n Tydskrif vir die Suid-Afrikaanse Reg - A default notice under the National Credit Act must come to the attention of the consumer unless the consumer is at fault : regspraak
|Article Title||A default notice under the National Credit Act must come to the attention of the consumer unless the consumer is at fault : regspraak|
|© Publisher:||Juta Law Publishing|
|Journal||Tydskrif vir die Suid-Afrikaanse Reg|
|Publication Date||Jan 2010|
|Pages||852 - 862|
|Keyword(s)||University of Johannesburg|
ISI Social Science
Munien v BMW Financial Services (SA) (Pty) Ltd 2010 1 SA 549 (KZD)
ABSA Bank Ltd v Prochaska t/a Bianca Cara Interiors 2009 2 SA 512 (D)
Section 11 of the Credit Agreements Act 75 of 1980 applied when a breach of contract arose. Section 11 required a credit grantor to notify the credit receiver of his failure to comply with any obligation under a credit agreement and to demand performance within 30 days before claiming a return of goods and cancelling the contract. Notification under section 11 was by means of a letter, which was either handed over to the credit receiver and for which an acknowledgement of receipt had to be obtained, or was posted by prepaid registered mail at an address stated in the credit agreement or at the subsequent changed address - being the business or residential address which served as the domicilium citandi et executandi ("domicilium") as per section 5(4) of the act.
The handing over of a letter resulted in the default notice coming to the attention of the credit receiver; however, the posting of a letter by registered mail did not always have this result. In the latter instance, the legal question posed was whether such a notice had to come to the attention of the credit receiver.
Marques v Unibank Ltd (2001 1 SA 145 (W)), which was the leading case in answering this question, stated that a section 11 notice did not need to come to the attention of the credit receiver (consumer) but that it merely needed to be proven, by the credit grantor, that it was sent or dispatched to the credit receiver (see § 2 below). What is not so clear is whether the position is similar to that of a default notice under section 129(1) read together with sections 130(1) of the National Credit Act 34 of 2005. Section 129(1)(a) states that a credit provider "may draw the default [under a credit agreement] to the notice of the consumer ..." and section 129(1)(b) (i) states that the credit provider "may not commence any legal proceedings to enforce the agreement before first providing notice to the consumer". Section 130(1) (a) requires that "10 business days have elapsed since the credit provider delivered a notice to the consumer as contemplated in section 129(1)" before legal proceedings are instituted.
Two recent cases, Munien v BMW Financial Services (SA) (Pty) Ltd (2010 1 SA 549 (KZD)) and ABSA Bank Ltd v Prochaska t/a Bianca Cara Interiors (2009 2 SA 512 (D)), answered the legal question under the new act, although with different outcomes. The latter case, which was heard first, stated that a section 129(1)(a) notice had to be brought to the attention of the consumer, whereas the former case decided otherwise, agreeing with the interpretation of section 11 of the old act in the Marques case and making no reference to or even considering the ABSA case. Both cases further dealt with fault : Munien dealt with the fault of the consumer in failing to comply with a legal obligation, and ABSA dealt with the fault of the credit provider in failing to comply with a legal obligation.
I believe the ABSA case should be the authoritative case, and the reasons for my submission are provided below.
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