SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document
in compliance with the law and SAFLII Policy
IN THE HIGH COURT OF SOUTH AFRICA
FREE STATE DIVISION, BLOEMFONTEIN
Not reportable
Case no: A131/2024
In the matter between:
TIMAC AGRO SOUTH AFRICA (PTY) LTD APPELLANT / PLAINTIFF
[Registration No: 2011/005705/07]
and
THEUNIS LODEWYK ADRIAAN NEL RESPONDENT / DEFENDANT
[ID No. 7[…]]
Neutral citation: Timac Agro South Africa (Pty) Ltd v Nel (A131/2024) [2026]
ZAFSHC 297 (11 May 2026)
Coram: VAN ZYL J et CHESIWE J et MANYE AJ
Heard: 25 July 2025
Delivered: This judgment was handed down electronically by circulation to
the parties’ representatives by e-mail and released to SAFLII. The time and date
for hand-down is deemed to be 15h00 on 11 May 2026.
Summary: Appeal – i ncidental credit agreement – commencement of
proceedings without compliance with the provisions of ss 129 and 130 of the
National Credit Act , 34 of 2005 – p roceedings not a nullity – a djournment of
proceedings to give notice, whereafter proceedings may be resumed.
ORDER
1 The appeal is upheld; the matter is referred back to the court a quo and the
order of the court a quo is set aside and substituted with the following order:
‘1.1 The trial is adjourned sine die.
2
1.2 The plaintiff is ordered to comply with the provisions of sections 129 and
130 of the National Credit Act, 34 of 2005, in respect of the Acknowledgement of
Debt referred to in the plaintiff`s particulars of claim.
1.3 Leave is granted to the plaintiff to amend its particulars of claim after
compliance with paragraph 1.2 above, the costs of which amendment and the
consequent amendment of the defendant`s plea, if any, are to be paid by the
plaintiff.
1.4 The plaintiff is granted leave to resume the action before the court a quo
after compliance with paragraphs 1.2 and 1.3 above.
1.5 The costs of the action stand over for later adjudication.’
2 The respondent is ordered to pay the costs of the appeal, counsel`s fees on
Scale B.
JUDGMENT
Van Zyl J (Chesiwe J et Manye AJ concurring)
[1] This is an appeal against the following order made by the court a quo (single
judge of this Division):
‘1. The plaintiff’s action is declared to have been issued prematurely.
2. The plaintiff may not commence any legal proceedings to enforce the agreement
between the parties before:
2.1 First providing the defendant with the notice as contemplated in section 129(1)(a) of
the National Credit Act, 34 of 2005; and
2.2 Meeting any further requirements set out in section 130(1) of the National Credit
Act, 34 of 2005;
3. The plaintiff to pay the costs of suit.’
[2] I will refer to the parties as in the present appeal.
Background
[3] On or about 13 June 2018 the appellant and the respondent concluded a
written, what was called, credit facility , a copy of which is annexed to the
particulars of claim as annexure ‘A’. The credit facility was concluded subject to
written terms and conditions, a copy of which is annexed to the particulars of claim
as annexure ‘B1’ (signed copy). In accordance with the terms and conditions, and
3
as also averred in the particulars of claim, the credit facility and the terms and
conditions are collectively referred to as ‘the agreement’.
[4] In terms of the agreement, the appellant and the respondent agreed that the
appellant would sell and deliver fertilizer to the respondent upon the latter’s
request.
[5] With reference to the agreement, the court a quo adjudicated the matter on
the basis that the appellant and the respondent agreed that the respondent must
pay within 180 days from the delivery of the fertilizer and the appellant was entitled
to charge interest at the rate of 2% above the prime interest rate per month
charged by Absa Bank Limited (which was 10% per annum ) from the date that the
payment became due until the payment was made in full.
[6] The appellant invoiced the respondent for the fertilizer sold and delivered.
The respondent failed to pay the appellant the full amount due in respect of the
said fertilizer. The balance remained outstanding.
[7] The appellant caused a notice complying with the provisions of s 129(1)(a) of
the National Credit Act 34 of 2005 (‘the NCA’), to be delivered via registered mail
to the respondent. The said notice was dated 21 January 2020.
