Sebola and Another v Standard Bank of South Africa Ltd and Another (CCT 98/11) [2012] ZACC 11; 2012 (5) SA 142 (CC); 2012 (8) BCLR 785 (CC) (7 June 2012)

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Sebola and Another v Standard Bank of South Africa Ltd and Another (CCT 98/11) [2012] ZACC 11; 2012 (5) SA 142 (CC); 2012 (8) BCLR 785 (CC) (7 June 2012)

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CONSTITUTIONAL COURT OF SOUTH AFRICA
Case CCT 98/11
[2012] ZACC 11
In
the matter between:
MASHILO
SHADRACK SEBOLA
First
Applicant
NOMBEKO
DAPHNE SEBOLA
Second
Applicant
And
STANDARD BANK
OF SOUTH AFRICA LIMITED
First
Respondent
DEPUTY
SHERIFF OF THE HIGH COURT,
ROODEPOORT:
FWJ COETZEE
Second
Respondent
And
SOCIO-ECONOMIC
RIGHTS INSTITUTE
OF SOUTH
AFRICA
First Amicus
Curiae
NATIONAL
CREDIT REGULATOR
Second Amicus
Curiae
BANKING
ASSOCIATION SOUTH AFRICA
Third Amicus
Curiae
Heard
on : 14 February 2012
Decided
on : 7 June 2012
JUDGMENT
CAMERON
J (Yacoob ADCJ, Froneman J, Khampepe J, Maya AJ, Nkabinde J, Skweyiya
J and van der Westhuizen J concurring):
Introduction
[1]
This is an application for leave to appeal directly to this Court
against a judgment of the Full Court of the South Gauteng
High
Court.  That Court dismissed an appeal against a decision of a
single judge of the same court (High Court), which refused
to rescind
a default judgment entered against the applicants, Mr and Mrs Sebola,
in September 2009.  Standard Bank (Bank)
obtained the judgment
after it instituted action to reclaim a home loan Mr and Mrs Sebola
owed.
[2]
The main issue before both the High
Court and the Full Court was whether the provisions of the National
Credit Act
[1]
(NCA) that entitle a debtor to written
notice before a credit provider may institute action
[2]
require that the debtor actually
receive that notice.  It was accepted that the Sebolas did not
receive the notice the Bank
sent to them.  The High Court and
the Full Court, the latter relying on the decision of the Supreme
Court of Appeal in
Rossouw
,
[3]
held that proof by the Bank that it
had despatched the notice was sufficient, even if the notice did not
reach the debtor, and therefore
that the action against the Sebolas
was competent.  The effect of these judgments was that the sale
in execution of the Sebolas’
property could go ahead.
[3]
In their application to this Court, Mr
and Mrs Sebola put that interpretation in issue.  They say it
fails to give effect to
sections 8(3)
[4]
and 39(2)
[5]
of the Constitution.  But after
they lodged the application, the Bank abandoned the judgment it
obtained against them.
It now says the matter has become moot.
That question, as well as condonation, must be considered before it
is possible to
consider whether the substantive issues of
interpretation should be addressed.  But first, a fuller
background.
Background
[4]
Mr and Mrs Sebola, married in community of property, entered into a
home loan agreement with the Bank in November 2007,
under which the
Bank granted them a loan of R1 312 500 against security of
a mortgage bond over their home.  Clause
13 of the agreement,
“Jurisdiction and addresses”, recorded that the Sebolas
chose the mortgaged property as the address
where notices and
documents “in any legal proceedings” should be served.
In addition, they specified a post office
box in North Riding,
Johannesburg, as the postal address to which “letters,
statements and notices may be delivered”.
The clause
recorded that the Sebolas accepted “that any letters and
notices posted to this address by the Bank by registered
post will be
regarded as having been received within 14 (fourteen) days after
posting”.
[5]
By 2009 the Sebolas had fallen into arrears with their bond
repayments.  On 16 March 2009 the Bank’s then attorneys

sent a notice to them, addressed to their North Riding post office
box.  The notice identified itself in terms of sections
129 and
130 and set out the options available to the Sebolas under that
provision.  It was sent by registered mail.
In their
rescission application, the applicants testified that they never
received it.  This was because the postal services
diverted the
notice to the wrong post office.  The Sebolas attached to their
papers a post office “tracking and tracing”
record, which
appeared to show that the item intended for North Riding had been
diverted instead to the Halfway House post office.
[6]
On 25 May 2009 the Bank issued summons against Mr and Mrs Sebola in
the South Gauteng High Court in which it sought payment
of the full
outstanding amount under the mortgage bond, namely R1 156 092.30,
together with interest and costs.
The Bank also sought an order
declaring the property “specifically” executable.
The return of service indicated
that the summons was served on 27 May
2009 by affixing a copy to the principal door of the property at the
applicants’ chosen
domicilium, being the mortgaged property.
[7]
On 25 September 2009, the Registrar of the South Gauteng High Court
granted default judgment against the Sebolas, affording
the Bank all
the relief it sought.  On 17 November 2009, the Bank obtained a
writ of attachment in respect of the property.
It was only
after this, the Sebolas testified, that they became aware of the
judgment for the first time.  They later sought
to rescind the
judgment, and the writ of execution the Bank obtained against their
home pursuant to it.
[8]
In their rescission application, the Sebolas stated that they did not
receive the summons, and asserted that it was impossible
that the
summons could have been affixed to their door since their home is in
a housing development, and they had ascertained that
the Sheriff did
not gain entry on the day the return of service indicated.
High
Court decision
[9]
In their application for rescission, the Sebolas conceded that their
repayments were in arrears and that they were consequently
in breach
of the bond agreement.  But they stated that they had received
neither the summons nor the section 129 notice before
the Bank
initiated proceedings.  Hence the Bank’s action was
incompetent.
[10]
For the purposes of rescission, the
Bank accepted that the Sebolas were unaware of the summons.  So
the only question was whether,
if the judgment was rescinded, the
Sebolas would have a defence to the Bank’s action.  That
depended on whether the
Bank had complied with sections 129(1) and
130(1) before instituting action.  At the time of the hearing
there were conflicting
single-judge decisions about the
provisions,
[6]
but no Supreme Court of Appeal
decision.  Blieden J followed earlier decisions that held that a
credit provider’s proof
of postage to the correct (chosen)
address constituted compliance for the purposes of the provisions.
He thus rejected the
applicants’ argument that non-receipt of
the section 129(1) notice constituted a bona fide defence to the
Bank’s claim.
He dismissed the application for rescission
with costs.
[11]
He immediately granted the Sebolas leave to appeal against his
decision to the Full Court.
Full Court appeal
[12]
The Sebolas appealed to the Full Court.  Just over 10 weeks
after they filed their notice of appeal, and before the appeal
was
heard, the Supreme Court of Appeal handed down its decision in
Rossouw
.
[13]
In
Rossouw
,
a bank sought summary judgment against a couple who had defaulted on
their mortgage bond repayments.  In their bond agreement,
the
couple chose delivery by registered post at the mortgaged property as
a means of service of any notice.  Their defences
to the Bank’s
summary judgment application included that they had not received the
statutory notice.  Resolving the
conflict between High Court
judgments,
[7]
the Supreme Court of Appeal found that
section 129 did not require the credit provider to prove that the
consumer had received the
notice – proof of despatch to the
consumer’s chosen address was sufficient:
“
It appears to me that the
legislature’s grant to the consumer of a right to choose the
manner of delivery inexorably points
to an intention to place the
risk of non-receipt on the consumer’s shoulders.  With
every choice lies a responsibility,
and it is after all within a
consumer’s sole knowledge as to which means of communication
will reasonably ensure delivery
to him.  It is entirely fair in
the circumstances to conclude from the legislature’s express
language in s 65(2) that
it considered despatch of a notice in the
manner chosen by the appellants in this matter sufficient for
purposes of s 129(1)(a),
and that actual receipt is the
consumer’s responsibility.”
[8]
[14]
Before the Full Court, the Sebolas sought to undercut
Rossouw
with constitutional arguments on interpretation.  But the Court
held itself bound by
Rossouw
.  It found that the decision
had authoritatively decided that the credit provider’s mere
sending of the notice by registered
post to the address chosen in the
mortgage bond constitutes compliance with the Act.  The appeal
was dismissed with costs.
Condonation
[15]
The Full Court dismissed the Sebolas’
appeal on 11 August 2011.  The Rules of this Court
[9]
required them to apply for leave to
appeal within 15 court days, by 1 September 2011.  Instead, they
filed their papers only
on 12 October 2011 – about six weeks,
or 29 court days, late.  They seek condonation because they are
representing themselves
and needed to have the record transcribed to
get legal advice about appealing.  They state that they received
the record from
the transcribers only on 4 October 2011, hence the
delay.
[16]
The Bank does not dispute these facts, which favour condonation.
The delay is not excessive, the prejudice and inconvenience
minimal,
and the Sebolas were at all times intent on pursuing their case.
Condonation should therefore be granted.
Submissions in this Court
[17]
The Sebolas submit that the High Court erred by failing to adopt a
purposive and contextual reading of section 129.  They
submit
section 129 should have been interpreted constitutionally in the
light of the Act’s objectives.  The Full Court’s

interpretation, they say, renders the protections the statute affords
consumers nugatory.  They submit the decision in
Rossouw
adversely affects consumers who are not versed in law.
[18]
The Bank submits that the matter has become moot.  About three
weeks before the date set for the hearing, it changed attorneys.

Shortly before its written argument was due, the Bank informed the
Sebolas, through its new attorneys, that its head office had
reviewed
the facts and decided to abandon the order and withdraw the action
against them.  The Bank recorded that it intends
to grant the
Sebolas the opportunity to exercise the protections afforded by
section 129.
[19]
Apart from mootness, the Bank submits that the Sebolas should not be
allowed to appeal directly to this Court without first
seeking a
ruling from the Supreme Court of Appeal.  It says the interests
of justice are against a direct appeal because,
although the way the
Sebolas have framed their application does raise a constitutional
issue, it was non-service of the summons
that led to the default
judgment against them, and not merely the fact that they did not
receive the statutory notice.  The
Bank has now rectified the
defect in the service of the summons by abandoning the judgment.
Therefore the issues lack urgency.
[20]
In addition, the Bank urged, the Supreme Court of Appeal has not had
the opportunity to consider constitutional arguments on
section 129.
Hence this Court will decide that question as a court of first and
last instance.  The Bank urged that
the constitutional questions
have not been properly pleaded or ventilated.  Neither the Bank,
nor other interested credit
providers, have been afforded a proper
opportunity to address the issues raised.
[21]
The Bank moreover supported
Rossouw
.
There is no reason, it contended, to think that the decision does not
promote the spirit, purport and objects of the Bill
of Rights.
The statute, it submitted, seeks to achieve an equitable balance
between the rights and responsibilities of consumers
and credit
providers.  If anything, the applicants’ interpretation
would unjustifiably limit credit providers’
right of access to
courts.
[10]
Amici
curiae
[22]
Three organisations were admitted as friends of the Court.
[23]
The Socio-Economic Rights Institute of South Africa (SERI) is a
non-profit company providing legal advice and representation
on
socio-economic rights.  It is a registered law clinic, and also
an approved law centre by the Johannesburg Bar Council.
SERI
lays emphasis on the wording of section 129(1)(a), which requires the
credit provider to “draw the default to the notice
of the
consumer”.  This indicates, it contends, that the notice
must come to the consumer’s actual attention.
However, a
credit provider need not in every case prove conclusively that the
consumer has received the notice.  Rather, the
Court should
adopt the following standard: if it appears that (a) the credit
provider has delivered the section 129 notice in compliance
with the
Act and the credit agreement, (b) the proceedings are not premature
and (c) there is nothing to suggest otherwise, then
a Court will
normally be satisfied, on a balance of probabilities, that a consumer
has in fact received the notice.
[24]
This would not apply where the credit provider’s papers are
defective on their own terms, or a consumer attends court
and asserts
that the notice was not received.  In these cases, the Court
should adjourn the matter so that the consumer can
be informed of,
and consider exercising, the options the statute affords.
[25]
The second amicus curiae is the
National Credit Regulator (NCR), a body established under the Act to
promote public awareness of
consumer credit matters, and to provide
guidance to the credit market and industry.
[11]
The NCR submits that section 129(1)
should be interpreted so that its notice requirement is prima facie
satisfied only when the
credit grantor shows that it has taken the
steps necessary to bring the notice to the attention of the consumer
acting reasonably.
Ordinarily, this will require the credit
provider to satisfy the court that the section 129(1)(a) notice
actually reached the address
specified by the consumer.
[26]
The NCR emphasises the importance of actual receipt of the notice to
the statutory scheme.  It submits that the interpretation
in
Rossouw
promotes neither the purpose of the NCA nor the
constitutional rights of consumers, which section 129(1)(a) was
enacted to protect.
It considers that an important purpose of
the Act was to promote non-litigious methods of resolving consumer
defaults.  The
section 129(1)(a) notice is, it says, intended to
bring extra-judicial remedies to the attention of consumers who are
caught in
debt default.  Many of these consumers are members of
previously disadvantaged or low-income communities and are unaware of

