Kim Armfield & Associates Attorneys & Administrators Our ref: Kim Armfield Your ref:
Date: 8 June 2012
TO ALL INTERESTED PARTIES
M.S. & N.D. SEBOLA V STANDARD BANK OF SA LTD – CCT CASE NO. 98/11 WHAT THE RULING OF THE CONSTITUTIONAL COURT MEAN TO US The Constitutional Court has handed down a decision in the abovementioned matter on 7 June 2012, but what does this very lengthy Judgment actually say? The main judgment was given by Justice Cameron and supported by the majority of the Constitutional Court Judges. Besides all the very technical (and not really relevant issues and opinions given), the main issue before the court was whether the provisions of the National Credit Act requires that a consumer actually receives notice of his default (what is called the Sect 129 Notice) as opposed to simply dispatching notice to the consumer in the hope that he will get this notice. To keep it simple, I shall refer to this notice as „the demand‟, and that is really what it is. It was common cause in the matter that these consumers never did receive the demand. They were no doubt aware that they were in default but the demand actually goes further than to merely draw their attention to their default. The demand gives them an opportunity to seek the assistance of a Debt Counsellor with the specific aim of arriving at a payment plan to get the account up-to-date. So the demand is a type of invitation to get help before (as stated by the court) the “guillotine” falls and the credit providers cancel the agreement and issue Summons. The court was notably silent on whether such a payment plan could be included in a debt review and I believe they intentionally skirted this issue. However, what is important and what came out in both the majority and minority judgments, is firstly the intention behind this demand and secondly the heavier onus on the Credit Provider to try and bring this demand to the attention of the consumer. Why? As the National Credit Act is there to protect the consumer and not to have a bullish Credit Provider steamroll through the legal enforcement process. The Credit Provider first has to see what the contract says about how legal notices are to be delivered. If by post, then the Credit Provider must ensure that it is not simply posted by ordinary post, but by registered post. The Court even went on to say that they should do a track and trace report to ensure that the demand went to the correct address and post office. Consumers need to collect their registered postage, this is important, especially now that they are given a „final chance‟ to make arrangements. The Credit Provider also has to check that the demand goes to the address chosen by
K. Armfield (B.Proc); J.I. Duminy (Non-Professional) 7 Voortrekker Road, Bellville, 7530 Tel: +27 21 949-2211 Fax: +27 21 949-1156 E-mail: kimaa@telkomsa.net
the Consumer. This is also important as many times the Credit Providers simply send it to the address on the contract, which may be an outdated contract. The Consumer has a right to change his address and should always notify the Credit Provider in order to protect his/her rights. If the Credit Provider knows of the new address, then the Credit Provider has to send it to the new address and not the usual so-called domicilium address. This is very good news indeed and once again some of the bullish behaviour of Credit Providers has been curtailed. The Consumer can also choose to receive legal demands by means of e-mail or fax if this has been communicated to the Credit Provider. Of course, all communications must be kept by the Consumer as proof. There are other interesting comments that was made in both the majority and minority reasons for judgment, and these will be dissected and hopefully used for the benefit of the consumer. The bottom line of the decision is that a Consumer has certain economic and other rights which has previously been ignored and certain measures are now going to be put in place to ensure that these rights are upheld. I believe the next step for Debt Counsellors and other parties is to start educating consumers more on their rights and how to apply it in practice (i.e. how to play a clean good game of chess with the Credit Providers and win!)
Yours faithfully K Armfield Kim Armfield & Associates
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K. Armfield (B.Proc); J.I. Duminy (Non-Professional) 7 Voortrekker Road, Bellville, 7530 Tel: +27 21 949-2211 Fax: +27 21 949-1156 E-mail: kimaa@telkomsa.net