[8] The respondent answered the appellant’s s 129- notice through his attorney
at the t ime, Jac N Coetzer, who addressed correspondence to the appellant’s
attorneys of record, which letter is attached to the particulars of claim as annexure
‘G’. In terms thereof:
(a) The respondent acknowledged receipt of the appellant’s s 129-notice.
(b) The respondent indicated that he wants to conclude an agreement in terms
of which the outstanding debt is settled via instalments.
(c) Respondent tacitly elected not to exercise any remedies provided to him in
terms of s 129(1)(a) of the NCA.
[9] On 19 March 2019, the respondent signed a written Acknowledgement of
Debt, attached to the particulars of claim as annexure ‘ D’. In terms of the
4
Acknowledgement of Debt, the respondent undertook to settle the outstanding
amount due to the appellant, namely R1 582 642.26, in three equal instalments of
R527 547.42 each, the first became payable on 31 May 2020 and the last
instalment on 31 July 2020.
[10] The respondent only made three partial payments to the appellant, namely
R225 000.00 on 8 June 2020, R50 000.00 on 30 June 2020 and R50 000.00 on
17 July 2020.
[11] As the Acknowledgement of Debt contained an acceleration clause, the
entire outstanding amount due by the respondent to the appellant became
payable on 31 May 2020.
[12] In terms of paragraph 17 of the particulars of claim the Acknowledgement of
Debt does not constitute a compromise or novation of the agreement.
Furthermore, it is averred at paragraph 22 of the particulars of claim that the
agreement and the Acknowledgement of Debt constitutes an incidental credit
agreement as defined in s 1 of the NCA.
[13] In the appellant’s particulars of claim, at paragraph 23 thereof, the appellant
averred as follows:
‘In light of the fact that the agreement and the acknowledgement of debt constitute
an ‘incidental credit agreement’, the plaintiff was exempted from the following
requirements of the NCA:
a. registration as credit provider;
b. pre-agreement disclosures;
c. the requirements pertaining the form and content of agreements;
d. unlawful agreements and unlawful provisions in agreements;
e. reckless credit; and
f. the dispute settlement mechanisms of the NCA.’
[14] In his plea, the defendant pleaded as follows:
‘Defendant pleads that both the purported agreements, annex A and the purported
acknowledgment of debt, annex D (credit agreements) are in their entirety – and
5
not only partially as averred by the Plaintiff – regulated by the National Credit Act
(NCA) and accordingly pleads . . .’
[15] In addition the defendant raised special pleas in respect of the following:
(a) Non-compliance with the provisions of Rule 41A.
(b) Lack of jurisdiction of the High Court.
(c) Contravention of the provisions of Part D of Chapter 4 of the NCA.
(d) Contravention of the provisions of Sections 103 and 104 of the NCA.
(e) Non-compliance with the provisions of Sections 123, 129 and 130 of
the NCA ‘by not affording the defendant the opportunity to remedy the
alleged defaults as required by the NCA’.
(f) Unlawfulness and ineffectiveness of the certificate of balance.
(g) Unlawfulness of the acceleration provisions.
[16] The defendant also pleaded to the merits of the appellant’s particulars of
claim.
[17] In addition the defendant filed three conditional counterclaims based on s
110, Part D of Chapter 4 and Part A of Chapter 5 of the NCA, respectively.
[18] At the inception of the trial the parties requested the court a quo to make a
ruling as to which party had the duty to begin with the presentation of evidence.
The court a quo ruled that such duty rested upon the defendant. The defendant
thereupon closed his case without presenting any evidence. The appellant called
two witnesses to testify in support of its case. Thereafter the appellant applied for
the amendment of its prayers as contained in the particulars of claim.
Findings by the court a quo
[19] The court a quo made the following main findings which are relevant to the
present appeal:
‘[14] The crucial point for determination is whether the credit facility agreement
and the acknowledgement of debt were incidental agreements or not. . . .
6
[20] . . . I conclude, therefore, that the transaction or transactions that the
parties entered into were incidental credit transactions.
