In the Constitutional court, the court invalidated section 89(5)(c) of the National Credit Act1 (NCA) on the basis that a person should not be arbitrarily deprived of property (section 25 (1) of the Constitution) and that sec 89(5)(C) of the NCA does so even after applying the sec 36 of the constitution (the limitation clause).
I found this judgement interesting and somewhat confusing at times. However as a student who am i to decide the merits or any other angle, i am entitled to my opinion though. That opinion being that the correct decision was made and should have been made sooner. Having just completed Law of Contracts we dealt with the NCA and the CPA (Consumer Protection Act) and both struck me as somewhat lopsided in favour of the consumer, which to be fair is done to protect naive consumers from loan sharks (of the illegal variety) and other unsavoury characters/lenders.
However, that protection should surely only extend to a certain point. Simply allowing consumers to escape liability on the basis of ignorance was wrong in law when you consider that the lender had no recourse to reclaim his property (provided the transaction was above R500 000, in which case a lender was required to register with the NCR), this clearly infringes on the lenders right to claim property lent under what is assumed to be a valid contract notwithstanding the fact that certain provisions have not been complied with.
The act will return to the legislature for correction and hopefully will be less vague and confusing, the court had this to say on vagueness, “Given that no contractual rights exist “under that credit agreement”, one wonders which “purported rights” stand to be “cancelled”. And what rights remain to be forfeited to the state? What are “purported rights” in any event?”
In my mind though this may not be the end of the argument since the facts of this case were based on the fact that first respondent (Opperman) was from Namibia and therefore was completely unaware of the NCA stipulations, to be fair he was not a “credit provider” in any event and it seems he was helping his friend. That said it there were contractual agreement entered into. The crux of the matter is whether money can be included within the ambit of sec 25 of the constitution and if so was the agreement valid in the circumstances and can the offending provision be saved by sec 36?
The CPA was not touched upon in this judgement, it would have been an interesting inclusion into the mix of the NCA and CPA and the constitution being read together. The respondent to be fair never did anything to warrant the inclusion of the CPA. However, under sec 5(2)(d) of the CPA “This Act does not apply to any transaction—(d) that constitutes a credit agreement under the National Credit Act, but the
goods or services that are the subject of the credit agreement are not excluded
from the ambit of this Act;” Thus the agreement itself would not fall under the CPA which confuses me since the CPA was designed to protect consumers against illegal contracts, the money itself would.
The judgement can be read here