Faculty of Law
Department of Mercantile Law
Selected Highlights from Research Findings
The former Credit Agreements Act contained specific provisions to deal with the cancellation of an instalment sale transaction. It also contained specific provisions that dealt with interim interdicts and attachments pending the cancellation procedures. The enforcement procedures of the National Credit Act (NCA) first of all need interpretation, whether they apply to cancellation at all. The researchers found that the enforcement procedures apply to cancellation as well. Although the NCA is silent with regard to interim interdicts and attachments, it is the submission of the researchers that such relief can be applied where the actions of the consumer threaten the rights of the credit provider in the goods sold, as long as the request for interim relief is still based on the common law substantive principles. The NCA also provides, like its predecessor, for a type of notice before the debt enforcement procedure may ensue. However, different time periods are involved. The provision that prescribes certain conditions under which a court may not determine a debt enforcement procedure will cause difficulty in practice. The researchers found that it will become the duty of the parties to provide the required information to the court, but that the NCA is silent on the procedure to be followed in this respect. In addition, they found that the NCA affords equal protection to the consumer regarding the exercise of the contractual rights by a credit provider to cancel a credit agreement as its immediate predecessor, the Credit Agreements Act. However, the provisions in the NCA that deal with this aspect are to some extent less clear than the repealed provisions and their judicial interpretation will have to be awaited
Contact person: Mr S Renke.
Section 90 of the National Credit Act, Act 34 of 2005, sets out a list of unlawful provisions in credit agreements. One such provision is to be found in subsections 90(2)(k)(vi)(aa) and (bb) that forbids the consent to the jurisdiction of: “(aa) the High Court, if the Magistrate’s Court has concurrent jurisdiction; or (bb) any court seated outside the area of jurisdiction of a court having concurrent jurisdiction and in which the consumer resides or works or where the goods in question (if any) are ordinarily kept.” The purpose of the research is to analyse and evaluate conflicting decisions regarding the interpretation of the above subsections. The critical question that the courts had to determine was whether these subsections oust the jurisdiction of a court by implication. In Myburgh, it was decided that the jurisdiction was indeed ousted, while in Mateman and Stringer, the court came to an opposite conclusion. After they had analysed and evaluated the above decisions, the researchers found that the High Court’s jurisdiction is not ousted by necessary implication and that the purpose of subsection (aa) was to forbid consent to costs on a High Court scale. They found that in the case of subsection (bb), the courts’ jurisdiction is ousted if such court is not closest in distance to the consumer’s residence, work or the place where the goods are ordinarily kept. If such interpretation is not awarded to (bb), the provision will be left ineffective and purposeless. In addition, they found that the conflicting decisions are the result of the legislature’s failure to specifically regulate jurisdiction, as the predecessor to the National Credit Act (the former Credit Agreements Act) did, and that the legislature should clarify this issue
Contact person: Prof M Roestoff.
Section 90 of the National Credit Act, Act 34 of 2005, sets out a list of unlawful provisions in credit agreements. One such provision is to be found in subsections 90(2)(k)(vi)(aa) and (bb) that forbids the consent to the jurisdiction of: “(aa) the High Court, if the Magistrate’s Court has concurrent jurisdiction; or (bb) any court seated outside the area of jurisdiction of a court having concurrent jurisdiction and in which the consumer resides or works or where the goods in question (if any) are ordinarily kept.” The purpose of the research is to analyse and evaluate conflicting decisions regarding the interpretation of the above subsections. The critical question that the courts had to determine was whether these subsections oust the jurisdiction of a court by implication. In Myburgh, it was decided that the jurisdiction was indeed ousted, while in Mateman and Stringer, the court came to an opposite conclusion. After they had analysed and evaluated the above decisions, the researchers found that the High Court’s jurisdiction is not ousted by necessary implication and that the purpose of subsection (aa) was to forbid consent to costs on a High Court scale. They found that in the case of subsection (bb), the courts’ jurisdiction is ousted if such court is not closest in distance to the consumer’s residence, work or the place where the goods are ordinarily kept. If such interpretation is not awarded to (bb), the provision will be left ineffective and purposeless. In addition, they found that the conflicting decisions are the result of the legislature’s failure to specifically regulate jurisdiction, as the predecessor to the National Credit Act (the former Credit Agreements Act) did, and that the legislature should clarify this issue
Contact person: Me H Coetzee.
The aim of this research project was to evaluate and compare the transfer of ownership options provided for in the definition of an instalment agreement in the National Credit Act. An instalment agreement entails a contract of sale of movable property, where payment of the price, or part thereof, is deferred and is to be paid in periodic payments. Interest, fees or other charges are payable to the credit provider in respect of the agreement or deferred amount. Possession and use of the property is transferred immediately to the consumer or the party to whom the goods are sold under an instalment agreement. However, the contract contains an ownership reservation clause in terms of which the consumer only becomes the owner of the property sold once the contract has been fully complied with. Alternatively, the contract allows for ownership to pass to the consumer immediately, subject to the right of the credit provider to repossess the property should the consumer fail to satisfy all his or her financial obligations in terms of the agreement. It is apparent from the definition of an instalment agreement that a contract of purchase and sale of movable property (goods) is at hand. The definition of an instalment agreement affords a choice to the credit provider regarding provisions in the agreement that regulate the transfer of ownership. The credit provider can either reserve the passing of ownership of the thing sold or agree to a contract, whereby ownership passes to the buyer immediately. The researchers found that, compared to the legal position of a seller in terms of a contract of sale containing an ownership reservation clause, the legal position of a seller in terms of an agreement allowing for the immediate passing of ownership subject to a commissary pact seems to be inferior and more complex, especially in relation to third parties. They concluded that sellers who wish to make use of this option when concluding an instalment agreement should acquaint themselves with the possible dangers involved when using this form of sale and should protect themselves accordingly
Contact person: Mr S Renke.