[22] The long and short of the defendant’s contention is that after the section
129 notice and the signing of the acknowledgement of debt, the amount of
R325 000.00 was paid to the plaintiff. The settlement that was reached in terms of
the acknowledgement of debt, irrespective of whether it was a novation of
compromise, constituted a new arrangement of payment that the defendant was
entitled to remedy. The defendant was not afforded the opportunity to remedy his
default in terms of the acknowledgement of debt as no section 129 notice was
addressed to him. The plaintiff used a “stale” section 129(1)(a) notice to initiate
legal proceedings to enforce the agreement whereas the subsequent default
obliged the plaintiff to issue a fresh section 129(1)(a) notice.
[26] There are two statutory conditions which must be met before the credit
provider may institute litigation under section 129. In peremptory terms, the
section declares that legal proceedings to enforce the agreement may not
commence before (a) providing notice to the consumer; and (b) meeting further
requirements set out in section 130. The two sections must be read together.
When a credit provider seeks to enforce the agreement by means of litigation, it
must first show compliance with section 130, whic h, by extension, refers back to
section 129. The application of these sections is triggered by the consumer’s
failure to repay the loan. These sections suspend the credit provider’s rights under
the credit agreement until certain steps have been taken. The credit provider is not
entitled to exercise its rights immediately under the agreement. It is first required to
notify the consumer of the specific default and demand that the arrears be paid. If
the consumer pays the arrears, then the dispute is settled.
the consumer pays the arrears, then the dispute is settled.
[27] Section 130(3)(a) of the NCA provides that despite any provision of law or
contract to the contrary, in any proceedings commenced in a court in respect of a
credit agreement to which this Act applies, the court may determine the matter
only if the court is satisfied that in the case of proceedings to which sections 127,
129 or 131 apply, the procedures required by those sections have been complied
with. The plaintiff has not complied with the requirements of section 129 read with
section 130, having as consequence that the action was instituted prematurely.
The plaintiff must first issue a notice in terms of section 129(1)(a) of the NCA
before any further steps could be pursued against the defendant.’
7
[20] The court a quo consequently made the order quoted at the beginning of this
judgment.
Application for leave to appeal
[21] This appeal is with leave of the court a quo.
[22] The grounds of the application for leave to appeal are, inter alia , the
following:
‘2. The learned Judge erred by finding in paragraph [22] of the judgment that
the acknowledgment of debt “… constituted a new arrangement of payment that
the defendant was entitled to remedy ”. This finding is in direct contradiction of the
judgment of the Supreme Court of Appeal in Ratlou v MAN Financial Services
(Pty) Ltd 2019 (5) SA 117 (SCA) . . .
3. The learned Judge should have held that the acknowledgment of debt
signed by defendant was linked to the underlying causa, the credit facility.
Accordingly, in the absence of express wording in the acknowledgement of debt to
the contrary, the plaintiff was not required to comply with the provisions of s 129
and 130 of the NCA for a second time upon the default of the defendant.
4. The learned Judge erred by finding that the plaintiff used a “ …’stale’
section 129(1)(a) notice to initiate legal proceedings to enforce the agreement
whereas a subsequent default obliged the plaintiff to issue a fresh Section
129(1)(a) notice”. The learned Judge erred by relying on Mashele v BMW
Financial Services (Pty) Ltd and Another 2021 (2) SA 519 (GP) as authority for
this proposition. In the Mashele judgment the court expressly rejected the
argument relating to a “stale” S 129 notice.
5. The learned Judge made an order that is not competent in terms of the
NCA and that conflict with S 130(4)(b) of the NCA. Having found that the plaintiff
did not properly comply with the required procedures of ss 129 and 130 of the
NCA, the only competent order that the learned Judge could have made was an
order in terms of s 130(4)(b) of the NCA . . .
6. It was incompetent for the Court to issue a final order in form of a
6. It was incompetent for the Court to issue a final order in form of a
declaratory order when the express provisions of the NCA states that the Court
must adjourn the matter temporarily whereafter the plaintiff will be entitled to
8
resume the proceedings if it had complied with the order. In the alternative, it was
incompetent for the Court to declare that the action has been instituted
prematurely.
7. The learned Judge only had the power to grant an order in terms of s
130(4)(b) of the NCA. . . .
