SCA overturns Standard Bank's settlement tactics that violated National Credit Act

THE Supreme Court of Appeal has ruled that Standard Bank had bypassed the rules of the National Credit Act (NCA) when it used settlement agreements with a family trust to enforce its debts by obtaining an order that 14 immovable properties of the trust be declared executable.

- ZELDA VENTER

The SCA found that settlement agreements supplementing a NCA-governed credit agreement are unlawful and void. It said enforcement requires Section 129 compliance. This section of the NCA requires a credit provider to send a written notice to a consumer in default of a credit agreement before legal proceedings can begin.

In this case, the bank used the settlement agreements to obtain orders from the Bloemfontein High Court to sell the properties in order to recover its debt, without the consumer being afforded the opportunity to oppose the application.

The Wolmarans Kinder Trust and its trustees, Christoffel and Emerentia Wolmarans, turned to the SCA to have the majority of the orders granted between them by the high court overturned. The appeal considered the validity, in light of the provisions of the NCA, of the two settlement agreements.