Skip to content Skip to sidebar Skip to footer

High Court Affirms NCT Consent Order: Appeal Dismissed

We are pleased to announce a significant judicial development that may be of particular relevance to debt counsellors, credit providers, and other stakeholders in the consumer credit industry. 

Importantly, the Court ruled that the order was neither erroneously sought nor granted...

Our firm acted on behalf of a debt counsellor in opposing a High Court appeal brought by a consumer seeking to rescind a consent order granted by the National Consumer Tribunal (NCT) under Section 165 of the National Credit Act.

Background

  • Debt Review Initiation: The consumer, determined to be over-indebted upon entering the debt review process, obtained agreements from all credit providers for a repayment plan crafted by the debt counsellor.
  • Consent Order by NCT: This consensual repayment plan was referred to the NCT, which granted a consent order in line with Section 138 of the NCA.

  • Rescission Attempt: The consumer later sought to rescind the consent order, alleging it had been granted in error. Representing the debt counsellor, our firm opposed this rescission, leading to the NCT’s rejection of the application.

  • High Court Appeal: Dissatisfied with the NCT’s refusal, the consumer escalated the matter to the High Court, aiming to overturn the decision.

Outcome of the Appeal

  • Appeal Dismissed with Costs: The High Court dismissed the appeal, upholding the NCT’s decision to refuse the rescission application. Importantly, the Court ruled that the order was neither erroneously sought nor granted, emphasizing that the debt counsellor had acted under a valid written mandate.
  • Reaffirmation of Debt Counsellors’ Role: The Court highlighted that debt counsellors are empowered to refer over-indebted consumers to the NCT for consent orders, provided all credit providers agree to the repayment plan. This decision aligns with the NCA’s goal of facilitating cost-effective and collaborative debt resolution mechanisms.

  • Finality in Legal Proceedings: Stressing the importance of finality in legal matters, the Court noted the consumer’s two-year delay in seeking rescission and the insufficient financial information provided. These factors significantly influenced the Court’s decision to dismiss the appeal.

  • Impact on Debt Review Process: The Court cautioned that allowing such rescission attempts could set a concerning precedent, potentially encouraging debtors to exit debt review prematurely—contrary to the NCA’s legislative intent to foster structured and sustainable debt solutions.

  • Broad Discretion of the NCT: Recognizing the wide discretion granted to the NCT and the courts under Section 165 of the NCA, the judgment upheld the NCT’s decision as compliant with the Act’s objectives.

Key Takeaways for Debt Counsellors

This landmark ruling strengthens the position of debt counsellors by affirming that once a repayment arrangement is agreed upon by all credit providers and formalized into a consent order, courts are unlikely to set it aside without compelling justification. It further underscores the NCA’s intent to ensure certainty, efficiency, and fairness in debt restructuring processes.

At VHT Attorneys, we take pride in representing debt counsellors and supporting their critical role in the consumer credit industry. If you have questions about this judgment or its implications, we invite you to contact us for expert advice.

For additional details, please refer to the High Court judgment document.

WHO ARE WE AT VHT

VHT Attorneys is a boutique law firm with a large vision. We provide innovative legal solutions with a renowned standard of integrity and confidentiality.

We help our clients:

  • Remove Debt Review Status
  • Commercial & Corporate Law
  • Labour Law
  • Dispute Resolution / Litigation

Leave a comment

Centurion Office

Building 15, Oxford Office Park,
3 Bauhinia Street

Cape Town Office

The View, Tygervalley Health Centre,
Unit 606, 6th Floor,
43 Old Oak Road, Bellville

Newsletter

© VHT ATTORNEYS . All Rights Reserved. Website crafted by Nifty Studio.