BRANCH: MAGISTRATES’ COURT PIETERMARITZBURG

Private Bag X 9011, PIETERMARITZBURG, 3200 • Cnr. Otto and Church Streets, PIETERMARITZBURG

Tel (033) 3555100, Fax (033) 3450324

Ref: 1/4/2

14 November 2007

To: All Legal Practitioners, Pietermaritzburg

The National Credit Act 34/2005, has now been in operation for more than 5 months and more than 50 % of the requests i.t.o. Rule 12 and Sections 57 and 58 of Act 32 of 1944 still have to be returned to you due to lack of compliance with the said Act.

During joint discussions the Magistrates of this district have formulated their prima facie interpretation of some of the requirements of the Act as they relate to default judgments i.t.o. Rule 12 and Sections 57 and 58. These guidelines, albeit based on nothing more than prima facie held views, may be of assistance in alleviating the aforementioned problem.

1)  The NCA is retrospective in so far as debt enforcement proceedings are concerned. See article 4 of

Schedule 3. All court proceedings initiated on / after 1 June 2007 have to comply with the NCA, no matter when the credit agreement was concluded.

(The term “debt enforcement” is used in the NCA in stead of “court proceedings”)

2)  The notice i.t.o. section 129 of the NCA cannot be replaced by a notice i.t.o. section 11 of the Credit

Agreements Act, 75 of 1980.

3)  Registered post is not prescribed as the method for delivery of the section 129 (or any other) notices.

See section 96. As poof of delivery will be required by the court, registered post may still be the most convenient manner of delivery.

4)  Before granting judgment the court has to be satisfied of the existence or non-existence of the

circumstances set out in section 130(3).

5)  Compliance with sections 129 and 130(3): Law cannot be pleaded. The court has to come to a

conclusion of law based on the facts pleaded.

Section 129: At the very least the particulars of claim ought to refer to a section 129 notice attached thereto from which the court may then conclude whether or not section 129 has been complied with.

Section 130(3): The defendant has to know what averments the plaintiff is making and the court has to be able to conclude from the averments made that section 130(3) has been complied with.

6)  The majority of “simple” summonses are based on contract. If those contracts are credit agreements

compliance with the NCA is required. The court may call for those contracts whenever it wishes to appraise itself of the nature thereof.

7)  The nature of the contract cannot be altered by the manner of pleading thereof.

8) A credit agreement will not necessarily take the form of a document signed by both parties. The

registration details supplied by patients or the admission details supplied by parents of scholars may, together with terms and conditions of payment, establish credit agreements. Invoices submitted may contain terms and conditions that, in the event of non-payment, result in incidental credit being granted.

9) Small credit agreements have to be recorded in a prescribed form. See section 93 read with Regulation

30. Section 9(2) defines small credit agreements.

10)  Payments made i.t.o. statutory provisions, such as rates and corporate levies, do not constitute credit

agreements even if a fee / charge / interest becomes payable by operation of law upon default of payment.

11)  A distinction has to be made between rates payable to a Local Authority and monies payable for

services rendered by a Local Authority. See the definition of “utility” and section 4(6)(b). Overdue amounts become incidental credit.

12)  Sections 57 and 58 of Act 32 / 1944: The first document whereby proceedings are initiated is either a

summons or a letter of demand. As from 1/6/07 this document has to be preceded by a section 129 notice.

13)  The section 129 notice and the letter of demand may be a combined document.

14)  Both the section 129 notice and proof of delivery thereof have to be attached to the request for

judgment.

15)  An admission of liability and undertaking to pay (sec. 57) and a consent (sec. 58) signed prior to a

section 129 notice is not valid.

16)  It is advisable to deal with section 130(3) in the section 129 notice.

17)  The Magistrate may mero motu raise issues of lawfulness / unlawfulness of the terms of a contract.

18)  The defendant has to raise questions relating to reckless credit and over-indebtedness.

P.S. JOUBERT

SENIOR MAGISTRATE

PRIVATE LAW SECTION

PIETERMARITZBURG

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