the remedies available to them.
[27]
The NCR commends its interpretation as practical.  A court must
be “satisfied” that the notice was received
at the
stipulated address.  This requirement would be satisfied by
appropriate averments made by the credit provider in the
summons that
the letter was sent by registered post on a specific date; delivered
to the appropriate post office on a specific
date (which can be shown
using the post office’s tracking technology); was not returned
to the sender; and that the credit
provider knows of no other
circumstances to indicate that the consumer did not actually receive
the notice.
[28]
Where an opportunistic consumer deliberately declines to collect a
registered letter, the NCR says that service can be effected
by a
sheriff.  The NCR says these costs are relatively low.
Once service has been proven, the onus will shift to the
consumer to
prove that the notice did not actually come to his or her attention,
through no fault of his or her own.  Where
the consumer does
discharge this onus, the effect is only dilatory and gives the
defendant an opportunity to exercise the rights
set out in the
section 129 notice.
[29]
The third amicus is the Banking
Association of South Africa (BASA), an association incorporated not
for gain under the Companies
Act,
[12]
and the official trade body of the
banking industry.  BASA submits that it is not in the interests
of justice to decide the
appeal as the evidence before the Court is
inadequate.  The Court, BASA says, lacks the facts needed to
determine the true
impact of the interpretations urged by SERI and
the NCR on the banking industry.  BASA has not been able to
quantify the cost
implications of those interpretations, but it
speculates that it will run into the hundreds of millions of rands.
This will
have a ripple effect throughout the industry and economy,
chasing up the cost of providing credit to all, thus harming poor
consumers
the most.  It therefore urged the Court not to decide
the matter.
[30]
The interpretations SERI and the NCR advance are unsustainable, BASA
submits, because they conflict with the language of the
NCA, are not
constitutionally required and would have dire consequences for the
credit industry and the economy.
[31]
And if the Court is inclined to adopt either SERI’s or the
NCR’s interpretation, BASA submits the effect should
be limited
to cases involving the attachment and execution of consumers’
homes.  This will reduce the costs and the
practical
difficulties.
Mootness and leave to appeal
[32]
The Bank correctly points out that any
ruling this Court makes will not affect the Sebolas themselves.
The judgment has been
abandoned, together with the costs orders
granted against them, and regardless of what this Court might decide
about section 129,
the options the provision affords will have been
made available to them.  Yet mootness is not an absolute bar to
deciding
an issue.  That is axiomatic: the question is whether
the interests of justice require that it be decided.
[13]
One consideration is whether the
Court’s order will have any practical effect on either the
parties or others.
[14]
[33]
In this case, a range of considerations favour deciding the section
129 issue.  Although the Bank has abandoned the judgment,
the
Sebolas have not withdrawn their application.  Far from it: in
written argument submitted the day before the hearing,
they noted
that the Bank still supports the reasoning of the Full Court judgment
it has abandoned.  They further note that
the Bank has not
tendered to pay the costs they incurred in resisting the sale of
their home.  Not only that, but they say
the Bank has threatened
to seek a costs order against them in this Court should they persist
with their application.  For
them, the matter is far from moot.
[34]
A dispute about costs alone is not
normally enough reason to hear an appeal whose issues have otherwise
gone dead.
[15]
But there is much more at stake here
than the Sebolas’ costs, significant as these no doubt are to
them.  The meaning
this Court assigns to the statutory
provisions will have significant practical impact.
[16]
There has been uncertainty for some
years about their meaning, with conflicting first-instance
decisions.
[17]
The Supreme Court of Appeal in
Rossouw
settled those disputes, but
it did not have the benefit, as we have had, of argument specifically
on the constitutional impact of
the various interpretations.
Nor did it have the benefit of the three amici.  Their
contrasting arguments greatly enriched
the debate about the statute.
Moreover, as the Sebolas’ challenge demonstrates, the
resolution
Rossouw
reached is controversial.  That
emerges too from the wide-ranging submissions made to us.  It is
desirable in the interests
of certainty that this Court decide the
appeal.
[35]
This conclusion makes it unnecessary
to consider the NCR’s application to be granted direct access
to this Court.  One
of the NCR’s functions is to provide
“guidance to the credit market and industry”.
[18]
To do this, the Act empowers it to
apply for a declaratory order on the “interpretation or
application” of any provision.
[19]
In the alternative to its
application to be admitted as an amicus, the NCR sought direct access
to secure a definitive ruling.
Since the substantive issues in
the appeal will indeed be decided, this application has become
unnecessary.
[36]
As indicated, the Bank concedes that
the applicants raise constitutional issues.  These are whether
the Supreme Court of Appeal
in
Rossouw
gave enough weight to constitutional
considerations in assigning a meaning to the statute’s
provisions.  That these considerations
are pertinent is clear,
since the Preamble to the statute indicates that it was enacted to
promote “a fair and non-discriminatory
marketplace for access
to consumer credit” and “black economic empowerment”.
The means by which the statute’s
purposes are to be achieved
include “promoting the development of a credit market that is
accessible to all South Africans,
and in particular to those who have
historically been unable to access credit”
[20]
and “promoting equity in the
credit market by balancing the respective rights and responsibilities
of credit providers and
consumers”.
[21]
These goals, and the means by which
they are to be pursued, are intimately connected to the
Constitution’s commitment to achieving
equality.
[22]
Our jurisdiction is thus plain.
[37]
In addition, though the Supreme Court of Appeal has not had the
benefit of the wide range of arguments advanced before us,
it has
addressed the construction of the provisions in issue in
Rossouw
.
Further, there has already been an appeal to the Full Court.
There are moreover prospects of success.  It is
therefore in the
interests of justice that the appeal be heard and its issues
determined.  Leave to appeal must be granted.
Sections
129 and 130 of the Act
[38]
For more than twenty five years, the
Usury Act
[23]
and the Credit Agreements Act
[24]
covered most
[25]
of the field of consumer credit
regulation in South Africa.
[26]
But the financial credit market was
ill-suited to South Africa’s post-apartheid economy and
society.  It was—
“
characterised by
discrimination, a lack of transparency, limited competition, high
costs of credit, and limited consumer protection.
The mechanisms to
prevent over-indebtedness that were in place at the time, could also
not adequately promote the rehabilitation
of consumers, and the
available debt relief could also not assist already over-indebted
consumers to deal with their debt.”
[27]
[39]
A major overhaul of previous credit
legislation was essential.  This was also necessary because
low-income consumers relied
increasingly on commercial credit and
many were becoming swamped with debt.  Reform came with the
passage of the Act in 2005.
It is weighty legislation, both in
size and impact.  It consists of 173 sections, together with
three schedules and regulations.
[28]
The statute “represents a clean
break from the past and bears very little resemblance to its
predecessors”.
[29]
Its purposes are to—
“
promote and advance the social
and economic welfare of South Africans, promote a fair, transparent,
competitive, sustainable, responsible,
efficient, effective and
accessible credit market and industry, and to protect consumers”.
[30]
[40]
The statute sets out the means by
which these purposes must be achieved,
[31]
and it must be interpreted so as to
give effect to them.
[32]
The main objective is to protect
consumers.  But in doing so, the Act aims to secure a credit
market that is “competitive,
sustainable, responsible [and]
efficient”.
[33]
And the means by which it seeks to do
this embrace “balancing the respective rights and
responsibilities of credit providers
and consumers”.
[34]
These provisions signal strongly that
the legislation must be interpreted without disregarding or
minimising the interests of credit
providers.  So I agree with
the Supreme Court of Appeal that—
“
[t]he interpretation of the NCA
calls for a careful balancing of the competing interests sought to be
protected, and not for a consideration
of only the interests of
either the consumer or the credit provider.”
[35]
(Footnote omitted.)
I
also agree that “whilst the main object of the Act is to
protect consumers, the interests of creditors must also be
safeguarded
and should not be overlooked”.
[36]
(Footnotes omitted.)
[41]
While the Act deals mainly with
commercial transactions between credit providers and consumers, as
defined, its provisions also
have a significant impact on aspects of
public law.  It introduces new forms of protection for
consumers.  These include
regulation of the consumer credit
industry,
[37]
prohibiting credit providers from
extending “reckless credit”,
[38]
and mechanisms to assist over-indebted
consumers to manage their debt burden.
[39]
[42]
An innovation is the NCR, whose
functions include developing public awareness of consumer credit
matters,
[40]
auditing credit providers
[41]
and reviewing legislation.
[42]
Consumers and others may submit
complaints about alleged contraventions of the Act to the NCR.
[43]
A further innovation is the
establishment of a National Consumer Tribunal
[44]
(Tribunal), which has countrywide
jurisdiction,
[45]
and the power to adjudicate certain
complaints.
[46]
The statute’s provisions
that invest the Tribunal with jurisdiction are crafted so that it
works alongside consumer courts
created by provincial
legislation.
[47]
An appeal lies to the High Court
against the Tribunal’s orders,
[48]
except those made by consent.
[49]
[43]
The statute was brought into operation
in stages
[50]
and came fully into force on 1 June
2007.  That too is when the provisions at issue, sections 129
and 130, came into operation.
It is necessary to set them out
in full.  Section 129 is headed “Required procedures
before debt enforcement”.
It reads:
“
(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; 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),
[51]
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.”  (Footnote added.)
[44]
Section 130 is headed “Debt procedures in a Court”.
It provides:
“
(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—
(a)  at least 10 business days
have elapsed since the credit provider delivered a notice to the
consumer as contemplated in
section 86(9), or section 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)  In addition to the
circumstances contemplated in subsection (1), in the case of an
instalment agreement, secured loan,
or lease, a credit provider may
approach the court for an order enforcing the remaining obligations
of a consumer under a credit
agreement at any time if—
(a)  all relevant property has
been sold pursuant to—
(i)   an attachment order;
or
(ii)  surrender of property in
terms of section 127; and
(b)  the net proceeds of sale
were insufficient to discharge all the consumer's financial
obligations under the agreement.
(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)  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
(c)  that the credit provider has
not approached the court—
(i)   during the time that
the matter was before a debt counsellor, alternative dispute
resolution agent, consumer court
or the ombud with jurisdiction; or
(ii)  despite the consumer
having—
(aa)
surrendered property to the credit provider, and before that property
has been sold;
(bb)
agreed to a proposal made in terms of section 129(1)(a) and acted in
good faith in fulfilment
of that agreement;
(cc)
complied with an agreed plan as contemplated in section 129(1)(a); or
(dd)
brought the payments under the credit agreement up to date, as
contemplated in section 129(1)(a).
(4)  In any proceedings
contemplated in this section, if the court determines that—
(a)  the credit agreement was
reckless as described in section 80, the court must make an order
contemplated in section 83;
(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)  the credit agreement is
subject to a pending debt review in terms of Part D of Chapter
4, the court may—
(i)   adjourn the matter,
pending a final determination of the debt review proceedings;
(ii)  order the debt counsellor
to report directly to the court, and thereafter make an order
contemplated in section 85(b);
or
(iii) if the credit agreement is the
only credit agreement to which the consumer is a party, order the
debt counsellor to discontinue
the debt review proceedings, and make
an order contemplated in section 85(b);
(d)  there is a matter pending
before the Tribunal, as contemplated in subsection (3)(b), the court
may—
(i)   adjourn the matter
before it, pending a determination of the proceedings before the
Tribunal; or
(ii)  order the Tribunal to
adjourn the proceedings before it, and refer the matter to the court
for determination; or
(e)  the credit agreement is
either suspended or subject to a debt re-arrangement order or
agreement, and the consumer has
complied with that order or
agreement, the court must dismiss the matter.”
[45]
Section 129(1)(a) requires a credit
provider, before commencing any legal proceedings to enforce a credit
agreement,
[52]
to draw the default to the notice of
the consumer in writing.  It has been described as a “gateway”
provision,
or a “new pre-litigation layer to the enforcement
process”.
[53]
Although section 129(1)(a) says the
credit provider “may” draw the consumer’s default
to his or her notice, section
129(1)(b)(i) precludes the commencement
of legal proceedings unless notice is first given.  So, in
effect, the notice is compulsory.
[54]
[46]
One of the means by which the
legislation expressly provides for its purposes
[55]
to be pursued is through “consensual
resolution of disputes arising from credit agreements”.
[56]
Section 129(1) is pivotal to this.  It
precludes legal enforcement of a debt before the credit provider has
suggested to the
consumer that he or she explore non-litigious ways
to purge the default.  Specifically, the notice must “propose”

that the defaulting consumer refer the credit agreement to a debt
counsellor, alternative dispute resolution agent, consumer court
or
ombud, with the intent that the parties resolve their dispute, or
agree on a plan to remedy the default.
[47]
The NCR characterised the notice as a vital safety valve designed to
prevent unnecessary litigation and premature foreclosure
on
consumers’ assets.  For its part, SERI contended that the
notice was so pivotal that the legislation demands that
a consumer
must actually be made aware of the options it sets out before legal
proceedings can be commenced.  The requirement
of actual receipt
is, SERI contended, “hardwired” into the provision.
[48]
SERI urged that in practical terms this requires the credit provider
to satisfy the court on a balance of probabilities that
the notice
was in fact delivered to the consumer, and came to his or her
notice.  Accordingly SERI sought an order declaring
that section
129(1)(a) “requires that the notice issued in its terms comes
to the attention of the consumer”.
[49]
The NCR likewise laid emphasis on the objectives of the notice
requirement, and on its pivotal position in the statutory scheme.

But it contended for less than SERI.  The NCR argued that the
notice should come to the consumer’s attention “insofar

as possible”.  In practical terms, it contended, this
means that the provision would be satisfied when the credit provider

shows that it has taken the steps necessary to draw the notice to the
attention of the
reasonable
consumer.  While this means a
court must be “satisfied” that the notice was received at
the consumer’s stipulated
address, proving this will normally
require something less: the credit provider must show only that the
notice was delivered to
the appropriate post office, and that it has
not been returned to sender.  Where an “opportunistic”
consumer deliberately
declines to collect a notice, the NCR contended
that the credit provider can protect itself by enlisting the Sheriff
of the Court
to serve the notice personally on the consumer.
[50]
The Bank and BASA supported
Rossouw
.  They contended
that, read together, sections 129 and 130 require the credit provider
to prove only “delivery”,
and for this proof of despatch
of the notice (and not receipt at the consumer’s address, nor
delivery to the post office
in question) would be sufficient.
BASA contended that the Act provides that accurate despatch of the
notice to the consumer’s
chosen domicilium, email address or
fax number constitutes compliance with the credit provider’s
obligation to deliver.
The legislation explicitly allocates the
risk of non-delivery to the consumer, and this it contended is
consistent with the Constitution.
[51]
At the heart of the conflict between
the contending positions lies a difference in method.  This is
whether section 129(1)(a)
should be read in isolation from, or in
conjunction with, section 130.  The Supreme Court of Appeal in
Rossouw
read
the two provisions together, but gave primacy to section 130, by
focusing on what the statute required a credit provider to
do to
“deliver” a section 129 notice to the consumer.
[57]
SERI and the NCR strongly criticised
this, urging this Court instead to adopt the approach taken in
judgments that read section
129(1)(a) separately from, or gave
primacy to it over, section 130.
[58]
[52]
In my view, the notice requirement in section 129 cannot be
understood in isolation from section 130.  This emerges from

three considerations.
[53]
First, it is impossible to establish
what a credit provider is obliged and permitted to do without reading
both provisions.
Thus, while section 129(1)(b) appears to
prohibit the commencement of legal proceedings altogether (“may
not commence”),
section 130 makes it clear that where action is
instituted without prior notice, the action is not void.  Far
from it.
The proceedings have life, but a court “must”
adjourn the matter, and make an appropriate order requiring the
credit
provider to complete specified steps before resuming the
matter.
[59]
The bar on proceedings is thus not
absolute, but only dilatory.  The absence of notice leads to a
pause, not to nullity.
But to deduce this, it is necessary to
read section 129 in the light of section 130.  Section 129
prescribes
what
a
credit provider must prove (notice as contemplated) before judgment
can be obtained, while section 130 sets out
how
this can be proved (by delivery).
[54]
The second consideration is how the
notice provision itself is expressed in the two sections.  They
both require that notice
be given, but do so in very different ways.
Section 129(1) says that legal proceedings may not be commenced
before the credit
provider “draw[s] the default to the notice
of the consumer”,
[60]
or before “first providing
notice to the consumer”.
[61]
The word “notice” here
shifts between two meanings: the first time it is used, it means the
attention of the consumer;
the second time, the notice itself.
The first use of “notice” indeed requires, as SERI and
the NCR urge, that
the consumer must not only receive the notice but
also take notice of it.  Section 130(1)(a), however, uses one of
these meanings
of notice only.  It permits court proceedings if
10 business days have passed “since the credit provider
delivered a
notice to the consumer as contemplated” in section
129(1).
[62]
It is true that this refers back to
section 129.  But the reference back is to delivery of “a
notice” to the consumer
as contemplated in section 129.
The indefinite article indicates that what section 130 requires is
delivery of a notice
contemplated in section 129, that is, the notice
itself.
[55]
Thus, while section 129 focuses on the consumer to whom the credit
provider must furnish notice, and to whose “notice”
the
information must come, section 130 tells the notice-provider what
must be done to fulfil the requirements of section 129, which
is to
“deliver” a notice as contemplated in section 129(1).
[56]
I appreciate the force of the argument
that the protection of consumer rights requires that primacy be given
to section 129(1);
[63]
but neither logic nor a coherent
approach to meaning allow us to ignore section 130(1)(a).  The
provisions cannot be approached
by sequestering them from each
other.  Their effect must be determined by an integrated
approach to their meaning.
[57]
That this is necessary appears also from a third aspect.  If
section 129(1)(a) is read in isolation, it seems to impose
an
obligation that, seen in isolation, may seem impossible to fulfil.
SERI sought an order that the notice must come “to
the
attention of the consumer”.  That is indeed what section
129 requires, but the critical question is what the statute
requires
a credit provider to prove to establish this.  What has come to
the attention of a consumer will almost always be
known only to him
or to her.  No means of direct proof lies within the reach of a
credit provider who wishes to enforce an
agreement.  It is for
this reason that section 130 imposes on the credit provider the
obligation to “deliver”
the notice.  This requires
the credit provider to establish, to the satisfaction of the court
from which enforcement of a
credit agreement is sought, that it has
delivered a notice to the consumer as contemplated in section 129.
[58]
To differing degrees, both SERI and the NCR accepted that the statute
does not require the credit provider to prove that the
notice
actually came to the attention of the consumer, for what they sought
in practical terms was not full-fledged enforcement
of an “actual
notice” provision.  SERI, though seeking a declaration
that the legislation demands actual notification,
conceded that in
practice the credit provider cannot be required to prove conclusively
that the consumer has received and read
the notice.  And the
NCR’s position was only that the credit provider must show that
it has taken the steps necessary
to ensure that the consumer, acting
reasonably, and not evasively or negligently, receives the notice.
[59]
So the notice requirement cannot be understood by focusing solely on
section 129.  But this does not diminish the significance
of
that provision.  As SERI and the NCR contended, one of the
statute’s core innovations is significantly consumer-friendly

and court-avoidant procedures.  These procedures are designed to
help debtors to restructure their debts, or find other relief,
before
the guillotine of cancellation or judicial enforcement falls.
[60]
It is true that those procedures are
available to consumers from the outset of the credit relationship.
Indeed, as the Bank
pointed out, the Regulations require that
most
[64]
credit agreements include, from their
inception, a statement of the consumer’s right to apply for
alternative dispute resolution
and for debt counselling.
[65]
But access to debt counselling and
extra-judicial resolution will undoubtedly have their most potent
impact when the guillotine
is about to fall.  And it is at this
point, before the credit provider resorts to court process, that the
legislation insists
the consumer should have the benefit of a
notice.  This plain statutory objective must significantly
influence the meaning
we give to “deliver” in section
130.  It is to that I now turn.
Meaning
of “delivered” in section 130
[61]
Determining what “delivered”
means in section 130 is not easy.  The definitions section of
the statute does not
define the word.  Nor does section 130.
And, though they could have done so, and even seem to have tried to
do so,
[66]
the Regulations do not prescribe any
method for delivery as envisaged in section 130.  What the
credit provider has to do to
establish that it has “delivered a
notice to the consumer as contemplated in . . . section
129(1)”
must therefore be determined by taking account of the
high importance of the section 129 notice, against the background of
the
statute’s other provisions that indicate how delivery of
notices must be effected.  These are three: section 65(1) and