8. The effect of the order of the Court is that the plaintiff must commence
proceedings de novo after it had complied with the requirements of ss 129 and
130 of the NCA. This position conflicts with the express wording of S 130(4)(b) of
the NCA.
11. The learned Judge should have postponed/adjourned the trial to enable
the plaintiff to comply with the provisions of the NCA after which the plaintiff would
have been entitled to resume the action.
12. The order of the Court elevates the defendant’s plea of non-compliance
with s 129 to a defence on the merits which it is not. . . .
13. The learned Judge erred by ordering the plaintiff to pay the costs of suit.
The learned Judge should have ordered the defendant to pay the costs of the
action on an attorney and client scale. Alternatively, the Court should have
reserved the issue of costs for determination when the action is resumed.’
Appealability of the order
[23] In Zweni v Minister of Law and Order [1993] 1 All SA 365; [1992] ZASCA
197; 1993 (1) SA 523 (A) at 532I – 533B, the court determined as follows:
‘A “judgment or order” is a decision which, as a general principle, has three
attributes, first the decision must be final in effect and not susceptible of alteration
by the Court of first instance;
Second, it must be definitive of the rights of the parties; and, third, it must have the
effect of disposing of at least a substantial proportion of the relief claimed in the
main proceedings . . .’
[24] Mr Rautenbach, who appeared on behalf of the respondent, referred in his
heads of argument and also during his oral argument to the principles applicable
to the interpretation of court orders, as decided in HLB International (South Africa)
9
(Pty) Ltd v NWRK Accountants and Consultants (Pty) Ltd 2022 (5) SA 373 (SCA);
(113/2021) [2022] ZASCA 52 (12 April 2022) where the following was stated at
paragraphs 26 to 28:
‘[26] The now well-established test on the interpretation of court orders is this:
“The starting point is to determine the manifest purpose of the order. In interpreting a
judgment or order, the court’s intention is to be ascertained primarily from the language of
the judgment or order in accordance with the usual, well -known rules relating to the
interpretation of documents. As in the case of a document, the judgment or order and the
court’s reasons for giving it must be read as a whole in order to ascertain its intention.”
[27] The manifest purpose of the judgment is to be determined by also having
regard to the relevant background facts which culminated in it being made. For as
was said in KPMG Chartered Accountants (SA) v Securefin Limited and Another ,
“context is everything”.
[28] A fairly recent illustration of the linguistic , contextual and purposive
approach to the interpretation of a judgment or order is to be found in Elan
Boulevard v Fnyn Investments , in which it was said that “(a)n order is merely the
executive part of the judgment and, to interpret it, it is necessary to read the order
in the context of the judgment as a whole”, and –
‘(a) part of the ‘usual well-known rules’ of interpretation, according to Olivier JA, is –
“dat mens jou nie moet blind staar teen die swart -op-wit woorde nie, maar probeer vasstel
wat die bedoeling en implikasie is van wat gesê is. Dit is juis in hierdie proses waartydens
die samehang en omringende omstandighede relevant is.” [footnotes omitted]
Loosely translated:
‘”One should not stare blindly at the black-on-white words but try to establish the meaning
and implication of what it is being said. It is precisely in this process that the context and
surrounding circumstances are relevant.”’
surrounding circumstances are relevant.”’
[25] Mr Rautenbach referred to the fact that the court a quo found that the
appellant had not complied with the requirement of s 129 read with s 130 of the
NCA ‘having as consequence that the action was instituted prematurely. The
plaintiff must first issue a notice in terms of Section 129(1)(a) of the NCA before
any further steps could be pursued against the defendant ’. He submitted that the
reference by the court a quo to the action being ‘premature’ should be understood
within the context of s 129 and s 130 as well as the judgment of Amardien and
Others v Registrar of Deeds and Others [2018] ZACC 47; 2019 (3) SA 341 (CC)
referred to by the court a quo. He further contended that by holding that the
appellant must ‘… first issue a notice in terms of section 129(1)(a) of the NCA
10
before any further steps could be pursued against the defendant ’, the court a quo
recognized the steps already taken, namely the issuing of summons, but required
further notification in terms of s 129 of the NCA.
