CAN I REINSTATE A CREDIT AGREEMENT?

A4If you default on a credit agreement and action is taken against you by the credit provider, you still have time, according to the National Credit Act (NCA)[1], to reinstate the credit agreement until the goods have been sold in execution.  This is also the case of Firstrand Bank Limited v Nomsa Nkata[2]

Redemption

Prior to the NCA coming into force, the position regarding the right of a consumer to re-instate a credit agreement was determined by the principle of redemption in common law. According to this principle, a consumer would be able to reinstate the credit agreement by paying the credit provider the full amount of the debt, together with ‘default charges’ and reasonable costs of enforcing the agreement.  According to the NCA, ownership and possession of an item or premises can be redeemed by paying only the amount overdue at that date, together with charges and costs.

The issue, however, is at which point it becomes too late to pay the amount overdue in the execution process. This issue was addressed in the case of FirstRand Bank Limited v Nomsa Nkata.[3] Section 129(3) and (4) of the NCA states:

“(3) Subject to subsection (4), a consumer may –

(a)  at any time before the credit provider has cancelled the agreement reinstate a credit agreement that is in default by paying to the credit provider all amounts that are overdue, together with the credit provider’s permitted default charges and reasonable costs of enforcing the agreement up to the time of reinstatement; and –

(b)  after complying with paragraph (a), may resume possession of any property that had been repossessed by the credit provider pursuant to an attachment order.

(4)  A consumer may not re-instate a credit agreement after–

      (a)   The sale of any property pursuant to –

            (i)     an attachment order; or

            (ii)    surrender of property in terms of section 127;

      (b) The execution of any other court order enforcing that agreement; or

      (c) The termination thereof in accordance with section 123.”

The Court’s judgement

The Supreme Court of Appeal found in the FirstRand Bank Limited case that in terms of both the common law as well as the NCA, “the Rubicon has been, and remains the sale in execution.” This means that at any point up until the time of the sale in execution, the consumer can put a halt to the execution proceedings and reinstate the agreement by paying the amount overdue, together with charges and costs.

The reasons…

The reason that the above provision was placed in the NCA was to make provision for the fact that many consumers borrow money over an extended period in order to finance the acquisition of large purchases such as a home or a motor vehicle. It was also noted in the above judgment that less affluent citizens may make use of extended credit to purchase household items and appliances. Therefore, the NCA assists consumers in providing them with the option of paying the overdue amount rather than having to pay the entire amount of the debt.

Conclusion

The Court established in the FirstRand Bank Limited case that Section 129(4) (b) can only be used before the sale has taken place and not thereafter. Once the sale has taken place the credit agreement cannot be re-instated between the consumer and the credit provider.

Should you find yourself in the temporary position of not being able to pay the monthly instalments of your credit agreement but are able to pay those instalments at a later stage, and not wanting to cancel the credit agreement, then it is imperative that you pay the money which is overdue to the Credit Provider prior to any sale in execution as you will not be able to reinstate the agreement thereafter.

References:

National Credit Act, 34 of 2005

Firstrand Bank Limited v Nomsa Nkata, (213/14) [2015] ZASCA 44 (26 March 2015)

[1] 34 of 2005

[2] (213/14) [2015] ZASCA 44(26 March 2015)

[3] (213/14) [2015] ZASCA 44(26 March 2015)

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. Errors and omissions excepted (E&OE)

WHO IS LIABLE FOR THE DAMAGES IN A CAR ACCIDENT?

A3What will happen to my vehicle after I have been involved in a motor vehicle accident and who will be responsible for the damages? Over and above the emotional and economical tension it causes a person and his/her family, there will always be legal principles that apply.

What does the law say?

The most prominent legal field that will apply when a person is involved in a motor vehicle accident is the law of delict. The law of delict will play an important role in determining who will be liable for the damages, if any. If the damages were caused due to the intentional or negligent conduct or omission of somebody else (the third party), the third party would be liable for the damages the car owner suffered. The third party is, however, not without a few defences, but that falls outside the scope of this article.

Litigation

An important legal doctrine to be observed in litigation is the doctrine of subrogation as it applies in the law of indemnity insurance. It is an accepted principle of indemnity insurance law that when an insurer fully indemnifies an insured party in the case of loss caused by a third party, the insurer has a claim against the third party in the name of the insured. The policy behind this doctrine is to prevent the insured party from receiving double compensation from both the insurer and the third party.

Insurance claims

From a procedural point of view, the insurer obtains the right to institute legal proceedings against the third party in the name of the insured party if the insured party still has an unsatisfied claim against the third party. This principle allows the insurer to become dominus litis (master in the proceeding), but only in name and on behalf of the insured party. The insurer becomes entitled to conduct the proceedings in the name of the insured party, provided that the insurer has fully indemnified the insured party and has also indemnified the insured party against the risk of legal costs which may arise from the proceedings. The insurer has no independent claim against the third party, but simply enforces the claim of the insured party for the insurer’s own benefit.