(2), section 96 and section 168.
[62]
Section 65 is headed, “Right to
receive documents”.  Sub-section (1) provides that
“[e]very document that
is required to be delivered to a
consumer in terms of this Act must be delivered in the prescribed
manner, if any.”
“Prescribed” means
“prescribed by regulation”.
[67]
The Regulations provide that, in them,
unless otherwise provided for, “delivered” means “sending
a document by
hand, by fax, by e-mail, or registered mail to an
address chosen in the agreement by the proposed recipient, [or,] if
no such address
is available, [to] the recipient’s registered
address”.
[68]
But the Regulations do not
specifically “prescribe” any manner for delivery of the
section 129 notice.  Hence,
the definition is inapplicable.
[69]
And, since the Regulations cannot be
used to interpret the Act,
[70]
we are brought back to the provisions
of the Act itself.
[71]
[63]
Section 65(2) is relevant, especially since it appears in Part A of
Chapter 4 of the Act, which is concerned with “consumer

rights”.  It provides:
“
If
no method has been prescribed for the delivery of a particular
document to a consumer, the person required to deliver that document

must—
(a)  make the document available
to the consumer through one or more of the following mechanisms—
(i)   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;
(ii)  by fax;
(iii) by email; or
(iv) by printable web-page; and
(b)  deliver it to the consumer
in the manner chosen by the consumer from the options made available
in terms of paragraph
(a).”
[64]
Section 96 appears in Chapter 5 of the Act, which regulates consumer
credit agreements.  It appears in Part B of that
Chapter, which
deals with “disclosure, form and effect of credit agreements”.
The provision is headed, “Address
for notice”.  It
reads:
“
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).”
Subsection
(2) provides that a party to a credit agreement may change its
address “by delivering to the other party a written
notice of
the new address by hand, registered mail, or electronic mail, if that
party has provided an email address.”
[65]
Section 168, which appears in Chapter 8, is concerned with the
enforcement of the Act.  It appears in Part C, which concerns

“miscellaneous matters”.  It provides:
“
Unless
otherwise provided in this Act, a notice, order or other document
that, in terms of this Act, must be served on a person
will have been
properly served when it has been either—
(a)  delivered to that person; or
(b)  sent by registered mail to
that person’s last known address.”
[66]
None of these provisions is made
applicable to section 130 in express terms.  This is a matter
for regret.  The lack of
clarity in the drafting of the Act has
justly been bemoaned.
[72]
Nevertheless, each of these provisions
appears to have some bearing on the meaning to be given to
“delivered” in section
130.  This is so because
section 65(2) is applicable where “no method has been
prescribed for the delivery of a particular
document to a consumer”
(and none has been prescribed for section 130); section 96(1) applies
because the notice envisaged
in section 130 is a “legal notice”
for a purpose contemplated in the credit agreement; and section 168
is pertinent
because it is titled “serving documents”.
To these indications of meaning must be added the considerations
already
mentioned, that section 130 is inextricably conjoined to
section 129, and the especial statutory significance of the notice
requirement.
[67]
So while there is no clear answer to
the meaning of “delivered” in section 130, the statute
does give clues to it.
First, section 65(2) indicates that
delivery entails making the document sought to be delivered
“available” to the
consumer through one or more of the
stipulated mechanisms.  One of those is by ordinary mail.
[73]
Cumulatively with these options
(“and”), the document must also be delivered to the
consumer “in the manner chosen
by the consumer” from the
options made available in paragraph (a).
[68]
Section 65 thus contemplates that
delivery is effected when a document is made available to a consumer
“by ordinary mail”.
I agree with the Supreme Court
of Appeal that section 65(2) covers a consumer’s choice of
registered mail.  This is
not only because postal delivery is
expressly sanctioned, and registered post is “a more reliable
means” of postal
delivery,
[74]
but also because “the greater
includes the lesser.”
[75]
But, the fact that there is no
practical means of proving that a notice sent by ordinary mail
reaches the addressee suggests that,
for section 130 “delivery”
to be achieved, more is needed.  At the very least, despatch of
the section 129 notice
must be effected by registered mail.
[69]
Section 96(1) requires delivery of legal notices “at the
address” of the other party “as set out in the
agreement”.  The same logic applies.  Since proof of
actual delivery to a specified address is not practicable,
despatch
to a registered address, at least, must be required for delivery
under section 130.
[70]
This emerges too from section 168, which stipulates that a document
that must be served in terms of the Act will have been
properly
served when it has been “sent by registered mail to that
person’s last known address.”  Here, proof
of
despatch by registered mail is clearly stated to be sufficient for
purposes of service.  However, the especial importance
of the
section 129 notice suggests that registered despatch is not enough,
and that something more may be required.
[71]
Section 65(2), which contemplates that delivery can be effected by
ordinary mail, and section 168, which stipulates that despatch
by
registered mail constitutes proper service of a notice, both indicate
that despatch by registered mail is contemplated for delivery
under
the Act.  Section 96 requires delivery “at the address”
set out in the agreement, but since this provision
itself uses
“deliver”, which is not defined in the statute, we are
driven to the other provisions to deduce what delivery
must entail,
and they indicate, for the reasons I have given, that despatch by
registered mail is indeed contemplated.
[72]
The Supreme Court of Appeal in
Rossouw
derived the meaning of
“delivered” primarily from the provisions of section
65(2).  It is correct that this provision
yields the answer that
statutory “delivery” is achieved through despatch.
But in my respectful view that means
of interpretation does not give
enough weight to the particular setting of the requirement in section
130, and its close conjunction
with section 129.  That provision
in turn embeds a notice that is pivotal to the statute’s
innovative entrenchment of
court-avoidant and settlement-friendly
processes.  Section 129 requires that notice be provided to the
consumer, and the obligation
in section 130 to deliver that notice
must be read in the light of the importance of that notice.
[73]
It is correct, as the Supreme Court of
Appeal observed, that section 65(2) expressly attaches value to the
communication method
“chosen by the consumer from the options
made available” in the provision, and that choice entails
responsibility.
[76]
On the other hand, as that Court also
pointed out, many credit providers use standard form agreements that
leave consumers very
little choice.
[77]
In addition, a fair reading of the
statute demands that the consequences ascribed to the consumer’s
choice of communication
method be off-set against the pivotal
significance of the section 129 notice.
[74]
These considerations drive me to conclude that the meaning of
“deliver” in section 130 cannot be extracted by parsing

the words of the statute.  It must be found in a broader
approach – by determining what a credit provider should be

required to establish, on seeking enforcement of a credit agreement,
by way of proof that the section 129 notice in fact reached
the
consumer.  As pointed out earlier, the statute does not demand
that the credit provider prove that the notice has actually
come to
the attention of the consumer, since that would ordinarily be
impossible.  Nor does it demand proof of delivery to
an actual
address.  But given the high significance of the section 129
notice, it seems to me that the credit provider must
make averments
that will satisfy the court from which enforcement is sought that the
notice, on balance of probabilities, reached
the consumer.
[75]
Hence, where the notice is posted,
mere despatch is not enough.  This is because the risk of
non-delivery by ordinary mail
is too great.  Registered mail is
in my view essential.  Even though registered letters may go
astray, at least there
is a “high degree of probability that
most of them are delivered.”
[78]
But the mishap that afflicted the
Sebolas’ notice shows that proof of registered despatch by
itself is not enough.  The
statute requires the credit provider
to take reasonable measures to bring the notice to the attention of
the consumer, and make
averments that will satisfy a court that the
notice probably reached the consumer, as required by section 129(1).
This will
ordinarily mean that the credit provider must provide proof
that the notice was delivered to the correct post office.
[76]
In practical terms, this means the credit provider must obtain a
post-despatch “track and trace” print-out from
the
website of the South African Post Office.  As BASA’s
submission explained, the “track and trace” service

enables a despatcher who has sent a notice by registered mail to
identify the post office at which it arrives from the Post Office

website.  This can be done quickly and easily.  The
registered item’s number is entered, the location of the item

appears, and it can be printed.
[77]
The credit provider’s summons or particulars of claim should
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 a registered item notification slip, informing
the
consumer that a registered article was available for collection.
Coupled with proof that the notice was delivered to
the correct post
office, it may reasonably be assumed in the absence of contrary
indication, and the credit provider may credibly
aver, that
notification of its arrival reached the consumer and that a
reasonable consumer would have ensured retrieval of the
item from the
post office.
[78]
The evidence required will ordinarily constitute adequate proof of
delivery of the section 129 notice in terms of section 130.

Where the credit provider seeks default judgment, the consumer’s
lack of opposition will entitle the court from which enforcement
is
sought to conclude that the credit provider’s averment that the
notice reached the consumer is not contested.
[79]
If in contested proceedings the consumer asserts that the notice went
astray after reaching the post office, or was not collected,
or not
attended to once collected, the court must make a finding whether,
despite the credit provider’s proven efforts, the
consumer’s
allegations are true, and, if so, adjourn the proceedings in terms of
section 130(4)(b).
[80]
In their bond agreement, the Sebolas and the Bank agreed that postal
delivery could be used.  They chose their North Riding
post
office box as the address to which notices could be delivered.
Their agreement recorded that they accepted that notices
posted to
this address by registered post would be “regarded as having
been received within 14 (fourteen) days after posting”.
[81]
I agree with the Supreme Court of
Appeal in
Rossouw
that, “to be effective, the
notice would have to comply both with the contract and with the
Act.”
[79]
So the Bank was obliged not only to
send the notice to their address at the North Riding post office,
which it did in fulfilment
of its agreement with the Sebolas; the
statute also obliged it to show that the notice actually reached the
correct post office.
That did not happen.  The Sebolas
were therefore entitled to rescission of the judgment granted against
them.  The proceedings
against them should have been adjourned
to allow the Bank to rectify the omission in regard to the notice.
[82]
BASA strongly urged that requiring credit institutions to establish
the likelihood of receipt would mean significantly more
trouble and
expense.  It pointed out that debt recoveries are processed in
bulk, and statutory notices despatched in great
number.  To
require a credit provider in the ordinary course not only to prove
despatch by registered mail, but also delivery
at the correct post
office is unjustified and would add considerable expense to the debt
recovery process.  This cost would
be passed on to ordinary
consumers – the very public the statute was enacted to protect
– in the form of higher credit
costs, making credit less
accessible.
[83]
I appreciate the force of these arguments.  But they should not
be overstated.  This judgment requires credit providers,
in the
ordinary course, where mail is used, to establish delivery by
registered post to the consumer’s post office.
That will
complicate bulk despatches, but not significantly.  More
importantly, we must stay true to the statutory scheme.
Section
129 requires that notice be provided to the consumer.  If
establishing this in the ordinary course adds some complexity
to bulk
processing of debt recoveries, that seems to me to be a consequence
of a legislative scheme that seeks to give consumers
a last chance
before court enforcement procedures drop the guillotine on them.
[84]
I accept that this judgment may heighten the cost of credit, and that
this will affect the pockets of not only credit institutions
but also
consumers, particularly those new to the credit market.  That is
a social burden the legislation imposes.  The
alternative would
be to underplay the importance of the notice, and under-weigh the
impact of the wording of section 129.
[85]
To require mere despatch of the section 129 notice, as the Bank and
BASA sought, under-appreciates its importance in the statutory

scheme.  It gives too little force to the plain wording of that
provision, which requires that the notice come to the attention
of
the consumer.  To require that the credit provider show that the
notice reached the intended post office does add expense
and effort
to the recovery process, but it gives proper recognition to the
statutory mechanisms designed to obviate court action.
And
court action is almost invariably much more expensive, and may be
calamitous for the consumer.  This the statute’s
notice
requirement seeks to avoid.
[86]
For these reasons, adding the indications the Act offers to the
signal importance the notice occupies in the statutory scheme,
I
conclude that the obligation section 130(1)(a) imposes on a credit
provider to “deliver” a notice to the consumer
is
ordinarily satisfied by proof that the credit provider sent the
notice by registered mail to the address stipulated by the consumer

in the credit agreement, and that the notice was delivered to the
post office of the intended recipient for collection there.
[87]
To sum up.  The requirement that a credit provider provide
notice in terms of section 129(1)(a) to the consumer must be

