News24

ConCourt to rule on defaulting debtors

2012-06-07 07:41

Johannesburg - The Constitutional Court will hand down judgment on Thursday on whether defaulting debtors must receive notice before creditors take action against them.

Mashilo Shadrack Sebola and his wife applied to the Constitutional Court for rescission of a default judgment on the basis that they had not received a notice from their creditor.

The creditor, Standard Bank, had issued a notice advising them of their rights, including the option to refer the agreement to a debt counsellor.

They were in default of payment under a credit agreement.

The notice did not reach the address to which it was sent and they did not respond. The bank obtained the judgment.

They applied for its rescission on the basis that they did not receive the notice.

The South Gauteng High Court found that proof of dispatch was enough. The Sebolas maintained that the National Credit Act, properly interpreted, requires them to have received the notice.

The bank, which has withdrawn the proceedings against them, argued first that the question was moot.

Apart from arguing certain other procedural issues, the bank contends essentially that the correct interpretation of the section was that the creditor was required to dispatch the notice and no more.

Three friends of the court have been admitted including the Socio-Economic Rights Institute of SA, the National Credit Regulator and the Banking Association of SA.

Comments
  • Allan - 2012-06-07 08:02

    The lack of service delivery of another state enterprise in the form of The Post Office is making it increasingly difficult for existing laws to be relied upon. Just posting a notice to a person in the vain hope that they will receive it and act upon it is no longer a realistic expectation.

      Charles-Bronson - 2012-06-07 08:19

      There goal.. Profit.. There attitude.. F@ck you. So we hope the court today will do the same to the banks.. F@ck you too..

      Faizel - 2012-06-07 09:14

      Allan, I am an attorney and our prime focus is collections and litigation. Posting a letter is enough in respect of notice even though the debtor MAY not receive it. Lets be real, you know when you in default you dont need to be reminded in this way. All banks have "pre-legal" collections before us attorneys step in. These debtors are pulling on straws as they know full well that they owe the money. I pray that they lose this bid as it will be prejudicial to the banking sector if it is not upheld. You attempt to locate a debtor who has move 10 times in one year, impossible. We rely on a domicillium address and registered post. Its all we can do when people run without notice to the bank that their address has changed. Hope this made sense

      Citroes - 2012-06-07 09:31

      @Faizel - what you are saying is making perfect sense, but the reality is that South African banks (and banks in general) have such a bad history of screwing the public over that nobody cares for them anymore. There's no sympathy for them and its their own fault. Stop raping the public then perhaps the public will be able to pay their debts!

      Daft - 2012-06-07 09:47

      Faizel...it appears that you act on behalf of banks for litigation purpose. Are you aware that a certain blue bank get their own staff to appraise repossess vehicles and do not make use of an in depended appraiser to protect the client's rights ? These vehicles are valued at a very conservative value so that they can dispose of then quickly. I would recommend that who's ever car is repossessed, they ask for a copy of the appraisal especially from the wheels blue bank.

      Lehlohonolo - 2012-06-07 10:30

      @Daft,the same banks who charged me 400 rands for withdrawing my money,they are very greedy

  • Ian - 2012-06-07 08:05

    Anyone can post a letter, recorded or not, still doesn't mean that it is recieved. Unless the bank can show that they made every effort to find the client I wouldn't believe much they say!

      mlungisi.botha - 2012-06-07 08:32

      According to the Law of Contract, communication, whether contractual or otherwise, is undertaken when the letter etc is posted. It says nothing about the post office being reliable or whether the sendee has received it. The communication has been send even if some crooked postman decides to dump his load down a drain somewhere. Millions of people have been disadvantaged because of this and millions have abused it. The specific requirement of receipt of the message by the other party in the National Credit Act should be extended to other contractual arrangements - life would be so much easier!

      Faizel - 2012-06-07 09:15

      I am an attorney and our prime focus is collections and litigation. Posting a letter is enough in respect of notice even though the debtor MAY not receive it. Lets be real, you know when you in default you dont need to be reminded in this way. All banks have "pre-legal" collections before us attorneys step in. These debtors are pulling on straws as they know full well that they owe the money. I pray that they lose this bid as it will be prejudicial to the banking sector if it is not upheld. You attempt to locate a debtor who has move 10 times in one year, impossible. We rely on a domicillium address and registered post. Its all we can do when people run without notice to the bank that their address has changed.

      Ian - 2012-06-07 22:23

      @Faizel, Unfortunately your profession is one that not many trust.... (no disrespect here but you wouldn't have a joke otherwise would you)!!!!!!!!!!!!!

