONAL CREDIT ACT WAS PROMULGATED TO:
1.4.1. Promote the economic and social welfare of all South Africans;
1.4.2. Promote a fair and transparent credit market;
1.4.3. Protect consumers and their rights in the credit market;
1.4.4. Regulate all Credit Providers, Debt Counsellors and Credit Bureaux;
1.4.5. Limit the cost of credit;
24
1.4.6. Provide uniformity by levelling the playing fields between Credit Providers by
standardising the way in which credit is granted by Credit Providers, so that consumers can
compare what is being offered.
1.4.7. Chapter 6 (sections 124 – 133) of NCA deals with collection, repayment, and surrender and
debt enforcement. In order to understand how NCA default judgments are dealt with, certain
definitions must be known.
2 IMPORTANT DEFINITIONS OF NCA FOR PURPOSES OF RDJ
Credit Provider A person or party who lends money, supplies goods or

services, advances money or credit, extends credit, to
another under a credit agreement;
Consumer In respect of a credit agreement, is a person or party, t o whom

goods or services are sold; to whom money is paid, or credit
granted, under a pawn transaction; to whom credit is granted
under a credit facility; the mortgagor under a mortgage
agreement; the borrower under a secured loan; the lessee under
a lease agreement; the guarantor under a credit agreement; or
to whom or at whose direction money is advanced or credit
granted under any other credit agreement borrows money or
provides credit to another under a credit agreement.
Credit Means an agreement that meets all the criteria set out in
agreement section 8
Credit facility Means an agreement that meets all the criteria set out in
section 8(3)
Credit Means an agreement that meets all the criteria set out in
guarantee section 8 (5)
Credit Means an agreement that meets the criteria set out in
transaction section 8(4)
Court day Means any day other than a Saturday, Sunday or public
holiday, and only court days shall be included in the
25
computation of any time expressed in days prescribed by
this Act or fixed by any order of Court.
Incidental Means an agreement, irrespective of its form, in terms of which
Credit an account was tendered for goods or services that have been
Agreement provided to the consumer, or goods or services that are to be
provided to a consumer over a period of time and either or both
of the following conditions apply:
(a) a fee, charge or interest became payable when payment of

an amount charged in terms of that account was not made
on or before a determined period or date; or
(b) two prices were quoted for settlement of the account, the
lower price being applicable if the account is paid on or
before a determined date, and the higher price being
applicable due to the account not having been paid by that
date.
Debt A person who is registered with the National Credit
Counsellor Regulator, and assists over- indebted consumers to
reconstruct their debt, either by negotiating with the credit
providers or obtaining a court order on behalf of
consumers.
Instalment Means a sale of movable property in terms of which –
Agreement
(a) all or part of the price is deferred and is to be paid by
periodic payments;
(b) possession and use of the property is transferred to the

consumer;
(c) ownership of the property either –
(i) passes to the consumer only when the agreement is fully
26
complied with; or
(ii) passes to the consumer immediately subject to a right of

the credit provider to re-possess the property if the
consumer fails to satisfy all of the consumer’s financial
obligations under the agreement; and
(d) interest, fees or other charges are payable to the credit

provider in respect of the agreement, or the amount that
has been deferred;
Lease Means an agreement in terms of which –
(a) temporary possession of any movable property is delivered

to or at the direction of the consumer, or the right to use any
such property is granted to or at the direction of the
consumer;
(b) payment for the possession or use of that property is –
(i) made on an agreed or determined periodic basis during the

life of the agreement; or
(ii) deferred in whole or in part for any period during the life of
the agreement;
(c) interest, fees or other charges are payable to the credit

provider in respect of the agreement, or the amount that has
been deferred; and
(d) at the end of the term of the agreement, ownership of that

property either –
(i) passes to the consumer absolutely; or
27
(ii) passes to the consumer upon satisfaction of specific
conditions set out in the agreement;
Mortgage Means a mortgage bond registered by the registrar of deeds
over immovable property that serves as continuing covering
security for a mortgage agreement;
Mortgage Means a credit agreement that is secured by the registration of

Agreement a mortgage bond by the registrar of deeds over immovable
property;
Pawn Means an agreement, irrespective of its form, in terms of which

Transaction –
(a) one party advances money or grants credit to another,

and at the time of doing so, takes possession of goods
as security for the money advanced or credit granted;
and
(b) either –
(i) the estimated resale value of the goods exceeds the

value of the money provided or the credit granted, or
(ii) a charge, fee or interest is imposed in respect of the

agreement, or in respect of the amount loaned or the
credit granted; and
(c) the party that advanced the money or granted the credit
is entitled on expiry of a defined period to sell the goods
and retain all the proceeds of the sale in settlement of
the consumer’s obligations under the agreement;
Principal Debt Means the amount calculated in accordance with section 101(1)
28
(a);
Public Interest Means a credit agreement that meets all the criteria prescribed
Credit in terms of section 11, and which is therefore exempt from the
Agreement application of provisions of this Act concerning reckless credit;
Reckless Credit Means the credit granted to a consumer under a credit

agreement concluded in circumstances described in section 80;
School Loan Means a credit agreement in terms of which –
(a) money is paid to a primary or secondary school on account

of school fees or related costs for the benefit of the
consumer’s child or other dependant; or
(b) a primary or secondary school defers payment of all or part

of the school fees or related costs for the consumer’s child
or other dependant;
Secured Loan Means an agreement, irrespective of its form but not including
an instalment agreement, in terms of which a person –
(a) advances money or grants credit to another, and
(b) retains, or receives a pledge to any movable

property or other thing of value as security for all
amounts due under that agreement;
Settlement Means the amount in respect of a credit agreement that is

Value required to be paid on a particular date to satisfy all the
consumer’s financial obligations to the credit provider, as
calculated in accordance with section 125(2);
Stokvel Means a formal or informal rotating financial scheme with
29
entertainment, social or economic functions, which –
(a) consists of two or more persons in a voluntary

association, each of whom has pledged mutual
support to the others towards the attainment of
specific objectives;
(b) establishes a continuous pool of capital by raising

funds by means of the subscriptions of the
members;
(c) grants credit to and on behalf of members;
(d) provides for members to share in profits from, and to

nominate management of, the scheme; and
(e) relies on self-imposed regulation to protect the

interest of its members;
Student Loan Means a credit agreement in terms of which –
(a) money is paid by the credit provider to an institution

of tertiary education on account of education fees or
related costs for the benefit of the consumer or a
dependant of the consumer; or
(b) an institution of tertiary education defers payment of

all or part of the consumer’s education fees or
related costs;
Utility Means the supply to the public of an essential –
(a) commodity, such as electricity, water, or gas; or
30
(b) service, such as waste removal, or access to
sewage lines, telecommunication networks or any
transportation infrastructure.
31
3. CREDIT AGREEMENT AN AGREEMENT BETWEEN A CREDIT
PROVIDED AND A CONSUMER. SECTION 8 NCA
NCA
CREDIT AGREEMENT
A B C D
CREDIT CREDIT CREDIT COMBINATION
FACILITY TRANSACTION GUARANTEE OF A, B AND C
A
1. Supply of
B
goods or
1. Pawn
services
agreement 1. Undertaking to
2. Discount satisfy upon
2. Supply of
Money transaction demand
3. Instalment obligation of
Sale another
3. Payment Agreement
consumer in
deferred 4. Mortgage
terms of A and B
Agreement
4. Interest is 5. Lease
levied Agreement 6.
Incidental
Credit
Agreement
4 FEATURES OF A CREDIT AGREEMENT – SECTION 8
4.1. Deferral of payment or

4.2. Prepayment of debt, AND
4.3. Fee
4.4. Charge
4.5. Interest or
32
4.6. Discount
(Mitchell v Beheerliggaam RNS Mansions 2010 (5) SA 75, See (Resource 41. 13) Nelson
Mandela Bay Metropolitan Municipality v Nobumba 2010 (1) SA 579 (ECG), See (Resource
41.14) Evans v Smith 2011 (4) SA 472 (WCC) , See (Resource 41.15) Essa v Asmal 2012 (2)
SA 576 (KZP)) See (Resource 41.16)
5. WHAT TYPE OF DEBT CAN BE RECOVERED BY MEANS OF THIS

PROCEDURE?
5.1 Chapter VIII – Recovery of Debts - of the Magistrate Courts Act is commenced by a definition
section 55 which reads as follows: “In this chapter, unless the context otherwise indicates
– ‘debt’ means any liquidated sum of money due.”
5.2 A liquidated sum of money is an amount which is agreed upon or which is capable of
speedy and prompt ascertainment, for example; the outstanding balance of a clothing
account, purchase price, insurance premiums, an amount of money borrowed, etc.
5.3 This, however, does not mean that an unliquidated sum of money, for example damages
flowing from a motor vehicle collision, cannot be recovered by the new procedure. If a
debtor receives a letter of demand in which an amount of money for damages is claimed,
and the debtor admits liability or sign and acknowledgement of debt, the amount
becomes liquidated and may be recovered by means of this procedure. The cause of
action is now the acknowledgment of debt which is a liquidated document and not the
motor vehicle collision. An unliquidated amount can also become liquidated through
agreement.
5.4 The word “due” in this definition means owing and already payable and does not include
in futuro amounts.
6 JURISDICTION
33
6.1 The place/district where the admission of liability in terms of section 57 or consent to
judgment in terms of section 58 was signed can never vest jurisdiction as the signing of
an admission of liability or consent to judgment is a prerequisite of the sub-sections. The
normal requirements pertaining to jurisdiction in respect of persons and causes of action
as set out in sections 28 and 29 of the Magistrates Courts Act are applicable. A request
for judgment in terms of section 57 or 58 can therefore only be entertained if the
judgment debtor resides, carries on business or is employed within the area of jurisdiction
of a specific court or if the cause of action arose wholly within that area of jurisdiction. To
establish this, the address to where the letter of demand was sent must be checked and
where there is an underlying written agreement, whether the cause of action arose fully or
the agreement was concluded within a specific court’s area of jurisdiction.
6.2 An exception is section 45 of the Magistrates Courts Act which allows parties to extend
the civil jurisdiction of the Magistrates’ Courts by consent. Section 45(1) stipulates that,
subject to the provisions of section 46, the parties may consent in writing to the
jurisdiction of either court for the district or the court for the regional division to determine
any action or proceeding otherwise beyond the jurisdiction in terms of section 29(1).
Because this enabling provision is subject to section 46, parties may not agree to extend
the jurisdiction of the court in respect of types of matters, which are excluded from the
jurisdiction of Magistrates’ Courts by section 46. Section 45(3) provides that any
consent given in proceedings instituted in terms of section 57, 58, 65 or 65J by a
defendant or a judgement debtor to the jurisdiction of a court which does not have
jurisdiction over the defendant or judgement debtor in terms of section 28, is of no force
and effect. With regard to value jurisdiction, there is no limit on the ability of parties to
agree to submit to the jurisdiction of the court. With regard to territorial jurisdiction, there
is an important proviso, subject to an exception, which limits ability of parties to submit to
the jurisdiction of a particular district court. It reads as follows:
“Jurisdiction by consent of parties
(1) subject to the provisions of section 46, the parties may consent in writing to the
jurisdiction of either court for the district or the court for the regional division to
determine any action or proceeding otherwise beyond the jurisdiction in terms of
section 29(1).
34
(2) Any provision in a contract existing at the commencement of the Act or thereafter
entered into, whereby a person undertakes that, when proceedings have been or
are about to be instituted, he will give such consent to jurisdiction as is
contemplated in the proviso to subsection (1), shall be null and void.
(3) Any consent given in proceedings instituted in terms of section 57, 58, 65 or 65J by
a defendant or a judgment debtor to the jurisdiction of a court which does not have
jurisdiction over that defendant or judgment debtor in terms of section 28, is of no
force and effect”
6.3 The consent must be in writing and must refer specifically to particular proceedings
already instituted or about to be instituted in the court contemplated.
6.4 The problem, which has arisen in respect of such consents, is that creditors appear to be
obtaining written consents to the jurisdiction of the court, which suits them in two ways:
6.4.1 When the debtor defaults and falls into arrears the creditor pressurizes the debtor to
consent to the court of the creditor’s choice by threatening to take immediate legal action
for the recovery of the debt if the debtor does not consent.
6.4.2 Some creditors require the debtor to sign an undated consent to the jurisdiction of the
court of the creditor’s choice when the contract is concluded and then, when the debtor
defaults, they fraudulently enter a date which makes it appear that the consent was given
after the claim arose.
6.5 The practices of obtaining consents in these ways are widespread, particularly for the
purpose of enabling the creditor to obtain judgment from a court of its choice in terms of
sections 57 or 58 of the Magistrates’ Courts Act. Sections 57 and 58 enable a creditor to
obtain a judgment without ever having issued a summons if the debtor acknowledges his
or her liability for the debt.
6.6. The reason why the practice of obtaining consent to the court of the creditor’s choice is a
problem is that consumers are prejudiced by having to defend action brought against them
in a court which is convenient for the creditor but inconvenient and costly for the debtor.
35
For instance, with the benefit of such consents, a bank which has its head office in
Johannesburg may issue summonses out of the Johannesburg Magistrate’s court against
debtors who reside all over the country. Debtors who want to defend such actions are then
required by the rules of court to enter an appearance to defend and conduct the litigation in
the Johannesburg Court. This may well infringe the rights of the defendants to access to
the courts as guaranteed by section 34 of the Constitution. See (Resource 41.11)
6.7 A term in an agreement or in the admission of liability in terms of section 57 or consent to

judgment in terms of section 58 whereby a party thereto either
(a) consents to the jurisdiction of magistrate’s court X (which but for the consent has no
jurisdiction over his person) in respect of any proceedings which may arise out of the
agreement, or
(b) undertakes, in the event of any proceedings arising out of the agreement, to consent
to the jurisdiction of magistrate’s court X in respect of those proceedings when such
have been or will be instituted, is null and void. This means that if a Court does not
have jurisdiction of the defendant or debtor in terms of section 28, then that court will
not have jurisdiction to hear the matter.
6.8 Section 45 provides that subject to section 46, the parties may consent in writing to the
jurisdiction of the District or Regional Court to hear any action or proceeding that is
beyond the jurisdiction in terms of section 29(1). Note that section 29 deals with
jurisdiction in respect of different causes of actions and the types of matters that can be
heard in the Magistrates Court.
6.9 A court must have jurisdiction over a person in terms of section 28 of MCA to have force
and effect when a consent to jurisdiction is signed in terms of section 57, 58, 65 or 65J by
36
a defendant or a Judgement debtor.
6.10 Where the aspect of jurisdiction is not clear from the papers filed, nothing prevents a
judicial officer seized with a request for judgment of this nature to request further
information – on affidavit – from the judgment creditor to enable an informed decision to be
made whether or not judgment should be granted ( Barclays Western Bank v Creser
1982(2) SA 104 (T), See (Resource 41.17) and also the judgment of J Leveson in the
unreported decision of SA Permanent Building Society v S U D Meer delivered on 7 April
1989, case nr.1978/88 (WLD) See (Resource 41.2) and African Bank v Additional
Magistrate Myambo NO and others 2010 (6) SA 298 (GNP). See (Resource 41.2)
7 THE IMPACT OF THE NATIONAL CREDIT ACT ON JURISDICTION CONSENT