The aim of this research project was to evaluate and compare the transfer of ownership options provided for in the definition of an instalment agreement in the National Credit Act. An instalment agreement entails a contract of sale of movable property, where payment of the price, or part thereof, is deferred and is to be paid in periodic payments. Interest, fees or other charges are payable to the credit provider in respect of the agreement or deferred amount. Possession and use of the property is transferred immediately to the consumer or the party to whom the goods are sold under an instalment agreement. However, the contract contains an ownership reservation clause in terms of which the consumer only becomes the owner of the property sold once the contract has been fully complied with. Alternatively, the contract allows for ownership to pass to the consumer immediately, subject to the right of the credit provider to repossess the property should the consumer fail to satisfy all his or her financial obligations in terms of the agreement. It is apparent from the definition of an instalment agreement that a contract of purchase and sale of movable property (goods) is at hand. The definition of an instalment agreement affords a choice to the credit provider regarding provisions in the agreement that regulate the transfer of ownership. The credit provider can either reserve the passing of ownership of the thing sold or agree to a contract, whereby ownership passes to the buyer immediately. The researchers found that, compared to the legal position of a seller in terms of a contract of sale containing an ownership reservation clause, the legal position of a seller in terms of an agreement allowing for the immediate passing of ownership subject to a commissary pact seems to be inferior and more complex, especially in relation to third parties. They concluded that sellers who wish to make use of this option when concluding an instalment agreement should acquaint themselves with the possible dangers involved when using this form of sale and should protect themselves accordingly
Contact person: Ms M Pillay.
The aim of this research project was to explore the overlap between the unlawful termination of a contract of employment and the unfair dismissal of an employee. The Supreme Court of Appeal has, in a sequence of cases, developed the common law contract of employment to include the implied right to a predismissal hearing. Due to the fact that labour legislation already regulates unfair dismissal law, this in effect creates a dual system of dispute resolution in relation to the termination of contracts of employment. Employer-employee relations were historically primarily regulated by the principles derived from the law of contract. The requirements for such contracts to have a binding effect rules in respect of the breach of such agreements and remedies were regulated by common law principles. A jurisdiction based on fairness, which includes the right to a predismissal hearing, was not recognised as common law. However, this all changed with the enactment of labour legislation that firmly entrenches the notion of fairness into the employment relationship. In South Africa, employees’ rights are significantly enhanced by the Constitution and labour legislation such as the Labour Relations Act (LRA), the Basic Conditions of Employment Act and the Employment Equity Act. Under the right not to be unfairly dismissed, the onus of proving fair reasons and procedures has been shifted to the employer. In addition to this, a specialised dispute resolution framework has been established, which includes the Commission for Conciliation, Mediation and Arbitration (CCMA), the Labour Court and Labour Appeal Court, with the view of giving expeditious and affordable finality to labour disputes. One might have assumed that common law principles in respect of the termination of contracts of employment were replaced by corresponding provisions contained in labour legislation. The researcher found that this was not the case. The Supreme Court of Appeal has now confirmed that the common law contract of employment has been developed to include the right not to be unfairly dismissed. Therefore, despite the fact that the LRA regulates unfair dismissal law, the civil courts may be approached to determine disputes about the termination of contracts of employment on common law principles. Arguments are also advanced that favour the position that the civil courts may be misdirected in developing the common law to include the right to a pre-dismissal hearing. It is submitted that two main factors may encourage disgruntled employees to elect the route of the civil courts. First, unfair dismissal disputes must be lodged within 30 days of the date of dismissal (and unfair labour practice disputes within 90 days). Secondly, as trade-off for expeditiousness, the LRA imposes a cap of 12 months’ remuneration on compensation for unfair dismissal. In terms of the Prescription Act, civil claims generally prescribe three years after the date of the incident that gave rise to a claim and there is no cap on common law damages in respect of breach of contract beyond the fact that actual loss must be proved. The researchers also found that it may be possible to appeal from the High Court against a decision about unlawful dismissal, but that it is only possible to take a CCMA award on review. In addition to this, the untenable possibility arises for an employee to challenge the fairness of dismissal in the CCMA, and simultaneously, or after losing the matter, to dispute the unlawful breach of the contract of employment in the High Court. The Constitutional Court has shown a willingness to protect the exclusive jurisdiction of the Labour Court in respect of the overlap between administrative law and labour law principles. It is suggested that it would be a logical development for the same court to bring the dual system of dispute resolution in respect of the unlawful versus unfair termination of contracts of employment to its logical conclusion in the same fashion
Contact person: Prof BPS van Eck.
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