Conclusion

In summary, the car owner will be able to hold the third party liable irrespective if he/she has insurance or not. If the car owner has insurance they will be able to claim the damages from the insurance. If he/she does, the insurance will be able to recover the loss in the name of the insurer from the third party. The relationship between the insured and the insurance is a contractual relationship and if any party fails to perform in accordance with the agreement, that party will be liable for breach of contract.

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. Errors and omissions excepted (E&OE)

SCHNETLER’S MAKING A DIFFERENCE ON MANDELA DAY

A2Mandela Day is an annual international day in honour of Nelson Mandela. This day is celebrated each year on 18 July, Mandela’s birthday. The day was officially declared as “Mandela Day” by the United Nations in 2009.

Mandela Day is a day which is dedicated in tribute of the legacy of Nelson Mandela and his values by means of volunteering and community service. Mandela Day is a global call to action that drives the idea that each individual has the power to transform the world and the ability to make a change.

The Mandela Day campaign message is:

“Nelson Mandela has fought for social justice for 67 years. We’re asking you to start with 67 minutes.”

For 67 years, Nelson Mandela devoted his life to the service of humankind – as a Human Rights Attorney, a prisoner of conscience, an international peacemaker and as the first democratically elected president of a free South Africa.

Schnetler’s partook in Mandela Day as a firm. We believe that in order for South Africa to be a better country for every citizen, it starts with us, with the people of South Africa. Every citizen of South Africa needs to come together in order to fight for a better future for all.

We therefore chose to dedicate our 67 minutes to volunteering at an animal shelter, Fallen Angels, situated in Melkbosstrand. We when arrived, we presented our donation to the organisation, which included cat and dog food, food bowls, blankets and pillows and newspapers to line the enclosures. Thereafter we were offered a brief history of the shelter and it came to be in existence, followed by a tour of the grounds, as we listened to the sad stories of many of the dogs homed there. Some of the tales of these animals were terrible to hear, and we all wondered out loud how human beings could treat a living and innocent being in the manner that some of these animals have been treated in their pasts.

We were each permitted to choose a dog and a lead, and thereafter proceeded to take our dog on a short walk on the open land surrounding the enclosures.

We are so glad to have offered our time and attention to some of the many sweet and loving dogs at the shelter, by giving them some extra love and care.

Compiled by: Laura Ames

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. Errors and omissions excepted (E&OE)

FANTASTIC START TO WOMEN’S MONTH!

A1_BHigh Court victory for women in polygamous marriages.

At the beginning of August a section of the law dealing with the recognition of customary marriages has been ruled by the Limpopo High Court as being unconstitutional.

Joseph Netshituka was in a civil law marriage with Joyce Netshituka and in customary marriages with three other women. All of the three customary marriages were entered into before 1998, which means that according to the Recognition of Customary Marriages Act 120 of 1998 (“the Act”), polygamous customary marriages entered into prior to 1998 are not considered to be that of in community of property.  Therefore, land that Joseph acquired in Limpopo in 1991 was only in his and Joyce’s names as they were married in community of property according to civil law. This particular piece of land was sold in 1999, but Joseph re-acquired it in 2002.

The children of three of Joseph’s customary wives, who passed away, argued in the Limpopo High Court that it was unconstitutional to not recognise the customary marriages as being in community of property because they were entered into prior to 1998. Their parents were married before the legislation where their mothers had no right to their husband’s property. This therefore left the children in the cold, as only their siblings whose mother was married in terms of civil law, were allowed to inherit.

Acting Judge A Lamminga referred to these as “old” polygamous customary marriages and further said that wives who entered into these “old” marriages had no claim to their husband’s assets, including property, which were acquired during the marriage. It was argued in Court that women who are affected by the now invalid provisions are mostly poor, older and live in the rural areas of our country. Neither these women, nor their children may inherit anything after the death of their husbands. Acting Judge Lamminga further remarked that women who entered into the “old” marriages were still being excluded from benefiting from their husband’s property – this left the women and their children particularly vulnerable. The Judge said that this discriminating provision should not be allowed to remain on South Africa’s statute books.

The High Court heard the argument of the children and agreed with them that Section 7(1) of the Act “discriminates unjustifiably against women in polygamous customary marriages on the basis of gender, race and ethnic or social origin and is thus inconsistent with the constitution and must be declared invalid”.  The Judge furthermore held that “until such time that legislation is passed to govern the proprietary consequences of customary polygamous marriages that occurred before the Act was passed, the wives who are parties to such marriages shall have joint and equal rights of management and control over and in the marital property of their husbands.” In conclusion Judge Lamminga added: “The recognition of the equal worth and capacity of all partners in customary marriages is well overdue and it should not be delayed any further.”

This ruling is a massive legal victory for women who are in polygamous customary marriages and is definitely an exciting start to Women’s Month!

Compiled by: Annerine du Plessis

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. Errors and omissions excepted (E&OE)