[26] Mr Rautenbach consequently submitted that the appellant’s contentions that
the effect of the court a quo’s order is that it must commence proceedings de novo
is not correct, since, so he submitted, the order of the court a quo, even if not
specifically stated, on a balance d interpretation of the context within which the
judgment was delivered, recognized the statutory provisions contained in s
130(4)(b) of the NCA. Mr Rautenbach therefore submitted that the court a quo
merely required an adjournment of the matter.
[27] He consequently contended that the court a quo’s order is not appealable
and that the appeal should, in the circumstances, be dismissed with costs. I do
not agree with the aforesaid submissions on behalf of the respondent.
[28] Although the court a quo indeed stated that ‘…the plaintiff must first issue a
notice in terms of section 129(1)(a) before any further steps could be pursued
against the defendant, this finding must be read in context with the order as such
where the court ordered that ‘…the plaintiff may not commence any legal
proceedings to enforce the agreement between the parties before compliance with
ss 129(1)(a) and 130(1) of the NCA ’. The word ‘commence’, in my view, is clearly
indicative thereof that the court a quo’s intention with the order is that the appellant
needs to comply with s 129 of the NCA and then commence proceedings de novo.
[29] That the court a quo undeniably intended to order that the appellant should
commence proceedings de novo, is clearly evident from the judgment in the
application for leave to appeal where the court a quo stated the following:
‘The applicant made persuasive arguments that, in the light of the order made, the
‘The applicant made persuasive arguments that, in the light of the order made, the
court should have postponed or adjourned the trial to enable the plaintiff to comply
with the provisions of the National Credit Act, (“the NCA”), whereafter the plaintiff
would have been entitled to resume the action.’
11
[30] The words ‘…in the light of the order made’ is, in my view, a reference to the
finding that the appellant’s action had been issued prematurely. What the court a
quo subsequently stated, namely that that order should have resulted in an order
that the trial be postponed or adjourned to enable the appellant to comply with the
provisions of the NCA, instead of the order which the court a quo in fact made,
confirms that the court a quo intended its order to mean that the proceedings
should start de novo.
[31] The judgment and order of the court a quo consequently, in my view, has a
final and definitive effect on the present action and is therefore appealable.
Notice of abandonment in terms of rule 41(2)
[32] The respondent filed a notice of abandonment in terms of Rule 41(2)
whereby he abandoned the judgment granted in his favour handed down by the
court a quo on 7 December 2023. The date of 8 August 2023, as well as the date
of 8 August 2024, appear on the said notice. I accept that the notice was filed on 8
August 2024.
[33] Rule 41(2) determines as follows:
‘Any party in whose favour any decision or judgment has been given, may
abandon such decision or judgment either in whole or in part by delivering notice
thereof and such judgment or decision abandoned in part shall have effect subject
to such abandonment. The provisions of sub-rule (1) relating to costs shall mutatis
mutandis apply in the case of a notice delivered in terms of this sub-rule.’
[34] The defendant contended in his heads of argument that in the alternative to
the submissions that the order is not appealable, the respondent’s abandonment
of the order of the court a quo have caused the order to become moot or of
academic importance.
[35] Section 16(2)(a)(i) of the Superior Court’s Act 10 of 2013, determines as
follows:
12
‘When at the hearing of an appeal the issues are of such a nature that the decision
sought will have not practical effect or result, the appeal may be dismissed on this
ground alone.’
[36] In the present matter it is evident from the notice of appeal that the order the
appellant is seeking on appeal, is the following:
‘1. That the appeal be upheld;
2. That the order of the Court a quo be set aside and replaced with the
following:
2.1 Judgment is entered into in favour of the plaintiff;
2.2 The defendant is ordered to pay the plaintiff R1 239 433.75 (ONE MILLION
TWO HUNDRED AND THIRTY -NINE THOUSAND FOUR HUNDRED AND
THIRTY-THREE RAND AND SEVENTY-FIVE CENT);
2.3 The defendant to pay interest on the amount above at the rate of 1% (ONE
PERCENT) per month calculated from the date of service of the summons being
20 September 2020 until the date of payment;
2.4 The defendant’s special pleas are dismissed;
2.5 The defendant’s counterclaim is dismissed;
2.6 The defendant to pay the plaintiff’s costs of suit on an attorney and client
scale;
3. That the defendant/respondent be ordered to pay the costs of the appeal
on an attorney and client scale.’
