ConCourt to rule on defaulting debtors

2012-06-07 07:41
File photo: The Constitutional Court (Sapa)

File photo: The Constitutional Court (Sapa)

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The bank, which has withdrawn the proceedings against them, argued first that the question was moot.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

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