  • mphotant.thelejane - 2012-06-07 08:09

    I can't wait for the outcome sic of these creditors not following procedures.

  • Deon - 2012-06-07 08:13

    When you change your address you should inform your bank of the change, within a certain time. As far as I know this is the Fica law. Many people move constantly to avoid paying bills.

  • Anthony - 2012-06-07 08:15

    If the court finds in favour of the bank, then ni future the bank could type a letter and then toss it. Its easy to say it was posted.I believe it should go as far as "proof of receipt"!

  • catgirl1971 - 2012-06-07 08:21

    Aren't these notices supposed to be dispatched under registered mail? It is no use sending it as ordinary mail as it can then conveniently go 'missing'. Thumbs down to Standard Wank!

  • JohnLove123 - 2012-06-07 08:24

    Congratulations with your application. I trust that the general public will support this application as the reckless lending practices by leading financial institutions, such as Standard Bank, need to be controlled. Standard Bank has been at the forefront of reckless lending practices and other, notably relating to immoral and illegal practices by debiting costs to defaulting debtors' home loan accounts, strictly in contravention with the NCA and CPA. A detailled submission is currently being prepared for submission to the Public Protector's office, the SA Reserve Bank, the National Credit Regulator and the Consumer Commission. As is the case with e-Toll, the general public has been bullied enough and require their voice to be heard. To merely send a registered notice of default by mail is notacceptable. What happened to those notices that have been sent during the Post Office strike that lasted nearly 4 months?

      Faizel - 2012-06-07 09:15

      I am an attorney and our prime focus is collections and litigation. Posting a letter is enough in respect of notice even though the debtor MAY not receive it. Lets be real, you know when you in default you dont need to be reminded in this way. All banks have "pre-legal" collections before us attorneys step in. These debtors are pulling on straws as they know full well that they owe the money. I pray that they lose this bid as it will be prejudicial to the banking sector if it is not upheld. You attempt to locate a debtor who has move 10 times in one year, impossible. We rely on a domicillium address and registered post. Its all we can do when people run without notice to the bank that their address has changed.

  • Antipoaching - 2012-06-07 08:27

    why should the Notice of Intention (Letter of Demand) have a lesser requirement than a Summons? A Summons has to be successfully served upon the defaulters address, if no-one is home the Sheriff (Court Messenger) has to confirm the identity of the residents with neighbors before the "service" is deemed successful....... if we are serious about the Credit Act, in my opinion, the same standard should appply to LoD's because the Debt Counselling affords the debtor the opportunity of avoiding the harsh consequence of losing all his assets whilst ensuring that the creditor receives his money

      Faizel - 2012-06-07 09:17

      Correction there buddy. The sheriff in terms of these matters will serve but attaching to a door or gate if nobody is home. This is a "domicillium address" by way of servie. I suggest that you read up on it before you sign another contract.

      catgirl1971 - 2012-06-07 09:25

      I had a neighbour's summons erroneously left on my safety gate - NOT even inserted in an envelope! Doesn't the Sheriff of the Court have envelopes? Surely people are entitled to privacy and not have their personal business available for all and sundry to read? I was extremely annoyed when I saw this notice.

      Antipoaching - 2012-06-07 10:13

      @ Faizel In the Eastern Cape debtors have successfully had Judgment rescinded as the Mag Court viewed affixing without confirming to NOT be proper service. I don't have debt so don't have contracts Faizel my years of Collections experience cured me of wanting debt...

  • JohnLove123 - 2012-06-07 08:31

    I appeal to anybody who's house has been repossessed in the past 10 years by Standard Bank to send me an e-mail to johnlovemore@gmail.com and myself or one of my assistants will contact you to discuss the process currently being pursued against Standard Bank. No details are required in the e-mail and each case will be treated in strictest confidence.

  • stefan.vanderspuy - 2012-06-07 09:57

    The banks and the cell phones companies are all the same. They're in business for maximum profits and collude. They don't care a hoot about their clients, unless you have plenty bucks and can (e.g.) join the Private banking elite.

  • Gavin - 2012-06-07 10:34

    In all fairness this system is being 'abused' on both sides, best to scrap it and rather tighten up on the credit granting side ..i.e. question the number of times the applicant has moved etc .. analyse and formulate a policy.

  • Willem - 2012-06-07 11:11

    Audi alterem partem is a basic rule of law that the Romans already knew. Even Pilate honoured it when he questioned Jesus. Unless a person knows that he is sued he cannot appear to state his case. The purpose of the notice is to give the debtor that knowledge and if he does not receive it there is no purpose in sending it. There is no point in sending it if it does not matter whether it is received or not.

  • pages:
  • 1