The borrower of money gave a lender a set of cheques to use to repay loans made to purchase and resell medical equipment and a sectional title unit. A number of cheques were handed over at the beginning of the transaction. The amounts and dates on the cheques would be inserted by the lender when instructed by the borrower to do so. The amounts paid were to include a participating share of any profits from the transactions as determined by the borrower in his discretion.

The indeterminate profit share for which no date of payment was fixed, which was not guaranteed and which could well not eventuate at all and, if it did, its value was to be determined by the borrower in his discretion, does not qualify as a “charge” under the National Credit Act. It did not turn the loan agreement into an NCA credit agreement, namely a loan subject to a charge, fee or interest.

In addition, the cheques were in payment of the loan and were not pledged or ceded for the purposes of section 4(5) of the NCA. The transaction was therefore not a secured loan because the loan was not secured by the cheques. It was paid by cheque. Section 4(5)(a) which refers to cheques used for “full payment for goods or services” includes cheques used for repayment of a loan and the NCA does not apply to such cheques.