CLAUSES
7.1 Section 90(2)(k)(vi)(bb) of the National Credit Act, Act 34 of 2005 impacts significantly on
the provisions of Section 45 of the Magistrates Court Act where the cause of action is
based on a credit agreement. The National Credit Act contains specific provisions that
limit the choice of jurisdiction. Section 45 of the Magistrates Court Act is specifically
excluded and jurisdiction is limited in terms of Section 90(2)(k)(vi)(bb) to “the court
where the consumer/judgment debtor resides works or where the goods in
question are ordinarily kept”. The section prohibits a credit agreement, which will now
in terms of the National Credit Act include a micro lending agreement, short term credit
transaction, small agreement and acknowledgement of debt, to contain a clause allowing
the consumer to consent or agree to the area of jurisdiction of any court. It does however,
on first glance, not prohibit the consumer, where legal proceedings have already been or
are about to be instituted, to consent in writing on a separate document to the area
jurisdiction of a specific magistrate’s court in terms of Section 45 of the Magistrates Court
Act. Note when that consent is signed, if the court does not have jurisdiction over the
defendant or debtor in terms of section 28 of MCA this agreement would be of no force
and effect.
7.2 The purpose of the National Credit Act is inter alia to effectively protect consumers from
deception and unfair conduct by credit providers. (Section 3(e) of NCA and the
37
unreported decision of ABSA Bank Limited v Myburgh ZAGPHC 2007 (299) See
(Resource 41.19) put plainly, its purpose is to protect the uninformed consumer. Section
91(a) of NCA further prohibits a credit provider from inducing a consumer, directly or
indirectly, to enter into a supplementary agreement or sign any document that contains a
provision that would be unlawful if it were included in a credit agreement. Section 90(2)(a)
of NCA stipulates that a credit agreement, which will now include a micro lending
agreement, is unlawful if its general purpose or effect is to defeat the purposes or policies
of the Act or to deceive the consumer. Section 90(2)(b) of NCA stipulates that a credit
agreement is unlawful if it directly or indirectly purports to waive or deprive a consumer of
any right under the Act or enables a credit provider’s to evade an obligation or duty in
terms of the Act or if it overrides the effect of any provision of the Act.
7.3 The principle that the Legislature was aware of existing legislation when enacting new
legislation is also applicable here.
7.4 A consumer therefore has the right to be informed and a credit provider a duty not to
include into a credit agreement a clause allowing the consumer to consent or agree to the
jurisdiction of any court other than a court having concurrent jurisdiction and in which the
consumer resides or works or where the goods in question (if any) are ordinarily kept. By
asking the consumer to agree to the jurisdiction of a specific magistrates court, albeit
after proceedings have already been instituted in terms of Section 45 of the Magistrates
Court Act has the effect of inducing the consumer to agree not only to an unlawful
provision but also to a provision that would override the effect of Section 90(2) (k) (vi)(bb)
of the National Credit Act. In Bafana Finance Mopane v Makwakwa and Another 2006(4)
SA 581 (SCA) See (Resource 41.20) it was held that an agreement whereby a party
purports to waive a benefit conferred upon him or her by statute, will be contra bonos
mores if it can be shown that such agreement would deprive the party, protection, which
the Legislature considered should be afforded by law.
7.5 The enforcement provisions of the National Credit Act including sections 90 and 91
became effective on 01 June 2007. Any micro loan or short term credit transaction
concluded on or after this date will have to comply with the provisions of the National
Credit Act. The abuse of Section 45 where judgments are sought in terms of Sections 57
and 58 of the Magistrates Court Act are well known. These processes allowed the credit
providers to “Forum Shop” and invariably select a court that is convenient to them even
38
although the court is far from where the judgment debtor resides or works. In Nedbank
Limited v Mateman and another [2008] 1 All SA 593 (T) at 600 See (Resource 41.21) it
was held that Section 90 of the National Credit Act was intended to outlaw forum
shopping in credit agreements.
7.6 In University of Stellenbosch Legal Aid Clinic v Minister of Justice and Correctional
Services, 2015(5) SA 221 (WCC) See (Resource 41.22) a declaratory order was
granted to the effect that section 45 of the MCA, does not permit a debtor in terms of a
credit agreement to consent in writing to the jurisdiction of a magistrates’ court other than
that in which that debtor resides or is employed. The appeal against this decision was
dismissed by the Constitutional Court. (University of Stellenbosch Legal Aid Clinic and
Others v Minister of Justice and Correctional Services and Others; Association of Debt
Recovery Agents NPC v University of Stellenbosch Legal Aid Clinic and Others; Mavava
Trading 279 (Pty) Ltd and Others v University of Stellenbosch Legal Aid Clinic and Others
[2016] ZACC 32.) See (Resource 41.22)
8 CREDIT PROVIDERS REGISTRATION REQUIREMENTS
8.1 REGISTRATION REQUIREMENTS
8.1.1 The NCA requires that credit providers must register with the National Credit Regulator if
that person, alone or in conjunction with another person, is a credit provider of at least
100 credit agreements, other than incidental credit agreements or if the total principal
debt owed to that credit provider exceeds the threshold prescribed in terms of section 42
(1). At this stage the threshold is R500 000.00. This requirement of the 100 agreements
was removed in the NCA Amendment Act 19 of 2014, See (Resource 41.23) which
came into effect on the 13 March 2015 and re-instated in National Credit Amendment
Act, Act 7 of 2019 See (Resource 41.24)
8.1.2 The threshold for registration was also amended from R500 000. 00 to nil rand in the
National Credit Regulations, which was released on 11 May 2016. The regulations
became effective six months after publication and will therefore take effect on 11
November 2016.
8.1.3 Note if a credit provider provides credit but is not registered the result is that the
agreement is unlawful and is also void as from the date the agreement was entered into.
39
The credit provider must refund the consumer any monies paid with interest and the right
of the credit provider to recover money paid or goods delivered is cancelled, unless the
court concludes that the consumer would be unjustly enriched.
8.2 WHO MUST BE REGISTERED AS A CREDIT PROVIDER IN TERMS OF THE ACT?
8.2.1 Based on the amendments to NCA and the amended regulations, all credit providers,
except those credit providers that provide incidental credit, must be registered with the
National Credit Regulator. Whether the credit provider conducts business in its own
name at or from more than one location or premises is required to register only once
with respect to all of such locations or premises. (Section 40(2) (c)) of NCA.
8.2.2 In terms of GN R202 of 13 March 2015, Form 2 is used for registration as credit provider
and form 3 is used supplementary registration.
8.2.2 A credit provider in respect of a credit agreement to which the NCA applies is:-
 a party whether natural or juristic who supplies goods or services under a discount
transaction, incidental credit agreement or instalment agreement;
 a party who advances money or credit under a pawn transaction;
 a party who extends credit under a credit facility;
 a mortgagee under a mortgage agreement;
 a lender under a secured loan;
 a lessor under a lease;
 a party to whom an assurance or promise is made under a credit guarantee;
 a party who advances money or credit to another under any other credit agreement;
or
 any other person who acquires the rights of a credit provider under a credit
agreement after it has been entered into.
40
8.2.3 Small credit providers and credit providers operating only within one province are
exempted from registration. (Section 39(1) of NCA)
8.2.4 A credit provider who provides incidental credit as a result of outstanding transactions
are not obliged to register. (Section 40(1) (a) of NCA)
8.3 WHO IS DISQUALIFIED FROM REGISTERING?
8.3.1 Both natural and juristic persons are in certain instances disqualified from registering in
terms of the NCA. Natural persons may be disqualified to register as credit providers in
terms of section 46 and juristic persons may be disqualified in terms of section 47 to
register as credit providers.
8.3.2 A natural person may not be registered as a credit provider if that person:
8.3.2.1 is a rehabilitated insolvent;
8.3.2.2 is under the age of 18;
8.3.2.3 is listed as excluded person in terms of section 14 of the Gambling Act.
8.3.2.4 is a mentally unfit person so declared by a court;
8.3.2.5 has been removed from an office of trust because of misappropriation of money;
8.3.2.6 has been a director or member of a governing body of an entity at the time it was
Involuntary deregistered, brought the industry into disrepute or acted with
disregard for consumer’s rights.
8.3.2.7 has been convicted during the previous 10 years of theft, fraud, forgery, perjury
and various other offences (Refer to Section 46(3)) of NSA.
8.3.2.8 is subject to administration order, subject to debt re-arrangement or engaged in,
employed by or acting as an agent for a person that is engaged in debt collection,
the operation of a credit bureau or as prescribed by the Minister.
8.3.3 A juristic person or an association of persons may not be registered as a credit

provider if any natural person who would be disqualified from individual registration
exercises general management or control of that person or association. (Refer to
Section 47(3) and Regulation 5 for other disqualifications.
8.4 WHEN MUST REGISTRATION TAKE PLACE?
8.4.1 In terms of the Act, a credit provider must register within 40 business days of the
commencement of the relevant portion of the NCA which became effective on the 1st of
41
June 2006. (Schedule 3 sub item 2(a)) When calculating the number of business days
the calculation must be made excluding the first day and including the last day and
without taking public holidays, Saturdays or Sundays into consideration. (Section 2(5))
of NCA.
8.4.2 An important provision, which allows for a delayed application for registration, is set out
in sub item 2(b) of Schedule 3 to the Act. It stipulates that during the first year after the
1st of June 2006 the requirement that a credit provider be registered is temporarily
satisfied from the time that a credit provider applies for registration until the National
Credit Regulator has made a final decision with respect to the application.
8.5 EFFECT OF NON-REGISTRATION ON CREDIT AGREEMENTS CONCLUDED.
8.5.1 A credit provider who is required to be registered in terms of the NCA but who is not so
registered, must not offer, make available or extend credit or enter into any credit
agreement or agree to do any of those things. If a credit provider is not registered with the
National Credit Regulator, the credit provider cannot extend credit or trade as a credit
provider. (Section 40(3))
8.5.2 A credit agreement concluded after the 1st of June 2006 between such a credit provider
and a consumer is an unlawful agreement and void to the extent provided for in Section
89. (Section 40(4) and 89(2) (d))
8.5.3 Section 89(4)(a) however stipulates that such an agreement is not unlawful if, within 30
days after the credit agreement was concluded, the credit provider had applied for
registration and was awaiting a determination of that application by the National Credit
Regulator.
8.5.4 A judicial officer considering such an agreement in any proceedings, before having to
exercise a judicial discretion, may, in assessing whether there has been compliance,
request the credit provider to file an original certificate of registration issued by the
National Credit Regulator, which was valid at the time the agreement was concluded or
an original acknowledgement of receipt of such application indicating that the credit
42
provider had applied for registration before the credit agreement was concluded or
within 30 days after the credit agreement was concluded. Refer to African Bank v
Additional Magistrate Myambo NO and others supra.) See (Resource 41.6)
8.5.5 If a credit agreement is found to be unlawful in terms of Section 89, the Act stipulates
in Section 89(5) that despite any provision of the common law, any other legislation
or any provision of an agreement to the contrary, a court must order that –
8.5.5.1 the credit agreement is void as from the date the agreement was entered
into;
8.5.5.2 the credit provider must refund to the consumer any money paid by
the consumer under that agreement to the credit provider, with
interest calculated- (i) at the rate set out in that agreement; and (ii) for
the period from the date on which the consumer paid the money to the
credit provider, until the date the money is refunded to the consumer;
and
8.5.5.3 all the purported rights of the credit provider under that credit
agreement to recover any money paid or goods delivered to, or on
behalf of, the consumer in terms of that agreement are either- (i)
cancelled, unless the court concludes that doing so in the
circumstances would unjustly enrich the consumer; or (ii)forfeited to
the State, if the court concludes that canceling those rights in the
circumstances would unjustly enrich the consumer.
8.5.6 This provision impacts significantly on the credit provider’s common law remedy to claim
back, at the very least, the principal debt due. The fact that Section 40(4) of NCA became
effective on the 1st of June 2006 and Section 89 only on the 1 st of June 2007 makes the
provisions even more ambiguous.
8.6 PROCEDURE TO REGISTER AS A CREDIT PROVIDER
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8.6.1 A credit provider who must be registered in terms of Section 45 of the NCA must apply for
registration in the prescribed manner and form to the National Credit Regulator.
8.6.2 An application is submitted by completing Form 2 together with any additional documents
required and by paying the applicable application fee as set out by Ministerial Notice.
(Regulation 4) of NCA, Except for the application fee a credit provider will also be
responsible for the payment of an initial registration fee to be paid upon registration as well
as an annual registration renewal. (Section 51(1)) Different fees may be prescribed for
credit providers including registration renewal fees based on the number of locations at or
from which a credit provider carry on registered activities. (Section 51(2)
8.6.3 A credit provider who applies for registration must also provide any information required by
the National Credit Regulator in terms of Section 45(2). The National Credit Regulator may
also propose any conditions on the registration of a credit provider as contemplated in
Section 48(3).
8.7 THE NATIONAL CREDIT REGULATOR
8.7.1 The National Credit Regulator is established in terms of Section 12 of NCA. In terms of
Item 8 (a) of Schedule 3 of NCA , the assets, liabilities and employees of a regulatory
institution designated by the Minister in terms of Section 15A of the Usury Act, (i.e. the
Micro Finance Regulatory Council), are transferred to and are assets, liabilities and
employees, respectively, of the National Credit Regulator. Accordingly, effectively as from
the 1 June 2006 the Micro Finance Regulatory Council became the National Credit
Regulator.
8.7.2 The National Credit Regulator is established as an independent juristic person and is in
reality the backbone of the Act, being responsible for the regulation of the South African
credit industry and tasked with certain registration and enforcement functions as well as
investigation of complaints, policy development, and monitoring, research and public
information and education. The monitoring function of the National Credit Regulator places
the regulator in an influential position with regard to the ongoing development of our
consumer laws. Section 18 of NCA makes provision for the National Credit Regulator to
44
report to the Minister annually regarding national norms and standards, and to advice and
to make recommendations to the Minister regarding changes in legislation.
8.7.3 Section 13 of NCA specifically places responsibility on the National Credit Regulator to
develop an accessible credit market and in this regard specifically to serve the needs of
historically disadvantaged persons, low income persons and communities, and remote,
isolated or low density populations and communities.
8.7.4 Section 14 read with section 48(3) of NCA gives the National Credit Regulator the
responsibility to register credit providers, credit bureaus and debt counsellors, including the
suspension of or cancellation of any such registration, and also, the establishment of and
maintenance of the registries pertaining to the aforesaid as contemplated in Section 53, as
well as the national register of credit agreements as set out in Section 69(1).
8.7.5 Section 15 of NCA places certain obligations on the National Credit Regulator for the
enforcement of the NCA, inter alia, by promoting informal resolution of disputes between
parties, receiving and investigation of complaints regarding contraventions of the NCA,
performing a monitoring function to ensure that prohibited conduct is prevented o detected
and prosecuted, issuing and enforcing compliance notices, referring matters to the Tribunal
and appearing before the Tribunal as permitted or required by the NCA, and also dealing
with any matter referred to it by the Tribunal.
8.7.6 With regard to the research and public information function of the National Credit
Regulator, Section 16 of NCA specifically states that the National Credit Regulator is
responsible to ‘increase knowledge of the nature and dynamics of the consumer credit
market and industry, and to promote public awareness of consumer credit’. The National
Credit Regulator is therefore obliged to implement measures to educate the public and to
promote awareness, to provide explanatory guidelines, to issue non-binding opinion on the
interpretation of any provision of the Act, and even to make application to a court for a
declaratory order regarding the interpretation or application of any provision of the Act
(Section 16(1) (b) (ii)).
8.7.7 The Section also tasks the National Credit Regulator with:
8.7.7.1 Monitoring of socio-economic patterns of consumer credit activity and in particular

identifying factors concerning over-indebtedness and the patterns, causes and
consequences of over- indebtedness;
45
8.7.7.2 At reasonable intervals analysing the historical data pertaining to credit applications
and agreements in order to establish demo-graphic patterns, investigate socio-
economic trends and detect patterns of any discriminatory practices;
8.7.7.3 Monitoring the needs of historically disadvantaged and low income persons, low
income communities and remote, isolated or low density populations and
communities, and monitoring trends with respect to promotion of black economic
empowerment and ownership;
8.7.7.4 Monitoring trends relating to credit insurance and alternative dispute resolution
agents;
and, reviewing legislation and public regulations from time to time, and reporting to the
Minister.
8.7.8 Section 17 of NCA provides for co-operation between the National Credit Regulator and
provincial credit regulators and any regulatory authority with regard to co-operative
activities, liaising on matters of common interest, and the exercising of jurisdiction over any
particular matter. The National Credit Regulator may require a provincial credit regulator to
submit a report to the National Credit Regulator regarding the activities of the provincial
regulator.
8.7.9 Section 136 of NCA provides for the initiation of complaints to the National Credit
Regulator regarding alleged contraventions of the NCA. In terms of subsection (2) the
National Credit Regulator may initiate a complaint in its own name. Regulation 50 of NCA
provides that a consumer may lodge a complaint against a credit provider either by
submitting a completed Form 29 or by contacting the National Credit Regulator
telephonically. Form 29 may be completed by a third party acting on behalf of the
complainant provided that written consent which must contain the information set out in
regulation 50(5) and signed by the complainant, accompanies such complaint. Complaints
which are lodged by telephone or by email may be lodged only by the complainant
personally.
46
8.7.10 Part C of Chapter 7 of NCA deals with investigation by the National Credit Regulator and
referral to the Tribunal as well as informal resolution of disputes by the National Credit
Regulator.
8.7.11 Section 25 gives the National Credit Regulator power to appoint inspectors and
investigators. An inspector must be issued with the prescribed certificate confirming his
appointment and he must be in possession of such certificate when performing his
functions. An inspector, when exercising his powers, is a peace officer as defined in
Section 1 of the Criminal Procedure Act 51 of 1977. Dispute resolution and registration
with the National Credit Regulator are dealt with elsewhere in these notes.
8.8 CERTIFICATES OF REGISTRATION
8.8.1. After receipt of an application for registration from a credit provider by the National Credit
Regulator, the processing thereof could take some time because the National Credit
Regulator may request certain additional information. Certificates are therefore not issued
immediately upon receipt of the application.
8.8.2 Sub item 2(b) of Schedule 3 to the Act

stipulates further that during the first year after the 1 st of June 2006 the requirement that a
credit provider be registered is temporarily satisfied from the time that a credit provider
applies for registration until the National Credit Regulator has made a final decision with
respect to the application.
8.8.3 Upon receipt of an application for registration from a credit provider the National Credit
Regulator issues a formal acknowledgment of receipt of the application pending processing
thereof. It would seem, at least up to the 1 st of June 2007 that such a document will suffice
in the place of a certificate of registration as long as it reflects clearly when the application
for registration was received. A credit provider concluding a credit agreement before the
date so reflected will not be complying with the provisions of Sections 40(3) and (4) of NCA.
47
8.8.4 When the credit provider is successfully registered the National Credit Regulator issues a
certificate of registration complying with Form 9 to the applicant together with a duplicate copy
of the certificate of registration for each registered location at or from which that credit provider
conducts the registered activities from. Section 52(1) of NCA
8.8.5 Each certificate of registration or duplicate registration certificate must contain:
1. a certificate number unique to that registrant

