Category Archives: Laws and Acts

Standard acknowledgements of debt and the National Credit Act (NCA)

03The new NCA not only regulates instalment sale agreements and lease agreements in respect of movables as was done by its predecessor,  the repealed Credit Agreements Act 75 0f 1980. The NCA applies to a much wider variety of credit agreements and has no monetary cap.  Instead of instituting legal action a creditor often gets a debtor to sign an acknowledgement of debt to facilitate repayment.

This document could contain a provision for instalments and interest and fees. The question arises whether this agreement in confirmation of an existing obligation constitutes a credit agreement for purposes of the NCA.

The purpose of this Act is to promote and advance the social and economic welfare of South Africans, promote a fair, transparent, competitive, sustainable, responsible, efficient, effective and accessible credit market and industry, and to protect consumers.

“Credit”, when used as a noun, is defined in the Act as a deferral of payment of money owed to a person or a promise to defer such payment; or a promise to advance or pay money to or at the direction of another person.

“Agreement” includes an arrangement or understanding between or among two or more parties which purports to establish a relationship in law between those parties.

The parties to a credit agreement governed by the NCA are referred to as the “consumer” and the “credit provider” and these definitions should be considered. An acknowledgement of debt normally refers to a historical event of cause and does not constitute a credit guarantee or any of the named credit transactions such as a pawn agreement, discount agreement, incidental credit agreement, instalment agreement, lease, secured loan or mortgage agreement or credit facility.

However, the fact that it contains a deferral of payment and requires the payment of interest, fees and other charges, will cause it to fall within the ambit of the catch-all term “credit transaction” provided for in Section 8(4)(f) of the Act.

Section 2(1) provides that the Act must be interpreted in a manner that gives effect to the purposes set out in Section 3. The question really is whether the legislature intended the rearrangement or the repayment terms of an existing debt,  for instance where money has already been advanced to a consumer a considerable period of time ago or where damages were suffered as a result of a delict or breach of contract, to constitute a credit agreement or transaction for purposes of the NCA.

Due to the elements of deferral and the charging of interest, fees and other charges in a standard acknowledgement of debt, and in the absence of any express or implicit indication to the contrary, it seems an inescapable conclusion that the agreement could be defined as a credit agreement within the meaning of the NCA. The relevance of this is that it might be that the credit provider would be required to register as such with the National Credit Regulator, affordability assessment would have to be done prior to conclusion, the consumer could become overindebted and apply for debt review, and many other onerous requirements will be applicable.

It is submitted that where the cause of action in relation to which the acknowledgement of debt was entered into is based on a contract or agreement which constitutes a credit agreement, the insertion of a no-novation clause into an acknowledgement of debt will not serve to exclude the agreement subsequently concluded, from the ambit of the NCA.

However, where the debt initially arose as a result of a delict, the insertion of a no-novation clause might have the effect of preserving the original cause of action, namely the delict, and thus cause the matter to fall outside the scope of the NCA.

One thing to be kept in mind is that a “consumer”, in respect of a credit agreement to which the NCA applies, means

  1. The party to whom goods or services are sold under a discount transaction, incidental credit agreement or instalment agreement;
  2. The party to whom money is paid, or credit granted, under a pawn transaction;
  3. The party to whom credit is granted under a credit facility;
  4. The mortgagor under a mortgage agreement;
  5. The borrower under a secured loan;
  6. The lessee under a lease;
  7. The guarantor under a credit guarantee; or
  8. The party to whom or at whose direction money is advanced or credit granted under any other credit agreement.

This definition might provide the answer as the acknowledgement of debt might, as a different cause of action, not qualify the consumer under the above definition.

So, too, is the underlying cause of action to the acknowledgement of debt, and it deserves no debate that signing an acknowledgement of debt is not something to go about without due consideration.

Should a court be convinced that the written acknowledgment of debt is subject to the NCA the court could be required to make a ruling in terms of Section 130(4)(b) of the NCA, which states:

In any proceedings contemplated in this section, if the court determines that – … the credit provider has not complied with the relevant provisions of this Act, as contemplated in subsection (3)(a), or has approached the court in circumstances contemplated in subsection (3)(c) the court must – adjourn the matter before it; and make an appropriate order setting out the steps the credit provider must complete before the matter may be resumed.

In Adams v SA Motor Industry Employers Association 1981 (3) SA 1189 (A) at 1198 – 1199, the court held that there is a presumption against novation and that, where novation was not intended, it was possible for two obligations to co-exist. These obligations would be interdependent, and the creditor does not have a free election to enforce the original obligation.

