Section 129 of the National Credit Act does not require a credit provider to prove that a notice by registered post actually came to the attention of the consumer. If a consumer has elected to receive notices by post, a credit provider must prove:
(a) the sending of the notice by registered mail;
(b) that the notice reached the correct post office; and
(c) that the post office sent a notice to the correct address of the consumer to collect the section 129 notice.
If these steps are proved, the credit provider would generally have discharged its obligations in terms of section 129. The burden then shifts to the consumer to explain why the notice still did not reach the consumer. Unless there is a good reason from the consumer why the notice was not collected from the post office (for example, because the consumer was in hospital at the time) a court will allow the credit provider to enforce the credit agreement and seek judgment.
This finding in the judgment of the constitutional court on 20 February 2014 in Kubyana v Standard Bank of South Africa Limited will be welcomed by the credit industry because it emphasises that a court will not allow consumers to frustrate the credit provider’s attempts to recover what is outstanding under a credit agreement by unreasonably failing to collect a section 129 notice from the post office.
A court will not allow consumers to frustrate the credit provider’s attempts to recover what is outstanding under a credit agreement by unreasonably failing to collect a section 129 notice from the post office.
The decision is important because it recognises that the National Credit Act seeks to strike a balance between the rights of consumers and credit providers and that credit providers play a crucial role in the economy of our country. Without credit providers, the majority of our people would not be able to buy houses and cars and the collapse of the credit system would be detrimental to our economy and the majority of our people.
The judgment clarifies the constitutional court’s earlier judgment in the Sebola case which dealt with obligations on a credit provider to deliver a default notice to a consumer before legal proceedings can be instituted. The earlier Sebola judgment resulted in conflicting judgments in the high courts. Post Sebola, some of our high courts held that if there was a track and trace report from the post office that suggested that a section 129 notice was not collected by the consumer, judgment could not be granted, whilst other high courts held that proof of delivery to the correct post office was sufficient, regardless of whether the notice was collected by the consumer.