Court Summons: Do I have to comply with the National Credit Act when I sue for payment of a friendly loan?

Court summons: My friend lost his job and he started defaulting on his credit. It became so bad he could not pay for water and electricity and his services were cut off. His mother who is sickly lives with him and she requires boiling water three times a day to sterilise medical equipment. He was R 35 000 in arrears when the Municipality cut his supply. He asked me to help. What are friends for? I withdrew the R 35 000 from savings and lent it to him. Fast forward two years later, my friend is now doing much better but he’s not getting around to paying the loan. It went from bad to worse and I instructed attorneys to summons him. My former friend defended the summons on the basis that I did not send him a notice in terms of Section 129 of the National Credit Act before issuing a summons. Do I have to comply with the National Credit Act to recover a loan from a friend? It does not seem fair. – John from Westville.

Court Summons: The solution for recovering “friendly” debts.

We gave John the good news.

The National Credit Act applies only to credit granted “at arms length”. Loans between friends are not subject to the National Credit Act. If it’s more like a once-off transaction with the purpose of assisting a friend especially if you don’t profit from the loan and the parties are not independent of each other, the NCA is not applicable. In other words, the defence that he did not comply with Section 129 of the National Credit Act before issuing summons is not valid and John should get judgment against his erstwhile friend. This was recently confirmed in the case of Petzer vs Dixon (A07/2023)[2023] ZAWCHC 63 (24 March 2023).

Remember

If you do not defend the bank’s summons within 10 Court (working) days the plaintiff can get default judgment against you and can then obtain a writ to take your assets to satisfy the judgment debt.

Good advice

• While the summons is being defended you are safe from the Sheriff.
• Credit providers settle most defendant credit matters amicably before it goes to trial.
• Mark all your correspondence with the collectors “Without Prejudice” so your efforts to settle cannot be used in evidence against you if the matter goes to court.
• Do not allow any party from entering your property unless it is the Sheriff with a court order to do so.
• Do not hand over your vehicle to anyone other than the Sheriff who has a Warrant of delivery stamped at Court.
• If you are unsure phone 10111 and a police officer will come and verify their identities.
• You are welcome to phone us to advise and assist you.

Be brave!

Receiving a Court summons is SCARY!!!

Free advice

We will start giving you free advice as soon as you send your first e-mail or Whatsapp.

A recipe for success

We achieve success in Court – view a few reported cases:

• Zammit and Another v Standard Bank of South Africa Ltd (7593/10) [2011] ZAKZDHC 84 (2 June 2011) 

• Wesbank, A division of Firstrand Bank Ltd v Jogee (5722/2010) [2012] ZAKZDHC 2 (27 January 2012)

• Mncwanga v Absa Bank Limited (13922/2018) [2022] ZAKZPHC 61 (21 October 2022) 

Court Summons or Bank Summons: We know what to do to help you.