understood in conjunction with section 130, which requires delivery
of the notice.  The statute, though giving no clear meaning
to
“deliver”, requires that the credit provider seeking to
enforce a credit agreement aver and prove that the notice
was
delivered to the consumer.  Where the credit provider posts the
notice, proof of registered despatch to the address of
the consumer,
together with proof that the notice reached the appropriate post
office for delivery to the consumer, will in the
absence of contrary
indication constitute sufficient proof of delivery.  If in
contested proceedings the consumer avers that
the notice did not
reach her, the court must establish the truth of the claim.  If
it 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.
[88]
What the statute requires depends on
the form of communication the credit provider uses.  The Act
clearly contemplates other
forms of communication, including email
and fax.
[80]
These proceedings do not require
us to say anything about them.
[89]
It follows that the appeal should succeed, and the Sebolas should be
granted the costs they incurred in seeking to set aside
the judgment
granted against them.
Order
[90]
The following order is made:
1. Condonation is granted.
2. Leave to appeal is granted.
3. The appeal succeeds.
4. The order of the High Court is set
aside and is replaced with the following:
“
The application for rescission
is granted with costs.”
5. The Bank must pay the Sebolas’
costs in the Full Court and in this Court.
ZONDO
AJ (Mogoeng CJ and Jafta J concurring):
Introduction
[91]
Section 129(1)(a) of the National
Credit Act
[81]
(NCA) reads:
“
(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; 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.”
(Underlining added.)
The
question for determination on the merits of this matter is: did
Standard Bank draw the default of the Sebolas to their notice
and
make to them the proposal referred to in section 129(1)(a) of the NCA
with the intent contemplated in section 129(1)(a) even
though the
letter that had been addressed to the Sebolas and sent by registered
mail went astray and did not reach them?
This raises the
question: what does section 129(1)(a) mean when it says that the
credit provider “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” and
other persons and
institutions mentioned therein
[82]
“
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”?
[92]
Cameron J has prepared a judgment (main judgment) in which he has set
out all the relevant facts.  I, therefore, do not
propose to set
out any facts in this judgment.  He has also dealt with the
jurisdiction of this Court, the issue of mootness,
the condonation
application and the application for leave to appeal.  On those
issues I am in full agreement with him.
[93]
The main judgment says that:
(a)
“
[T]he critical question”
in this case “is what the statute requires a credit provider to
prove to establish [that a
section 129(1)(a) letter came] to the
attention of the consumer”.
[83]
(b)
It
will seem impossible for the credit provider to prove that a section
129(1)(a) letter reached the consumer.
[84]
(c)     If a
credit provider sends a section 129(1)(a) letter by registered post,
it will ordinarily be taken
to have reached the consumer, and, the
credit provider will be taken to have complied with section
129(1)(a), if the letter has
reached the consumer’s local post
office.
(d)
“
The
statute requires the credit provider to take reasonable measures to
bring the notice to the attention of the consumer, and make
averments
that will satisfy a court that the notice probably reached the
consumer as required by section 129(1).  This will
ordinarily
mean that the credit provider must
provide proof that the notice was delivered
to
the correct post office
.”
[85]
(Underlining added.)
[94]
I am unable to agree with the main judgment on paragraph 93(a) to (d)
above.  Furthermore, I am unable to agree with the
interpretive
approach adopted in the main judgment which focuses on the meaning of
section 130(1) when the question before us for
determination is not
whether section 130(1) was complied with but whether section 129(1)
was complied with.
[95]
With regard to (a), in my view the question before us is one of the
construction of section 129(1) and not one of evidence.
The
question that the main judgment says is the critical question in this
case relates to a question of evidence.  The
determination of
such a question cannot legitimately help to answer the question: what
does section 129(1)(a) mean?
[96]
As to (b), I am also unable to agree that it will ordinarily be
impossible for the credit provider to prove that a section
129(1)(a)
letter reached the consumer.  If a credit provider elects to
send an employee or agent to the consumer to give the
latter a
section 129(1)(a) letter personally and the employee or agent gives
the letter to the consumer or even reads it to him
before giving it
to him – just like a sheriff does when he serves a court
process on a person – the credit provider
will have proof that
the consumer was made aware of the default and the proposal.
The employee or agent can depose to an
affidavit.  He can even
secure a signature by the consumer to acknowledge receipt of the
letter.  If the credit provider
sends a section 129(1)(a) letter
by ordinary mail or by email or fax and the consumer responds to it
in writing or by telephoning
the credit provider, the credit provider
will have proof that the consumer was made aware in writing of the
default and the proposal.
The credit provider will depose to an
affidavit to the effect that the consumer telephoned after receiving
the section 129(1)(a)
letter and discussed the contents thereof with
the credit provider.  If the consumer sends a written reply to
the credit provider,
that reply will serve as proof of receipt of the
section 129(1)(a) letter by the consumer.  If the consumer
visits the credit
provider’s business premises to discuss the
contents of a section 129(1)(a) letter, the credit provider can
depose to an
affidavit to the effect that the default was
successfully drawn to the notice of the consumer and the section
129(1)(a) proposal
was made to him because he reacted to the section
129(1)(a) letter.  The same can be achieved if the credit
provider makes
use of a courier or of a sheriff.
[97]
It must be remembered that, when a letter that is sent by registered
post is collected from a post office, the post office
will require
the person collecting it to bring photographic identity to show that
he or she is the person to whom the letter is
addressed and he or she
will have to sign that he or she received the letter.  Accordingly,
I do not think that there is a
sufficient basis for the view that it
will almost be impossible for the credit provider to prove that a
section 129(1)(a) letter
reached the consumer.
[98]
Furthermore, the matter must not be decided on a basis which suggests
that most people will dishonestly deny having received
a section
129(1)(a) letter, when in fact they have received it.  In my
view most people will admit receipt of correspondence
if they
received it.  It will be a minority who will dishonestly deny
having received correspondence which they actually received.
It
will be an even smaller minority that will deny receiving a letter
when they actually received the letter and they know
that it was a
letter sent by registered post because it probably may be proved that
they actually did receive the letter or that
the probabilities are
that they received the letter.
[99]
In any event it is important to stress that the credit provider is
free to choose any of the different methods of delivery
because the
section does not prescribe any method.  Where the credit
provider opts for delivery by mail, it makes its choice
with the full
knowledge that the burden rests upon it to prove that the default had
been brought to the attention of the consumer,
as well as the
proposal to refer the credit agreement to a debt counsellor.
The difficulties, if any, encountered by the
credit provider in
proving delivery under a method of its choice cannot determine the
construction to be ascribed to section 129(1)(a).
This is so
even where the credit provider chooses the cheapest method because
delivery costs are irrelevant to the construction
of the section.
[100]
The findings in paragraph 93 (c) and (d) above are related.
They all relate to the main judgment’s further finding
about
what the credit provider is required to do to comply with section
129(1)(a).  That is to draw the default in repayments
to the
notice of the consumer and to make to him or her the proposal
contemplated in section 129(1)(a).  The finding in the
main
judgment in (d) has no basis in the provisions of the statute
whatsoever and no provisions thereof have been cited to support
that
finding.
[101]
As to (c) above, this is a critical finding of the main judgment.
Although in various parts of the main judgment statements
are made to
the effect that a section 129(1)(a) letter is required to reach the
consumer or to come to the attention of the consumer,
the effective
and critical finding of the main judgment as to what the credit
provider must do in order to “draw the default”
in
repayments “to the notice of the consumer” and make to
him the proposal referred to in section 129(1)(a), and, therefore,
to
comply with section 129(1)(a) when it sends a section 129(1)(a)
letter by registered post is 93(c) above.  That is that
it will
ordinarily
be enough if the letter reaches the consumer’s
local post office.  This finding in the main judgment completely
undermines
the construction that section 129(1)(a) entails that the
section 129(1)(a) letter must come to the attention of the consumer
or
that the default and the proposal must be conveyed to the mind of
the consumer.  Indeed, this finding effectively says that

ordinarily a section 129(1)(a) letter need not reach the consumer and
its contents need not reach the mind of the consumer.
I am
unable to agree with this.
[102]
In my view, properly construed and
analysed, the finding of the main judgment on section 129(1)(a) is
that, although section 129(1)(a)
entails that a section 129(1)(a)
letter should reach the consumer or that the credit provider must
make the consumer aware of the
default and the proposal, when section
130(1)(a) and other provisions of the NCA are taken into account,
“ordinarily”
section 129(1)(a) will have been complied
with if a section 129(1)(a) letter that was sent by registered post
reaches the consumer’s
local post office.
[86]
The main judgment is to the effect
that, if a consumer informs the Court that he did not receive the
letter and the Court believes
him, the Court may adjourn the
proceedings in terms of section 130(4) of the NCA.  Either there
is compliance when the letter
reaches the consumer’s local post
office or there is compliance when the consumer is made aware of the
default and the section
129(1)(a) proposal.  In my view the
latter reflects the legal position.
[103]
I take the view that section 129(1)(a) means that the credit provider
must, in writing, make the consumer aware of the fact
that he is in
default and of the credit provider’s proposal that he refer the
credit agreement to a debt counsellor so that,
if there is a dispute
between the parties about the credit agreement, they can try to
resolve it, debt restructuring can be resorted
to or the payments can
be brought up-to-date.
[104]
With regard to the main judgment’s reliance upon the word
“delivered” in section 130(1)(a) to justify not
giving
section 129(1)(a) its ordinary meaning, I take the view that that
word must be given its ordinary meaning.  If that
word is given
its ordinary meaning, section 130(1)(a) is not at odds with the clear
language of section 129(1)(a).  As will
be seen later in this
judgment, our case law is to the effect that the ordinary meaning of
the word “deliver” is “to
hand over, transfer,
commit to another’s possession or keeping” of someone
else.
[105]
The effective conclusion reached in the main judgment as to what
compliance with section 129(1)(a) entails, when a section
129(1)(a)
letter was sent by registered post, does not, in my view, give proper
weight to the fact that section 129(1)(a) was enacted
primarily for
the benefit and protection of the consumer, rather than that of the
credit provider.  Indeed, in my view that
meaning is
inconsistent with section 129(1)(a).  Furthermore, that
conclusion places the consumer in a worse position than
he was at
common law, where the creditor, seller or lessor had contractually
undertaken to give the debtor a notice of a breach
of contract and to
give him an opportunity to purge the default before the creditor
could exercise its right to cancel the agreement
or to institute
legal proceedings against the debtor.
[106]
Finally, when one has regard to previous legislation which had some
of the features of section 129(1)(a), one finds that case
law
interpreting such legislation also required that the debtor,
purchaser or lessee had to receive the notice informing him of
his
default and calling upon him to remedy the breach before the seller
or creditor could cancel the agreement or institute legal

proceedings.  I now proceed to deal with the question for
determination.
[107]
I begin by showing how problems similar to the one confronting the
Court in the present case have been dealt with at common
law.  I
trace the line of Appellate Division cases relating to notices of
cancellation where the Appellate Division required
actual knowledge.
If, in that era, the Appellate Division advocated actual awareness,
then I can see no reason why this Court,
alive to the realities of
South Africa, should not require actual knowledge in this time and
age.  I also refer under this
part of the judgment to the law
relating to the termination of a contract of employment, which
similarly supports the proposition
that, when a notice of termination
of such contract is required to be given, the content of the notice
must be conveyed to the
other party for the termination to be
effective or valid.  I then turn to other statutes with
provisions comparable, to some
extent, to section 129(1)(a).
Interpretations of the relevant provisions of those statutes are
persuasive authorities for
interpreting the present legislation in
the manner that I propose.  I then give a detailed examination
of various provisions
of the NCA and the purposes of the NCA to show
that they support actual awareness.  Even were those textual
indicators not
conclusive, any interpretation of the NCA must promote
the purposes of the NCA, and actual awareness promotes not only
consumer
protection but also the use of non-judicial mechanisms for
resolving disputes which the NCA so clearly requires.
The common law position
[108]
At common law a
party to a contract has the right to cancel or terminate a contract
such as that of a lease or of employment by
giving the other party a
notice even if there was no breach of contract by the other party
unless the contract provides otherwise.
In a case where such a
party has to give the other party a notice of termination of the
contract, the notice is required to be
conveyed to the other party.
I do not understand our case law to reveal any concern of
insurmountable problems about proof
of the conveyance of the notice
to the other party.  Furthermore, in those cases where a party
such as a seller or lessor
has contractually bound himself to give
notice to the other party that the latter is in breach of his
agreement and calls upon
him to remedy the breach before he can
exercise his right to cancel the agreement or to institute legal
proceedings, the notice
is required to reach the mind of the other
party.
[87]
[109]
In
Swart
v Vosloo
[88]
the Court held that there had been no
valid or effective cancellation of the lease where the lessor’s
letter of cancellation
had not been seen by the lessee (even though
it had been given to the lessee’s employee at the bottle store,
which was the
subject of the lease, and the employee had put the
letter on the lessee’s desk), but the lessee had not seen the
letter until
after he had sent a letter to the lessor exercising his
option to purchase the bottle store and the lessor had read the
lessee’s
letter.  In other words, the Court held that
until the lessor’s letter had come to the lessee’s
attention, the
lessor’s decision to cancel the lease was not
effective in law.
[110]
In
Swart
v Vosloo
the determination
of the matter revolved around the construction to be given to the
words “the lessor shall be entitled .
. . to declare this lease
cancelled and terminated forthwith”.
[89]
There were two questions for
determination in the matter, namely:
(a)
whether the lessor had to give notice to the lessee of his decision;
and
(b)  if so, whether the
cancellation only became effective when it actually reached the mind
of the lessee.
[111]
After discussing the basic principles
of the law of contract and cases such as
Noble
v Laubscher
,
[90]
Schuurman v Davey
,
[91]
Jaffer v Falante
[92]
and
Steyn’s
Foundry (Pty) Ltd v Peacock
,
[93]
Holmes JA summed up his conclusion
thus: “It must be taken as settled that, in the absence of
agreement to the contrary, a
party to a contract who exercises his
right to cancel must convey his decision to the mind of the other
party; and cancellation
does not take place until that happens.”
[94]
Although Holmes JA’s
judgment was a minority judgment, there was no disagreement between
the majority and the minority on
this point.
[112]
The relevant provision of the lease under consideration in
Swart v
Vosloo
was to the effect that the lessor was entitled to declare
the contract cancelled and terminated forthwith.  It did not
expressly
say to whom the lessor was entitled to make the
declaration.  Nevertheless, Holmes JA held that the clause meant
that the
lessor had to declare to the lessee.  The basis for
this conclusion was given as follows:
“
Now
‘declare’ means to make known which necessarily connotes
a person or persons to whom something is made known.
And in the
context of the lease the obvious and only such person is the lessee.
Now you cannot make
something known to him unless it reaches his mind.
Hence this provision does not vary the
basic rule discussed above: it is in conformity with it.  This
answers the contention
that the lease expressly empowers the lessor
to cancel without notice to the lessee.”
[95]
(Underlining added.)
Writing
for the majority in the same case, Wessels JA wrote:
“
In
my opinion, however, as a matter of language, the word ‘declare’
and most, if not all, of its synonyms clearly connote
(subject
possibly to context and definition by the parties to a contract) an
activity which concerns not only the person making
the declaration
but some other person or persons as well.  A verbal declaration
would ordinarily be a completely sterile activity
unless it were to
be addressed to some person or persons.”
[96]
[113]
Wessels JA referred to judgments which he said appeared to be based—
“
upon
an acceptance of the proposition that our law requires a party who
elects to exercise a right of cancellation to notify the
defaulting
party of his decision to terminate the contract.  It is,
furthermore, implicit in those judgments that, if a party
relies upon
intimation contained in a legal process, such intimation operates to
terminate the contract if it is brought to the
notice of the
defaulting party by the actual service upon him of the process
embodying the intimation.”
[97]
Wessels
JA then concluded that the provision in the forfeiture clause of the
lease was to be construed as meaning that, if the lessor
decided to
“avail himself of the right of terminating the lease, his
election to do so was to be intimated or made known
to the
lessee.”
[98]
[114]
Wessels JA also pointed out that the—
“
termination
of a contract has important consequences upon the reciprocal rights
and duties of the parties thereto and this would
seem to provide
further justification for holding that, if a party decided to
exercise a right to declare a contract cancelled,
he should intimate
his election to the defaulting party effectively to terminate the
contract, unless that contract itself provides,
either expressly or
by necessary implication, that termination may be effected in some
manner other than communication to the defaulting
party.”
In
this regard Wessels JA referred to the remarks of Herbstein J in
Jaffer v Falante
[99]
and those of Hoexter JA in
Resisto
Dairy (Pty) Ltd v Auto Protection Insurance Co. Ltd
[100]
in regard to an insurer’s duty
to inform the insured if it had decided to repudiate liability in
respect of a claim under
the policy.
[101]
[115]
If the Court in
Swart
v Vosloo
could hold, as it
did unanimously, that a provision of the lease which entitled the
lessor “to declare [the] lease cancelled
and terminated
forthwith” meant that the declaration had to reach the mind of
the buyer, how can it be held that the provision
in section 129(1)(a)
means that the default need not reach the mind of the consumer?
In the relevant clause of the lease
in
Swart
v Vosloo
,  words such
as “to the lessee” were not included to make it clear
that the declaration was to be made to the
lessee.  Yet the
Court held that the use of the word “declare” meant that
the declaration had to reach the mind
of the lessee.  In section
129(1)(a) the provision includes the words “to the notice of
the consumer” to indicate
to whose notice the credit provider
has to draw the default.  Furthermore, although in section
129(1)(a) there is no express
reference as to whom the proposal must
be made, it is necessarily implied that it is to be made to the
consumer.  How, then,
can it be said that the NCA does not
contemplate that the proposal must reach the mind of the consumer?
The case of
Fourie v Olivier
en ’n Ander
[102]
supports this reasoning since the
Court held that the notice which the seller was required to give to
the purchaser, to afford him
the opportunity to purge the default,
was required to be received by the purchaser.  In that case two
letters had been returned
undelivered.
[116]
In
Miller
and Miller v Dickinson
[103]
the parties had entered into a deed of
sale in respect of a certain property.  The respondent was the
purchaser and the appellant
the seller.  The property was
adjacent to the respondent’s parents’ property.  In
the preamble to the deed
of sale the respondent was described as
being “of Box 148 Randburg”.  In clause 17 of the
deed of sale the blank
space in which the purchaser’s address
should have been filled in to indicate where the purchaser would
receive all notices
under the deed was not filled in.  Clause 13
read as follows in so far as it is relevant:
“
Should
the purchaser fail to pay on due date any instalment or other imposts
as provided for in this deed of sale, but not otherwise,
the sellers
shall be entitled to give the purchaser written notice requiring the
purchaser to remedy such default, and should the
purchaser within
twenty-one (21) days after the posting of such notice fail to remedy
the default then and in that case, the sellers
shall without further
notice, have the option:
(a)  to declare this deed of sale
cancelled . . . or
(b)  to sue forthwith for the
recovery of the whole of the balance outstanding under this deed of
sale, or for payment of any
arrear instalments as the sellers may
think fit.”
[104]
[117]
After the respondent had fallen into arrears with his payment the
appellants’ attorney sent him two registered letters
at
different times, one notifying the respondent of his default and the
other cancelling the agreement.  Both letters were
returned by
the postal authorities marked “unclaimed”.  The
attitude of the appellants was that the notices were
as valid as if
the respondent had received them.  The respondent did not deny
that Box 148, Randburg was his postal address.
He said that he
had made an arrangement with his parents to collect his post for him
and they had from time to time given
him mail from the postal box.
He made this arrangement because he had relocated.
[118]
Following
Swart
v Vosloo
,
[105]
the High Court held that, as the
respondent had not received the letters, there had been no valid
cancellation of the sale agreement.
On appeal the Appellate
Division followed its decision in
Swart
v Vosloo
.  However, it
noted that the deed of sale contemplated two notices to be given by
the sellers in the event of the purchaser
failing to comply with the
terms of clause 13.  One of those notices was to give an
opportunity to the defaulting party to
remedy its default.  The
Court then said:
“
If
a declaration of cancellation of an agreement by a creditor, in order
to be effective, has to be brought to the mind of the debtor,
in the
absence of an agreement to the contrary, a notice to remedy a default
before such cancellation, would, I think,
a
fortiori
be
required to be received by the debtor.
The
position in the present case seems to be no different, in the absence
of an agreement, from that of the case of a creditor generally
who
has to put a debtor
in mora
and who, if he cannot find the debtor,
must, if necessary, resort to a process of summons
in
judicio
.”
[106]
(Underlining added.)
[119]
The common law rule
that a notice of termination of a contract by one party must reach
the mind of the other party to the contract
in order to be effective
also applies to contracts of employment.  In
Transport
& Allied Workers Union & Others v Natal Co-operative Timber
Ltd
[107]
(
NCT
)
the Court
held that the notice of termination of a contract of employment “must
be given to the employee
personally
unless he has
appointed an agent with authority to receive such notice on his
behalf (cf
Honono
v Willowvale Bantu School Board & Another
1961
(4) SA 408
(A) at 414H).”
[108]
[120]
At common law a
notice of the termination of a contract, including a contract of
employment, must also be clear, unconditional and
unequivocal.
[109]
In the
NCT
case the Court
dealt with the rationale behind the requirements that the notice of
termination of a contract must be clear, unequivocal
and
unconditional.  McCall J said:
“
It
seems to me that the rationale behind the requirements that the
notice must be clear and unequivocal and that it must be
unconditional
is, as far as the employee is concerned, the same.
He must be left in no doubt as to where he stands as far as his
continued
employment is
concerned
as to what
the employer’s intentions are with regard thereto.  In the
case of a dismissal, on notice, for misconduct
or incompetence for
example, he must know that his employer has elected to terminate his
contract from a specific date, so that
he may govern his conduct
accordingly.  He may decide to accept the termination . . . [or]
claim specific performance”.
[110]
A little later, McCall J said of the
employee in such a case:
“
In
any case, he must know the precise time from which the termination
takes effect, so that he can judge whether he has been
given
sufficient notice, either under the
relevant statutory provision governing his employment or under the
common law, as the case may
be, or that he has been tendered the
correct amount of money in lieu of the requisite notice, if that is
what the employer elects
to do.”
[111]
In my view, although this was given as
a rationale for the requirement that a notice of termination must be
clear, unequivocal and
unconditional, it equally explains why the
notice of termination must be communicated to the employee or why the
notice must come
to the attention of the employee before it can be
said to be effective.
[121]
There are two reasons why I have referred to the
fact that at common law the notice of termination of a contract as
well as the
notice placing the other party
in
mora
are required to be communicated to
the other party to the contract before they can be effective in law.
[122]
The first is that section 129(1)(a) also contains
a provision that obliges the credit provider, inter alia, to put the
consumer
in mora
before
it can exercise its right to cancel the agreement or institute legal
proceedings.  The second is that section 129(1)(a)
was enacted
primarily, if not exclusively, for the benefit and protection of the
consumer.  If that is correct, the correct
construction of
section 129(1)(a) cannot conceivably be one that puts the consumer in
a worse position than the position at which
he was at common law.
Under the common law, where the creditor had undertaken the
obligation to give a debtor a notice of
a breach of contract and an
opportunity to purge that breach, such notice had to be conveyed to
the mind of the debtor before it
could be said that the creditor had
given the debtor notice of such breach or notice of termination and
could cancel the agreement.
The proposition that section
129(1)(a) does not mean that the consumer’s default and the
credit provider’s proposal
should be brought to the consumer’s
actual attention and that the section is complied with if the section
129(1)(a) letter
reaches the consumer’s local post office
places the consumer under the NCA in a worse position than a debtor
was at common
law where the creditor had contractually undertaken to
put the debtor
in mora
and
yet section 129(1)(a) was primarily enacted for the benefit and
protection of the consumer.
[123]
The other reason is that, whatever difficulties
may be thought to be inherent in requiring that a notice of
termination of a contract
be received by the other party to the
contract, they were not considered at common law sufficient to
justify requiring that a notice
of termination need not be received
by the other party.  Surely in this day and age when
communication is better and faster
than it was then, the proposition
that a section 129(1)(a) letter, which is a very important letter,
need not be received by the
consumer cannot be justified.
Interpretation of similar statutes
[124]
Now that we know the position at common law on the
issue under consideration in this matter, it is necessary to consider
what our
jurisprudence is in regard to the interpretation of other
statutes which contained provisions which deal with the situation
where
the seller or creditor was required to alert the purchaser or
debtor of default in payments before the seller or creditor could