2. the identity of the registrant
3. the identity number of the registrant in the case of a natural person
4. the registration number of a juristic person in terms of the Companies Act or Close
Corporation Act
5. in the case of a partnership the words “trading in partnership” which must be specified
6. the activities that the registration permits the registrant to engage in, conduct or make
available to the public
7. the signature of a duly authorised representative of the National Credit Regulator
8. the date on which the certificate was issued
8.8.6 A credit provider is further obliged to reflect on all its credit agreements, in a legible typeface, its
registered status and registration number. Section 52(5) (b) of NCA
8.8.7 It is also a condition of every registration that a credit provider complies with every
applicable provision of the National Credit Act. Section 50(2) (b) of NCA
8.9 HOW LONG IS REGISTRATION VALID FOR?
8.9.1 Registration is effective on the date that the certificate or duplicate certificate of
registration is issued by the National Credit Regulator. Section 52(4)(a) of NCA
8.9.2 Where delayed registration is applicable and only up to the 1 st of June 2007, it will also be
effective from the date the formal acknowledgment of receipt of the application for
registration is issued to the credit provider by the National Credit Regulator. Sub item 2(b)
of Schedule 3 to the Act)
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8.9.3 Registration remains effective, subject to the timeous payment of the prescribed annual
registration renewal fees, until the credit provider is deregistered or the registration is
cancelled in terms of the Act. Section 52(4) (b) of NCA Although it would seem that
registration certificates are now valid for as long as there is compliance with this sub
section and not just for only twelve months as was the case with certificates issued by the
Micro Finance Regulatory Council, a judicial officer may still, in any proceedings, before
having to exercise a judicial discretion, and whilst assessing whether there has been
compliance with this sub Section, request the credit provider to file proof of payment of the
prescribed annual registration renewal fees. If the prescribed annual registration renewal
fees have not been paid the registration is not effective. Whether an agreement concluded
whilst registration was not effective is an unlawful agreement and void to the extend
provided for in Section 89 of NCA is open for debate. Cognisance should also be taken of
the provisions of Section 164(1) of NCA which stipulates that nothing in this Act renders
void a credit agreement or a provision of a credit agreement that is prohibited or may be
declared unlawful unless a court declares that agreement or provision to be unlawful.
9 GENERAL PROCEDURE FOR DEBT COLLECTION
9.1 Although these procedures are often referred to as the “demand procedure”, it must be
kept in mind that either a letter of demand or a summons may initiate these procedures.
For purposes of this discussion we are assuming that the creditor made use of a letter of
demand.
9.2 Section 59 of NCA stipulates as follows: “Written request constitutes first document in
action - If no summons is issued in an action the written request referred to in sections
57(2) and 58(1) shall constitute the first document to be filed in the action and shall contain
the particulars prescribed in the rules.”
9.3 Rule 4(1) (a) of the Magistrates Courts Act (MCA) governs the contents of the letter of
demand and reads as follows: “The letter of demand referred to in sections 57 and 58 shall
contain particulars about the nature and the amount of the claim.”
49
9.4 There is no specific format prescribed for the letter of demand in the Act. In terms of rule
4(1)(a) of MCA the letter of demand must be in writing and shall contain particulars
regarding the nature and the amount of the claim. Note the legislature’s specific use of the
word “shall” and not “may”. The information in the letter of demand must therefore enable
the debtor to identify the creditor and the claim and place the judgment debtor in a position
to make an informed decision whether to defend the matter or accede to the claim in terms
of section 57 or 58.
9.5 It occurs often that a debt is ceded to a professional debt-collector who now issues the
letter of demand in its own name. The debtor will most likely have no idea who the
creditor is, and it is for this reason that the letter of demand must make mention of the fact
that the cause of action is a cession by the original creditor to the debt-collecting agency.
Who the original creditor is must therefore be clear upon a simple reading of the letter of
demand. The date and manner (oral or in writing) of cession should also be reflected.
9.6 The new rule 4(1)(b) of MCA, adds a further requirement where the National Credit Act is
applicable which reads as follows: “Where the original cause of action is a credit
agreement under the National Credit Act, 2005, the letter of demand referred to in section
58 of the Act must deal with each one of the relevant provisions of sections 129 and 130
of the National Credit Act, 2005, and allege that each one has been complied with.”
9.7 The allegations a credit provider will have to make to comply is referred to in the default
judgment checklist infra
9.8 When judgment is requested in terms of this procedure the clerk of the court or
magistrate should be able to determine the cause of action from the contents of the letter
of demand. The consent to judgment does not constitute a new separate cause of
action. The application for judgment is based on the cause of action stated in the letter of
demand or the summons African Bank v Additional Magistrate Myambo NO and others .
See (Resource 41.6)
10 DELIVERY AND SERVICE OF THE LETTER OF DEMAND IN TERMS OF SECTIONS
57 & 58
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10.1 There is some uncertainty regarding the question whether the letter of demand has to be
received by the judgment debtor by registered post or whether an acknowledgment, of
receipt of the letter, by the judgment debtor will suffice. The reason for this is the wording
of section 56 of MCA which reads as follows: “If any person (in this section called the
debtor) pays any debt due to him to any other person (in this section called the creditor)
after the creditor has caused a registered letter of demand to be sent to the debtor
through an attorney demanding payment of the debt, the creditor shall be entitled to
recover from the debtor the fees and costs prescribed in the rules for a registered letter
of demand: Provided that the amount of such fees and costs was stated in the letter of
demand.”
10.2 The fact that the section specifically refers to a registered letter of demand created this
uncertainty. Because of this it is argued that the letter of demand in terms of section 57
and 58 should be registered. This argument does however not hold water.
10.3 If it was the intention of the legislature that the letter of demand could only be sent by
registered post, sections 57(1) and 58(1) would have referred to a “registered” letter of
demand and not just a letter of demand as it currently reads. In section 57(1)(d) the
legislator states that the debtor must be notified by registered letter of the acceptance of
his offer. In terms of sections 57(3) and 58(2) the absent debtor must be informed by
registered letter of the judgment against him/her. The question to be asked is why would
the legislator refer in three different instances to a registered letter of demand and neglect
to do so in sections 57(1) and 58(1)? The provisions of sections 57 and 58 are clear and
unambiguous. It refers to a letter of demand and the ordinary meaning thereof does not
include a registered letter of demand. If the legislators’ intention was for the letter of
demand to be registered, it would specifically have referred to a registered letter of
demand in sections 57(1) and 58(1).
10.4 It is clear from the wording of section 56 of MCA that it only refers to the cost-aspect of the
letter of demand. It is interesting to note however that although section 60(1) of the
Magistrates Courts Act which reads as follows: “Unless expressly otherwise provided in
this Act or the Rules and subject to the provisions of section 19 of the Debt Collectors Act,
114 of 1998, See (Resource 41.25) no person other than an attorney or an agent referred
51
to in section 22 shall be entitled to recover from the debtor any fees or remuneration in
connection with the collection of any debt.”
10.5 This section states that no person other than an attorney or a debt collector registered in
terms of the Debt Collectors Act, shall be entitled to recover any fees from the debtor,
section 56 allows a creditor – that would include a private litigant – to claim the fees and
costs pertaining to the letter of demand but only if the letter was
(a) sent through an attorney,
(b) by registered post and
(c) the amount of such fees and costs were stated in the letter of demand. The costs of the
registered letter of demand under section 56 are included under - Undefended Actions -
Item 1 of Part 2 of Table A of Annexure 2 of MCA.
10.6 The creditor is therefore not obliged to make use of a registered letter of demand, however,
should he/she want costs for the letter of demand there “shall” be compliance with all three
requirements set out supra. If the debtor was handed the letter of demand personally, a
creditor cannot claim the fees of the letter of demand.
10.7 Rule 2(1) of MCA also now defines “default judgment” as a judgment entered or given in the
absence of the party against whom it is made and will include section 57 and 58 judgments
(Section 58A). “Deliver” (except when a summons is served on the opposite party only, and
in rule 9 of MCA means to file with the registrar or clerk of the court and serve a copy on the
opposite party either by hand-delivery, registered post, or, where agreed between the
parties or so ordered by court, by facsimile or electronic mail (in which instance Chapter III,
Part 2 of the Electronic Communications and Transactions Act, 25 of 2002 See (Resource
41.26) will apply), and "delivery", "delivered" and "delivering" have corresponding meanings.
It would therefore have to be clear from the letter of demand or from another document that
the parties agreed to delivery by facsimile or electronic mail.
10.8 The sequence in which the letter of demand is received is also of the utmost importance.
Section 57(1) reads “if any person has received a letter of demand” and section 58 to “if any
person upon receipt of a letter of demand”. That is receipt of the letter of demand before
signing of the admission of liability in terms of section 57 or consent to judgment in terms of
52
section 58. If the letter of demand is received by the debtor after the signing of the
admission of liability or the consent to judgment, there is non-compliance with the sequential
requirements of the sub-sections and judgment cannot be granted.
10.9 The date on which the admission of liability or the consent to judgment was signed as well
as the date of receipt of the letter of demand must be verified. If both occurred on the same
day and there is no time reflected on any of the documents, it is normally accepted that the
sequential requirements had been adhered to and letter of demand received first.
10.10 The letter of demand may sometimes refer to a period within which payment of the debt
must take place, for example 30 days from receipt of the letter of demand. The admission of
liability or the consent to judgment can therefore not be signed before this period has lapsed,
unless there is a clear waiver of the period by the judgment debtor.
11. THE NOTICE IN TERMS OF SECTION 129 OF THE NATIONAL CREDIT ACT
11.1 Cognisance should also be taken of the provisions of section 129 of the National Credit Act
which stipulates that if the consumer is in default under a credit agreement, and before
commencement of any legal proceedings in order to enforce the agreement, the credit
provider must deliver a notice to the consumer/judgment debtor. The credit provider may not
enforce the credit agreement and therefore approach the court for remedies unless at least
10 business days have lapsed since delivery of the notice, and the consumer has been in
default for at least 20 business days. The two periods may run concurrently.
11.2 This section provides: -
129. Required procedures before debt enforcement.
(1) If the consumer is in default under a credit agreement, the credit provider—
(a) may draw the default to the notice of the consumer in writing and propose
that the consumer refer the credit agreement to a debt counsellor, alternative
dispute resolution agent, consumer court or ombud with jurisdiction, with the
intent that the parties resolve any dispute under the agreement or develop
and agree on a plan to bring the payments under the agreement up to date;
53
and
(b) subject to section 130 (2), may not commence any legal proceedings to
enforce the agreement before—
(i) first providing notice to the consumer, as contemplated in paragraph ( a),

or in section 86 (10), as the case may be; and
(ii) meeting any further requirements set out in section 130.
(2) Subsection (1) does not apply to a credit agreement that is subject to a debt
restructuring order, or to proceedings in a court that could result in such an order.
(3) Subject to subsection (4), a consumer may—
(a) at any time before the credit provider has cancelled the agreement re-instate a
credit agreement that is in default by paying to the credit provider all amounts
that are overdue, together with the credit provider’s permitted default charges
and reasonable costs of enforcing the agreement up to the time of re-
instatement; and—
(b) after complying with paragraph (a), may resume possession of any property
that had been repossessed by the credit provider pursuant to an attachment
order.
(4) A consumer may not re-instate a credit agreement after—
(a) the sale of any property pursuant to
(i) an attachment order; or
(ii) surrender of property in terms of section 127;
(b) the execution of any other court order enforcing that agreement; or
(c) the termination thereof in accordance with section 123.
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11.3 Section 129(3) and (4) has been amended and a subsection (5), (6) and (7) were added on
19 May 2014; which only came into operation on 13 March 2015. This section provides
Section 129 (3) Subject to subsection (4), a consumer may at any time before the credit
provider has cancelled the agreement, remedy a default in such credit
agreement by paying to the credit provider all amounts that are overdue,
together with the credit provider’s prescribed default administration
charges and reasonable costs of enforcing the agreement up to the
time the default was remedied.
Section 129 (4) A credit provider may not re-instate or revive a credit agreement after—
(a) the sale of any property pursuant to
(i) an attachment order; or
(ii) surrender of property in terms of section 127;
(b) the execution of any other court order enforcing that agreement; or
(c) the termination thereof in accordance with section 123.
Section 129 (5) The notice contemplated in subsection (1)(a) must be delivered to
the consumer—
(a) by registered mail; or

(b) to an adult person at the location designated by the consumer.
(6) The consumer must in writing indicate the preferred manner of delivery contemplated in
subsection (5).
(7) Proof of delivery contemplated in subsection (5) is satisfied by—
(a) written confirmation by the postal service or its authorised agent, of delivery to the
55
relevant post office or postal agency; or
(b) the signature or identifying mark of the recipient contemplated in subsection (5)(b).’’
11.4 The effect of the amendment to these sections were discussed extensively in Nkata v
FirstRand Bank Ltd 2016 (4) SA 257 (CC) See (Resource 41.27) at paragraphs 92 to 105.
The effect of this amendment is that instead of a consumer being able to ‘reinstate’ a credit
agreement, the consumer may now remedy a default; Section 129(4) amendment provides
for the substitution of the word ‘consumer’ with ‘credit provider’. Consequently, a credit
provider, rather than a consumer is afforded the ability to reinstate or revive a credit
agreement, save in the specific instances which were indicated in subsection (a) – (c). These
sections apply fully to pre-existing credit agreements from the effective date; 13 March 2015.
11.2 The date upon which legal proceedings had commenced is also very important. If the
summons was issued or Section 57 or 58 of MCA proceedings commenced with on or before
31 May 2007, it is not necessary to deliver a Section 129 notice. On or after 1 June 2007 a
Section 129 notice would have had to be delivered beforehand. It would therefore, because
of date on which the full application of the National Credit Act commenced and the time limits
prescribed not have been practically possible to commence legal proceedings before 2 July
2007. Processes issued between 1 June and 1 July 2007 would therefore have been
premature and could not be rectified by the delivery of a Section 129 notice after the fact.
11.3 The content of the Section 129 notice is also strictly prescriptive, African Bank v Additional
Magistrate Myambo NO and others . See (Resource 41.2) By virtue of Section 129(1)(b) the
credit provider’s cause of action is not complete unless the Section 129-notice has been
given. It must draw the default under the credit agreement to the notice of the consumer and
propose that the consumer refer the credit agreement to a debt counsellor, alternative
dispute resolution agent, consumer court or ombud with jurisdiction, with the intent that the
parties resolve any dispute under the agreement or develop and agree on a plan to bring the
payments under the agreement up to date. The notice must also inform consumer that the
credit agreement may be referred to the NCR for Debt Intervention. (National Credit
56
Amendment Act, 7 of 2019 See (Resource 41.24) that came into operation on 19 August
2019) If any of the above allegations are lacking there is non-compliance with section 129.
Such a defect is fatal and cannot be rectified after the fact by delivering a fresh notice unless
the court has made an order in terms of section 130(4)(b)(ii) of NCA setting out what steps a
credit provider must take before resuming the matter. It’s probably better for a credit
provider/plaintiff to withdraw the legal proceedings formally with notice to the consumer and
to commence afresh proceedings. The notice required by Section 129 constitutes a “legal
notice” as contemplated in Section 96(1) of NCA which states: “Whenever a party to a credit
agreement is required or wishes to give legal notice to the other party for any purpose
contemplated in the agreement, this Act or any other law, the party giving notice must deliver
that notice to the other party at-
(a) the address of that other party as set out in the agreement, unless paragraph (b) applies;
or
(b) the address most recently provided by the recipient in accordance with subsection (2).”
11.4 The credit provider will have to prove delivery of the notice to the consumer by means of
credible testimony as there is an onus on the credit provider to prove that it has complied with
Section 129 of NCA, in that the notice was given to the consumer. Absa Bank Ltd v
Prochaska 2009 (2) SA 512 (D)) See (Resource 41.28)
11.5 In the unreported decision of Imperial Bank v Kubeka delivered on 04/02/2010 Case Number
28713/08 See (Resource 41.29) (North Gauteng) it was held that the contents of the notice
should come to the actual knowledge of the consumer as its purpose is to inform the
consumer of his/her rights. You can only assert your right when you know of it.
11.6 In the decision of First Rand Bank Ltd v Dhlamini 2010 (4) SA 531 (GNP) See (Resource
41.30) it was held that in terms of the wording of the section, it’s not whether the notice had
been "delivered" to the consumer, but rather whether the credit provider had "drawn the
default to the notice of the consumer in writing". Compliance with section 129 of NCA
requires that notice of any default by the consumer be brought to his actual attention; and
that failure on the part of the credit provider to do so will bar the institution of legal
proceedings with the result that any action instituted before then will be premature.
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11.7 In Starita v ABSA Bank Limited 2010 (3) SA 443 (GSJ) See (Resource 41.31 ) it was held
that the section 129(1) notice need not be actually received by the consumer. It is sufficient
that it was sent by registered post to the domicilium address.
11.8 In ABSA v Mkhize and another [2012] ZAKZDHC 38 See (Resource 41.32) the Court held
that other options in terms of Section 65(2) of NCA are to be exercised if registered letter
was not collected or was returned. This section provides, if no method of service is
prescribed, be delivered to the consumer in person at the business premises of the credit
provider or at any other location designated by the consumer but at the consumer's expense,
or by ordinary mail, by fax, by email or by printable web-page. A notice in terms of Section
168 of NCA will have been properly served when it has been either delivered to that person
or sent by registered mail to that person’s last known address. In terms of Regulation 1 of
NCA “delivered” is defined as “sending a document by hand, by fax, by e-mail or by
registered mail to an address chosen in the agreement or the recipient’s registered address”.
11.9 In Nedbank limited v Binneman [2012] ZAWCHC 141, See (Resource 41.33) the court held
that the requirement necessary for the section 129 notice was the requirement of posting per
registered mail and proof of reaching the post office.
11.10 The Constitutional Court in Sebola and Another v Standard Bank of South Africa and Another
2012 (5) SA 142 (CC) See (Resource 41.34) found that the National Credit Act represents a
clean break from past legislation and bears very little resemblance to its predecessors. The
purpose of this compulsory notice in terms of Section 129 of NCA was to promote non-
litigious methods of resolving consumer defaults and a gateway provision or new litigation
layer to the enforcement process. Section 130 imposes on the credit provider the obligation
to “deliver” the notice. This requires of the credit provider to establish, to the satisfaction of
the court that it has delivered a notice to the consumer as contemplated in Section 129 of
NCA to the address stipulated by the consumer in the credit agreement. Dispatch of the
notice must at the very least be effected by registered mail. This is however not enough
because of the high significance of the notice and the plain wording of Section 129 of NCA,
which requires that the notice come to the attention of the consumer. The credit provider
must make averments that will satisfy the court that reasonable measures were taken to
bring the notice to the attention of the consumer and that the notice, on a balance of
probabilities, reached the consumer as required by Section 129(1) of NCA.
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11.11 In practical terms this means that the credit provider must obtain a post-dispatch “track and
trace” print-out from the post office. The credit provider’s particulars of claim to the summons
or where Sections 57 & 58 of the MCA is pursued – the letter of demand – will have to allege
that the notice was delivered to the relevant post office and that the post office would, in the
normal course, have secured delivery of the registered item notification slip, informing the
consumer that a registered article was available for collection, that notification of its arrival
reached the consumer and that a reasonable consumer would have ensured retrieval of the
item from the post office.
11.12 The Constitutional Court, in the matter of Kubyana v Standard Bank of South Africa Ltd (CCT
65/13) [2014] ZACC 1 See (Resource 41.35) (20 February 2014) held that whilst a credit
provider must take certain steps to ensure that a consumer is adequately informed of their
rights, such a credit provider cannot be non-suited or hamstrung if the consumer
unreasonably fails to engage with or make use of the information provided. Consumers should
receive the full benefit of the protections afforded by the NCA, but the noble pursuits of that
statute should not be open to abuse by individuals who seek to exercise those protections
unreasonably or in bad faith.
11.13 The court found that the Act prescribes obligations which credit providers must discharge in
order to bring section129 notices to the attention of consumers. When delivery occurs
through the postal service, proof that these obligations have been discharged entails proof
that—
11.12.1 the section 129 notice was sent via registered mail and was sent to the correct
branch of the Post Office, in accordance with the postal address nominated by the
consumer. This may be deduced from a track and trace report and the terms of the
relevant credit agreement;
11.12.2 the Post Office issued a notification to the consumer that a registered item was
available for her collection;
11.12.3 the Post Office’s notification reached the consumer. This may be inferred from the fact
that the Post Office sent the notification to the consumer’s correct postal address,
which inference may be rebutted by an indication to the contrary; and
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11.12.4 a reasonable consumer would have collected the section 129 notice and engaged with
its contents. This may be inferred if the credit provider has proven (a)-(c), which
inference may, again, be rebutted by a contrary indication: an explanation of why, in
the circumstances, the notice would not have come to the attention of a reasonable
consumer.
11.14 If the matter is contested and consumer submits that the notice did not reach her, the court
must establish the truth of the claim. If the court finds that the credit provider has not complied
with section 129(1), it must in terms of section 130(4)(b) adjourn the matter and set out the
steps the credit provider must take before the matter may be resumed.
12 CAN THE LETTER OF DEMAND IN TERMS OF SECTIONS 57 OR 58 AND NOTICE IN