[37] Because the notice of abandonment was filed and received after the appeal
record was finalized, a copy of the said notice and correspondence in relation
thereto, are attached to the appeal record as a separate bundle.
[38] From an e- mail attached to the bundle addressed from the respondent’s
attorney of record to the appellant’s attorney of record, it appears that the
respondent initially relied on the unreported judgment of Department: Transport,
Province of Kwazulu- Natal v Ramsaran and Others [2019] ZASCA 62; 2019 JDR
0944 (SCA) for the contention that in abandoning the judgment, the respondent
has removed the lis between the parties and that the appellant’s appeal has
consequently been rendered moot as a result thereof.
13
[39] The appellant appeals the alleged error by the court a quo by having failed to
enter judgment in favour of the appellant despite hearing evidence and despite the
trial being concluded. The appellant is therefore seeking affirmative relief in the
form of a judgment in its favour. The fact that the respondent has abandoned the
order made by the court a quo, does not mean that judgment is automatically
entered into in favour of the appellant.
[40] The respondent’s notice of abandonment in terms of r ule 41(2) does
therefore not affect the status of the issues in the appeal.
[41] The appeal has therefore, in my view, not become moot or of mere academic
importance.
The merits of the appeal
[42] Section 129(1) of the NCA provides as follows:
‘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, alternatively
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; 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) meet any further requirements set out ins section 130.’
[43] Section 130(1) of the NCA provides as follows:
‘130. Debt procedures in a Court.
(1) Subject to subsection (2), a credit provider may approach the court for an
order to enforce a credit agreement only if, at that time, the consumer is in default
and has been in default under that credit agreement for at least 20 business days
and –
14
(a) at least 10 business days have elapsed since the credit provider delivered
a notice to the consumer as contemplated in s ection 86(10), or s ection 129(1), as
the case may be;
(b) in the case of a notice contemplated in section 129(1) the consumer has –
(i) not responded to that notice; or
(ii) responded to the notice by rejecting the credit provider’s proposals; and
(c) in the case of an instalment agreement, secured loan or lease, the
consumer has not surrendered the relevant property to the credit provider as
contemplated in Section 127.
(2) . . .
(3) Despite any provision of law or contract to the contrary, in any proceedings
commenced in a court in respect of a credit agreement to which this Act applies,
the court may determine the matter only if the court is satisfied that-
(a) in the case of proceedings to which sections 127, 129 or 131 apply, the
procedures required by those sections have been complied with;
(b) . . .’
[44] The purposes of s 129 of the NCA are set out in Amardien and Others v
Registrar of Deeds and Others [2018] ZACC 47; 2019 (3) SA 341 (CC) para 56:
‘(a) It brings to the attention of the consumer the default status of her credit
agreement.
(b) It provides the consumer with an opportunity to rectify the default status of
the credit agreement in order to avoid legal action being instituted on the credit
agreement or to regain possession of the assets subject to the credit agreement.
(c) It is the only gateway for a credit provider to be able to institute legal action
against the consumer who is in default under a credit agreement.’
[45] At paragraphs 58 and 59 of Amardien, supra, the following are determined
with reference to ss 129 and 130 of the NCA:
‘[58] There are two statutory conditions which must be met before the credit
provider may institute litigation under s 129. In peremptory terms, the section
declares that legal proceedings to enforce the agreement may not commence
declares that legal proceedings to enforce the agreement may not commence
before (a) providing notice to the consumer; and (b) meeting further requirements
set out in s 130.
[59] The reference to s 130 reveals a strong link between the two provisions
hence they are required to be read together. When a credit provider seeks to
15
enforce the agreement by means of litigation, it must first show compliance with s
130, which, by extension, refers back to s 129. The application of these sections is
triggered by the consumer’s failure to repay the loan. These sections suspend the
credit provider’s rights under the credit agreement until certain steps have been
taken. The credit provider is not entitled to exercise its rights immediately under
the agreement. It is first required to notify the consumer of the specific default and
demand that the arrears be paid. If the consumer pays up the arrears then the
dispute is settled.’
