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Cape Town - Credit providers are hoping for a positive judgment from the appeal court on the delivery of default notices to defaulting consumers, says banking specialist lawyer Aslam Moosajee.
On August 22 the Supreme Court of Appeal (SCA) is to hear argument on whether a court can grant default judgment to enforce a credit agreement such as a home loan, where it knows that a Section 129 notice under the National Credit Act did not reach the consumer because it was not collected from the post office.
The banking industry will be following the appeal before the SCA with close interest, says Moosajee. "Banks will be hoping for a finding that consumers' failure to collect Section 129 does not allow them leeway to escape any legal consequences by pleading ignorance of the notice."
In Sebola versus The Standard Bank of South Africa Limited (June 2012) the Constitutional Court held that it was not sufficient for the bank to show that the notice had been sent by registered post to the address chosen by the defaulting consumer.
The bank must also print out a “track and trace” printout from the website of the South African Post Office to show that the notice was delivered to the correct post office for the chosen address.
If the notice reached the relevant post office, a court can accept this as adequate proof of delivery of the notice to the defaulting consumer.
Since the Sebola judgment was delivered in June last year, there have been conflicting judgments in the high courts about its proper interpretation, says Moosajee.
An issue that has troubled a number of our high courts is whether it is sufficient to prove that the notice reached the correct post office or whether the Sebola judgment means that, if there is evidence that the consumer did not collect the notice, default judgment cannot be granted.
In other cases, the Western Cape High Court held that if the bank proved the notice was sent to the correct post office, the risk of non-receipt of the notice rests with the defaulting consumer.
Proof of delivery to the correct post office is sufficient, regardless of whether the notice was collected by the debtor.
This approach was not adopted by the South Gauteng, KwaZulu-Natal and Eastern Cape high courts, which interpreted the Sebola judgment in a different way.
The courts held that if the track and trace report indicates that the Section 129 notice was returned to the sender, there has not been compliance with the National Credit Act and judgment cannot be granted.
The banks are hoping the court will rule that consumers cannot get away with the excuse that the registered item was not collected, if it can be proven that a Section 129 notice was sent to the defaulting consumer by registered mail and it reached the correct post office.
On August 22 the Supreme Court of Appeal (SCA) is to hear argument on whether a court can grant default judgment to enforce a credit agreement such as a home loan, where it knows that a Section 129 notice under the National Credit Act did not reach the consumer because it was not collected from the post office.
The banking industry will be following the appeal before the SCA with close interest, says Moosajee. "Banks will be hoping for a finding that consumers' failure to collect Section 129 does not allow them leeway to escape any legal consequences by pleading ignorance of the notice."
In Sebola versus The Standard Bank of South Africa Limited (June 2012) the Constitutional Court held that it was not sufficient for the bank to show that the notice had been sent by registered post to the address chosen by the defaulting consumer.
The bank must also print out a “track and trace” printout from the website of the South African Post Office to show that the notice was delivered to the correct post office for the chosen address.
If the notice reached the relevant post office, a court can accept this as adequate proof of delivery of the notice to the defaulting consumer.
Since the Sebola judgment was delivered in June last year, there have been conflicting judgments in the high courts about its proper interpretation, says Moosajee.
An issue that has troubled a number of our high courts is whether it is sufficient to prove that the notice reached the correct post office or whether the Sebola judgment means that, if there is evidence that the consumer did not collect the notice, default judgment cannot be granted.
In other cases, the Western Cape High Court held that if the bank proved the notice was sent to the correct post office, the risk of non-receipt of the notice rests with the defaulting consumer.
Proof of delivery to the correct post office is sufficient, regardless of whether the notice was collected by the debtor.
This approach was not adopted by the South Gauteng, KwaZulu-Natal and Eastern Cape high courts, which interpreted the Sebola judgment in a different way.
The courts held that if the track and trace report indicates that the Section 129 notice was returned to the sender, there has not been compliance with the National Credit Act and judgment cannot be granted.
The banks are hoping the court will rule that consumers cannot get away with the excuse that the registered item was not collected, if it can be proven that a Section 129 notice was sent to the defaulting consumer by registered mail and it reached the correct post office.
