Motitsoe v Absa Bank and Others (NCT/255/2009/138(1)(P)) [2010] ZANCT 44 (21 April 2010)

Motitsoe v Absa Bank and Others (NCT/255/2009/138(1)(P)) [2010] ZANCT 44 (21 April 2010)

The Tribunal found that the interest rate of 60 percent per annum charged by Randburg Finance in the consent agreement far exceeded the statutory maximum for short term loans under the National Credit Act. Furthermore, the total amount to be repaid by the applicant under the consent agreement was in clear contravention of the in duplum rule, which prohibits interest and charges from exceeding the principal debt. The Tribunal was unable to establish the exact outstanding principal at the time of default but determined that the agreement would result in Randburg Finance receiving more than legally permitted. Consequently, the Tribunal refused to grant the consent order and referred the...

Citation
[2010] ZANCT 44
Parties
Applicant: Basetsana Angelina Motitsoe; Respondent: Absa Bank; Respondent: African Bank; Respondent: Direct Axis (SA) Pty Ltd; Respondent: Randburg Finance; Respondent: Consumer Friend
Court
National Consumer Tribunal
Jurisdiction
South Africa
Judgment Date
21 April 2010
Case Number
NCT/255/2009/138(1)(P)
Procedural Posture
Consent Order Application / Application for Consent Order Under Section 86(8) and Section 138 of the National Credit Act
Outcome
Application for consent order refused; matter referred to the National Credit Regulator for investigation.
Judges
T Woker
Legal Topics
National Credit Act, Debt Restructuring, Interest Rate Regulation, In Duplum Rule, Prohibited Conduct, Short Term Loan
Banking and Finance Civil Procedure National Credit Act Debt Restructuring Interest Rate Regulation In Duplum Rule Prohibited Conduct Short Term Loan

Case Brief

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Parties

Basetsana Angelina Motitsoe

Applicant

Absa Bank

Respondent

African Bank

Respondent

Direct Axis (SA) Pty Ltd

Respondent

Randburg Finance

Respondent

Consumer Friend

Respondent

Procedural Posture

Consent Order Application / Application for Consent Order Under Section 86(8) and Section 138 of the National Credit Act

Legal Issues

  1. 1 Whether the interest rate charged by Randburg Finance in the consent order exceeds the statutory maximum under the National Credit Act.
  2. 2 Whether the consent agreement between the applicant and Randburg Finance contravenes the in duplum rule as codified in section 103(5) of the Act.
  3. 3 Whether the Tribunal should grant a consent order under section 86(8) and section 138 of the National Credit Act given the terms of the agreement.

Ratio Decidendi

The Tribunal found that the interest rate of 60 percent per annum charged by Randburg Finance in the consent agreement far exceeded the statutory maximum for short term loans under the National Credit Act. Furthermore, the total amount to be repaid by the applicant under the consent agreement was in clear contravention of the in duplum rule, which prohibits interest and charges from exceeding the principal debt. The Tribunal was unable to establish the exact outstanding principal at the time of default but determined that the agreement would result in Randburg Finance receiving more than legally permitted. Consequently, the Tribunal refused to grant the consent order and referred the...

Court Disposition

Application for consent order refused; matter referred to the National Credit Regulator for investigation.

Orders

  • The application for a consent order is refused.
  • The matter is referred to the National Credit Regulator to investigate whether there was prohibited conduct by Randburg Finance.