NCR In Duplum Judgment to be heard by Supreme Court
We previously reported on the uncertainty and problems created by the National Credit Act “in duplum” ruling in the NCR declaratory order granted by Judge Du Plessis on the 21st August 2009 in the North Gauteng High Court.
The major banks involved in the application shortly thereafter indicated their intention to appeal this aspect of the judgment, which seemed to drastically curtail the rights of credit providers to charge interest on defaulting debt. Now eventually the slow wheels of justice have begun turning on this issue when Judge Du Plessis on the 7th July 2010 granted the banks the right to appeal the matter to the Supreme Court of Appeal.
We will follow this issue closely as its impact on the charging of interest on debts in this country will be immense.
I have a few questions and would appreciate views on the following:
An Arbitration Award rules that a party to a Training Contract must pay the last instalment of the Training Fee plus interest plus legal costs. The Award is made in 2006, and is upheld on Review in 2009, and in 2010 an Appeal is denied on the grounds that the Appeal was not lodged within a reasonable time.
QUESTIONS:
1. is the interest calculated as COMPOUND interest or as SIMPLE interest?
2. Does the In Duplum Rule apply? If so, why? The Training Provider is not a Bank / Financial Institution – does it fall within the definition intended by the Credit Agreements Act?
1. The interest is simple interest.
2. The common law in duplum rule applies (as opposed to statutory in duplum in terms of the NCA), i.e. interest can not exceed the capital for the period that payments are not being paid.
See article on the Supreme Court of Appeal judgment http://www.creditmanagement.co.za/ncr-declarator-appeal-decision-given-by-highest-court/
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