TERMS OF SECTION 129 BE COMBINED IN ONE DOCUMENT AND ARE THEY
COMPARABLE?
12.1 The finding of the court in Sebola and Another v Standard Bank of South Afric See (Resource
41.34) a and Another makes it clear that it cannot for the following reasons:
12.1.1 The letter of demand as requirement applies to all judgments sought in terms of Sections
57 or 58 of the MCA. The NCA Section 129 notice applies only to credit agreements
where debt enforcement by repossession or judgment is sought.
12.1.2 The legislature’s intention in respect of both documents differs. The letter of demand is a
requirement of both Sections 57 and 58 as a remedy, where no summons was issued,
and its purpose is to inform the defendant about the amount of the claim, the nature
thereof and that the defendant is in default, so that the defendant can make an informed
decision whether to adhere to or oppose the claim.
12.1.3 Although the Section 129 notice also informs the consumer of his/her default the
intention of the legislature here is clearly different to that of a letter of demand. The
section 129 notice promotes non-litigious methods of resolving consumer defaults and
the laudable purpose of avoiding litigation where possible. The delivery of the section
129 notice is a precondition for cancellation of a credit agreement in terms of the
National Credit Act. The consumer must further be specifically informed of and referred
to consumer bodies to assist him/her to resolve any dispute under the agreement or
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develop and agree to a plan to bring arrear payments up to date. The notice must also
inform consumer that the credit agreement may be referred to the NCR for Debt
Intervention. (National Credit Amendment Act, 7 of 2019 that came into operation on 19
August 2019)
12.1.4 Notice periods applicable to the documents also differ significantly. The letters of
demand in terms of Sections 57 and 58 requires no notice period which is why it is
convenient for plaintiff’s to request defendants to sign an admission of liability in terms of
Section 57 or a consent to judgment in terms of Section 58 immediately after receiving
the letter of demand.
12.1.5 Section 129 of the National Credit Act read together with Section 130(1) makes it clear
that a credit provider/plaintiff will not be entitled to commence legal proceedings unless
10 (ten) business days has lapsed since delivery of the notice and the consumer had
been in default for at least 20 (twenty) business days. The periods can run concurrently.
It is therefore not possible to sign an admission of liability in terms of Section 57 or
consent to judgment in terms of Section 58 immediately after receiving the Section 129
notice. The consumer can also very importantly NOT waive the time periods whether
orally or in writing prescribed by the Act. Section 90(2)(b) of the National Credit Act)
12.1.6 Section 59 stipulates that if no summons is issued in an action the written request
referred to in sections 57(2) and 58(1) shall constitute the first document to be filed in the
action and shall contain the particulars prescribed in the rules. Legal proceedings
therefore only commences when the letter of demand in terms of sections 57(1) or 58(1)
is delivered. Section 129 of the National Credit Act read together with Section 130(1)
makes it clear that a credit Provider /plaintiff will not be entitled to commence legal
proceedings unless 10 (ten) business days has lapsed since delivery of the section 129
notice.
12.2 It is therefore not possible to combine the letter of demand in terms of sections 57(1) or
58(1) with the section 129 notice into one document.
13 COMPLIANCE WITH SECTION 130(3) OF THE NATIONAL CREDIT ACT
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13.1 Section 130(3) provides that, despite any provision of law or contract to the contrary the court
may determine the matter only if the court is satisfied that –
13.1.1 in the case of proceedings to which sections 127, 129 or 131 apply, the procedures
required by those sections have been complied with;
13.1.2 there is no matter arising under that credit agreement, and pending before the
Tribunal that could result in an order affecting the issues to be determined by the court;
and
13.1.3 that the credit provider has not approached the court during the time that the matter
was before a debt counsellor, alternative dispute resolution agent, consumer court or
the ombud with jurisdiction;
13.2 Compliance with the provisions of Section 130(3) is a prerequisite to the enforcement of a
debt and peremptory, leaving the court no discretion or deviation. If a credit provider
approaches the court at a time at where the consumer is not yet in default for 20 (twenty)
business days, the court cannot determine the matter because it is premature. The same
applies where the credit provider approaches the court during the 10 (ten) business days
before receiving the consumer’s response to a Section 129(1)(a) notice. It would therefore
have to be clear from the papers before court and upon credible evidence that the time limits
have been complied with and that no matter is pending before the Tribunal or a debt
counsellor. These allegations will have to be contained in the letter of demand in terms of rule
4(1)(a) and the credit provider (not the attorney) will have to submit an affidavit indicating
compliance in terms of rule 12(6A) before judgment can be granted. In African Bank v
Additional Magistrate Myambo NO See (Resource 41.6) and others supra various other
allegations that should be contained in the letter of demand or summons to make out a proper
cause of action are discussed and referred to in a default judgment checklist infra.
14 CATEGORIES OF CREDIT AGREEMENTS
14.1. In terms of Section 9(1) every credit agreement is characterised as a small agreement, an
intermediate agreement, or a large agreement. A credit agreement can also comprise a short
term credit transaction as stipulated by regulation 39(2) of NCA.
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14.2 SMALL AGREEMENTS
14.2.1 A credit agreement is a small agreement if it is
1. a pawn transaction of any amount;

2. a credit facility and the credit limit under that facility is at or below the lower of the
thresholds (R15 000.00) established in terms of Section 7(1)(b) of NCA ) or
3. any other credit transaction (except a mortgage agreement or a credit guarantee) and the
principal debt under that transaction or guarantee falls at or below the lower of the
thresholds
established in terms of Section 7(1)(b).
14.3 SHORT TERM CREDIT TRANSACTIONS
14.3.1 A short term credit transaction refers to a
1. Credit transaction
- in respect of a deferred amount at the inception of the agreement not exceeding R8000.00
and
- in terms of which the whole amount is repayable within a period not exceeding 6 months and
- interest is charged at 5% per month to a maximum of 30% over the 6 months’ period and
not 60% per annum. A decision by the National Consumer Tribunal, which carries the same
weight as a High Court, delivered on 21/04/2010 Case number NCT/255/2009/138, Motsitsi v
ABSA Bank & Others See (Resource 41.36) held that an agreement to pay interest at 60%
per annum constituted an illegal
agreement.
- in terms of which an amount of money was disbursed to the consumer to be utilized at the
sole
discretion of the consumer and
1 includes a pawn transaction of any amount
2. but does not include a credit transaction in respect of which the agreement is conditional
upon
- the amount deferred being paid by the credit provider directly or
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- indirectly to a person or juristic person that is related to the credit provider or
- the amount deferred being paid by the credit provider to a person or juristic person other than
- a consumer, except where such condition is introduced by the consumer.
14.4 INTERMEDIATE AGREEMENTS
14.4.1 A credit agreement is an intermediate agreement if it is
1. a credit facility and the credit limit under the facility falls above the lower of the thresholds
(R15 000.00) established in terms of Section 7(1)(b); or
2. any credit transaction (except a pawn transaction, a mortgage agreement or a credit
guarantee) and the principal debt under that transaction or guarantee falls between the
thresholds
(R15 000.00 to R250 000.00) established in terms of Section 7(1) (b).
14.5 LARGE AGREEMENTS
14.5.1. A credit agreement is a large agreement if it is
1. a mortgage agreement; or
2. any other credit transaction (except a pawn transaction or a credit guarantee) and the principal
debt under that transaction or guarantee falls at or above the higher of the thresholds
(R250 000.00) established in terms of Section 7(1)(b) of NCA.
14.5.2 The distinction is important since certain provisions of the Act apply to all credit agreements,
while
others apply only in respect of small, intermediate or large agreements respectively.
15 EXEMPTION OF PUBLIC INTEREST CREDIT AGREEMENTS
15.1 In terms of Section 11 of NCA the Minister may declare that credit agreements entered into in
specified circumstances, or for specified purposes, during a specific period are public interest credit
agreements.
15.2 A public interest credit agreement is exempt from the application of part D of Chapter 4 to the
extent that it concerns reckless credit. (Section 11(5)).
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16 PRE-AGREEMENT STATEMENT AND QUOTATIONS
16.1 A credit provider is obliged to furnish a consumer who is considering entering into a credit
agreement with a pre-agreement statement and quotation.
16.2 The quotation contained in this document will be binding for a period of 5 business days. After the
expiry of the 5 business days the quotation will be binding at the discretion of the credit provider.
Should the terms differ, a new pre-agreement statement and quotation is required. In calculating
the 5 business days, the first day, public holidays and weekends are excluded. The last day is
included. The consumer may elect to enter into the credit agreement immediately after receiving
the pre-agreement statement and quotation or may elect to wait until a later date.
17 APPLICABILITY TO SMALL AGREEMENTS
17.1 A credit provider is obliged to furnish a consumer entering into a small agreement with a
prescribed pre-agreement statement and quotation.
17.2 The prescribed statement:
1. May be contained in one or two separate documents.

2. Must be in the format set out in Form 20.2 of the regulations.
3. Must be signed by both a representative of the credit provider and the consumer.
17.3 The statement must contain a summary of:
1. The credit advanced or the value of the goods

2. Deposit payable
3. Individual instalment amount
4. Number of instalments
5. Type of instalment e.g. weekly
6. Total amount of all instalments
7. Annual rate of interest
8. Initiation fee
9. Monthly service fee (to be included in the instalment)
10. Credit life insurance (to be included in the instalment)
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17.4 Payment arrangements
1. Method of payment
2. Date of first payment
3 Date of last payment
17.5 Additional information
17.5.1 Additional charges as provided for in Section 102 (b) – (g) of NCA
1. the cost of an extended warranty agreement;

2. delivery, installation and initial fuelling charges;
3. connection fees, levies or charges;
4. taxes, licence or registration fees; or
5. credit insurance premiums
17.5.2. Optional items
1. This will include optional insurance as well as other options that may be included in the
agreement provided security provided
2. Further significant information about the rights and obligations of the consumer. Section 106
governs the payment of any credit insurance premiums.
3. Within business 5 days after the presentation of the quotation the consumer may enter into a
credit agreement. The interest rate or credit cost of the agreement must be: at the quoted rate;
or at a lower rate.
4. In terms of Section 93 (2) of NCA a document that records a small credit agreement must be in
the prescribed form. The prescribed form is Form 20.2. In the case of agreements that originate
telephonically or electronically the consumer must be supplied with a copy of the document
within a reasonable time. The Minister may prescribe different forms to be used for small
agreements that are categorized as: developmental credit agreements; and other credit
agreements.
5. According to regulation 30(1) of NCA a small credit agreement must contain all the information
reflected in Form 20.2. Form 20.2 makes provision for the following information.
6. The type of agreement
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1. The credit provider’s
i. Name
ii. National Credit Regulator Registration Number
iii. Physical address
iv. Contact number
2 The consumer’s
i. Name
ii. Identity number/CIPRO or other official number
iii. Physical address
iv. Contact number
3 Payment schedule
4 Security (If applicable)
5 Payments
6 Insurance
7 Statements
8 Default administration costs
9 Reasonable rental that can be charged (if applicable)
10 Consumer’s right to rescind (if applicable)
11 Early settlement
12 The right to terminate the agreement by the consumer or Credit Provider
13 Obligation to disclose the location of the goods (if applicable)
14 Surrender of goods (if applicable)
15 Addresses for receiving of documents
16 Penalty interest on arrear amounts
17 Marketing option and annual increases
18 Reduction of credit limit (if applicable)
19 Date
20 Where the agreement was signed
21 Signature of: - Consumer and Credit Provider
18 APPLICABILITY TO INTERMEDIATE AND LARGE CREDIT AGREEMENTS
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18.1. A credit provider must not enter into an intermediate or large credit agreement unless the credit
provider has given the consumer- a pre-agreement statement- in the form of the proposed
agreement; or in another form addressing all matters required in terms of Section 93 of NCA;
and a quotation in the prescribed form, Form 20.1, setting out
18.1.1 the principal debt,
18.1.2. the proposed distribution of that amount,
18.1.3. the interest rate and other credit costs,
18.1.4. the total cost of the proposed agreement, and
18.1.5. the basis of any costs that may be assessed under Section 121 (3) of NCA if the consumer
rescinds the contract.
18.2 The quotation may be set out in Form 20 if the credit provider provides both small and
intermediate
credit agreements with similar features. It may also be in a differing format if it complies with the
requirements of regulation 29 (1) (c) and (d).
18.3 Regulation 29 (1) (c) requires that the “quotation” must appear in bordered text box marked
“Quotation”
18.4 Regulation 29 (1)(d) of NCA requires that the following information be disclosed in the
“quotation”:
principal debt, proposed distribution of the principal debt, other ongoing credit costs, service fee
and when payable, initiation fee, rand value of interest, residual or final amount payable (if any),
total cost of the proposed agreement, annual interest rate, basis for costs payable under
Section 121(3)(b)(i) of NCA [costs of returning goods to the credit provider], basis for rental
costs under Section 121(3)(b)(i) of NCA , number of instalments and instalment amount.
19 RULE 12(5) & (7) AND UNDERLYING CAUSES OF ACTION
19.1. If the request for judgment in terms of section 57 or 58 of MCA and accompanying documents
are in order, the clerk of the court shall not enter judgment for the amount for which the debtor
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admitted liability or the outstanding balance of the amount and costs. In terms of rule 12(7) the
clerk of the court may refer any request for judgment to court.
19.2 According to Jones and Buckle The Civil Practice of the Magistrates Courts in South Africa ninth
edition Vol. 1 243, the wording of section 57(2) and section 58(1) is peremptory and the clerk of
the court must not enter judgment even if the request is in order. The clerk of the court must
refer the request for judgment to court in terms of rule 12(7).
19.3 Pretorius Burgerlike Prosesreg in the Landdroshowe, Vol. 1 403, is of the opinion that section
57(2) and section 58(1) should not be interpreted in such a way that the clerk of the court has
no discretion to refer a request for judgment in terms of section 57 or 58 to court. Jones and
Buckle’s approach therefore no longer holds water.
19.4. It is further to be remembered that the request for judgment, albeit in terms of section 57 or 58,
is and remains a request for judgment by default. Section 59 of the Magistrates Courts Act
stipulates that if no summons is issued in an action the written request referred to in Sections
57(2) and 58(1) shall constitute the first document to be filed in the action. Rule 12, although
referring to a summons, cannot be read in isolation without the provisions of Rule 11. Rule
11(6) stipulates that the granting of any judgment by consent is subject to the provisions of
Section 58 and Rule 12(7). This is confirmed in the decision of African Bank v Additional
Magistrate Myambo NO See (Resource 41.6) and others supra. Judge Poswa in his minority
judgment goes so far as to state that it is a matter of great concern to him that magistrates,
depends entirely on the decision of the clerk of the court, in the sense, that it is only after the
clerk of the court has deemed it fit to refer the application for consent judgment to a magistrate
that a magistrate can intervene. He is further concerned that a number of clerks may not refer
matters to the magistrates’ simply because they are overwhelmed by the process, or too busy
to give the matters the attention it requires and not mindful of the importance of compliance,
with the provisions of the National Credit Act, by credit providers. He also refers to the number
of instances in the majority judgment in which the clerk of the court must refer the request to
court and is of the view that it would be inappropriate to merely order that the clerk of the court
“may” refer the request to magistrates but rather that in most instances where the National
Credit Act is applicable clerks must refer the requests to the magistrates.
19.5 The magistrate may then, in exercising a judicial discretion, in terms of Rule 12(7)(a) request
further information in the form of a query to the plaintiff including a request to file the original
underlying written agreement to establish whether there was compliance with the National
69
Credit Act or other legislation. In the unreported decision of SA Permanent Building Society v S
U D Meer supra at page 6 of the typed judgment the following was held: “… the court has a
discretion to grant a judgment by default …. In an appropriate case the court is always entitled
to call for further information before granting judgment. That is a faculty it possesses to enable
it to exercise its discretion. Where suspicions of breach exist or even where the court wishes to
make a random check, the court could call upon the creditor or moneylender to furnish
accounts in proof of the claim.”
19.6 In African Bank v Additional Magistrate Myambo NO See (Resource 41.6) and others
supra at it was held that magistrates are entitled to interrogate the application for judgment
and may require proof by the plaintiff of any fact or document pertaining to the underlying
agreement under the National Credit Act. Clerks of the court and magistrates may even
require proof by plaintiff of any fact or document so as to enable the clerk of the court or
the court to determine whether the granting of credit in question was an instance of
reckless credit or not.
19.7. Where reckless credit becomes an issue clerks of court must however refer such a request for
judgment to court. A credit provider can prevent this by alleging in the letter of demand or
summons that a credit assessment as required by section 81(2) had been conducted before the
credit agreement was entered into and that the credit agreement is not reckless as provided for
in section 80(1).
19.8 Rule 12(5) as amended on the 15th of October 2010 reads as follows: “The registrar or clerk of
the court shall refer to the court any request for judgment on a claim founded on any cause of
action arising out of or based on an agreement governed by the National Credit Act, or the
Credit Agreements Act, 1980 (Act No. 75 of 1980), and the court shall thereupon make such
order or give such judgment as it may deem fit.”
19.9 All default judgments founded on any action arising out or based on an agreement governed by
the National Credit Act including section 57 and 58 judgments must now be referred to a
magistrate for consideration.
20 REGULATION OF INTEREST, COSTS AND FEES
20.1 The National Credit Act limits amounts claimed by the credit provider claiming fees, charges,
interest and items from the consumer. A credit provider must not charge the consumer a credit
fee or charge prohibited by the Act. (Section 100(1)(a)) of NCA In addition a creditor provider
70
must not charge a consumer a higher price for any goods or services than the price charged
by that credit provider for the same or substantially similar goods or services in the ordinary
course of business on the basis of a cash transaction. (Section 100(2)) of NCA
21 WHAT CAN THE CREDIT PROVIDER RECOVER?
21.1 The credit provider may recover the following: - the principle debt, interest, a service fee, an
an initiation fee, administration charges after default collection costs, cost of certain services
where the credit provider acts as an agent for the consumer for example: - credit insurance,
extended warranty, delivery, installation and initial fuelling charges, connection fees, levies or
charges, - taxes, licence or registration fees
21.2. When the credit provider acts as an agent for the consumer to acquire certain services, fees
are
claimable. The actual amount for the service itself can be charged for, not an inflated amount
which includes commission.
22 MEANING OF PRINCIPLE DEBT
22.1 The principle debt will be inclusive of for example the actual selling price of a motor vehicle
amounting to R300 000.00, plus costs of an extended warranty and licence or registration fees
if applicable, an initiation fee, service fee, interest minus any amount that is paid in settlement
such as a deposit.
23 MEANING OF DEFERRED AMOUNT
23.1 Means re-payment is deferred for later. This amount consists of the principal debt, and may
include initiation fee, service fee, interest, insurance, administration charges, collection costs,
extended warranty, delivery, installation and initial fuelling charges, taxes, licences and
registration fee, credit insurance less any amount paid in settlement or credited to the deferred
amount. Regulation 39) of NCA See (Resource 41.37)
24 MEANING OF INITIATION FEE
24.1. Are costs incurred in initiating a credit agreement and charged by the credit provider?
24.2. It can form part of the principle debt or be paid separately.
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24.3 It can only be claimed if there is a credit agreement with the consumer.
(Section 101(b)(ii))
24.4 The initiation fee must not exceed the prescribed limits. (Section 101(b)(i))
24.5 The initiation fee must not exceed 15% of the principle debt. (Regulation 43(3))
24.6 Can be levied on the date stipulated in the agreement but not earlier than the date of
approval of the credit application.
24.7. With one exception no initiation fee can be charged on a new credit agreement
replacing an existing one in part or whole where the parties are the same. (Regulation
43(2) & section 101(2))
24.8. However, an initiation fee can be charged when registering a new mortgage bond in
transfer from one credit provider to another at the request of the consumer and with
disclosure of the fee. (Regulation 43(1))
25 MEANING OF INTEREST RATE
25.1. Interest is the amount that a credit provider charges a consumer on the outstanding balance
of a credit agreement. This amount is calculated by the credit provider using a percentage,
which is called the interest rate. This interest rate must be reflected on the credit agreement
that the consumer signs at the time of entering into a credit agreement. The Act regulates
interest rates by specifying maximum interest rates that credit providers may charge
consumers for various credit agreements. Refer to the table below for the maximum interest
rates that the Act has specified.
25.2. Ensure that the interest rate claimed on the summons is the same as in the agreement; know
the difference between contractual interest and prescribed rate of interest.
26 MEANING OF REGULATION OF INTEREST
26.1 interest is expressed as a percentage

