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Delivering a Section 129 Notice to a Consumer

Delivering a Section 129 Notice to a Consumer

In terms of the National Credit Act1 (hereinafter the “Act”), when a consumer has defaulted on a payment, the credit provider must first notify the consumer in writing of the default and provide him or her with the opportunity to rectify the default within a certain amount of days in terms of Section 129 of the Act. The consumer is considered in default if his or her account is 20 business days in arrears. In this notice, the credit provider must propose that the consumer refer the credit agreement entered into to a debt counsellor or a consumer court or an ombudsman, with the necessary authority to handle any possible disputes. The purpose of such a referral, is to enable the consumer and the credit provider to resolve the matter, or agree to a plan to bring the repayments up to date. A credit provider cannot take legal action against a consumer before first notifying the consumer of the default and to drawing the consumer’s attention to his or her rights.

The Constitutional Court, in Moshomo Levin Kubyana v Standard Bank of South Africa Ltd2, determined what steps a credit provider must take to discharge its obligation to effect proper delivery and ensure that a Section 129 notice reaches a consumer before commencing with litigation.

In the above matter, Standard Bank delivered the Section 129 notice by registered post to the branch of the Post Office which Mr Kubyana had chosen as his domicillium address. Even though two notifications were sent to his home, requesting that he collects his registered mail, he never did so. Five weeks later, the notice was returned to Standard Bank uncollected. The respondent subsequently issued summons out of the High Court for cancellation of the agreement, the return of the motor vehicle, and payment of damages in terms of the agreement. The Applicant filed a special plea, claiming that the Court had no jurisdiction to hear the matter because the respondent had failed to comply with its obligations in terms of Section 129 of the NCA.

In considering the matter, the High Court found that the bank had fulfilled its legal obligation in terms of Section 129 of the Act. In doing so, Standard Bank was therefore entitled to enforce its claim against the Applicant.

The Constitutional Court upheld the decision of the High Court. The Court indicated that this is an essential component of the Act’s efforts to first look for non-litigious resolution of disputes, before approaching the courts. The Court further ruled that in order to effect delivery, the creditor must take those steps that would bring the notice to the attention of a reasonable consumer.

When a consumer has elected to receive notices by way of post, a credit provider must prove (i) dispatch of the notice by way of registered mail; (ii) that the notice reached the correct branch of the Post Office; and (iii) that the notification from the Post Office requesting that the consumer collect the Section 129 notice, was sent to the chosen address.

If a credit provider has taken all necessary steps to bring the notice to the attention of the reasonable consumer, then it will generally have discharged its obligations.

Act 34 of 2005
2 2014 JDR 0284 (CC)

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