Jun 3,2014 / News / Legal Brief

The Constitutional Court recently handed down judgment in the case of [Moshomo Levin Kubyana v Standard Bank of South Africa Ltd 2014 JDR 0284 (CC)] on February 20, 2014. The court had to consider what steps a credit provider must take to discharge its obligation to effect proper delivery and ensure that a notice of default in terms of section 129 of the NCA reaches a consumer before commencing litigation.


In 2007, Mr Kubyana (the applicant) and the Standard Bank of South Africa Limited (the respondent), entered into an Instalment Sale Agreement (“the agreement”) for the purchase of a motor vehicle. In terms of that agreement the applicant had to make monthly instalments to the respondent. However, the applicant failed to make regular payments of those instalments which then fell into arrears. In 2010, the respondent sent the applicant a notice of default in terms of section 129 of the NCA, advising the applicant that he had fallen into arrears with his payment and that the respondent intended to approach a Court for relief.

The notice was sent by registered post to the address which the applicant had nominated in the agreement. Despite the fact that two notifications were sent by the relevant post office to the applicant’s nominated address, advising the applicant to collect his registered mail, the applicant failed to do so. The uncollected notice was eventually returned to the respondent some five weeks later.


The respondent subsequently issued summons out of the High Court for cancellation of the agreement, the return of the motor vehicle and payment of damages in terms of the agreement. The applicant filed a special plea that the Court a quo had no jurisdiction to hear the matter because the respondent had failed to comply with its obligations in terms of section 129 of the NCA. The matter proceeded to trial where the applicant was legally represented and the dispute was fully ventilated. However, the applicant did not testify or provide an explanation for his failure to collect the section 129 notice. The Court a quo upheld the respondent’s claim, and found that the respondent had fulfilled its obligation to bring the notice to the applicant’s attention.

The Supreme Court of Appeal dismissed the applicant’s application for leave to appeal the decision of the Court a quo and as a result the applicant sought leave to appeal to the Constitutional Court. The Constitutional Court confirmed the decision of the High Court and found in favour of the respondent.


The Constitutional Court held that, under section 129 of the NCA, a credit provider wishing to enforce its rights under a credit agreement must deliver a notice to a consumer setting out the consumer’s default and drawing the consumer’s attention to his or her rights. Importantly, the Constitutional Court confirmed that once a credit provider has produced the track and trace report indicating that the notice was sent to the correct branch of the post office and has shown that a notification was sent to the consumer by the post office, the credit provider would generally have shown that it had discharged its obligations under the NCA to effect delivery. It will then fall on the consumer to explain why it is not reasonable to expect the notice to have reached his/her attention.


The Constitutional Court therefore held that the applicant was at fault for not attending to the receipt of the notice. The Constitutional Court remarked that the section 129 notice of default is one of the crucial components of the NCA in striving to achieve non-litigious dispute resolutions.

This has significant implications for credit providers where they seek to enforce claims based on credit agreements and where they are required to deliver a section 129 notice.

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