On the 3rd of June 2016, in the matter of Blue Chip 2 (Pty) ltd v Rynedelt (499/15) [2016] ZASCA 98, the Supreme Court of Appeal handed down judgement regarding the delivery of a notice in terms of Section 129(1)(a) of the National Credit Act 34 of 2005 (“the Act”) and whether the delivery of the same notice forms part of the cause of action of the claim arising from the default of a credit agreement.
The appellant is a credit provider in terms of the Act and entered into several credit agreements with the Respondents. As the appellant is a credit provider, the act requires that a Section 129 letter be sent to the defaulting debtor, informing him of his default and the avenues available to him to settle the claim. The credit agreements signed by the respondents provided for the choice, by the respondent, of a domicilium citandi et executandi at which they would accept all notices and process in any matter that may arise from the contract. The section 129 notices where
duly sent by registered post by the appellant to the chosen addresses of the respondent, and the proof thereof was attached to the Appellants summons.
When setting out the averment of jurisdiction in its particulars of claim, the appellant averred that the Bloemfontein Magistrate’s court had the necessary jurisdiction to hear the matter as the whole cause of action arose within its jurisdiction. The question before the court was whether the fulfilment of the legislative requirement of the delivery of the section 129 letter forms part of the cause of action and that the cause of action is therefore incomplete until same is delivered. If this were to be answered in the affirmative, the address at which the section 129 letters are sent must fall within the jurisdiction of the court in which the claimant avers the whole cause of action arose. In this matter, the respondents’ chosen domicilium did not fall within the jurisdiction of Bloemfontein Magistrate’s court.
The court held that serving a section 129 notice is a pre-requisite for any judgement sought on a claim arising out of a default of a credit agreement. Should this pre-requisite step not be taken, the court will not grant judgement in favour of the claimant, and the summons would be rendered expiable. It is therefore evident that successfully serving a section 129 letter, and same being brought to the attention of the defaulting debtor is a necessary element for the claimant to prove.
The court therefore held that in order to disclose a cause of action to enforce a claim arising from a default of a credit agreement, an averment of compliance with section 129 of the act must be contained in the summons and proved. Complying with the legislative requirement therefore comes before a cause of action can be said to have arisen, and failure to comply with such requirement would mean that there is no cause of action. When one therefore avers that “the whole cause of action arose within the court’s jurisdiction”, it must be borne in mind that the address at which the section 129 letters are sent must fall within that court’s jurisdiction. Should this not be the case, the claimant must follow the jurisdiction of the court in which the defaulting party resides.
Written by Claudia Bragazzi, Candidate Attorney