26.2 interest is expressed as an annual rate
26.3 interest may not exceed the maximum prescribed rate. (Section 101(1)(d))
26.4 no penalty interest allowed therefore interest claimed on overdue payments or
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default must not exceed the highest rate applicable to any part of the principle debt.
(Section 103(1))
26.5 interest is debited only at the end of the day when the charge applies and can be
calculated daily. (Section 103(3))
26.6 Interest chargeable or debited at any time after the day to which it applies (Section
103(2)) and can be added to the deferred amount at the end of the month or on the
agreed date. Interest may not be added more than once in every month.
(Regulation 40 (1)(a)(iii). However, it can be added to the deferred amount at an
interval longer than a month.
26.7 Interest that is due can be added to the deferred amount on the last day of the
agreement in the final month of the credit agreement.
26.8 With the exception of variable interest rates, a credit provider must not unilaterally
increase interest rates. The consumer must be given written notice of at least five
business days. The notice will set out particulars of the envisage change concerning
interest rates, the amount of a credit fee or charge, a change in the frequency or
time for payment of a credit fee or charge.
27 MEANING OF VARIABLE INTEREST RATES
27.1 A credit provider must give written notice to a consumer when they have a credit
agreement that has a variable interest rate. The notice must be within 30 business days
after the day on which a change in the variable interest rate takes effect. The notice must
set out the new rate, and any further prescribed information. If the rate is determined by a
reference rate in terms of section 103(4), the reference rate must be the same as that used
by that credit provider in respect of any similar credit agreements currently being issued by
it.
28 CALCULATION OF INTEREST
28.1 Regulations prescribe the calculation of interest (Section 105(1) with regulation 39 & 40)
Rand amount of interest for a day = deferred amount for the day x interest rate
Number of days in a year
73
R0.81 = R1000 x 29.8%
number of days in the year (365)
28.2 With regard to short term credit transactions the following formula is applicable in
terms of regulation 40 (2)(b)
Rand amount of interest for a day = deferred amount for the day x interest rate
Number of days in the month
R1. 66 = R1000 x 5%
Number of days in the month (30)
29 MAXIMUM PRESCRIBED INTEREST RATES UNDER THE NATIONAL CREDIT ACT
29.1 The transitional provisions of the Act set out in Schedule 3 Section 5, the maximum interest rate.
“The maximum annual finance charge rate set in terms of the Usury Act, 1968 (Act No.73 of
1968), and in effect immediately before the effective date continues in force despite the repeal
of that Act, as the maximum interest rate, until the Minister first prescribes a maximum rate of
interest in terms of section 105 of NCA.”
29.2 The minister of finance, after consulting with the credit regulator may prescribe a method of
calculating maximum interest rates and fees. The Reserve Bank Repurchase Rate (RR) also
called repo rate is used to calculate the maximum interest rate. Presently the repo rate is 7% per
annum.
29. 3 Prescribed Rate of Interest Act - Rate and Date Changes
DATE 1 October 1 August 8 January 1 March 1 May 1 1 May 1 January

1993 to 31 2014 to 7 2016 to 29 2016 to 30 2016 to September 2018 to 2019
July 2014 January February April 2016 date 31 2017 to 30 31 to date
2016 2016 August December
74
2017 April 2018 2018
RATE 15.5% 9% 9.75% 10.25% 10.5% 10.25% 10% 10.25%
29.4 The rate prescribed at the time when interest begins to run is fixed at such rate and cannot be
varied or lowered even after the adjustments made to the prescribed rate by the Minister. Davehill
(PTY) LTD & others v Community Development Board 1988 (1) SA 290 (A). See (Resource
41.38)
29.5. National Credit Act – Interest Rate changes applicable from 06 May 2016 as per GG 39379 dated
6 November 2015. See regulation 42(1). These fees are applicable to new credit agreements
concluded from 6 May 2016. An urgent application was brought by Micro Finance South Africa v
The Minister of Trade and Industry (Gauteng Division, Pretoria, Case no 16746/2016, See
(Resource 41.39) to stay the operation of these regulations which related to set aside the fees
regarding short term credit transactions. The application was unsuccessful. However, the court
granted an order that the regulations pertaining to interest and fees with regard to short term credit
agreements that is R8000 or less repayable within 6 months or less will be set aside in terms of
PAJA in terms of section 6(2)(e) and or section (2) h. However, the court granted NCR and DTI
leave to appeal.
29.6. RR in this table refers to the repo rate which from 8/07/2019 was 6.5% in terms of Regulation
42(1).
Credit Type Before 6 May 2016 After 6 May 2016

Maximum Prescribed Maximum Prescribed
75
Interest Rates Interest Rates
Mortgage agreements RR x 2,2 + 5 % per year RR plus 12% per year = 18.5%
Credit facilities RR x 2,2 + 10% per year RR plus 14% per year = 20.5%
Unsecured credit transactions RR x 2,2 + 20% per year RR plus 21% per year = 27.5%
Developmental Credit RR x 2,2 + 20% per year RR plus 27% per year = 33.5%
Agreements
For the development of RR x 2,2 + 20% per year RR plus 27% per year = 33.5%
small business
For low income RR x 2,2 + 20% per year RR plus 27% per year = 33.5%
housing (unsecured)
Short term credit transactions 5% per month 5% per month on first loan
maximum repayment period
= 6 months
3% per month on subsequent
loans within a calendar year
A decision by the National
Consumer Tribunal, which
carries the same weight as a
High Court, delivered on
21/04/2010 Case no.
NCT/255/2009/138, Motitsoe
v ABSA Bank & Others held
that an agreement to pay
interest at 60% per annum
constituted an illegal
agreement.
76
See also Micro Finance
South Africa v The Minister
of Trade and Industry
(Gauteng Division, Pretoria,
Case no 16746/2016).
However, the court granted an
order that the regulations
pertaining to interest and fees
with regard to short term credit
agreements that is R8000 or
less repayable within 6 months
or less will be set aside in
terms of PAJA in terms of
section 6(2)(e) and or section
(2) h. However, the court
granted NCR and DTI leave to
appeal. Note this is still
applicable as appeal is
pending.
Other credit agreements RR x 2,2 + 10% per year RR plus 17% per year = 23.5%
Incidental credit agreements 2% per month 2% per month
29.8 An initiation fee must only be charged when a new credit agreement is established with a
consumer and must not be charged on a transactional basis where there is no new credit
agreement with the consumer. Regulation 43(3) of NCA
29.9 National Credit Act – New Maximum Initiation Fee Table applicable from 06 May 2016 as per
GG 39379 dated 6 November 2015 From 06 May 2016 the Maximum Initiation Fee Table is as
follows:
77
Sub- sector Maximum Initiation Fee Maximum Initiation Fee after
before 6 May 2016 6 May 2016
Mortgage (a) R1, 100 per credit agreement, plus (c) R1, 100 per credit agreement, plus
agreements 10% of the amount of the 10% of the amount of the
agreement in excess of R10, 000. agreement in excess of R10, 000.
(b) But never to exceed R5, 000. (d) But never to exceed R5, 250.
Credit facilities (a) R165 per credit agreement, plus, (c) R165 per credit agreement, plus,
10% of the amount of the 10% of the amount of the
agreement in excess of R1,000 agreement in excess of R1,000
(b) But never to exceed R1,000 (d) But never to exceed R1,050
Unsecured credit (a) R165 per credit agreement, plus, (c) R165 per credit agreement, plus,
transactions 10% of the amount of the 10% of the amount of the
(b) But never to exceed R1, 000. (d) But never to exceed R1, 050.
Developmental credit agreements
For the development of a (a) R275 per credit agreement plus, (b) R275 per credit agreement plus,
small business 10% of the amount of the agreement 10% of the amount of the agreement
in excess of R1,000 in excess of R1,000
(b) But never to exceed R2, 500. (b) But never to exceed R2, 600.
For low income housing (a) R550 per credit agreement, plus, (b) R550 per credit agreement, plus,
10% of the amount of the 10% of the amount of the
(unsecured) agreement in excess of R1,000 agreement in excess of R1,000
Short term credit (a) R165 per credit agreement, plus, (b) R165 per credit agreement, plus,
transactions 10% of the amount of the agreement 10% of the amount of the agreement
in excess of R1,000 in excess of R1,000
Other credit (a) R165 per credit agreement, plus, (a) R165 per credit agreement, plus,
agreements 10% of the amount of the 10% of the amount of the
Incidental credit Nil Nil
Service fee (on all (a) R50 per monthly statement plus VAT (a) R60 per monthly statement plus VAT
credit agreements
including short term
credit transactions
78
30 SERVICE FEES
30.1 A service fee is paid by the consumer to the credit provider for having a credit agreement. A
service fee can be paid monthly, annually or per transaction or on a combination of periodic and
transaction basis. The current maximum monthly service fee is R60.00 plus VAT. (Regulation 44
with section 105(1)) The service fee must not exceed the prescribed amount relative to the
principal debt. (Section 105(c) (iii)) In a non-credit facility the service fee is payable on a monthly
or annual basis.
30.2 The service fee covers the cost of administering a credit agreement which is the operational cost
of the credit provider such as rent, labour, communication, banking, processing of repayments
and any other costs related to the administration of a credit agreement.
30.3. A service fee must be charged for a calendar month in which it is due and payable and on a
pro rata basis where the credit agreement was concluded during the course of that calendar
month.
31 UNSECURED CREDIT TRANSACTION
31.1 Is a debt which is not supported by any pledge or other right in property or surety ship or any
other
form of personal security- Regulation 40(1) of NCA. Examples are pawn or discount
transactions,
incidental credit agreements, instalment agreements, lease agreements, other agreements
where
payment is deferred.
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32 IN DUPLUM V ULTRA DUPLUM RULE (SECTION 103)
32.1 THE COMMON LAW – IN DUPLUM RULE
32.1.1 It is trite that the in duplum rule forms part of South African law. The basic rule provides that
interest stops running once unpaid interest equals unpaid capital. (LTA Construction Bpk v
Adminstrateur, Transvaal 1992 (1) SA 473 (AD); See (Resource 41.40) Standard Bank of SA
Ltd v Oneanate Investments (Pty) Ltd 1995 (4) SA 510 (C); See (Resource 41.41) Standard
Bank of South Africa Ltd v Oneanate Investments (Pty) Ltd (in liquidation) 1998 (1) SA 811
(SCA) at 827H–I) See (Resource 41.42)
32.1.2 The rule applies only to arrear and unpaid interest. (Ethekwini Municipality v Verulam Medicentre
(Pty) Ltd [2006] 3 ALL SA 325 (SCA) See (Resource 41.43)
32.1.3 It is also incorrect to state that interest runs only until the amount of interest reaches the double of
the capital amount. In Oneanate supra it was held at 834H–I: ". . . That interest on the
amount ordered to be paid may accumulate to the extent of that amount irrespective of whether it
contains an interest element. This would then mean that (i) The in duplum rule is suspended
pendente lite, where the lis is said to begin upon service of the initiating process, and (ii) Once
judgment has been granted, interest may run until it reaches the double of the capital amount
outstanding in terms of the judgment.”
32.1.4 The gist of the passage quoted above is that interest does not run only until the amount thereof
reaches the double of the capital amount outstanding in terms of the judgment but it also runs
pendente lite because, as a rule, the in duplum rule is suspended during litigation. (Margo &
Another v Gardner [2010] JOL 26137 (SCA)) See (Resource 41.44)
32.1.5 Payments must be appropriated to interest first and then to the capital amount. Interest will
accrue again as soon as payments are made.
32.1.6 The prohibition on interest in duplum rule is not limited to money-lending transactions but applies
to all contracts arising from a capital sum owed, which is subject to a specific rate of interest.
32. 2 SECTION 103(5) OF THE NATIONAL CREDIT ACT OR ULTRA DUPLUM RULE
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32.2.1 The common law in duplum rule inspired the provisions of section 103(5) of NCA and is based on
the principal that it is in the public interest that borrowers should be protected from exploitation of
lenders who permit interest to accumulate.
32.2.2 Section 103(5) reads as follows; “Despite any provision of the common law or a credit agreement
to the contrary, the amounts contemplated in section 101 (1) (b) to (g) that accrue during the time
that a consumer is in default under the credit agreement may not, in aggregate, exceed the
unpaid
balance of the principal debt under that credit agreement as at the time that the default occurs.”
32.2.3 Previously “principle debt” referred to the price of the item on the floor or purchase price. The
“principle debt” in terms of the National Credit Act refers to the purchase price but may also now
in terms of section 102 of NCA include an initiation fee, service fee, insurance, default
administration charges, collection costs, extended warranty, delivery, installation and initial
fuelling charges, taxes, licenses and registration fee as well as credit insurance. It also only
applies to an instalment agreement, a mortgage agreement, a secured loan or a lease.
32.2.4 Section 103(5) of NCA can also not be contractually altered or excluded in advance. Section
90(2) (a) of NCA stipulates that a credit agreement is unlawful if its general purpose or effect is
to defeat the purposes or policies of the Act or to deceive the consumer. Section 90(2)(b) of NCA
stipulates that a credit agreement is unlawful if it directly or indirectly purports to waive or deprive
a consumer of any right under the Act or enables a credit provider to evade an obligation or duty
in terms of the Act or if it overrides the effect of any provision of the Act. Section 91(a) of NCA
further prohibits a credit provider from inducing a consumer, directly or indirectly, to enter into a
supplementary agreement or sign any document that contains a provision that would be unlawful
if it were included in a credit agreement. Such term or conduct will render the agreement or
portions thereof unlawful in terms of the above provisions.
32.2.5 Section 101(1) stipulates that: A credit agreement must not require payment by the consumer of
any money or other consideration, except-
(a) The principal debt, being the amount deferred in terms of the agreement, plus the value of any
item contemplated in section 102;
(b) An initiation fee, which-
81
(i) May not exceed the prescribed amount relative to the principal debt; and
(ii) Must not be applied unless the application results in the establishment of a credit agreement
with that consumer;
(c) A service fee, which-

(i) In the case of a credit facility, may be payable monthly, annually, on a per transaction basis or
on a combination of periodic and transaction basis; or
(ii) In any other case, may be payable monthly or annually; an
(iii) Must not exceed the prescribed amount relative to the principal
(d) Interest, which-