either cancel the agreement or institute legal proceedings against
the debtor.
[125]
Before 1965, section 12 of the
Hire-Purchase Act
[112]
(1942 Act) read as follows:
“
No
seller shall, by reason of any failure on the part of the buyer to
carry out any obligation under any agreement, be entitled
to enforce—
. . .
(b)  any provision in the
agreement for the payment of any amount as damages, or for any
forfeiture or penalty, or for the
acceleration of the payment of any
instalment, unless he has made written demand to the buyer to carry
out the obligation in question
within a period stated in such demand,
not being less than ten days, and the buyer has failed to comply with
such demand.”
In
1965 section 12 was amended.  The relevant portion thereafter
read as follows:
“
No
seller shall, by reason of any failure on the part of the buyer to
carry out any obligation under any agreement, be entitled
to enforce—
. . .
(b)  any provision in the
agreement for the payment of any amount as damages, or for any
forfeiture or penalty, or for the
acceleration of the payment of any
instalment, unless he has by letter handed over to the buyer or sent
by registered post to him
at his last known residential or business
address, made demand to the buyer to carry out the obligation in
question within a period
stated in such demand, not being less than
ten days, and the buyer has failed to comply with such demand.”
[113]
[126]
It is clear from section 12(b), as it was before its amendment in
1965, that its purpose was to preclude the seller from taking
certain
steps against the purchaser as a result of the latter’s breach
of their agreement.  What the seller was precluded
from doing
was to enforce any provision of the agreement for the payment of
damages, penalty or for forfeiture or for the acceleration
of the
payment of any instalment unless—
(a)     he had
made a written demand to the buyer to carry out the obligation in
question within a period specified
in the demand which had to be 10
days or more; and
(b)    the buyer had
failed to comply with the demand to carry out the obligation in
question.
This
means that, prior to the amendment of 1965, section 12(b) of the 1942
Act precluded the seller from instituting proceedings
to enforce an
agreement without first making a “written demand to the buyer
to carry out the obligation in question”
within the period
specified in the demand and unless “the buyer has failed to
comply with such demand.”
[114]
[127]
In
Weinbren
v Michaelides
,
[115]
the seller, in purporting to comply
with the provisions of section 12(b) of the 1942 Act, as it stood
prior to the 1965 amendment,
had addressed a letter to the purchaser
and sent it by registered post to the latter’s last known
address.  The letter
never reached the purchaser.  It was
returned by the Post Office to the seller with the note “gone
away”.
In that case the Court expressed the view that
prima facie section 12(b) meant that the demand in writing had to
reach the buyer.
[116]
The Court said:
“
Now,
I think it is clear and Mr
Merber
does not contend to the contrary – that
prima
facie
the demand which must
be made in writing under section 12(b) must reach the buyer.  The
Legislature has given him ten days
after the demand in which to
comply with the demand and that means, I think, that the demand to be
effective must be a demand which
has reached the buyer.”
I
am in agreement with this view.
[128]
In section 12(b), before the 1965 amendment, what was required of the
seller before he was allowed to proceed was that he
should have “made
written demand to the buyer to carry out the obligation in question .
. . and the buyer [had] failed to
comply with such demand.”
What is required of the credit provider in section 129(1)(a)
and (b) of the NCA is to “draw
the default to the notice of the
consumer in writing and propose that the consumer refer the credit
agreement to a debt counsellor”
with the required intent.  If
the Court in
Weinbren
was right in holding that, on that
wording of the 1942 Act, the Legislature intended that the demand in
writing should reach the
buyer, I cannot see how it can be said, on
the above wording of section 129(1)(a), that the Legislature did not
intend that the
letter, which draws the default to the notice of the
consumer and which contains the credit provider’s proposal
about what
should be done to resolve the problem, need not reach the
consumer.
[129]
An argument was advanced on behalf of the seller in
Weinbren
’s
case that, by reason of a clause in the agreement between the
parties, the parties had agreed that “any written notice
to be
given to the buyer shall be sufficiently delivered if sent by post to
the residential or business address of the buyer last
known to the
seller” and the fact that the seller had posted the letter or
notice to the buyer’s last known address
meant that the seller
had complied with section 12(b) of the 1942 Act.  The Court
rejected this argument.
[130]
One of the bases upon which the Court rejected the argument was that,
if upheld, it would mean that—
“
a
perfectly honest buyer might change his address and might use the
statutory right which is given to him of giving a fortnight’s

notice of that change, using the fortnight after he had changed his
address within which to give his notice and during that period
a
letter demanding that he carry out his obligations might be delivered
to his old address.”
[117]
The
Court said that in such a case, an honest buyer would be deprived of
his statutory right to be given the section 12(b) opportunity
to
purge the default before the seller could institute legal proceedings
against him.  For this and other reasons, the Court
rejected the
proposition that there was compliance with section 12(b) if a letter
that had been sent by registered post to the
buyer had not reached
him.
[131]
It is now necessary to refer to and
consider the provision of section 13(1) of the Sale of Land on
Instalments Act
[118]
(1971 Act), and how it was interpreted
by our courts.  Section 13(1) read as follows:
“
No
seller shall, by reason of any failure on the part of the purchaser
to fulfil an obligation under the contract, be entitled to
terminate
the contract or to institute an action for damages, unless he has by
letter handed over to the purchaser and for which
an acknowledgement
of receipt has been obtained, or sent by registered post to him at
his last known residential or business address,
informed the
purchaser of the failure in question and made demand to the purchaser
to carry out the obligation in question within
a period stated in
such demand, not being less than thirty days, and the purchaser has
failed to comply with such demand.”
[132]
I draw special attention to the fact that what section 13(1) required
of the seller when the purchaser had failed to fulfil
an obligation
under the contract was that the seller must inform the purchaser of
the failure in question and demand that the purchaser
carry out the
obligation within a period specified in the letter.  The seller
was to do this “by letter handed over
to the purchaser . . . or
sent by registered post to him at his last known residential or
business address”.  Under
section 13(1) the obligation had
to be carried out within a period stated in the letter.  Under
section 129(1)(a) of the NCA
read with section 130(1)(a) no court
proceedings may be instituted until at least 10 business days have
elapsed since compliance
with section 129(1).  Under section
13(1) the termination of the agreement or the institution of court
proceedings was precluded
until certain conditions had been met.
Under sections 123 and 130(1)(a) of the NCA the termination of an
agreement and the
institution of legal proceedings are also precluded
until certain conditions have been met.  When one compares the
wording
of section 12(b) of the 1942 Act and the wording of section
13(1) of the 1971 Act, it becomes immediately clear that, to a very

large extent, the two provisions are identical.  When section
13(1) is compared with section 129(1)(a), read with sections
123 and
130(1)(a), it is clear that the two sections share some similar
features.
[133]
There can be no doubt that both sections 12(b) and 13(1) sought to
address the same problem, namely, the procedure to be followed
and
the conditions that had to be met before the seller could act in one
way or another when the buyer was in breach of the agreement
between
the parties.  There can also be no doubt that under both
provisions, the seller was required to bring the breach or
default to
the notice of the buyer or purchaser in writing, and had to afford
the buyer a period of at least 10 days to enable
the latter to remedy
the breach or bring the payments up to date before he could institute
legal proceedings or before he could
terminate the agreement.
It must be noted that those features, which were present in sections
12(b) and 13(1), are also present
in section 129(1)(a) and (b) read
with section 130(1).  I now consider how the courts interpreted
section 13(1) of the 1971
Act.
[134]
In
Maharaj
v Tongaat Development Corporation (Pty) Ltd
[119]
(
Maharaj
)
there was a dispute between the parties about whether the purported
cancellation of a contract of sale of land was valid.
This
depended on whether the period prescribed in section 13(1) of the
1971 Act began to run from the time the letter was received
by the
purchaser.  The Appellate Division said:
“
It
is to be noted that section 13(1) of Act 72 of 1971 postulates two
alternative methods of informing the purchaser of any default
on his
part and demanding that it be remedied within the period stated in
the letter (being not less than 30 days):
(a)  by handing the letter over
to the purchaser and obtaining an acknowledgement of receipt
therefor; or
(b)  by sending it by registered
post to the purchaser at his last known residential or business
address.”
[120]
[135]
The Court stated in
Maharaj
that it was in agreement with Galgut
J’s view expressed in
Maron
v Mulbarton Gardens (Pty) Ltd
[121]
that the seller is entitled to choose
any one of the two alternative methods.
[122]
The Court also said in
Maharaj
:
“
It
is to be noted that the first-mentioned method contemplates a handing
over of the letter to the purchaser himself.  Although
the
seller may no doubt cause the handing over to be effected by his
agent or servant, it is, in my opinion, clear that the handing
over,
in order to be effective,
must
be to the purchaser and to nobody else.
”
[123]
(Underlining added.)
The
Court pointed out that it was clear from the first method of handing
over that the Legislature intended that the purchaser should
be
informed personally of the alleged default and should, moreover, be
accorded the full benefit of the period within which he
was required
to remedy the default.
[124]
The Court said this in respect
of a case where the first method of handing over was used.  It
went on to say the following
in respect of sending a letter by
registered mail:
“
In
providing for an alternative method, the Legislature no doubt
contemplated the possibility that a handing over to the purchaser

might not always be possible or convenient.
The
question arises whether, in prescribing (for the convenience of the
seller) an alternative method of informing the purchaser
by letter of
an alleged default, the Legislature contemplated any lesser measure
of protection for the purchaser than that inherent
in the employment
of the first-mentioned method?  For the reasons which follow, I
am of the opinion that the question must
be answered in the
negative”.
[125]
(Underlining added.)
[136]
The Appellate Division gave seven reasons why it held that the
provision of section 13(1), which allowed the seller to send
the
notice to the purchaser by registered post to his last known
residential or business address, required that the letter should

