The application of section 85 of the National Credit Act in an application for summary judgment

Abstract

Before the implementation of the National Credit Act (NCA) in 2007 Consumer protection legislation was largely unheard of in South Africa. One of the main objectives if the NCA is to promote the protection of debtors. Debt counselling as set out in section 86 is one way in which the legislature endeavours to provide this protection. Section 85 determines that a court may in any matter before it, regarding a credit matter where the debtor claims to be over indebted, refer the credit agreement to a debt counsellor or declare the debtor over indebted and restructure his debts. In practice, section 85 is usually reserved for use by debtors in applications for summary judgement with regard to immovable property. Section 85 grants the court the discretion to refer the credit agreement to a debt counsellor resulting in the postponement or amendment of the summary judgement. It falls to the debtor to convince the court to order such a referral. The courts have identified a number of important factors that must be considered during the implementation of the courts discretion. This article is a critical discussion of section 85 as well as the court’s interpretation thereof.