(i) Must be expressed in percentage terms as an annual rate calculated in the prescribed manner;
and
(ii) Must not exceed the applicable maximum prescribed rate determined in terms of section 105;
(e) Cost of any credit insurance provided in accordance with section 106
(f) Default administration charges, which-
(i) May not exceed the prescribed maximum for the category of credit agreement concerned; and
(ii) May be imposed only if the consumer has defaulted on a payment obligation under the credit
agreement, and only to the extent permitted by Part C of Chapter 6; and
(g) Collection costs, which may not exceed the prescribed maximum for the category of credit
agreement concerned and may be imposed only to the extent permitted by Part C of Chapter 6.
32.2.6 In National Credit Regulator v Nedbank and Others 2009 (6) SA 29 (GNP) See (Resource 41.45)
it was held that once the total charges in section101(1)(b)-(g) equal the amount of the unpaid
balance – no further charges may be levied even if further payments are made.
32.2.7 In Nedbank and Others v National Credit Regulator and Another 2011 (3) SA 581 (SCA)
(Resource 41.46) the court confirmed the court a quo’s interpretation of section 103(5). Court
further considered the applicability of the common law in duplum rule on section 103(5). Finance
houses contended that any payments made whilst in default should reduce the section 102
charges. SCA interpreted use of the word “despite” in section 103(5) by the legislature to
82
intentionally deviate from the common law in duplum rule and found that it was self-standing
provision and not a codification of the common law in duplum rule.
33 CREDIT INSURANCE
33.1 This includes credit life insurance, insurance covering loss or damage to property and
loss or theft of a card or PIN.
33.2 The credit provider may require the consumer to maintain credit life insurance during the term of
credit agreement. Insurance cover may also be required in respect of immovable property that is
subject to a mortgage bond. It may not exceed the full as set value of the property. (Section
106(1) of NCA
33.3 The credit provider may not demand or offer that the consumer purchase or maintain insurance
that is unreasonable or at an unreasonable cost to the consumer having regard to the actual risk
and liabilities involved in the credit agreements. Section 106(2) of NCA The consumer must be
given an opportunity to take out his own insurance. If insurance is provided by the credit provider
no additional surcharge, fee or premiums more than the actual cost of the insurance can be
charged. In addition, full details of the credit insurance must be provided to the consumer by the
credit provider. (Section 106(4) (a) of meeting with regulation 33(1) of NCA
33.4 This includes the cost to the consumer of any insurance supplied, the amount of any fee,
commission, remuneration or benefit receivable by the credit provider. The terms and conditions of
the insurance policy must be explained to the consumer and a copy of the policy provided to the
consumer. (Section 106(5) of NCA
33.5 In NCR v Lewis Stores (Pty)(Ltd) and Another [2016] ZANCT 33 See (Resource 41.47) was a case
that dealt with at paragraph 43 to 45 and paragraph 65 the Tribunal held
“43. Lewis does not appear to deny that it sold loss of employment insurance to pensioners or
unemployed consumers. In this regard it refers to “pensioners” as “retired persons”. It further
does not appear to deny that the selling of this type of insurance to these consumers is
unreasonable. It concedes that no insurable risk existed in relation to these consumers as
they could not claim for loss of employment where no employment existed. It did an internal
investigation which found numerous instances where this had occurred since 2007. This
83
resulted in the current process of reimbursing all the identified customers with a total of R48.8
million in premiums and R22.8 million in interest. It has however raised a number of defences
to the allegation that its conduct can be declared as prohibited conduct.
44. Lewis argues that the insurance contracts in question were void ab initio. In common law
these contracts were therefore a nullity and not a contract at all. As no valid contract came
into being there could not have been a transgression of section 106(2).
45. In this regard the provisions of section 106(2) are clear, a credit provider must not offer or
demand that the consumer purchase or maintain insurance that is unreasonable or at an
unreasonable cost to the consumer, having regard to the actual risk and liabilities involved in
the credit agreement. The section makes the very offer of insurance under these
circumstances unlawful. Even if it could be argued that the insurance contract was void, there
is no requirement in the NCA that a valid contract come into being.
65. The Tribunal therefore makes the following findings in respect of the NCR’s allegations:
65.1 The Respondent is found to have contravened section 106(2)(a) of the NCA in that it
offered or demanded that pensioned (retired) and unemployed consumers pay for
loss of employment insurance. This conduct is prohibited in terms of the NCA.
65.2 The Respondent is found to have contravened section 106(2)(a) of the NCA in that it
offered or demanded that pensioned (retired) consumers pay for disability insurance.
This conduct is prohibited in terms of the NCA. “
33.6 Government Gazette number 4040 of 9 February 2017 deals with issues pertaining to maximum
credit life premiums pertaining to agreement entered into after 9 August 2017
PRESCRIBED MAXIMUM CREDIT LIFE PREMIUMS
Sub- sector Maximum Prescribed Costs
Mortgage agreements R2.00 per R 1000.00 deferred.
Affordable housing mortgage agreements (principle R2.00 per R1000,00 deferred (consumer under age of 55)
debt is not more than R450 000)
R2.50 per R1000,00 deferred (consumer above age 55)
Credit facilities R4.50 per R 1000.00 of the average utilisation per billing cycle.
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Unsecured credit transactions R4.50 per R 1000.00 of the deferred amount
34 COLLECTION COSTS
34.1 Collection costs can be claimed by the credit provider. It must not exceed the costs incurred in
enforcing the debt. It may also not exceed the costs prescribed in terms of the Supreme Court
Act, 59 of 1959, See (Resource 41.48) the Magistrate’s Court Act, 1944, See (Resource 41.2)
the Attorneys Act, 53 of 1979 See (Resource 41.49) or the Debt Collector’s Act 114 of 1998,
See (Resource 41.25) whichever is applicable.
35 DEFAULT ADMINISTRATION CHARGES
35.1 The credit provider may claim charges for necessary letters written for debt enforcement. This
amount will not exceed R17 as provided under undefended actions in the Magistrate’s Court Act
32 of 1944. The reasonable and necessary cost of delivery of the letter may also be recovered.
(Regulation 46) of NCA
36 FEES CLAIMABLE BY REGISTERED DEBT COLLECTORS
36.1 Section 60 of the Magistrates Court Act contains a very important stipulation. The section reads as
follows: (1) Unless expressly otherwise provided in this Act or the rules and subject to the
provisions of section 19 of the Debt Collectors Act, 1998, See (Resource 41.25) no
person other than an attorney or an agent referred to in section 22 of NCA shall be entitled to
recover from the debtor any fees or remuneration in connection with the collection of any debt. (2)
Any person who contravenes any provision of subsection (1), shall be guilty of an offence and on
conviction be liable to a fine not exceeding R4000, or, in default of payment, to imprisonment for a
period not exceeding 12 months, or to both such fine and such imprisonment.”
36.2 Registered Debt Collectors may only claim the fees set out in the Government Gazette hereunder
and no additional fees may be levied. It is also important to distinguish between a Debt Collector
acting as Agent for a client and one that took session of the claim.
85
36.3. Where formal session of the claim was taken cognisance of the provisions of the National Credit
Act should be taken. The definition of “credit provider” in terms of the Act includes “any person who
acquires the rights of a credit provider under a credit agreement after it has been entered into”. A
Debt Collector who took session of a claim under a credit agreement would fall under this
definition. This could mean that such a Debt Collector must not only be registered in terms of the
Debt Collectors Act with the necessary certificate, but that the registration requirements of a credit
provider in terms of the National Credit Act will also have to be complied with. The Debt Collector
would therefore in all probabilities also have to register with the National Credit Regulator and
comply with the provisions of Sections 40 & 89 of the National Credit Act and be in possession of
the necessary registration certificate. If the Debt Collector is so registered it would seem that
certain additional fees might be levied in terms of the National Credit Act.
37 LATEST CASE LAW DEVELOPMENTS
37.1 The National Consumer Tribunal in Centurion dismissed the referral by the NCR in the matter of
the National Credit Regulator vs Lewis Stores (Pty) Ltd and Monarch Insurance, Case Number:
NCT/27651/2015/140(1). Monarch Insurance, Case Number: NCT/27651/2015/140(1). See
(Resource 41.47) This matter related to Lewis Stores offering consumers extended warranties that
run concurrently with the manufacturer’s warranties as well as the charging of a club fee reflected
in the consumer’s statements of account. Lewis stores is effectively crediting the consumers
account. The majority held that there was a separate contract for joining the club and a separate
fee charged for club members. The NCR does not support the credit retailers conduct of charging
consumers a club fee on credit agreements or under any supplementary agreements or documents
because the fee increases the consumers cost of credit, and therefore appealed the decision of the
Tribunal. The leave to appeal was granted in the North Gauteng High Court regarding the charges
for extended warranties overlapping with manufacturers’ warranties and the club fees levied by
Lewis Stores (Pty) Ltd.
37.2 In the matter of Microfinance South Africa (MFSA) v Minister of Trade and Industry and Another
16746/2016 [2016] ZAGPPHC See (Resource 41.50) the North Gauteng High Court ruled in
favour of the NCR and the Department of Trade and Industry (DTI) in the application challenging
the regulations reducing the interest rate on the second short-term loan in a calendar year from 5%
to 3% per month. The full bench set aside an earlier judgment by Justice Louw setting aside the
regulation reducing the interest rate on the short-term loan. The Full Bench amongst others found
that:
86
 Justice Louw erred in not considering the evidence of DTI and NCR on various issues in
his judgement;
 The reduction of the interest rate on the short-term loan serves a legitimate government
purpose of combating consumer over-indebtedness;
 The Minister of Trade and Industry considered all relevant factors, and acted rationally and
lawfully;
 Many credit providers have already amended their systems to implement the regulations at
considerable costs;
 It would not be in the interests of justice to set aside the regulations and place millions of
consumers in a position to pay higher interest rates merely because a small number of
credit providers feel the regulations make them less profitable; and
 MFSA and its members is a small portion of the total role players in the South African
credit industry.
The MFSA was ordered to pay NCR and DTI’S costs, including the costs of the application for
leave to appeal as well as the costs of two counsel. This means that the regulations remain in
force and means that consumers pay 5% interest on the first short-term loan and 3% interest
on subsequent short-term loans in a calendar year.
The MFSA took the matter to the Supreme Court of Appeal and on 08 November 2018 the
SCA dismissed the MFSA’s application for special leave to appeal the judgment of the Full
Court of North Gauteng High Court in favour of the NCR and DTI on the regulations reducing
the interest rates on the short-term loan.
The regulations reduced the interest rate on the second short-term loan in a calendar year
from 5% to 3% per month.
37.3 Nedbank Ltd v Thobejane and others Case No. 84041/15 … See (Resource 41.50)
(unreported) dealt with the issue of monetary jurisdiction and the Court’s issue and clogging up
the Court roles. This case involved a number of cases involving foreclosure whereby financial
institutions are resorting to the High Court regarding foreclosure ort f mortgage bonds, which
fell within the jurisdiction of the Magistrates Court. The second issue that had to be dealt with
was that fact that although these matters fell within the jurisdiction of the Johannesburg High
87
Court, litigants approached the Pretoria High Court and not the Johannesburg High Court. As a
result of this practice, this meant that the High Court in Pretoria was over burdened with
matters clogging the Court Rolls.
The Courts looked into the matter; there were a number of matters placed before the Court,
which resulted in a full bench being instituted. The reasons advanced by litigants as to why the
Magistrates Courts were not approached was as follows: -
 There are inordinate delays;
 They experienced problems in obtaining dates for hearing;
 There is no uniform approach pertaining to the granting of orders;
 Unnecessary queries are raised;
 There exists a general reluctance to declare immovable property specially executable
 Section 66(4) of the Magistrates Court Act poses a problem as attachments lapses after
a year;
 Administration and staff at the Magistrates Courts are not efficient;
 Delays occur due to unavailability of stenographers and recording machines;
 It’s not always less expensive to litigate there;
 They will have to appoint correspondent attorneys, which will result in additional costs;
and
 Due to the depreciation in the value of motor vehicles, they need swift and effective
action.
SAHRC also submitted that the rights of distresses debtors were also affected by virtue of the
matters proceeding in the High courts as opposed to the Magistrates’ Courts and as a result
thereof access to courts were denied because they could not afford to litigate in the High
Courts.
Various issues were ventilated in this matter by reference to various policies, Acts and case law.
The Courts eventually held that: -
88
1. To promote access to justice, from the 2 February 2019, civil actions and or applications,
where the monetary value claimed is within the jurisdiction of the Magistrate’s Courts,
such actions and applications should be instituted in the Magistrates’ Courts having the
jurisdiction, unless the High Court has granted leave to hear the matter in the High
Court.
2. It is declared that the High Court is entitled to transfer a matter mero motu to another
court, i.e. a Magistrates Court and or Local and Provincial Divisions, if it is in the interest
of justice.
This now means that there will be an increase of recovery of bond foreclosure matters in
the Magistrates Court from 02/02/2018.
37.4 Absa Bank Ltd (ABSA) v Mokebe, ABSA v Kobe, ABSA v Vokwana, Standard Bank v
Colombrick and Another ZAGPJHC 485; 2018(6) SA 492, See (Resource 41.51) dealt with the
process that a bank is required to follow when selling a person’s in a sale in execution. The case
dealt with Rule 46A in terms of the High Court Rules, the issue of adjudication of claims involving
monetary judgements and the issue of execution, the setting of reserve price and the factors to
be considered when making this determination. In this case, it was held that that: -
 in all matters were execution is obtained against primary residence, the entire claim
including the monetary judgement must be adjudicated the same time.
 Execution against movable and immovable property is not a bar to the revival of the
agreement until the proceeds of the agreement have been realised.
 Any document initialling proceedings “the defendants or respondent’s attention is drawn

to the provisions of section 123(3) of NCA 34 of 2005 that he or she may pay to the
creditor grantor all amounts that are overdue together with the interest and costs
 credit providers permitted default charges and reasonable taxed or agreed costs of
enforcing the agreement prior to the sale and transfer of the immovable property and so
revive the credit agreement ‘’
89
 Save in exceptional cases, a reserve price should be set by the court in all matters
where execution is granted against immovable property, which is the primary residence
of the debtor, where the facts disclosed justify such an order.
 The Court held that in all matters where execution is sought against a primary
residence, the entire claim including the monetary judgment, must be adjudicated the
same time. This means when the application for execution of the primary residence, the
monetary judgement must be part of the same cause of action and must not be brought
piecemeal.
90
MODULE 9 NOTE 1
DEBT COLLECTION
Topic: Section 57
91
RELEVANT RESOURCES
RESOURCES
RELEVANT

1 Act 1.1 The Magistrates Court 1.1 Section 28, 29, 38, 55, 57, 59
Act 32 of 1944 109
1.2 The National Credit Act 1.2 Sections 8, 40, 46, 47, 48, 51,
34 of 2005 81, 86, 92, 93, 101, 103, 106,
124, 125, 126B, 127, 128,
129,
130, 131, 132, 133
1.3 National Credit 1.3

Amendment Act 7 of
2019
1.4 National Credit 1.4
Amendment Act 19 of
2014
1.5 Prescription Act 68 of 1.5 Section 17
1969 Section 80
1.6 The General Law 1.6 Section 35
Amendment Act 62 of
1955
1.7 The Law of Evidence 1.7 Section 3

Amendment Act 45 of
1988

Rules
92
Regulation 30
Regulation 31
Regulation 36
Regulation 39
Regulation 40
Regulation 41
Regulation 42
Regulation 43
Regulation 45
Regulation 46

2016 Section 59
Section 109

South Africa Volume ll, Rule 6
tenth edition, Service 11, Rule 6A
2016 Rule 9(12)
Rule 12
Rule 17
Rule 60A
93
Regulation 30
Regulation 31
Regulation 36
Regulation 39
Regulation 40
Regulation 41
Regulation 42
Regulation 43
Regulation 45
Regulation 46
CIRCULAR 17 OF 2018
CIRCULARS
Kindly double click to open document
94
ACT: AMENDMENTS RESULTING FROM ACT 7 OF 2017
LEGISLATION
Note this column depicts the Note this column explains the amendments
actual amendments.
4. The following section is 4. Section 55A has been inserted after section 55 of
hereby MCA.
inserted in the Magistrates’
Courts Act, 1944, after
section
55 This section includes factors that must be taken
into account by the Court when considering
‘‘Factors to be taken into whether that an order is just and equitable. The
account when considering factors are exhaustive and not limited to the
an order which is just and following factors:
equitable
(a) the size of the debt;
(b) the circumstances in which the debt arose;
55A. For purposes of Chapters (c) the availability of alternatives to recover the
VIII and IX of this Act, the debt;
factors a court must take (d) the interests of the plaintiff or judgment creditor;
into account when (e) the rights and needs of the elderly, children,
considering whether an persons with disabilities and households headed
order is just and by women;
equitable, include, but are (f) social values and implications;
not limited to— (g) the amount and nature of the defendant’s or
judgment debtor’s income;
(a) size of the debt; (h) the amounts needed by the defendant or
(b) the circumstances in which judgment debtor for necessary expenses and
the debt arose; those of the person’s dependent on
95
(c) the availability of alternatives him or her and for the making of periodical
to recover the debt; payments which he or she is obliged to make
(d) the interests of the plaintiff or in terms of an order of court, agreement or
or judgment creditor; otherwise in respect of his or her other
(e) the rights and needs of the commitments; and
elderly, children, persons
with disabilities and (i) whether the order would, in the circumstances
households headed by of the case, be grossly disproportionate.’’.
women;
(f) social values and
implications;
(g) the amount and nature of
the
defendant’s or judgment
debtor’s income;
(h) the amounts needed by the
defendant or judgment
debtor or necessary
expenses and
those of the persons
dependent on him or her and
for the making of periodical
payments which he or she is
obliged to make in terms of
an order of court, agreement
or otherwise in respect of his
or her other commitments;
and
(i) whether the order would, in

the circumstances of the
case, be grossly
disproportionate’’.
Substitution of section 57 of Act 32 of 1944, as substituted by section 1 of Act 63 of
96
1976 and amended by section 2 of Act 81 of 1997
‘‘Admission of liability and ‘‘Admission of liability and undertaking to pay

undertaking to pay debt in debt in instalments or otherwise
instalments or otherwise
57. 57.
(1) If any person (in this section (1) If the defendant or judgement debtor received
called the defendant) has a letter of demand or has been served with a
received a letter of demand summons demanding payment of any debt, the
or has been served with a defendant or judgement may in writing—
summons demanding
payment of any debt, the
defendant may in writing—
(a) admit liability to the plaintiff (a) admit liability to the plaintiff for the judgement
for debt, interest and costs claimed in the letter of
the amount of the debt and demand or summons or for any other amount;
costs claimed in the letter of
demand or summons or for
any other amount;
(b) offer to pay the judgement debt, interest and

