DID YOU KNOW: ConCourt gives certainty on service of NCA letters

On 20 February the Consititutional Court, in the case of Kubyana v Standard Bank of South Africa Ltd (CCT 65/13) [2014] ZACC 1, provided some much needed clarity on the question as to how far a creditor has to go to prove that a consumer received his letter of demand in terms of s129 of the National Credit Act. In previous court judgments consumers have gone so far as to argue that the creditor must prove that the consumer actually received and read the letter, which would make it well-nigh impossible for any creditor to recover a debt from a consumer. It is therefore a great relief that this debate has now finally been laid to rest.

The Court emphasised that, although the Act is directed to protect the consumer, it does not disregard the rights of credit providers. The purpose of section 129 of the Act is two-fold in that it brings the default of a consumer to his attention as well as setting out various options which could be used to remedy the default. Both the consumer and credit provider share responsibilities in resolving the dispute.

The Court decided that if the consumer communicated to the credit provider his preferred mode of delivery with regards to notices then the credit provider is to respect these instructions. However the Act does not require the notice to come to the subjective attention of the consumer. The credit provider must merely take certain steps to bring the notice to the consumer’s attention. Should the consumer choose delivery via postal service the credit provider must prove the following for it to be considered proper delivery:

• The notice must be sent via registered post and sent to the correct branch of the Post Office – this is proved by use of the “track and trace” report that can be found on the Post Office’s website;

• The Post Office is to send a notification to the consumer that registered mail is available for collection;

• The notification sent from the Post Office must reach the consumer, which can be inferred by using the consumer’s correct postal address; and

• If the first 3 conditions are met, the consumer is deemed to have received the notice, unless he can prove that it did not reach his address.

While many consumer will no doubt continue to come up with innovative arguments to avoid their creditors, this judgment does provide some much needed clarity on the initial steps of the debt recovery process.

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