The Confusion Continues: Lack of Clarity with the Application of Section 129(3) of the National Credit Act 34 of 2005 – Naidoo v Changing Tides 17 (Pty) Ltd (1885/2009) [2024] ZAKZDHC 55 (23 August 2024)
Résumé
Since the enactment of the National Credit Act 34 of 2005, there has been much inconsistency and confusion regarding the application of many of its provisions. From an interpretational perspective, section 129 has undoubtedly been one of the most controversial provisions in the Act. Section 129 (3) provides that a consumer may reinstate a credit agreement by settling the arrears, default and enforcement costs. Unfortunately, section 129 (3) has been extremely problematic in its interpretation and application - as it is unclear how and when this right can be exercised. The main challenges within sections 129 (3) and (4), such as the requirements for the right to come into effect, and the time when the right lapses, were considered and resolved by the Constitutional Court in Nkata v FirstRand Bank 2016 (4) SA 257 (CC). The recent judgment of Naidoo v Changing Tides 17 (Pty) Ltd and Others 1885/2009 KLD has however exposed some other challenges with section 129 (3), such as whether the provision contains any time limitations as to when the right can be claimed, and whether a recapitalisation of the arrears constitutes a reinstatement. Given the importance of the right to reinstatement as a debt relief mechanism for consumers, clarity is urgently needed on the aspects regarding its application; hence, an amendment to section 129 (3) may be necessary to create this certainty.
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