Nkata v Firstrand Bank Limited and Others (CCT73/15) [2016] ZACC 12; 2016 (6) BCLR 794 (CC); 2016 (4) SA 257 (CC) (21 April 2016)

Nkata v Firstrand Bank Limited and Others (CCT73/15) [2016] ZACC 12; 2016 (6) BCLR 794 (CC); 2016 (4) SA 257 (CC) (21 April 2016)

The majority of the Constitutional Court held that the credit agreement was reinstated when Ms Nkata paid all overdue amounts, as the Bank had not properly notified her of legal costs, nor were those costs agreed or taxed, and thus they were not due and payable at the relevant time. The Bank's unilateral debiting of costs to the bond account did not constitute a demand for payment or render those costs immediately payable. Section 129(3) does not preclude reinstatement where the consumer has paid all overdue amounts but has not been given due notice of reasonable legal costs. The legal costs become due and payable only when they are reasonable, agreed or taxed, and on due notice to the...

Citation
[2016] ZACC 12
Parties
Applicant: Nomsa Nkata; Respondent: Firstrand Bank Limited; Respondent: Sheriff for the District of Durbanville, Western Cape; Respondent: Kraaifontein Eiendomme / Properties; Respondent: Registrar of Deeds, Western Cape; Amicus Curiae: Socio-Economic Rights Institute of South Africa
Court
Constitutional Court
Jurisdiction
South Africa
Judgment Date
21 April 2016
Case Number
CCT 73/15
Procedural Posture
Civil Appeal / Appeal From Supreme Court of Appeal, Following High Court Judgment
Outcome
Appeal upheld; Supreme Court of Appeal order set aside; credit agreement reinstated; sale in execution set aside; costs awarded to applicant.
Judges
Moseneke DCJ, Cameron J, Jafta J, Khampepe J, Madlanga J, Nkabinde J, Nugent AJ, Van der Westhuizen J, Zondo J
Legal Topics
National Credit Act, Reinstatement of Credit Agreement, Default Judgment, Notice Requirements, Reasonable Costs of Enforcement, Consumer Protection
Banking and Finance Civil Procedure Constitutional Law National Credit Act Reinstatement of Credit Agreement Default Judgment Notice Requirements Reasonable Costs of Enforcement +1 more

Case Brief

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Parties

Nomsa Nkata

Applicant

Firstrand Bank Limited

Respondent

Sheriff for the District of Durbanville, Western Cape

Respondent

Kraaifontein Eiendomme / Properties

Respondent

Registrar of Deeds, Western Cape

Respondent

Socio-Economic Rights Institute of South Africa

Amicus Curiae

Procedural Posture

Civil Appeal / Appeal From Supreme Court of Appeal, Following High Court Judgment

Legal Issues

  1. 1 Whether section 129(3) of the National Credit Act permits reinstatement of a credit agreement when the consumer has paid all overdue amounts but not separately paid reasonable enforcement costs.
  2. 2 Whether the Bank's unilateral debiting of legal costs to the bond account constitutes payment for purposes of reinstatement under section 129(3).
  3. 3 Whether the sale in execution and default judgment were valid given alleged non-compliance with statutory notice requirements.

Ratio Decidendi

The majority of the Constitutional Court held that the credit agreement was reinstated when Ms Nkata paid all overdue amounts, as the Bank had not properly notified her of legal costs, nor were those costs agreed or taxed, and thus they were not due and payable at the relevant time. The Bank's unilateral debiting of costs to the bond account did not constitute a demand for payment or render those costs immediately payable. Section 129(3) does not preclude reinstatement where the consumer has paid all overdue amounts but has not been given due notice of reasonable legal costs. The legal costs become due and payable only when they are reasonable, agreed or taxed, and on due notice to the...

Court Disposition

Appeal upheld; Supreme Court of Appeal order set aside; credit agreement reinstated; sale in execution set aside; costs awarded to applicant.

Orders

  • Leave to appeal is granted.
  • The appeal succeeds.