(b) offer to pay the amount of costs for which he or she admits liability, in
the instalments or otherwise;
debt and costs for which he
or
she admits liability, in (c) undertake in addition to pay the collection fees
instalments or otherwise; for which the plaintiff is liable in respect of the
recovery of such instalment; and
(c) undertake on payment of
any
instalment in terms of his or
97
her offer to pay the collection
fees for which the plaintiff is
liable in respect of the
recovery of such instalment; (d) agree that, in the event of his or her failure to
and carry out the terms of his or her offer, the
plaintiff shall, without notice to the
defendant, be entitled to apply for judgment
(d) agree that, in the event of for the amount of the outstanding balance of
his the debt, costs, and for an order for payment
or her failure to carry out the of the judgment debt and costs in instalments.
terms of his or her offer, the Note: If the plaintiff or his or her attorney
plaintiff shall, without notice accepts the said offer, proof will be required
to the defendant, be entitled from the plaintiff that he or she advised the
to apply for judgment for the defendant of such acceptance in writing
amount of the outstanding by registered letter.
balance of the debt for which
he or she admits liability,
with
costs, and for an order of the
court for payment of the
judgment debt and costs in
instalments or otherwise in
accordance with his or her
offer, and if the plaintiff or his
or her attorney accepts the (1A) The offer referred to in subsection (1)(b)
said offer, he or she shall must—
advise the defendant of such
acceptance in writing by (a) set out full particulars of the defendant’s—
registered letter.
(1A) The offer referred to in (i) monthly or weekly income and

subsection (1)(b) must— expenditure, supported where reasonably
possible by the most recent proof in the
(a) set out full particulars of the possession of the defendant;
98
defendant’s—
(i) monthly or weekly income

and expenditure, supported (ii) other court orders or agreements, if any,
where reasonably possible with other creditors for payment of a debt
by the most recent proof in and costs in instalments; and
the possession of the
defendant;
(ii) other court orders or (b) indicate the amount of the offered instalment.
agreements, if any, with
other creditors for payment
of a debt and costs in (2) If, plaintiff advised defendant / attorney in
instalments; and writing that defendant’s offer has been
accepted, defendant fails to carry out the terms
(b) indicate the amount of the of the offer, court may, upon the written
offered instalment. request of plaintiff/ attorney and if the following
documents are attached
(2) If, after having been advised
by the plaintiff or his or her
attorney in writing that his or
her offer has been accepted,
the defendant fails to carry
out (a) enter judgment in favour of the plaintiff for the
the terms of his or her offer, amount or the outstanding balance of the
the court may, upon the amount of the debt for which the defendant has
written request of the plaintiff admitted liability, with costs; and
or his or her attorney and
subject to subsection (2A) -
(a) enter judgment in favour of

the plaintiff for the amount (b) order the defendant to pay the judgment debt
or the outstanding balance and costs in specified instalments or otherwise
of the amount of the debt in accordance with his or her offer, and such
99
for which the defendant order shall be deemed to be an order of the
has admitted liability, with court mentioned in section 65A (1).
costs; and
(b) order the defendant to pay

the judgment debt and
costs in specified
instalments or otherwise in (2A) The written request referred to in subsection
accordance with his or her (2) must be accompanied by—
offer, and such order shall
be deemed to be an order
of the court mentioned in (a) the summons or if no summons has been
section 65A (1). issued, a copy of the letter of demand;
(2A) The written request referred

to in subsection (2) must be (b) the defendant’s written acknowledgment of
accompanied by— liability and offer;
(a) the summons or if no

summons has been issued, (c) all the particulars and documentary evidence
a copy of the letter of referred to in subsection (1A), in order for the
demand; court to be apprised of defendant’s financial
position at the time the offer was made and
(b) the defendant’s written accepted;
acknowledgment of liability
and offer;
(c) all the particulars and

Documentary evidence
referred to in subsection (d) a copy of the plaintiff’s/attorney’s written
(1A), acceptance of the offer and proof of postage
in order for the court to be thereof to the defendant; and
apprised of the defendant’s
financial position at the time
100
the offer was made and
accepted; (e) an affidavit or affirmation by plaintiff or a
certificate by his or her attorney stating in
(d) a copy of the plaintiff’s or his which respects the defendant has failed to carry?
or her attorney’s written out the terms of his or her offer and, if the
acceptance of the offer and defendant has made any payments since
proof of postage thereof to the date of the letter of demand or summons,
the showing how the balance claimed is arrived at.
defendant; and
(e) an affidavit or affirmation by

the plaintiff or a certificate by
his or her attorney stating in
which respects the defendant (2B) The court—
has failed to carry out the
terms of his or her offer and, (a) may request any relevant information from the
if the defendant has made plaintiff/ attorney in order for the court to be
any payments since the date apprised of defendant’s financial position at the
of the letter of demand or time judgment is requested;
summons, showing how the
balance claimed is arrived
at.
(2B) The court— (b) must act in terms of the provisions of the
National Credit Act and the regulations
(a) may request any relevant thereunder dealing with over- indebtedness,
information from the plaintiff reckless credit and affordability assessment,
or his or her attorney in order when considering a request for judgment in
for the court to be apprised of terms of this section, based on a credit
the defendant’s financial agreement under the National Credit Act;
position at the time judgment
is requested;
(b) must act in terms of the
101
provisions of the National
Credit Act and the (c) may, if the defendant is employed, and after
regulations satisfying itself that it is just and equitable that
thereunder dealing with over- an emoluments attachment order be issued and
indebtedness, reckless credit that the amount is appropriate, authorise an
and affordability assessment, emoluments attachment order referred to
when considering a request in section 65J; and
for judgment in terms of this
section, based on a credit
agreement under the
National
Credit Act;
(c) may, if the defendant is

employed, and after (d) may, notwithstanding the defendant’s consent to
satisfying pay any scale of costs, make a costs order as it
itself that it is just and deems fit.
equitable
that an emolument
attachment order be issued
and that the amount is (3) When the court granted the judgment in terms of
appropriate, authorise an subsection (2), and if the judgment debtor/
emoluments attachment attorney was not present when the judgment was
order entered, the judgment creditor/ his or her
referred to in section 65J; attorney must, within 10 days after it had
and knowledge that judgment has been entered,
advise the judgment debtor by registered letter
of the terms of the order that was granted.
(d) may, notwithstanding the

defendant’s consent to pay
any scale of costs, make a
costs order as it deems fit.
102
(3) When the judgment referred
to in subsection (2) has been
entered and an order made,
and if the judgment debtor (4) Any judgment entered in favour of the plaintiff
was not present or under subsection (2) has the effect of a judgment
represented by default,
when the judgment was
entered and the order made,
the judgment creditor or his (5) The provisions of this section apply subject to
or the relevant provisions of the National Credit
her attorney must, within 10 Act where the request for judgment is based on
days after it has received a credit agreement under the National Credit
knowledge that judgment has Act.’’.
been entered and an order
made, advise the
judgment debtor by
registered
letter of the terms of the
judgment and order.
(4) Any judgment entered in

favour of the plaintiff under
subsection (2) has the effect
of a judgment by default.
(5) The provisions of this section

apply subject to the relevant
provisions of the National
Credit Act where the request
for judgment is based on a
credit agreement under the
National Credit Act.’’
103
1 INTRODUCTION AND GENERAL OVERVIEW
1.1 The Magistrates’ Courts Amendment Act 63 of 1976 See (Resource 41.52) (MCA) introduced two
DISCUSSION
procedures for the recovery of debts. These procedures can be found in sections 57 and 58 of the
MCA.
1.2 Although these procedures are often referred to as the “demand procedure”, it must be kept in
mind that these procedures are not limited to instances where a letter of demand was sent to the
debtor, but are also available to the creditor where a summons has been issued. Although the
creditor has a choice between a letter of demand or a summons to institute these procedures, in
practice the letter of demand is used in the vast majority of instances.
1.3 The principal difference between the section 57 and 58 procedure is that under section 57 the
judgment debtor admits liability to the judgment creditors’ claim and undertakes to pay the
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judgment debt in instalments. Only when an instalment remains unpaid, is the judgment creditor
entitled to approach the court and obtain judgment. Under section 58, the judgment debtor
consents to judgment, there and then unconditionally, and undertakes upon judgment being
granted to pay the judgment debt in instalments. Section 57 is conditional undertaking to obtain
default judgment; meaning once the admission of liability is signed, only when the judgment
debtor defaults will the judgment creditor proceed to obtain judgment and section 58 is an
unconditional undertaking to obtain default judgment.
1.4 Act 7 of 2017 brought about an amendment to Section 57 and 58 of MCA. Section 55A impacts
directly on these two sections of the MCA.This section provides for factors that the Court must
take into consideration when considering whether granting an order in terms of section 57 and 58
is just and equitable in terms of section 55 of MCA.
1.5 There are also many other amendments which came about relating to production of documents
by the judgment debtor that is required by the court and the fact that a court must make a finding
regarding the issues of reckless credit, affordability and over indebtedness.
2 PROCEDURE
2.1 In terms of section 57(1) the debtor may after receiving a letter of demand or a summons, in
writing:
2.1.1 Admit liability to the plaintiff for the amount of debt and costs or any other amount claimed in letter
of demand or summons; section 57(1)(a)
2.1.2 Offer to pay to the plaintiff the amount of debt and costs to which liability was admitted to in
instalments or otherwise; section 57(1)(b)
2.1.3 Undertake to pay collection fees should payment be made in instalments; section 57(1)(c) and
2.1.4 Agree that in the event of failure to carry out the terms of the offer, the plaintiff or judgement
creditor
105
shall be entitled to request judgment, without further notice to the debtor, for the outstanding
amount
plus, costs and for a court order for the payment of the judgment debt and costs in instalments in
accordance with his offer; section 57(1)(d)
2.1.5 If the plaintiff accepts the offer, the plaintiff shall advise the defendant of such acceptance in
writing
by registered letter; section 57(1)(d)
2.2 In terms of section 57(1)(a) the debtor may admit liability for the amount or for any other amount.
Should the debtor admit liability for a lesser amount and the creditor accepts his/her offer, the
creditor will not be able to request judgment for the original amount if the debtor fails to comply
with the terms of the offer? The judgment debtor cannot admit liability for the delivery or return of
movable goods for example a motor vehicle or racing horse, as the section refers exclusively to
the payment of a debt.
2.3 If the defendant’s or judgement debtor’s offer is accepted, the creditor must inform the debtor by
registered letter of such acceptance. In terms of section 57(2) the debtor is only obliged to start
payments in accordance with the offer after being informed by registered letter of the acceptance of
the offer. The debtor will only be in “default” if there was non –compliance with the offer after the
debtor has been informed of such acceptance, and only then may a request for judgment be lodged
with the clerk of the court.
2.4 For as long as the debtor complies with the undertaking the matter is never referred to court. If the
debtor fails to carry out the terms of the offer after having been advised by the creditor or the
creditor’s attorney in writing that the offer has been accepted, the creditor or creditor’s attorney may
lodge with the clerk of the court a request for judgment.
2.5 In terms of section (1A), the offer referred to in subsection (1)(b) must set out full particulars of the
defendant’s
(i) monthly or weekly income and expenditure, supported where reasonably possible by the most
recent proof in the possession of the defendant and
(ii) other court orders or agreements, if any, with other creditors for payment of a debt and costs
in
106
instalments; and must indicate the amount of the offered instalment. It is important for the
judgment creditor to furnish the judgment debtor with a credit worthy certificate of the
judgment debtor which is usually obtained from the credit bureau.
.
2.6 The Court may request all the particulars and documentary evidence referred to in subsection (1A),
in order for the court to be apprised of defendant’s financial position at the time the offer was
made
and accepted; Section (2A) (c)
2.7 The Court may request any relevant information from the plaintiff/ attorney in order for the court to
be apprised of defendant’s financial position at the time judgment is requested; Section (2B) (a).
2.8 In terms of section 2(B)(b) the court must act in terms of the provisions of the National Credit Act
and the regulations thereunder dealing with over- indebtedness, reckless credit and affordability
assessment, when considering a request for judgment in terms of this section, based on a credit
agreement under the National Credit Act;
2.9 In terms rule 12(6A), if the matter relates to the NCA, the following documents will have to
accompany the request for judgment:
1. A copy of the letter of demand together with the original proof of posting or the debtors signature,
acknowledging receipt thereof, if no summons was issued;
2. If delivered by e-mail of fax as agreed between the parties in terms of rule 2(1) proof thereof
together with an affidavit of service is required;
3. If a summons was issued, the original summons and sheriffs’ return of successful service
4. The original admission of liability and offer to pay in instalments
5. The original underlying written agreement between the parties;
6. A copy of the letter of acceptance of the offer together with the original proof of posting or the
debtors signature, acknowledging receipt thereof;
7. If delivered by e-mail of fax as agreed between the parties in terms of rule 2(1) proof thereof
together with an affidavit of service;
8. An affidavit or affirmation by the creditor or a certificate by creditor’s attorney in which it is stated in
what respect the debtor had failed to carry out the terms of the offer, and if the debtor has made
payments, showing how the balance is arrived at.
107
9. Any other document that the Court finds necessary and relevant at the time when the offer was
made and at the time when default judgment is required.
10. Any finding that the court makes with regard to reckless credit, over- indebtedness and assessment
of affordability.
11. An affidavit containing such evidence as is necessary to establish that all requirements in law have
been complied with in terms of rules 4(2), 4(6) and 12(6A).
2.10 The Court must in addition to entering judgment make an order for the payment of the debt and
costs in accordance with the debtor’s original offer, which can also be in a single instalment
(section 57(2) (c)(i) and (ii)).
2.11 In the majority of cases the judgment debtor will not be present or be represented when judgment
is entered and an order for the payment in instalments is made. Should this be the case, the
creditor or creditor’s attorney must advise the judgment debtor by registered letter of the terms of
the judgment and order to pay in instalments.
2.12 Any judgment in terms of section 57(2) has the effect of a judgment by default in terms of section
57(4). According to Jones and Buckle, supra, Vol.1 244, this means that such a judgment may be
rescinded in terms of section 36 and rule 49, and that execution procedures may be instituted.
3. PRACTICAL APPLICATION OF SECTION 57 AND RULE 4
3.1 Rule 4 deals with sections 57 and 58 requests for judgment to the Clerk of court. The rule sets
out additional requirements that must be complied with to enable the granting of judgment.
3.2 The request for judgment must be in writing and is directed to the Clerk of court. Form 5A must be
used.
3.3 The form must be accompanied by an affidavit which contains evidence as is necessary to
establish that all requirements in law have been complied with.
3 . 4 Forms 5A requires a copy of the letter of demand sent to the defendant in terms of section 56,
the defendant’s written acknowledgment of liability to the debtor for the amount of the debt and
the costs claimed, copy of the plaintiff’s written acceptance of offer and the affidavit or affirmation
108
by the plaintiff or a certificate by the plaintiff’s attorney. Proof of service or posting must
accompany the request for judgment.
3.5 It is mandatory for an affidavit by a creditor indicating how the terms of an agreement or offer has
been breached, detailing the payments made to date and how the balance owing has been
arrived at. In addition, certain documents must accompany the request for judgment. The
section129 National Credit Act notice should also be attached.
3.6 The necessity for this provision is evident from the difficulty experienced in determining whether
to grant judgment where one is not fully apprised of all the relevant legal requirements. One must
be sure that all these requirements are met before entering a judgment and making it an order
of court. Due to the serious consequences, flowing from an order of court the law must be
correctly applied.
3.7 Rule 4(1)(a) prescribes that where a letter of demand as referred to in section 59 of the Act is
used it must „contain particulars about the nature and the amount of the claim.‟
3.8 The National Credit Act, 2005 (NCA) impacts on the credit market significantly. Accordingly its
objectives to protect consumers and provide a consistent, transparent, fair, responsible,
efficient, effective and accessible credit market is being addressed in the requirements set out in
rule 4.
3.9 Frequently, debts are ceded to debt collectors who proceed to recover the debt in their own
name. To ensure that the debtor is fully apprised with the chain of events relating to the
debt recovery, the fact and details of the cession must be communicated in the letter of
demand. When suing by way of summons it is mandatory in terms of Rule 5(9) that a
plaintiff who sues as cessionary must indicate the name, address and description of the cedent
at the date of cession. Accordingly, it is imperative that the legal relationship between the parties
that alleges the right to the claim and the grounds for the demand are communicated to ensure
that there is no prejudice faced by the debtor due to ignorance.
3.10 The last sub rule makes some of the provisions namely Rules 12(6), 12 (6A) and 12 (7) apply
to a request for judgment in terms of sections 57 and 58 of the Act. Rule 12(6) requires that if
109
the claim is based on a liquid document or any agreement in writing, then such agreement must
be filed with the request. Rule 12(6A) requires that evidence confirming compliance with any
legislative requirement be filed with the request. The effect of the reference to rule 12(7) is
that the clerk may refer the application to a magistrate.
3.11 The impact of this provision on section 57 and is that proper consideration is given to
the request by ensuring that all necessary facts and evidence is provided and judicial
intervention is sought where necessary.
3.12 T h e Clerk of court shall refer to the court any request for judgment on a claim founded on any
cause of action arising out of or based on an agreement government by the NCA, and the court
shall there upon make such order or give such order or give such judgment as it may deem fit.
110
QUALITY ASSURANCE
The purpose of this section is to conscientise Magistrates about what Quality Assurance
ASSURANCE
inspection will be looking for when doing Quality Assurance.