[46] The court a quo also referred to the aforesaid quotation in its judgment.
[47] As is evident from the notice of application for leave to appeal referred to
earlier, the first ground of the leave to appeal is based on the contention that the
appellant was not required to comply with the provisions of s 129 and 130 of the
NCA following the respondent’s default under the Acknowledgement of Debt.
[48] In this regard, the appellant relied on Ratlou v MAN Financial Services (Pty)
Ltd 2019 (5) SA 117 (SCA) where it was held that the settlement and the written
credit facility in that matter, are interdependent. It was consequently found at
paragraph 26 of the said judgment that:
‘. . . there can only be one conclusion: that the NCA was not designed to regulate
settlement agreements where the underlying agreements, or causa, would not
have been considered by the Act.’
[49] It was consequently found that the settlement agreement did not fall within
the ambit of the NCA and the respondent therefore had no obligation to comply
with the provisions thereof prior to enforcing its terms.
[50] However, contrary to the present matter , in that matter the original rental
agreements did not fall within the ambit of the NCA . In the present matter , even
based on the appellant’s own case in paragraph 23 of the particulars of claim, both
based on the appellant’s own case in paragraph 23 of the particulars of claim, both
the agreement and the Acknowledgement of Debt constituted incidental credit
agreements. This fact was also referred to in the court a quo’s judgment,
paragraph 7 thereof, and the question was then raised in paragraph 14 thereof
whether the credit facility agreement and the Acknowledgement of Debt were
16
incidental agreements or not. The court a quo concluded at paragraph 20 of the
judgment as follows:
‘I conclude, therefore, that the transaction and/or transactions that the parties
entered into were incidental or credit transactions.’
[51] The finding that the Acknowledgment of Debt also constitutes an incidental
credit transaction is not a ground of appeal and must therefore be accepted.
[52] Section 8(1) of the NCA determines, inter alia , as follows with regard to the
classification and categories of credit agreements:
‘8. Credit agreements.
(1) Subject to subsection (2) , an agreement constitutes a credit agreement for
the purposes of this Act if it is –
(a) . . .
(b) a credit transaction, as described in subsection (4);
(c) . . .
(4) An agreement, irrespective of its form but not including an agreement in
subsection (2), constitutes a credit transaction if it is –
(a) . . .
(b) an incidental credit agreement, subject to section 5(2);
(c) . . .’
[53] The aforesaid determinations are made recognizing the limited application of
the NCA to incidental credit agreements in terms of s 5 of the NCA.
[54] A credit transaction therefore constitutes an incidental credit agreement ,
which constitutes a credit agreement for purposes of the Act.
[55] In terms of s 4(1), subject to ss 5 and 6, the NCA generally applies to every
credit agreement between parties dealing at arm’s length and made within or
having an effect within, the Republic.
[56] Consequently, the provisions of s 129 of the NCA are applicable to the
Acknowledgement of Debt in the present instance.
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[57] The appellant therefore had to comply with the provisions of s 129 of the
NCA, read with the provisions of s 130 of the NCA, before it approached the court
for an order to enforce the provisions of the Acknowledgement of Debt. The court
a quo was consequently correct in its finding in this regard.
[58] The consequent finding which must be made, is what the consequences are
of the fact that the appellant did not properly comply with the required provisions of
ss 129 and 130 of the NCA with regard to the Acknowledgment of Debt.
[59] In this regard the appellant correctly refer red to the applicability of the
provisions of s 130(4)(b) of the NCA in its notice of application for leave to appeal,
read with the provisions of s 130(3)(a), which determine as follows:
‘130(3)(a) Despite any provision of law or contract to the contrary, in any
proceedings commenced in a court in respect of a credit agreement to which this
Act applies, the court may determine the matter only if the court is satisfied that –
(a) in the case of proceedings to which sections 127, 129 or 131 apply, the
procedures required by those sections have been complied with;
(b) . . .
(c) . . .
(4) In any proceedings contemplated in this section, if the court determines
that –
(a) . . .