reach the purchaser.  The Court’s reasons were that:
(a)     In
enacting section 13(1) the overall intention of the Legislature was
to afford reasonable protection
to a purchaser who, by reason of a
failure by him to fulfil an obligation under a contract, faces a
threat by the seller to terminate
the agreement or to institute an
action for damages.
(b)    In prescribing
that the seller could send the letter by registered post, the
Legislature no doubt accepted
that that method is almost invariably
employed where important letters or other documents are sent to an
addressee through the
post.  Whilst registered letters no doubt
do go astray, there is, at least, a high degree of probability that
most of them
are delivered.
(c)     The date
of posting and the date of delivery can readily be established.
(d)    Section 13(1)
requires that the letter be sent to the purchaser “at his last
known residential or business
address”, which would not
necessarily be the same as the address which, in terms of the
contract, serves as
domicilium citandi et executandi
for all
purposes of the contract.  The learned Judge went on to say that
“
[t]his, in my opinion, is an
indication that the Legislature intended, as in the case of the
first-mentioned method, that the letter
should reach the purchaser
or, at least, be made available to him at an address where he is
likely to be placed in possession thereof.
If the question of
delivery of the letter were to be in issue, I am of the opinion that
evidence that it was delivered at
the specified address would
constitute
prima facie
proof of the delivery of the letter to
the addressee (the purchaser).”
[126]
(e)
If
the letter was not delivered to the addressee (the purchaser) the
letter would be returned to the seller and he would know that
“his
method of delivery was ill-chosen.”
[127]
(f)
If the period of 30 days began to run
from the date of posting, “an element of uncertainty, affecting
the purchaser’s
protection”
[128]
would be introduced.  The Court
went on to say:
“
The date of the letter would
not necessarily be a reliable guide as to the date of posting.
This difficulty arose in the present
case.  It was suggested
that the postmark would proclaim the date of posting.  As to
that, one knows from experience
that postmarks are not always clearly
decipherable . . . It is obviously important for a defaulting
purchaser to know with certainty
within what time the default is to
be remedied by him.  He would ordinarily have certainty if the
period mentioned in the
letter begins to run from the date of
delivery thereof to him.”
[129]
(g)
“
It
is always open to a seller to take steps to verify whether delivery
has been effected and, if it has, the date thereof.  He,
too,
would then know when the period mentioned in the letter
expires.”
[130]
[137]
In conclusion the Court said:
“
For
these reasons, I am satisfied that, upon the proper construction of
section 13(1), the period mentioned in the letter (being
not less
than 30 days) begins to run from the date on which it is received by
the purchaser.”
[131]
In
Phone-A-Copy Worldwide (Pty)
Ltd v Orkin and Another
[132]
the Appellate Division followed its
decision in
Maharaj
.
The meaning of delivery
[138]
A to Z Bazaars (Pty) Ltd v Minister
of Agriculture
[133]
(
A
to Z
) is a case in which
the Appellate Division dealt definitively with what the ordinary
meaning of the word “deliver”
or “delivered”
is.  In response to an expropriation notice from the Minister of
Agriculture in which A to Z Bazaars
(Pty) Ltd (A to Z) was offered a
certain amount of compensation, A to Z posted a letter to the
Minister accepting the compensation
offered.  However, before
that letter could reach the Minister, A to Z sent a telegram to the
Minister withdrawing its acceptance
of the compensation offered by
the Minister.  The question for decision was whether or not,
when A to Z posted the letter
of acceptance of the Minister’s
offer, a contract came about between the parties even before the
letter of acceptance reached
the Minister, or whether no contract
came into being then and, therefore, A to Z’s telegram
withdrawing the acceptance, which
was received by the Minister, was
effective.
[139]
The Minister took a view that accorded
with cases such as
Cape
Explosives
[134]
where it was held that, when a written
offer is made by letter sent through the post, a contract comes into
being, in the absence
of the expression of a different intention by
the offeror, on the posting by the offeree of the letter of
acceptance.  A to
Z maintained that a contract would only have
come into being in that case once the letter of acceptance had been
received by the
Minister.
[140]
The answer depended on the
construction of section 6(1) of the Expropriation Act.
[135]
As far as it is relevant for present
purposes, section 6(1) of the Expropriation Act read:
“
(1)
An owner whose property has been expropriated in terms of section two
shall within thirty days
(or such longer period as the Minister may
in writing allow) from the date of notice in question deliver or
cause to be delivered
to the Minister—
(a)  a written statement
indicating—
(i)   if any compensation
was offered for such property, whether or not he accepts that
compensation and, if he does not
accept it, the amount claimed by him
as compensation; or
(ii)  if no such compensation was
offered, the amount claimed by him as compensation;
(b)  if such property is
immovable property, his title deed thereof, if it is in his
possession or under his control”.
[141]
The Appellate Division held that the
principle expounded in
Cape
Explosives
did not apply to
the
A to Z
case
because section 6(1) required A to Z to “deliver or cause to be
delivered to the Minister” a statement indicating
whether it
had accepted or rejected the compensation offered.  The approach
adopted by the Appellate Division was to give
the word “deliver”
or the phrase “cause to be delivered” its ordinary
meaning.  The Appellate Division
held that the ordinary meaning
of the verb “deliver” is “to hand over, transfer,
commit to another’s possession
or keeping”.
[136]
The Court rejected a contention by the
Minister to the effect that the word “deliver” or the
phrase “cause to
be delivered” in section 6(1) had to be
read to include “post or cause to be posted”.
[137]
The Court said:
“‘
Deliver
or cause to be delivered’ does not relate only to an acceptance
of the offer - if there is no acceptance, the offeree
must ‘deliver
or cause to be delivered’ a statement that he does not accept,
setting out the amount claimed by him
as compensation.
A
mere posting of such a statement, which never reaches the offeror,
could hardly be considered to constitute compliance with this

provision.
”
[138]
(Underlining added.)
[142]
The Court went on to say:
“
The
words ‘in accordance with the provisions of section 6(1) of the
aforesaid Act’ in paragraph 4 of the notice of expropriation,

therefore, import the condition that acceptance of the offer is to be
effected by ‘delivery’ (in the sense explained
above) of
a written acceptance.  The appending of a postal address to the
notice does not alter this.  It only means
that ‘delivery’
may there be effected.
The
post may be used, but only when the statement actually reaches ‘P.O.
Box 2648, Pretoria’, is the delivery completed.
”
[139]
(Underlining added.)
[143] The Court also said:
“
On
a true construction the word ‘deliver’ in section 6 does
not include mere posting.  But, even if it did, section
7 of the
Interpretation Act, 33 of 1957, would appear to operate against the
respondent:
‘
Where
any law authorizes or requires any documents to be served by post,
whether the expression ‘serve’, or ‘give’,
or
‘send’, or any other expression is used, then, unless the
contrary intention appears, the service shall be deemed
to be
effected by properly addressing, prepaying, and posting a registered
letter containing the document, and, unless the contrary
is proved,
to have been effected at the time at which the letter would be
delivered in the ordinary course of post.’
It
emerges clearly that the service is only effective from the date of
actual delivery.
Normally this is deemed to be
‘
the
time at which the letter would be delivered in the ordinary course of
post’,
but
the contrary may be proved.
If
it is established that the letter never reached its destination, the
service never becomes effective.  The service is inchoate
until
actual delivery.
It
seems to follow that, if before that time another communication
arrives, neutralising the first, it should prevail.”
[140]
(Underlining added.)
[144]
In conclusion the Court said:
“Moreover, if the expropriatee adopts the post as a means for
the conveyance of the title deed
or above-mentioned particulars to
the Minister, he assumes the risk that it may go astray”.
[141]
Another case which dealt with the
ordinary meaning of the word “deliver” is
Loryan
(Pty) Ltd v Solarsh Tea and Coffee (Pty) Ltd
[142]
but it simply referred to the
A
to Z
decision.
[145]
In my view the use of the word “delivered” in section
130(1)(a) does not present any problem whatsoever if it
is properly
construed.  To construe it properly, I think it must be
interpreted in the light of section 129(1)(a) not, as
suggested in
the main judgment, that section 129(1)(a) must be interpreted in the
light of section 130.  However, we must
give the word
“delivered” in section 130(1) its ordinary meaning as
explained in the
A to Z
case.  If the word “delivered”
in section 130(1)(a) is given its ordinary meaning, then it
contemplates that the
section 129(1)(a) letter or notice would be
handed over to the consumer or would be transferred to the possession
of the consumer
or to his keeping.  That is more consistent with
the requirement of section 129(1)(a) that the credit provider has to
draw
the default to the notice of the consumer.
The proper interpretation of
section 129(1)(a)
[146]
Purposive construction must be used in
construing section 129(1)(a).  This is required by section 2(1)
of the NCA.
[143]
[147]
The purposes of the NCA
[144]
are to promote and advance the social
and economic welfare of South Africans, promote a fair, transparent,
competitive, sustainable,
responsible, efficient, effective and
accessible credit market and industry and to protect consumers, by,
among other things—
(a)     promoting
the development of a credit market that is accessible to all South
Africans, and
in particular to those who have historically been
unable to access credit
under sustainable market conditions;
(b)    promoting equity
in the credit market by
balancing the respective rights and
responsibilities of credit providers and consumers
;
(c)     addressing
and preventing over-indebtedness of consumers, and
providing
mechanisms for resolving over-indebtedness based on the principle of
satisfaction by the consumer of all responsible financial

obligations
;
(d)    providing for a
consistent and accessible
system of consensual resolution of
disputes arising from credit agreements
; and
(e)
“
providing for a consistent and
harmonised system of debt restructuring, enforcement and judgment,
which
places priority on the
eventual satisfaction of all responsible consumer obligations under
credit agreements.
”
[145]
(Underlining added.)
[148]
Section 15(a) of the NCA is also significant.  It enjoins the
National Credit Regulator (NCR) to enforce the NCA by “promoting

informal resolution of disputes arising in terms of this Act between
consumers on the one hand and a credit provider or credit
bureau on
the other, without intervening in or adjudicating any such dispute”.
[149]
If a credit provider does not intend
to terminate a credit agreement before the time provided for in the
agreement owing to the
consumer being in default of payment or does
not intend to commence legal proceedings to enforce the agreement, it
is not obliged
to take the steps contemplated in section 129(1)(a).
However, the effect of section 129(1)(a) and (b) read with
section 123(1)
and (2)
[146]
is that a credit provider may not
terminate a credit agreement as a result of the consumer’s
default in payments without first
drawing the default to the
consumer’s notice in writing and proposing to him that he refer
the credit agreement to a debt
counsellor with the intent referred to
in section 129(1)(a).
[150]
In terms of section 129(1)(a) either the drawing of the default to
the notice of the consumer, the referral of the credit
agreement by
the consumer to a debt counsellor, or both, need to be done “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”.  This suggests
that the overall
objective of the two steps to which reference is made in section
129(1)(a) is to enable the two parties to “resolve
any dispute
under the agreement” if there is a dispute or to “develop
and agree on a plan to bring the payments under
the agreement up to
date”.  That is why section 129(1)(a) requires that there
be “the intent that the parties
resolve any dispute under the
agreement or develop and agree on a plan to bring the payments under
agreement up to date”.
[151]
It is implied in the proposal and the referral provided for in
section 129(1)(a) that both parties must endeavour to resolve
any
dispute under the agreement that may exist between them or develop
and agree on a plan to bring the payments up to date.
Such a
duty gives effect to the purpose provided for in section 3(i)
relating to the provision of a system of debt restructuring
and
enforcement “which places priority on the eventual satisfaction
of all responsible consumer obligations under credit
agreements.”
If there was no such obligation on the parties, the provisions of
section 129(1)(a) would have very little
value.
[152]
Section 129(1)(b) precludes the credit
provider, subject to section 130(2), from commencing any legal
proceedings to enforce a credit
agreement unless two conditions are
met.  The one is “first providing notice to the consumer,
as contemplated in [section
129(1)(a)], or in section 86(10), as the
case may be”.
[147]
The other is meeting any further
requirements set out in section 130.
[148]
Section 130(2) has no
application to the present case.
[153]
I
draw attention to the following:
(a)
Section 129(1)(a) makes it clear that the default
must be drawn “to the notice of the consumer”; it does
not say that
the credit provider must address a letter to the
consumer and send it to his address.  In this regard it is plain
that the
section requires the credit provider to draw the default to
the attention of the consumer.
(b)
Section 129(1)(a) requires that, in referring the
credit agreement to a debt counsellor, the consumer must do so “with
the
intent that the parties resolve any dispute under the agreement
or develop and agree on a plan”.  This requirement can

only be met if the consumer has received the section 129(1)(a)
letter.  There can be no such intent on the part of the consumer

when he has not become aware of the contents of a section 129(1)(a)
letter.  He cannot participate in the resolution of any
dispute
under the agreement if he is not aware of the default and of the
credit provider’s proposal nor can he develop and
agree with
the credit provider on a plan to bring the payments under agreement
up to date if he is not aware of the contents of
the section
129(1)(a) letter.
(c)
If it is said, as it is in the main judgment, that
section 129(1)(a) is complied with if the section 129(1)(a) letter
has reached
the consumer’s local post office even if it has not
reached him or his address, the consumer will also not know the date
when the letter reached the local post office and, therefore, will
not know from what date he must calculate the 10 business day
period
referred to in section 130(1)(a) within which he must convey his
reply to the credit provider.
(d)
Section 129(1)(b) is clear: it is “to the
consumer” that the section 129(1)(a) notice must be provided.
It precludes
the commencement of legal proceedings by the credit
provider to enforce the agreement “before
first
providing notice to the consumer
, as
contemplated in paragraph (a), or in section 86(10), as the case may
be”.  (Underlining added.)  To provide
something
seems to me to involve handing something over to that person.
[154]
Section 130(1) also needs to be considered.  It reads:
“
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—
(a)  at least 10 business days
have elapsed since the credit provider
delivered a notice to the
consumer as contemplated in section 86(9), or section 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 in that
notice; or
(ii)  responded to the notice by
rejecting the credit provider’s proposals”.  (Underlining
added.)
[155]
It will be recalled that in the main
judgment, as well as in
Rossouw
[149]
and certain judgments of the different
High Courts that preceded
Rossouw
,
the use of the word “delivered” in section 130(1)(a) was
heavily relied upon to support the proposition that section
129(1)(a)
does not entail that the consumer must receive the section 129(1)(a)
letter or must be aware of the contents of that
letter.  It
seems to me, as I say elsewhere in this judgment, that the reliance
upon the word “delivered” in section
130(1)(a) to advance
that proposition is misplaced.
[156]
There are a number of High Court
decisions on what compliance with section 129(1)(a) entails which
preceded
Rossouw
.
Some, like
Munien
,
[150]
Mellet
,
[151]
Rockhill
[152]
and
Starita
[153]
were to the effect that the mere
dispatch of a section 129(1)(a) letter constitutes compliance with
section 129(1)(a) by the credit
provider.  Others, like
Dhlamini
[154]
and
Prochaska
[155]
were to the effect that section
129(1)(a) is complied with when the default is drawn to the attention
of the consumer and the credit
provider’s section 129(1)(a)
proposal is made to him.  It is not necessary to discuss all of
those decisions.
It suffices to say that most, if not all, of
the decisions that took the view reflected in
Rossouw
failed to focus on the real
question that must be asked in order to determine whether section
129(1)(a) has been complied with.
In the light of the wording
of section 129(1)(a) that question is: did the credit provider draw
the default to the notice of the
consumer and propose that he refer
the credit agreement to a debt counsellor with the intent
contemplated in section 129(1)(a)?
If the answer to this
question is yes, there has been compliance.  If the answer is
no, there has been no compliance.
If an attempt was made to
draw the default to the notice of the consumer but it was not
successful, it remains an unsuccessful
attempt.  The decisions
which took the view reflected in
Rossouw
unduly focussed on the word
“delivered” in section 130(1)(a), to the detriment of
section 129(1)(a) and failed to give
that word its ordinary meaning.
[157]
Furthermore, the word “delivered”
in section 130(1)(a) is qualified by the words “as contemplated
in . . . section
129(1)(a)”.  That means that one must
first establish what section 129(1)(a) means and then understand the
word “delivered”
in section 130(1)(a) within the context
of the meaning of section 129(1)(a).  Therefore, to the extent
that the word “delivered”
may have different meanings,
one has to choose a meaning that is as close as possible to the
meaning of section 129(1)(a).
One ought not attach to the word
“delivered” a meaning which is inconsistent with section
129(1)(a) or which is at
variance with the meaning of section
129(1)(a).  Although I have said what I have just said about the
meaning to be attached
to the word “delivered” in section
130(1)(a), strictly speaking, anyone construing the word “delivered”

in section 130(1)(a), does not need to go that far.  All one
needs to do is to give the word “delivered” in section