QUALITY
DEFAULT JUDGMENTS
1. The plaintiff shall furnish to the court evidence either oral or by affidavit of the nature
and extent of the claim (Rule 12(4))
Magistrate Case number Date of judgment
2. If the action be on a liquid document the plaintiff shall before judgment file of record -
● the original of such document, or
● an affidavit setting out reasons to the satisfaction of the court why such original
cannot or should not be filed (Rule 12(6))
3. The court shall thereupon assess the amount recoverable by the plaintiff and shall give
an appropriate judgment (Rule 12(4))
4. The court shall thereupon make such order or give such judgment as it may deem fit
(Rule 12(4))
111
5. Default judgment – amounts already paid deducted?
6. Is the summons in the prescribed form?
 Shall in all respects conform to the specimens (Rule 1(2)(a))

 On standard paper A4 (Rule 1(2)(b))
 In printed form (Rule 5(3))
7. Has the summons been correctly issued?
 Signed by the clerk of the court? (Rule4(1)(a))

 Date of issue refected on summons? (Rule 5(2))
 Case number on summons (Rule 3(1))
Magistrate Case number Date served Date of judgment
9. Does the name and physical address of the attorney or plaintiff appear on the
summons (Rule 6(2)(b))
112
10. Is the physical address within the prescribed distance (not more than 15 km) from the
court (Rule 6(2)(c))
11. Appearance to defend entered – defendant may, at the request of the plaintiff, deliver a
consent, in writing, to an address being furnished further than 15 km – plaintiff shall
deliver address where he will accept service (Rule 6(2)(cB))
12. Address given for service shall not be that of the clerk of the court or the sheriff,
unless in the case of the State Attorney (Rule 6(2)(d))
13. Does the postal address of the attorney or plaintiff appear on the summons? (Rule 6(2)
(a))
14. Does the signature of the attorney or plaintiff appear on the summons? (Rule 6(2)(a))
15. Does the name of the Magistrate’s district correspond with the place of the issue of the
summons? If not, then judgment cannot be granted untill the error is amended either in
113
terms of (Rule 7 or Rule 55(A))
Magistrate Case number Place summons issued Date of judgment
16. Is the matter within the area of jurisdiction of the court? (Section 26) and in respect of
persons (Section 28) and in respect of causes of action (Section 29)
17. Is judgment requested at the correct court? (Control purposes – where name of seat o
court differs from name of magisterial district)
Magistrate Case number Name of seat Date of judgment
18. Is the defendant described as required by the rules?
Summons shall show:-
 surname of the defendant

 defendant’s sex, and
 residence or place of business, and where known,
 his first name or initials,
 his occupation and in the case of
 a woman, her marital status, and
 if the defendant is sued in a representative capacity, the capacity in which he is
sued
(Rule 6(5)(a))
19. Does the court have jurisdiction in respect of the cause of action? (Section 29(1) r/w
section 46)
114
20. Was the correct number of days in which to enter an appearance to defend granted to
the defendant? (Or no dies inducia) (Rules 5 and 12(1)(a))
 10 days – subject to section 59 (Rule 5(1))

 20 days – actions against the State
Magistrate Case number Number of days granted Date of judgment
21. Have the dies inducia expired? (Rule 13(3))
Magistrate Case number Date notice of Date of judgment

appearance filed
22. Is the Appearance to Defend in the correct format?
 signed by defendant
 full address where defendant will accept service of process
 address not more than 8 km
 if more than 8 km – consent by plaintiff in writing
 address not clerk of court or sheriff unless State Attorney
(Rule 13(4))
23. Appearance to defend defective – default judgment may not be granted unless plaintiff
has delivered a written notice to defendant calling upon him to deliver a new notice of
appearance within 5 days of the receipt of notice (Rule 12(2)(a))
24. Is the plaintiff entitled to the interest that has been claimed?
● particulars of claim shall show the rate at which the interest is calculated (Rule 6(3)
115
(a)(ii))
● if no agreement or no other law – section 1 of Prescribed Rate of Interest Act No. 55 of

1975 applicable (15.5% with effect from 01.10.93 – GN R1814 GG 15143)
Magistrate Case number Interest Correct interest Date of judgment
25. Are the costs claimed correct? (Annexure 2 Table A)
116
26. Have any amendments to the summons been correctly executed?
● before service – initialled by clerk of the court (Rule 7(2))
● after service – Rule 55A application
27. Has the summons been correctly served? (Rule 9)
Magistrate Case number Date of judgment Date served Particulars of service
28. Has the defendant consented to judgment? Judgment must be granted by the clerk of the
court and not the magistrate (Section 58)
29. Has the defendant made an offer to pay, in instalments, the amount claimed in the
summons? (unliquidated claim)
Judgment must be granted by the clerk of the court and not the magistrate (Section 57)
30. Is the notice in the summons in line with the amendments provided for in GN R910 of
1998? (paragraph (v) to be included in summons) (Coetzee v Government of the Republic of
South Africa; Matiso and Others v Commanding Officer, Port Elizabeth Prison, and Others
1995 (4) SA 631 (CC)
117
MICRO LENDING
66. (a) Does the money lending transaction comply with the exemptions promulgated
in Government Notice No. 1406 of 8 August 2005 (previously Government Notice
No. 713 of 1 June 1999)
Magistrate Case number Date
(b) Plea facts in particulars of claim – state every fact necessary with reference to
the Exemption Notice to make out a proper cause of action that the money
agreement is exempted (Credit Corp. v Swart 1959(1) SA 550 (I) & Botha v Potch
Motors (Edms) Bpk 1963(1) SA 279(A) at p 238 F section 284)
National Credit Act, No. 34 of 2005
67. (a) Magistrate is only empowered to make one or more of the orders ito section
87(1)(a) and (b) and cannot make an order as to the reduction of the interest rate
(Section 86 and SA Taxi Securitization (Pty) Ltd v Lennard [2011] JOL 27185 (ECG)
118
CHECKLIST NUMBER 1
NOTE
CHECKLIST
CHECKLIST IN TERMS OF SECTION 57

1 Check if claim is for liquidated debt or not – original written underlying
agreement is required ;
2 Check the content of letter of demand and SERVICE and ascertain
whether :
 If served by registered post – original proof of posting required including
track and trace report;
 If served personally on judgment debtor – signature acknowledging receipt
of admission of liability and or underlying agreement is required;
 If delivered by e-mail of fax as agreed between the parties in terms of rule
2(1) proof thereof together with an affidavit of service is required;
3 Ascertain the court’s jurisdiction established from judgment debtors’
address or underlying agreement – not where admission of liability was
signed.
4 Ensure letter of demand received before signing admission of liability
5 Check there is sufficient information for debtor to identify creditor, cause of
action and amount claimed – compliance of Rule 4(1)
6 Check sufficient information if debt was ceded – date and manner in
writing of cession Rule 6(12);
7 Check whether debtor admits liability and offers to pay in instalments
8 Check that the offer must be accepted by registered letter - original letter
and proof of posting required as well as track and trace report
9 If delivered by e-mail or fax as agreed between the parties in terms of rule
2(1) proof thereof together with an affidavit of service;
10 If debtor fails to carry out the terms of the offer, the creditor requests
judgment
11 Form 5A must be accompanied by the following documents
12 Copy of letter of demand if no summons was used
119
13 Original admission of liability and undertaking to pay
14 Copy of the letter of acceptance
15 An affidavit or certificate by judgment creditor stating in which respects the
judgment debtor has failed to carry out the terms of the offer and, if any
payments had been made, showing how the balance claimed is calculated
16 An affidavit containing such evidence as is necessary to establish that all
requirements in law have been complied with in terms of rule 4(2) &
12(6A).
17 Remember to make a finding of Reckless credit, over indebtedness and
assessment of affordability.
18 Check whether the file cover has the case number on it.
19 Check whether the parties are correctly reflected on the file cover.
20 Check whether the classification of the cause of action has been
specified?
21 Check whether the file is correctly referred to the Magistrate in terms of
Rule 12(5) or Rule 12 (7).
22 Check whether the clerk of court has stamped the court file with the
default judgement stamp.
23 Check whether the clerk of court has reflected whether the defendant is a
juristic or a natural person?
24 Check that the case numbers are the same as the RDJ and summons;
25 Check that the parties are cited as in the RDJ and summons;
26 Check that the address were the documents were served is the same as
that reflected in the summons or particulars of claim;
27 Check that service had been served as reflected in terms of Rule 9 of
MCR;
28 Check that the sheriff had signed the sheriffs return of service.
29 If you are dissatisfied with anything on the sheriffs return of service you
must query it with plaintiff or plaintiff’s attorney
30 Check whether a COMBINED SUMMONS is used as opposed to a
SIMPLE SUMMONS because every summons must contain
comprehensive particulars of claim in respect of compliance with certain
sections Rule 5(7).
120
31 Ensure that the following averments are reflected in the statement of
material facts and check that:-
32 The NCA applies to the agreement concerned and note the date when the
agreement was entered into in order to ascertain whether the agreement
prescribed or not.
33 The credit provider (usually Banks and Micro lenders) are registered in
terms of section 40 of NCA and that the annual registration fees are paid
in terms of section 51(1)(c); proof of registration and payment of fees
must be attached to the application for default judgement which must be a
certified copy of the original not a copy of a copy;
34 The court has jurisdiction which is where the consumer caries on
business, is employed in your district or an averment that the goods are
kept within the court’s jurisdiction.
NOTE, the whole cause of action in terms of section 28 (1) (d) of the
Magistrates Court Act is not applicable to credit agreements governed by
the NCA. Section 90 (2) (k) (vi) (bb) provides that a provision to such
effect in a credit agreement will be an unlawful agreement;
35 The section 129 (1) notice was a notice to the consumer to bring the
arrears up to date and did not include any threats or demands as at this
stage there is nothing to be demanded until the consumer has either
rejected the proposal or the period of 10 days has expired since the
Section 129 notice was dispensed. Ensure the rejection is in writing; how
the Section 129 notice was served. If service is effected by registered
mail, ensure that a track and trace report is attached to show that the
section 129 notice had reached the correct post office where the
consumer resides, carries on business, employed or where the goods are
kept. Where there is consent to serve by alternative ways in terms of
section 65 of NCA, - by fax, face- book, internet or any other social media
preferred by the consumer that such consent is attached – Sebola v.
Standard Bank of South Africa Ltd 2012 (5) Sa 142 (CC); Kubyana v
Standard Bank of South Africa Ltd (CCT 65/13) [2014] ZACC 1; 2014 (3)
SA 56 (CC) 2014;
36 The section 130 required time of 20 days had been complied with prior to
121
the issue of summons. Note the section 129 and section 130 notice can
be in the same document;
37 That the plaintiff has attached the pre – agreement and quotation in terms
of section 92 of NCA and that it complies with Form 20 of the Regulations
to NCA if the agreement is a small, intermediate or large agreement;
38 Check whether the plaintiff attached the original or a copy of the credit
agreement or the relevant part of the agreement that plaintiff is relying on
for his cause of action in terms of section 93 of NCA.
39 Ensure that the pre- agreement and quotation is a prerequisite of the
agreement. It does not matter if the documents are signed on the same
date, but the consumer should be given an opportunity to consider the
former.
40 Ascertain whether the agreements are grouped as small, intermediate or
large credit agreement section 8 NCA;
41 Ensure the agreement was signed by both parties. Study the agreement
and ensure that the interest complies with the maximum permissible
amounts as set out in section 103(5) and with section 101(b-g) read with
regulations 42.
42 Enquire as to how the sum claimed as capital is arrived at, ascertain
whether any part thereof is interest. Ensure no interest is added on
interest. Consider the in duplum and ultra in duplum rules
43 Check as to whether the capital amount on the summons does not exceed
the total amount in the agreement, if it exceeds then query it;
44 Ensure that the interest rate claimed on the summons is the same as in
the agreement;
45 Ensure that the particulars of claim have a complete breakdown of the
principal debt, all costs, number of instalments and instalment amount.
46 Check that each process that is attached has the case number affixed to it
47 If the summons was amended after service does it comply with Rule 55A?
48 Note If the amount for which judgment is requested, or the percentage of
interest requested, is lower than that prayed for in the summons, judgment
may only be granted for the lower amount or percentage, as the case may
be.
122
PRECEDENT AND PRACTICAL EXAMPLE FOR SECTION 57 APPLICATION
INSTRUCTIONS
PRECEDEN
You are requested to kindly double click the icon in order to enable you to open the
T
document.
TOPIC PRECEDENT
1. Section 57 Application
2. Record of Proceedings
123
RESOURCES
NO. RESOURCE RESOURCE

NUMBER
1 Resource 41.1
RESOURCE
S
2 Resource 41.2
3 Resource 41.3
4 Resource 41.4
5 Resource 41.5
6 Resource 41.6
7 Resource 41.7
8 Resource 41.8
9 Resource 41.9
10 Resource 41.10
11 Resource 41.11
124
12 Resource 41.12
13 Resource 41.13
14 Resource 41.14
15 Resource 41.15
16 Resource 41.16
17 Resource 41.17
18 Resource 41.18 SA Permanent Building Society v S U D Meer

delivered on 7 April 1989, case nr.1978/88 (WLD)
19 Resource 41.19
20 Resource 41.20
21 Resource 41.21
21 Resource 41.22
23 Resource 41.23
24 Resource 41.24
25 Resource 41.25
125
26 Resource 41.26
27 Resource 41.27
28 Resource 41.28
29 Resource 41.29
30 Resource 41.30
31 Resource 41.31
32 Resource 41.32
33 Resource 41.33
34 Resource 41.34
35 Resource 41.35
36 Resource 41.36
37 Resource 41.37
126
38 Resource 41.38
39 Resource 41.39
40 Resource 41.40
41 Resource 41.41
42 Resource 41.42
43 Resource 41.43
44 Resource 41.44
45 Resource 41.45
46 Resource 41.46
47 Resource 41.47
48 Resource 41.48
49 Resource 41.49
50 Resource 41.50
51 Resource 41.51
127
52 Resource 41.52
BIBLIOGRAPHY
1 Constitution of the Republic of South Africa, Act No. 108 of 1996
2 Magistrates Act 90 of 1993 , Regulation 54(A)
3 The Magistrates Court Act 32 of 1944,
4 Superior Courts Act, Act 10 of 2013.
5 The Magistrates Court Rules
6 Van Loggerenberg, Jones and Buckle : The Civil Practice of the Magistrates
Court in South Africa Volume I, tenth edition, Service 11, 2016
7 Van Loggerenberg, Jones and Buckle : The Civil Practice of the Magistrates
Court in South Africa Volume ll, tenth edition, Service 11, 2016
8 Interpretation Act, 33 of 1957
9 Legal Practices Act 28 of 2014
10 Electronic Communications and Transactions Act 25 of 2002
11 National Credit Act, No. 34 of 2005
12 The Courts of Law Amendment Act 7 of 2017
128
13 AMLERS Precedents of Pleadings - 8th Edition, Harms
14 Civil Procedure in the SC by Erasmus
Own Notes
NOTES
OWN
129
130

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MODULE 9 NOTE 1

Topic: Introduction and Overview of Magistrates

Civil Facilitation Team 2019

2 Circulars from Commission. Arranged from latest to oldest

3 Rule for discussion of this topic

4 Discussion of Guidance Note on subject matter

5 Quality Assurance Guidelines

7 Precedents and Suggested Record of Proceedings

8 Resources referred to in this note

10 Own Note for making notes

RELATED LINKS TO RELATED EXPLAINATION WHERE

RESOURCES RESOURCES NECESSARY

The National Credit

3 The Law of Evidence 1.3 Section 3

4 The Courts of Law

2 Rules 2.1 The Magistrates Court 2.1

Regulations 4.1 The National Credit Act, Regulation 28

3 National 3.1 Van Loggerenberg, 2.1 Section 28

3.2 Van Loggerenberg, 3.2 Rule 1(4)

Regulations 4.1 The National Credit Act, Regulation 28

(b) a defective memorandum of notice of intention to defend by a defendant who is not

(c) a request for a judgment by default having been refused.

4. Applications in terms of sections 57 and 58 of the Act

(4) Every summons shall set forth-

(b) Every summons, except a divorce summons, shall include:

(i) a form for consent to judgment;

[Subrule (5) substituted by GN R507/2014 w.e.f. 28 July 2014]

(6) A summons shall also-

6. Rules relating to pleadings generally

(c) disability in respect of-

[Subrule (11) substituted by GN R507/2014 w.e.f. 28 July 2014]

Topic: Introduction and Overview to Debt

Civil Facilitation Team 2019

RELATED LINKS TO RELATED EXPLAINATION WHERE

RESOURCES RESOURCES NECESSARY

1.3 NCA Amendment Act 19

3 The Law of Evidence 1.3 Section 3

4 The Courts of Law

2 Rules 2.1 The Magistrates Court 2.1

Regulations 4.1 The National Credit Act, Regulation 28

3 National 3.1 Van Loggerenberg, 2.1 Section 28

3.2 Van Loggerenberg, 3.2 Rule 1(4)

Regulations 4.1 The National Credit Act, Regulation 28

1.1. WHAT IS DEBT COLLECTION?

1. 2. THE SEQUENCE OF THE DEBT COLLECTION PROCEDURE

1.4 THE NATIONAL CREDIT ACT WAS PROMULGATED TO:

2 IMPORTANT DEFINITIONS OF NCA FOR PURPOSES OF RDJ

Credit Provider A person or party who lends money, supplies goods or

Consumer In respect of a credit agreement, is a person or party, t o whom

(a) a fee, charge or interest became payable when payment of

(b) possession and use of the property is transferred to the

(c) ownership of the property either –

(i) passes to the consumer only when the agreement is fully

(ii) passes to the consumer immediately subject to a right of

(d) interest, fees or other charges are payable to the credit

Lease Means an agreement in terms of which –

(a) temporary possession of any movable property is delivered

(b) payment for the possession or use of that property is –