An acknowledgment of debt, sometimes referred to as an IOU, is evidence of a debt which is due, but differs from a promissory note as it does not contain an express promise to pay. However, where the acknowledgment of debt is coupled with an undertaking to pay, it will give rise to an obligation in terms of that undertaking.

The case of Rodel Financial Service (Pty) Ltd v Naidoo and Another 2013 (3) Sa 151 (Kzp), and its annotations is recommended for reading and getting a better understanding of the applicable principles.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.

POPI-Wet

02Die konsepwet op die Beskerming van Persoonlike Inligting, waarna algemeen verwys word as die POPI-wet, sal binnekort wetgewing word en is bedoel om die prosessering van persoonlike inligting te reguleer. Dit moet saamgelees word met ander relevante wette soos:

• ELEKTRONIESE KOMMUNIKASIE EN TRANSAKSIES Wet 25 of 2002 (‘ECT’)
• BEVORDERING VAN TOEGANG TOT INLIGTING Wet 2 of 2002 (‘PAIA’)
• REGULERING VAN DIE ONDERSKEPPING VAN KOMMUNIKASIES Wet 70 of 2002 (‘RICA’)
• VERBRUIKERS BESKERMINGS Wet 68 of 2008 (‘CPA’)

Gegewe die e-handel en tegnologie wat deur en tussen besighede gebruik word, word persoonlike Inligting van beide werknemers en kliënte al hoe makliker toegangklik vir derde partye.

POPI beoog om sekere beskermingsbeginsels in te voer ten einde minimumvereistes te stel vir die prosessering van persoonlike inligting. Daar is agt beginsels ter beskerming van inligting vervat in hoofstuk 3 van die konsepwet, naamlik:

Aanspreeklikheid; Beperking op prosessering; Spesifisering van die doel; Beperking op verdere prosessering; Kwaliteit van inligting; Openheid; Sekuriteitsbeheermaatreëls; Deelname van die persoon waarop die inligting betrekking het.

Die doel is om deursigtigheid te bevorder m.b.t watter inligting versamel kan word en hoe dit verwerk gaan word. Dit mag dalk die einde beteken van al die ongevraagde bemarkingsoproepe en rommelpos wat ons op ‘n daaglikse basis ontvang.

Prosessering beteken breedweg enigiets wat gedoen word met persoonlike Inligting, insluitend versameling, gebruik, bewaring, disseminasie, modifikasie of vernietiging (ongeag of sodanige prosessering outomaties is al dan nie).

POPI-nakoming behels die vaslegging van die minimum vereiste data, die versekering van akkuraatheid en verwydering van data wat nie meer benodig word nie. Hierdie maatstawwe sal waarskynlik die algemene betroubaarheid van ‘n organisasie se databasis verbeter.

Nakoming vereis verder die identifisering van persoonlike Inligting en die tref van redelike maatreëls om die data te beskerm, soos  nagaan van die werkvloei van kliënte se dokumente en toesien dat noodsaaklike inligting nie verlê word of in die verkeerde hande beland nie.

Die POPI-wet  strook met soortgelyke wetgewing wat in 70 tot 80 ander lande bestaan. Suid-Afrika is nou gereed om te voldoen aan internasionale standaarde vir die versameling en hantering van persoonlike inligting.

Die Wet beskerm nie net die manier waarop inligting gebruik en/of hergebruik word deur die ontvanger van die inligting nie, maar die party wat die inligting versamel het ook die verantwoordelikheid om seker te maak dat dit akkuraat en aktueel is en nie misleidend is nie.

Persoonlike Inligting mag slegs geprosesseer word as vrywillige, spesifieke en oorwoë toestemming daartoe verkry is.

‘n Reguleerder van Inligtingbeskerming (Information Protection Regulator) wat wye gesag sal hê, sal aangestel word en sal die openbare belang kan opweeg teen ‘n individu se reg op privaatheid.

Daar is egter gevalle waar POPI nie van toepassing sal wees nie. Artikel 4-uitsonderings sluit in:

  1. suiwer huishoudelike of persoonlike aktiwiteite
  2. inligting wat reeds genoegsaam gedeïdentifiseer is
  3. sommige staatsfunksies, insluitend kriminele vervolging, nasionale sekuriteit ens.
  4. joernalistiek onderworpe aan ‘n etiese kode
  5. funksies van die regsbank ens.

Bron:
http://www.popi-compliance.co.za/
http://www.saaci.co.za/

Hierdie is ‘n algemene inligtingstuk en moet gevolglik nie as regs- of ander professionele advies benut word nie. Geen aanspreeklikheid kan aanvaar word vir enige foute of weglatings of enige skade of verlies wat volg uit die gebruik van enige inligting hierin vervat nie. Kontak altyd u regsadviseur vir spesifieke en toegepaste advies.