130(1)(a) its ordinary meaning as explained by the Appellate Division
in the
A to Z
case to which I have already
referred.  That is “to hand over, transfer, commit to
another’s possession or keeping”.
[156]
That meaning is in line with the
ordinary meaning of the notion of drawing something to someone’s
notice.
[158]
If the
position was that, as was held in
Rossouw
,
the dispatch of a section 129(1)(a) letter by the credit provider
complies with section 129(1)(a), even if it does not reach the

consumer, the calculation of the period of 10 business days to which
reference is made in section 130(1)(a) would commence on the
day
after the day on which the credit provider dispatched the letter to
the consumer.  This would mean that, if the letter
took five
days to reach the consumer’s address, the consumer would by
then be left with half that period of 10 business days
to seek to
either bring the payments up to date or respond to the credit
provider’s proposal.  The result would be that
the
consumer is denied the benefit of the full 10 business days provided
for in section 130(1)(a) of the NCA.  This cannot
be right.
The same applies if the main judgment’s interpretation is
adopted.  The time would begin to run from
the day after the day
on which the letter reached the consumer’s local post office
and not when the consumer received the
section 129(1)(a) letter.
The consumer would stand to suffer more hardship or prejudice if
section 129(1)(a) were given that
interpretation than the hardship or
prejudice which the credit provider stands to suffer if section
129(1)(a) is given the construction
I propose in this judgment.
[159]
In my view the Legislature could never have
provided, as it did in section 130(1)(a), that the credit provider
may not approach
the court to enforce a credit agreement against a
consumer, unless at least 10 business days have elapsed since the
credit provider
delivered the section 129(1)(a) letter to the
consumer, if the intention was that the period of 10 business days
afforded to the
consumer has to be calculated from the day of the
dispatch of such letter or from the day the letter arrived at the
post office
closest to the consumer.  The Legislature could
never have intended such a consequence because it would have been
aware that
in the end the consumer would not have 10 business days
within which to convey his reply to the credit provider.  I am,
therefore,
of the opinion that the 10 business days to which
reference is made in section 130(1)(a) is 10 business days from the
date of receipt
by the consumer of the section 129(1)(a) letter.
[160]
Finally, the proposition that the credit provider
has drawn the default to the notice of the consumer if the section
129(1)(a) letter
has gone as far as the consumer’s local post
office disadvantages a very significant section of the population of
South Africa.
That is that part of the population which lives
in areas where the postal authorities do not deliver the post to
people’s
residences or where many households do not have access
to the use of postal boxes provided by post offices.  Most of
the people
to whom I refer in this regard live in rural areas or on
farms belonging to their employers and in some townships.  Some
of
the people in rural areas depend on the local school to receive
their mail.  In such cases people use the local shop or the

postal address of the local school.  The owner of the shop or
the principal of the local school fetches the mail from the
nearest
post office and brings it to his shop or the school, as the case may
be, and the local people get it from there or other
people would take
their friends’ letters or their neighbours’ letters when
they find them at the store or at the school.
[161]
In South Africa the majority, if not all, of the
people who are subject to this poor postal service are black and
poor.  They
form part of the group that the NCA seeks to protect
and benefit under section 129(1)(a) and section 130.  In my
view, as
far as possible, an interpretation that will prejudice so
large a section of the people that the NCA seeks to protect should be

avoided.  In the construction of section 129(1)(a) and section
130(1)(a), it is possible to avoid such an interpretation.
[162]
The considerations to which I make reference above
with regard to black people living in rural areas and in some
townships fortify
me in the view that, when section 129(1)(a)
requires the credit provider to “draw the default to the notice
of the consumer
in writing and propose that the consumer refer the
credit agreement to a debt counsellor . . .”, it
means
that the credit provider must
inform
the consumer of the default and make the proposal
contemplated in section 129(1)(a) to him.  On this construction
of section
129(1)(a) the period of 10 business days to which
reference is made in section 130(1)(a) does not start running while
the section
129(1)(a) letter is on its way to the consumer but it
starts to run when the consumer is informed of the default and learns
of
the credit provider’s proposal that he refer the credit
agreement to a debt counselor.
[163]
Section 130(3)(a) provides:
“
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”.  (Underlining
added.)
From
this it is clear that the Legislature regards the section 129
procedure as so important that it decided to preclude a court
from
dealing with a matter relating to a credit agreement until it has
first satisfied itself that the section 129(1)(a) procedure
has been
complied with.
[164]
Section 130(4) provides:
“
In
any proceedings contemplated in this section, if the court determines
that—
(a)  the credit agreement was
reckless as described in section 80, the court must make an order
contemplated in section 83;
(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”.
[157]
Once
again it seems to me that this provision is indicative of how
seriously the Legislature takes the provisions of section 129(1)(a).

It regards them as so important that, if a court determines
that the credit provider has not complied with them, it would
be
obliged not to proceed with the matter but to adjourn the matter and
make an order specifying the steps that the credit provider
must
complete before the matter may be resumed in court.
[165]
If compliance with section 129(1)(a) means that the consumer must be
made aware of the fact of his default and of the credit
provider’s
proposal, the steps the court could specify in its order to ensure
that the consumer personally receives the section
129(1)(a) letter
could be any one or more of the following:
(a)     the credit
provider sends another section 129(1)(a) letter by registered mail.
(b)    the credit
provider gives the section 129(1)(a) letter to the sheriff to serve
on the consumer personally.
(c)     the credit
provider sends an employee or agent to visit the consumer’s
residential address or
workplace and personally give him the section
129(1)(a) letter.
(d)    the credit
provider sends the section 129 (1) (a) letter to the consumer by
courier.
(e)     the credit
provider sends the 129(1)(a) notice by email.
It
would be understandable if the Court would take the trouble to
specify these steps as the steps that the credit provider must

complete before the matter can be resumed in court because these
steps would enhance the possibility that the consumer becomes
aware
of his default and of the credit provider’s proposal that he
refer the credit agreement to a debt counsellor.
[166]
Section 96 reads:
“
Address
for notice
(1)  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).
(2)  A party to a credit
agreement may change their address by delivering to the other party a
written notice of the new address
by hand, registered mail, or
electronic mail, if that other party has provided an email address.”
(Underlining added.)
[167]
The question that arises is whether a
section 129(1)(a) letter or notice is a “legal notice”
that a party to a credit
agreement is required to or may wish to give
to the other party to the agreement for any purpose contemplated in
the Act.
In my view, the answer is, without a doubt, a yes.
That means that section 96 applies in a case such as the present
one.
Section 96(1) enjoins the party who is required to give a
legal notice or who wishes to give notice to “deliver that
notice
to the other party” and specifies even where the
delivery must take place.  I say it enjoins the party seeking to
or
required to give such notice because it says “
must
deliver that notice to the other
party”.  Once one accepts that a section 129(1)(a) letter
is a legal notice as contemplated
in section 96(1), then one must
give the word “deliver” in section 96(1) its ordinary
meaning as reflected in the
A
to Z
case above.
[158]
[168]
The language of section 96 is clear.  The section says that the
notice must be delivered “to the other party”.
That
leaves no room for the proposition that a notice that is not
delivered to such party is good enough.  Furthermore, if
one
then gives the word “deliver” in section 96(1) its
ordinary meaning of handing over or transferring something to
the
possession or keeping of another, quite clearly that proposition is
inconsistent with the notion that a letter which is stuck
at the
consumer’s local post office has been delivered to him or its
contents have been drawn to his notice.
[169]
Section 96(1) also makes it clear where the delivery of the legal
notice must take place.  It says “at . . . the
address of
that other party as set out in the agreement, unless paragraph (b)
applies”.  That means that there are only
two addresses at
which a legal notice as contemplated in section 96(1) and, therefore,
a section 129(1)(a) letter, may be delivered,
if the requirements of
section 96(1) are to be complied with.  It is either at the
other party’s (in this case the consumer’s)
address as
given in the credit agreement or at the address most recently
provided by the recipient in accordance with section 96(2).

That means either an address provided by a party to a credit
agreement when he or she changes to a new address different from the

one provided in the credit agreement.  For an address to come
within the provision of section 96(2) it must have been delivered
in
writing to the party seeking to give legal notice by hand, registered
mail, or electronic mail, if the party seeking to give
the legal
notice has provided an email address.
[170]
Section 168 must also be considered.  It reads:
“
Unless
otherwise provided in this Act, a notice, order or other document
that, in terms of this Act, must be served on a person
will have been
properly served when it has been either—
(a)  delivered to that person; or
(b)  sent by registered mail to
that person’s last known address.”
[171]
The provisions of section 168 are consistent with the provisions of
section 96 as set out above.  Whereas the provisions
of section
96 govern the giving of a legal notice for purposes of the NCA or a
credit agreement, the provisions of section 168
govern the service of
notices, orders or other documents in terms of the NCA.  Both
section 96(1) and section 168(1)(a) contemplate
delivery “to
the other party” or delivery “to that person”.
Both section 96(2) and section 168(1)(b)
provide alternative methods
of delivery to the other party at the address given in the credit
agreement.  Both section 96
and section 168 appear to be
inconsistent with the notion that a letter or notice that ends at the
consumer’s local post
office would be sufficient for purposes
of section 96 and section 168.  If a letter, order or notice
that ends at the consumer’s
local post office would not be
sufficient for purposes of section 96 and section 168, why would it
be sufficient for purposes of
section 129(1)(a)?
[172]
Section 168 recognises only two forms of service as proper service on
a person under the NCA.  They are where the notice,
order or
other document is “delivered to that person” and where it
is “sent by registered mail to that person’s
last known
address”.  The first-mentioned manner of service presents
no difficulty.  The question that may be asked
with regard to
the second-mentioned manner of service is: to what scenario does the
second-mentioned manner of service apply?
[173]
The answer has to be that it applies to a situation where the
consumer’s current whereabouts are not known to the credit

provider.  That is why section 168(b) says that the address to
which the notice, order or document must be sent by registered
post
is his last known address.  This means that, if a notice is sent
by registered mail to the address that a consumer gave
to the credit
provider in the credit agreement as his
domicilium citandi et
executandi
, that service will not be proper service where the
notice is returned from that address as unclaimed and the credit
provider is
aware of another address as the consumer’s last
known address.  In such a case the credit provider would be
obliged
to send the letter by registered mail to the consumer’s
last known address even if that address is not the one given in the

credit agreement as his
domicilium citandi et executandi
.
[174]
The Legislature was so keen that the notices, documents, or orders
that must be served on parties to credit agreements should
come to
the relevant person’s personal attention that it enacted
section 168(b) requiring that the notice be sent to a person’s

last known address rather than to the address given in the credit
agreement.  Section 168(b) supports the proposition that
a
section 129(1)(a) letter must be received by the consumer and it is
no compliance with section 129(1)(a) if it goes only as far
as the
consumer’s local post office.
Conclusion
[175]
The construction that the NCA does not ordinarily require that the
default and the proposal to which reference is made in
section
129(1)(a) be conveyed to the consumer—
(a)     is
textually inconsistent with the words “draw the default to the
notice of the consumer in writing
and propose that  the consumer
refer the credit agreement to a debt counsellor . . .” in
section 129(1)(a);
(b)    is inconsistent
with most of what the NCA seeks to do in order to advance its
purposes as set out in section
3;
(c)     ignores
the fact that section 129(1)(a) was enacted primarily for the benefit
and protection of the
consumer;
(d)    places the
consumer in a more disadvantageous position in relation to the credit
provider than he was at common
law;
(e)     does not
advance even the credit provider’s interests in the long term
even though it may advance
them in the short term; and
(f)      has
the effect of reading into the NCA a deeming provision to the
following effect: when a section
129(1)(a) letter, addressed to a
consumer and sent by registered post, has reached the consumer’s
local post office, the
consumer is deemed to have received it. This
is done even though the NCA has no such deeming provision.
[176]
In my view, the construction of section 129(1)(a), which entails that
the credit provider must make the consumer aware of
the default and
of the proposal contemplated in section 129(1)(a), accords with the
language of the provision, is fair, gives effect
to the purpose of
section 129(1)(a) and gives appropriate weight to the Legislature’s
intention to make cancellation and
judicial enforcement of credit
agreements measures of last resort that must be resorted to when the
dispute resolution mechanisms
prescribed by the NCA have been
exhausted and the consumer has been afforded an opportunity to avoid
such steps.
[177]
For the above reasons, I would uphold the appeal and make the order
proposed in the main judgment.
For the First Respondent:
For
the First Amicus Curiae:
For the Second Amicus Curiae:
For the Third Amicus Curiae:
Advocate
CDA Loxton SC and Advocate JA Cassette instructed by Norton Rose
South Africa (incorporated as Deneys Reitz Inc).
Advocate
S Wilson and Advocate I De Vos instructed by the Socio-Economic
Rights Institute of South Africa Law Clinic.
Advocate
M Chaskalson SC and Advocate D Smit instructed by Webber Wentzel.
Advocate
G Marcus SC and Advocate N Ferreira instructed by Bham and Dahya.
[1]
Act 34 of 2005.
[2]
Section 129(1) read with section 130.  These provisions are set
out in [43]-[44] below.
[3]
Rossouw
and Another v Firstrand Bank Ltd
2010
(6) SA 439
(SCA) (
Rossouw
).
There were two judgments, one by Maya JA, and a concurring judgment
by Cloete JA.  Cloete JA concurred in the judgment
of Maya JA,
who concurred in his, and the other members of the Court (Mpati P,
Navsa JA and Ebrahim AJA) concurred in both.
[4]
Section 8(3) provides:
“
When
applying a provision of the Bill of Rights to a natural or juristic
person in terms of subsection (2), a court—
(a) in order to give
effect to a right in the Bill, must apply, or if necessary develop,
the common law to the extent that legislation
does not give effect
to that right; and
(b) may develop rules of
the common law to limit the right, provided that the limitation is
in accordance with section 36(1).”
[5]
Section 39(2) provides:
“
When
interpreting any legislation, and when developing the common law or
customary law, every court, tribunal or forum must promote
the
spirit, purport and objects of the Bill of Rights.”
[6]
Standard
Bank of South Africa Ltd v Rockhill and Another
2010
(5) SA 252
(GSJ) (provision does not require proof of receipt, but
only despatch to postal address selected by consumer);
Firstrand
Bank Ltd v Dhlamini
2010
(4) SA 531
(GNP) (more than mere despatch required: proper notice
involving personal service drawing the notice to the consumer’s

actual attention is necessary);
Starita
v ABSA Bank Ltd and Another
2010
(3) SA 443
(GSJ) (provision does not require proof of receipt of
notice by consumer, but only despatch to exact address chosen by
consumer);
Munien
v BMW Financial Services (SA) (Pty) Ltd and Another
2010
(1) SA 549
(KZD) (delivery is effected by despatch, hence mere proof
of posting by registered post is sufficient);
Standard
Bank of South Africa Ltd v Mellet and Another
[2009] ZAFSHC 110
(actual receipt not required);
ABSA
Bank Ltd v Prochaska t/a Bianca Cara Interiors
2009 (2) SA 512
(D&CLD)
(more required than mere despatch).
[7]
See above n 6.
[8]
Rossouw
above n 3 at para 32,
per Maya JA.  The Court held that the bank had failed to prove
in its application for summary judgment
that the registered letter
had actually been sent to the Rossouws, and therefore that summary
judgment should have been refused.
The appeal succeeded on
this ground.
[9]
Constitutional Court Rule 19(2).
[10]
Section 34 of the Constitution provides:
“
Everyone
has the right to have any dispute that can be resolved by the
application of law decided in a fair public hearing before
a court
or, where appropriate, another independent and impartial tribunal or
forum.”
[11]
Sections 12 and 16 of the Act.
[12]
Act 61 of 1973.
[13]
Van Wyk
v Unitas Hospital and Another (Open Democratic Advice Centre as
Amicus
Curiae
)
[2007] ZACC 24
;
2008 (2)
SA 472
(CC);
2008 (4) BCLR 442
(CC) at para 29.
[14]
Id.
[15]
Section 21A(1) of the Supreme Court Act 59 of 1959 provides that the
Supreme Court of Appeal may dismiss an appeal on the sole
ground
that “the judgment or order sought will have no practical
effect or result”.  Section 21A(3) provides
that, save in
exceptional circumstances, “the question whether the judgment
or order would have no practical effect or
result” must be
determined “without reference to consideration of costs”.
This Court in
Biowatch
Trust v Registrar, Genetic Resources, and Others
[2009] ZACC 14
;
2009 (6)
SA 232
(CC);
2009 (10) BCLR 1014
(CC) at para 11 held that the
principle this provision embodies, that appeals solely on costs
should be entertained only in “exceptional
circumstances”,
was “manifestly meritorious.”  See also
Wiese
v Government Employees Pension Fund and Others
[2012] ZACC 5
at para
22.
[16]
See
MEC
for Education, KwaZulu-Natal, and Others v Pillay
[2007] ZACC 21
;
2008 (1)
SA 474
(CC);
2008 (2) BCLR 99
(CC) at paras 32-5, where the Court
decided the issues arising from a dispute between a school and a
learner who had left the
school by the time the matter was heard.
[17]
See above n 6.
[18]
Section 16(1)(b).
[19]
Section 16(1)(b)(ii).
[20]
Section 3(a).
[21]
Section 3(d).
[22]
Section 1 of the Constitution provides that one of its founding
values is “the achievement of equality”.  Section

9(1) of the Bill of Rights provides that “[e]veryone is equal
before the law and has the right to equal protection and
benefit of
the law.”  Section 9(2) provides that legislative and
other measures, designed to protect or advance persons
disadvantaged
by unfair discrimination, may be taken to promote the achievement of
equality.  Section 39(2) provides that
when interpreting any
legislation, every court “must promote the spirit, purport and
objects of the Bill of Rights.”
[23]
Act 73 of 1968.
[24]
Act 75 of 1980.  This Act replaced the Hire-Purchase Act 36 of
1942, which covered only a small number of credit transactions.