(b) the credit provider has not complied with the relevant provisions of this Act,
as contemplated in subsection (3)(a), or has approached the court in
circumstances contemplated in subsection (3)(c) the court must –
(i) adjourn the matter before it, and
(ii) make an appropriate order setting out the steps the credit provider must
complete before the matter may be resumed;
(c) . . .’
[60] I already found earlier in this judgment that the court a quo in fact found that
the appellant must commence proceedings de novo after it had complied with the
requirements of ss 129 and 130 of the NCA.
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[61] I agree with the contention on behalf of the appellant by Mr Swart that this
finding of the court a quo conflicts with the express wording of s 130(4)(b) of the
NCA.
[62] The aforesaid finding is also contrary to and conflicting with the established
legal position enunciated by the Constitutional Court in Sebola and Another v
Standard Bank Limited and Another [2012] ZACC 11; 2012 (5) 142 (CC) and
followed by, inter alia , the full court in Benson and Another v Standard Bank of
South Africa (Pty) Ltd and Others [2019] ZAGPJHC 30; 2019 (5) SA 152 ( GJ)
wherein it was held as follows at paragraph 16 thereof:
‘[16] In Sebola the Constitutional Court made the following clear: First, the
commencement of proceedings without prior notice does not render the
proceedings a nullity, but simply requires an adjournment of proceedings so as to
permit the credit provider to give notice before the proceedings may be resumed.
A failure to give notice does not invalidate the proceedings but is simply dilatory.’
[63] I consequently find that the court a quo should have adjourned the trial to
enable the appellant to comply with the provisions of the NCA and to amend its
particulars of claim accordingly , after which the appellant would be entitled to
resume the action.
[64] The appeal should consequently succeed on the said basis and the matter is
to be referred back to the court a quo.
[65] The merits of the action as such can therefore not be determined in this
appeal. The court a quo has not yet determined the merits of the action.
Furthermore, the order which is to be made in the appeal may result in a
reopening of the case of the respective parties in order lead further evidence.
The costs
[66] The court a quo ordered the appellant to pay the costs of suit. Although it
was argued on behalf of the appellant that the court a quo should have ordered
the respondent t o pay the costs of the action on an attorney and client scale, I
cannot agree with this contention.
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[67] As stated above, the court a quo has not yet det ermined the merits of the
action, which determination will obviously have an impact upon the appropriate
order as to costs. In my view, it will consequently not be appropriate to make an
order as to the costs of the action at this stage.
[68] As to the costs of the appeal, the appellant is in my view entitled thereto,
following its success on appeal, albeit on its alternative grounds of appeal. The
fact that the respondent abandoned the order of the court a quo, did not have a
practical effect on the continuation and/or finalization of the action. The appellant
was left with no other option but to appeal the matter.
Order
[69] The following order is made:
1 The appeal is upheld; the matter is referred back to the court a quo
and the order of the court a quo is set aside and substituted with the
following order:
‘1.1 The trial is adjourned sine die.
1.2 The plaintiff is ordered to comply with the provisions of sections 129 and
130 of the National Credit Act, 34 of 2005, in respect of the Acknowledgement of
Debt referred to in the plaintiff`s particulars of claim.
1.3 Leave is granted to the plaintiff to amend its particulars of claim after
compliance with paragraph 1.2 above, the costs of which amendment and the
consequent amendment of the defendant`s plea, i f any, are to be paid by the
plaintiff.
1.4 The plaintiff is granted leave to resume the action before the court a quo
after compliance with paragraphs 1.2 and 1.3 above.
1.5 The costs of the action stand over for later adjudication.’
2 The respondent is ordered to pay the costs of the appeal , counsel’s
fees on Scale B.
______________________
C VAN ZYL
JUDGE OF THE HIGH COURT
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I concur:
______________________
S CHESIWE
JUDGE OF THE HIGH COURT
I concur:
______________________
L MANYE
ACTING JUDGE OF THE HIGH COURT
Appearances:
For the Appellant: Mr DD Swart
Instructed by: Salley`s Attorneys, Bloemfontein
For the Respondent: Mr JS Rautenbach
Instructed by: Blair Attorneys, Bloemfontein