n SA Mercantile Law Journal = SA Tydskrif vir Handelsreg - Credit provider - who should that be, and how should that be determined under the National Credit Act 34 of 2005? : analyses

Volume 27, Issue 2
  • ISSN : 1015-0099
  • E-ISSN: 1996-2185



The case of 2013 (2) SA 1 (CC) () has brought clarity as far as the constitutional validity of the now-deleted s 89(5)() of the National Credit Act 34 of 2005 (NCA/the Act) is concerned (s 89(5)() was deleted by s 27 of the National Credit Amendment Act 19 of 2014). The facts of the case are as follows:

The respondent, Mr Opperman (), a Namibian and a farmer by trade, lent a total sum of R7 million to a Mr Boonzaaier (Boonzaaier) for the purpose of the latter's property development scheme. Opperman was not registered as a credit provider at the time of providing the loan, as was required by s 40(1) of the NCA. He was not in the business of providing credit, was unaware of the requirement to register and had no intention of violating the NCA. Boonzaaier was unable to meet his obligations to repay the loan and informed Opperman accordingly. Opperman applied to the High Court for the sequestration of Boonzaaier's estate and a provisional sequestration order was granted. The court in its own discretion raised concerns about provisions of the NCA, and refused to grant a final sequestration order. The High Court found that, under the terms of the NCA, the loans concerned were 'credit agreements'; that Opperman, as the lender, was a 'credit provider'; and that Boonzaaier, as the borrower, was a 'consumer'. Because strict application of the NCA unjustly deprived Opperman of his property, the High Court found s 89(5)() of the Act to be in conflict with the Constitution of the Republic of South Africa, 1996. The matter was brought to the Constitutional Court for confirmation. The Constitutional Court was, therefore, vested with a duty to fathom the constitutionality of that controversial provision (that is, s 89(5)()).

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