Bayport Securitisation Limited and Another vs. University of Stellenbosch Law Clinic and Others - (04 Nov 2021)

Statutory provision should not be interpreted so as to alter the common law unless the intention to do so was clearly reflected in the enactment

Civil

The appeal concerned the construction to be placed on ‘collection costs’ as defined in Section 1 and whether collection costs in Section 101(1)(g), as read with Section 103(5), of the National Credit Act, 2005 (the NCA) included all legal costs pre-and post-judgment. The high court favoured an interpretation that in terms of Section 101(1)(g), collection costs included all legal fees incurred by the credit provider to enforce the monetary obligations of the consumer. Those included the costs incurred: (a) prior to the commencement of litigation; (b) post the commencement of litigation, but pre-judgment and (c) post-judgment. It was thus construed to include all legal fees incurred through the employment of attorneys and counsel, as well as the execution of the judgment.

On appeal, the Appellants contended that collection costs as defined and referred to in Section 101 (1)(g) did not include legal fees incurred by the credit provider through the initiation of legal proceedings.

It was trite that, a statutory provision should not be interpreted so as to alter the common law more than was necessary unless the intention to do so was clearly reflected in the enactment, whether expressly or by necessary implication. Collection costs, as defined and referred to in Section 101(1)(g), should be given the same meaning as in D & D H Fraser Ltd v Waller where a distinction was drawn between the collection fees charged by an attorney prior to litigation and the costs awarded in an action to recover the debt.

Section 103(5) of the NCA is to be applied for as long as the consumer remained in default of his or her credit obligations, from the date of default to the date of collection of the final payment, irrespective of whether judgment had been granted – the Supreme Court held that after a judgment has been granted against a consumer usually, save for necessary disbursements and charges allowed in terms of the relevant tariff, only interest accrues on the judgment debt. The remaining charges contemplated in Section 101(1)(b) to (g) were not post-judgment charges. The judgment entered was for the capital sum fixed at a particular date together with interest. Consequently, Section 103(5) did not apply post-judgment. Accordingly, the appeal allowed.

Tags : COST INCLUSION POST-JUDGMENT