See Otto and Otto
The
National Credit Act Explained
2
ed (LexisNexis, Durban 2010) at xi and para 2.
[25]
Other statutes that cover consumer financial transactions include
the
Alienation of Land Act 68 of 1981
, the Banks Act 94 of 1990 and
the
Consumer Protection Act 68 of 2008
.  Previously, the
Lay-byes Regulations promulgated under the repealed Sale and Service
Matters Act 25 of 1964 (formerly
called the Price Control Act),
governed lay-by agreements.  See Joubert 5
LAWSA
2010 (second edition) at
para 181.  Lay-by agreements, where a supplier agrees to sell
goods, and accepts payment in instalments,
while holding the goods
until the consumer has paid the full price, are now covered by
section 62
of the
Consumer Protection Act.
[26
]
See McQuoid-Mason (ed)
Consumer
Law in South Africa
(Juta
& Co. Ltd, Cape Town 1997) at 131-81.
[27]
Kelly-Louw “The Prevention and Alleviation of Consumer
Over-indebtedness” (2008) 20
SA
Merc LJ
200
at 204-5.
[28]
Regulations issued under section 171 of the Act, published under GN
R489 GG 28864, 31 May 2006, and amended by GN R1209 GG 29442,
30
November 2006 and GN R604 GG 30713, 29 May 2008.
[29]
Otto and Otto
The
National Credit Act Explained
2
ed (LexisNexis, Durban 2010) at para 2.3.
[30]
Section 3.
[31]
Section 3(a)-(i) provides that these purposes are to be advanced by—
“
(a)
promoting the development of a credit market that is accessible to
all South Africans, and in particular to those
who have historically
been unable to access credit under sustainable market conditions;
(b)
ensuring consistent treatment of different credit products and
different credit providers;
(c)
promoting responsibility in the credit market by—
(i)  encouraging
responsible borrowing, avoidance of over-indebtedness and fulfilment
of financial obligations by consumers;
and
(ii) discouraging
reckless credit granting by credit providers and contractual default
by consumers;
(d) promoting equity in
the credit market by balancing the respective rights and
responsibilities of credit providers and consumers;
(e) addressing and
correcting imbalances in negotiating power between consumers and
credit providers by—
(i)  providing
consumers with education about credit and consumer rights;
(ii) providing consumers
with adequate disclosure of standardised information in order to
make informed choices; and
(iii)
providing consumers with protection from deception, and from unfair
or fraudulent conduct by credit providers
and credit bureaux;
(f)
improving consumer credit information and reporting and regulation
of credit bureaux;
(g) addressing and
preventing over-indebtedness of consumers, and providing mechanisms
for resolving over-indebtedness based on
the principle of
satisfaction by the consumer of all responsible financial
obligations;
(h) providing for a
consistent and accessible system of consensual resolution of
disputes arising from credit agreements; and
(i)  providing for
a consistent and harmonised system of debt restructuring,
enforcement and judgment, which places priority
on the eventual
satisfaction of all responsible consumer obligations under credit
agreements.”
[32]
Section 2(1).
[33]
Section 3.
[34]
Section 3(d).
[35]
Nedbank
Ltd and Others v National Credit Regulator and Another
2011 (3) SA 581
(SCA) at
para 2.
[36]
Rossouw
above n 3 at para 17,
per Maya JA.
[37]
Sections 39-59.
[38]
Section 80 defines “reckless credit”.  Section
81(3) provides that a credit provider “must not enter into
a
reckless credit agreement with a prospective consumer”.
Material untruthfulness on the part of a consumer is a
complete
defence to an allegation that a credit agreement is reckless
(section 81(4)).
[39]
Section 79 defines “over-indebtedness”.
[40]
Section 16(1)(a).  For the NCR’s role in initiating
declaratory litigation, see [35] above.
[41]
Section 16(1)(d).
[42]
Section 16(1)(g).
[43]
Section 136(1).
[44]
Section 26.
[45]
Section 26(1)(a).
[46]
Section 141.
[47]
Sections 140-1.
[48]
Section 148(2)(b).
[49]
Section 138.
[50]
The National Credit Act came into operation in three phases (see
Proc 22 in GG 28824, 11 May 2006):
•
A
large part came into operation on 1 June 2006, namely sections 1-25,
35-59, 69, 73, 134-62 and 164-73, together with Schedules
1-3.
These provisions included those dealing with the statute’s
application, the establishment of the NCR, registration
requirements
and procedures for credit providers, debt counsellors and credit
bureaux.
•
On
1 September 2006, the Tribunal was established and the enabling
provisions, sections 26-34, were brought into effect. Certain

sections dealing with the credit information held by credit bureaux
and consumers’ rights to challenge it, sections 67-8,
70 and
72 also came into operation on this date.
•
The
remaining provisions (sections 60-6, 71, 74-133 and 163) came into
operation on 1 June 2007.  These included the provisions

dealing with the rights of consumers; credit marketing practices;
over-indebtedness and reckless credit; consumer credit agreements;

the permitted interest rates and other costs of credit; collection
and repayment of credit agreements; and the debt collecting

procedures.
I
am indebted for this exposition in large part to Kelly-Louw “The
Prevention and Alleviation of Consumer Over-indebtedness”

(2008) 20
SA Merc LJ
200 at 207, fn 31.
[51]
Section 86 provides for debt review.  Section 86(1) provides
that a consumer may apply to a debt counsellor to be declared

“over-indebted”.  A debt review application may not
be made if the credit provider has proceeded to take the
steps
contemplated in section 129 to enforce the agreement (section
86(2)).  The Supreme Court of Appeal held in
Nedbank
Ltd and Others v National Credit Regulator and Another
2011 (3) SA 581
(SCA) at
para 14 that by giving the section 129(1)(a) notice itself the
credit provider has taken “steps” contemplated
in
section 86(2), and therefore that debt review is no longer available
to the consumer.
[52]
The Supreme Court of Appeal has held that this includes legal
proceedings to cancel the agreement:
Nedbank
Ltd and Others v National Credit Regulator and Another
2011 (3) SA 581
(SCA) at
para 12.
[53]
Id at para 8, quoting CM van Heerden and N Campbell
Guide
to the National Credit Act
(2008)
Service Issue 2 at 12-7 and 12-8.
[54]
See
Nedbank
Ltd and Others v National Credit Regulator and Another
2011 (3) SA 581
(SCA) at
para 8.  It was held in
African
Bank Ltd v Myambo NO and Others
2010
(6) SA 298
(GNP) at 311A-D (judgment of the majority of the Full
Court) that since the allegation that notice has been given
completes the
cause of action, it must be contained in the summons
or letter of demand, and not in the request for judgment by
consent.
This point does not arise in these proceedings.
[55]
Section 3 is set out in [39] above.
[56]
Section 3(h).  Sub-paragraphs (a) to (i) are set out above n
31.
[57]
Rossouw
above n 3 at para 22,
per Maya JA.
[58]
Firstrand
Bank Ltd v Dhlamini
2010
(4) SA 531
(GNP) at paras 23-4; compare
ABSA
Bank Ltd v Prochaska t/a Bianca Cara Interiors
2009 (2) SA 512
(D&CLD)
at paras 54-5.
[59]
Section 130(4)(b)(i) and (ii).
[60]
Section 129(1)(a).
[61]
Section 129(1)(b)(i).
[62]
More fully, section 130(1)(a) refers to a notice “contemplated
in section 86(9), or section 129(1), as the case may be”.

All parties agreed that “section 86(9)” was a patent
legislative mistake or typographical error, and that the enactment

must read “section 86(10)”.  Section 86(10) allows
a credit provider to give notice to a consumer who is in
default
under a credit agreement that is being reviewed “to terminate
the review” 60 business days after the consumer
applied for
the review.
[63]
Firstrand
Bank Ltd v Dhlamini
2010
(4) SA 531
(GNP) at paras 23-4.
[64]
The requirement does not apply to “small” credit
agreements.  By GN R713, GG 28893, 1 June 2006, these are
specified as credit facilities or debts (apart from mortgages or
credit guarantees) lower than R15 000.  See section
9(2),
read with section 7(1)(b).
[65]
Regulation 31 specifies requirements for “intermediate”
or “large” agreements.  They must contain
a
statement of the consumer’s rights to resolve a complaint by
way of alternative dispute resolution, to file a complaint
with the
NCR, and to make an application to the Tribunal (Regulation
31(2)(w)).  They must also contain a statement of the

consumer’s right to apply to a debt counsellor to be declared
over-indebted in terms of section 86, and the process to
be followed
(Regulation 31(2)(BB)).
[66]
The definitions section of the Regulations provides that the words
and expressions defined bear the meaning given “in these

Regulations”.  Since the statute clearly envisages that
the Regulations will define “delivery” not for
the
purposes of the Regulations, but for the purposes of the statute,
this seems to have been an unfortunate drafting slip-up.
A simple
amendment to the Regulations to make clear that the definition of
“delivery” applies not to the Regulations,
but to
section 129 and section 130, may have forestalled this litigation.
[67]
Section 1 of the Act.
[68]
Regulation 1 to the Act.
[69]
See above n 66.
[70]
Rossouw
above n 3 at paras 24-7,
per Maya JA.
[71]
The Interpretation Act 33 of 1957 is also of no help.  Section
7, “Meaning of service by post”, provides that
“[w]here
any law authorises or requires any document to be served by post,
whether the expression ‘serve’ or
‘give’ or
‘send’, or any other expression is used, then, unless
the contrary intention appears, the service
shall be deemed to be
effected by properly addressing, prepaying, and posting a registered
letter containing the document, and,
unless the contrary is proved,
to have been effected at the time at which the letter would be
delivered in the ordinary course
of post.”  This offers
no shortcut because the Interpretation Act applies only “unless
the contrary intention
appears” in any statute (section 1).
This means that we are driven to establish first what the meaning of
the NCA
is.
[72]
Nedbank
Ltd and Others v National Credit Regulator and Another
2011 (3) SA 581
(SCA) at
para 2 (“Numerous drafting errors, untidy expressions and
inconsistencies” make interpreting the Act “a

particularly trying exercise”).
[73]
Section 65(2)(a)(i).
[74]
Rossouw
above n 3 at para 30,
per Maya JA.
[75]
Id at para 57, per Cloete JA.
[76]
Id at paras 30-2, per Maya JA.
[77]
Id at para 58, per Cloete JA (a consumer “could hardly
complain if the method of delivery of a document chosen by him or

her proves ineffective”, but “for so long as credit
providers employ standard form contracts which make provision
for
one possibility only”, the argument “loses sight of
reality”).
[78]
Maharaj
v Tongaat Development Corporation (Pty) Ltd
1976
(4) SA 994
(A) at 1001B, quoted by Cloete JA in
Rossouw
above n 3 at para 57.
[79]
Rossouw
above n 3 at para 57,
per Cloete JA.
[80]
Section 65(2)(a).
[81]
Act 34 of 2005.
[82]
After
this I shall only mention the debt counsellor and shall not also
mention the alternative dispute resolution agent, consumer
court or
ombud with jurisdiction but I must be understood to be referring to
them as well.
[83]
Main
judgment at [57].
[84]
Id.
[85]
Id
at [75].
[86]
See
the main judgment at [76], [79], [85] and [87].
[87]
Swart
v Vosloo
1965
(1) SA 100
(AD) particularly at 105H, 113F-H and 114H-115A;
Miller
and Miller v Dickinson
1971
(3) SA 581
(A) particularly at 588E-F and
Fourie
v Olivier en ‘n Ander
1971
(3) SA 274 (TPA).
[88]
Above n 7.
[89]
Above n 7 at 105H.
[90]
1905 TS 125.
[91]
1908 TS 664.
[92]
1959 (4) SA 360 (C).
[93]
1965 (4) SA 549 (T).
[94]
Swart v
Vosloo
above
n 7 at 105G.
[95]
Id at 105H.
[96]
Id at 113F-G.
[97]
Id at 114H-115A.
[98]
Id
at 115D.
[99]
Above n 12 at 362.
[100]
1963 (1) SA 632
(A) at 640C.
[101]
Swart v
Vosloo
above
n 7 at 115E-G.
[102]
1971 (3) SA 274 (T).
[103]
Above n 7.
[104]
Id at 586H–587A.
[105]
Discussed
above at [109]-[115].
[106]
Miller
and Miller v Dickinson
above
n 7 at 588E-F.
[107]
(1992) 13 ILJ 1154 (D).
[108]
Id
at 1160E.
[109]
See
NCT
above n 27 at
1160F-1162G and the authorities cited therein.
In
the High Court decision in
Putco
Ltd v TV & Radio Guarantee Co (Pty) Ltd
1984
(1) SA 443
(WLD) Nicholas J said: “in order to be effective a
notice of termination of a contract must be clear and unequivocal.”

That statement was approved on appeal in
Putco
Ltd v TV Rradio Guarantee Co (Pty) Ltd
1985
(4) SA 809
(A) at 830E and subsequently again in
Ponisammy
and Another v Versailles Estates (Pty) Ltd
1973
(1) SA 372
(A) at 385G.
[110]
NCT
above n 27 at 1162G-I.
[111]
Id at 1163A.
[112]
Act 36 of 1942.
[113]
Act
30 of 1965.
[114]
The difference between the 1965 amendment of section 12(b) of the
Hire-Purchase Act of 1942 and section 12(b) prior to that amendment,

in so far as it is relevant to the present matter, was that the
amended section 12(b) made it clear beyond any doubt that the

purchaser had to hand the letter over to the buyer.  Such words
were absent in the pre-1965 provision.
[115]
1957 (1) SA 650 (WLD).
[116]
Id at 651A.
[117]
Id at 652A.
[118]
Act 72 of 1971.
[119]
1976 (4) SA 994 (A).
[120]
Id at 999H-1000A.
[121]
1975 (4) SA 123
(W) at 125 B-C.
[122]
Maharaj
above
n 39 at 1000A-B.
[123]
Id at 1000B.
[124]
Id
at 1000H.
[125]
Id
at 1000H-1001A.
[126]
Id
at 1001D.
[127]
Id
at 1001D-E.
[128]
Id at 1001E-F.
[129]
Id
at 1001E-G.
[130]
Id at 1001G.
[131]
Id at 1001G-H.
[132]
1986 (1) SA 722 (A).
[133]
1975 (3) SA 468 (A).
[134]
Cape
Explosives Works, Ltd v South African Oil and Fat Industries, Ltd;
Cape Explosives Works, Ltd v Lever Brothers (South Africa),
Ltd
1921
CPD 244
at 266.
[135]
Act 55 of 1965.
[136]
A to Z
above
n 53 at 477B.
[137]
Id
at 477A-B.
[138]
Id.
[139]
Id at 477G-H.
[140]
Id at 477H-478B.
[141]
Id at 478F.
[142]
1984 (3) SA 834 (W).
[143]
Section 2(1) of the NCA reads: “This Act must be interpreted
in a manner that gives effect to the purposes set out in section
3.”
[144]
Section
3 of the NCA.
[145]
Section 3(i) of the NCA.
[146]
Section 123 reads in relevant part:
“
Termination
of agreement by credit provider
(1) A credit provider
may terminate a credit agreement before the time provided in that
agreement only in accordance with this
section.
(2) If a consumer is in
default under a credit agreement, the credit provider may take the
steps set out in Part C of Chapter
6 to enforce and terminate that
agreement.”
[147]
Section
129(1)(b).
[148]
Section 130 is set out in para [44] of the main judgment.
[149]
Rossouw
and Another v Firstrand Bank Ltd
2010
(6) SA 439
(SCA).
[150]
Munien v BMW
Financial Services (SA) (Pty) Ltd and Another
2010
(1) SA 549
(KZD) at para 14.
[151]
Standard
Bank of South Africa Ltd v Mellet and Another
[2009] ZAFSHC 110
at
para 11.
[152]
Standard
Bank of South Africa Ltd v Rockhill and Another
2010 (5) SA 252
(GSJ) at
para 5.
[153]
Starita
v ABSA Bank Ltd and Another
2010
(3) SA 443
(GSJ) at para 18.6.
[154]
Firstrand
Bank Ltd v Dhlamini
2010
(4) SA 531
(GNP) at paras 27-8.
[155]
ABSA
Bank Ltd v Prochaska t/a Bianca Cara Interiors
2009 (2) SA 512
(D&CLD)
at para 55.
[156]
See above n 53.
[157]
The section 83 order a court is expected to make, after it makes a
section 80 finding that a credit agreement was reckless, depends
on
why the credit agreement was reckless.
[158]
See above [138]-[145].