CCT88/14

[2015] ZACC 15

2015 (10) BCLR 1158 (CC)

Madlanga J

24 March 2015

5 June 2015

http://hdl.handle.net/20.500.12144/3786

Application for confirmation of the order of the Cape Town High Court: Chevron SA (Pty) Ltd v Dennis Edwin Wilson T/A Wilsons and Others (5244/2013) [2014] ZAWCHC 121 (5 June 2014).

National Credit Act 34 of 2005 — constitutional validity of section 89(5)(b) — section is procedurally unfair — National Credit Amendment Act 19 of 2014 — section 27(a) and (b) Unlawful credit agreements — refund of money paid under credit agreement if credit provider unregistered — substantive and procedural fairness of mandatory refund. Constitutional challenge — section 25(1) of the Constitution — arbitrary deprivation of property — procedural arbitrariness — lack of judicial discretion — less restrictive means Unjustified enrichment — condictio ob turpem vel iniustam causam — creditor free from turpitude — par delictum rule. Application for the confirmation of an order of the High Court, Western Cape Division, Cape Town declaring section 89(5)(b) of the National Credit Act 34 of 2005 inconsistent with the Constitution on the basis that it permits arbitrary deprivation of property in contravention of section 25(1) of the Constitution, insofar as it enjoins courts to order creditors to refund all monies received under an unlawful credit agreement. The Court held that money in hand constituted a property interest protected by section 25 of the Constitution. Ordering refund of money a credit provider has already received is deprivation of the provider’s property interest. Further, section 89(5)(b)allows a court no discretion in ordering the refund. This meant that the provisions were procedurally unfair and the deprivation arbitrary, because a court could not take relevant factors into account in each case. The Court also found that the fact that a creditor had an unjustified enrichment claim against the debtor did not alleviate the arbitrariness of the deprivation. The claim was not guaranteed to succeed and, even if successful, may be worthless because of the particular debtor’s financial status or circumstances. The Court concluded that the arbitrary deprivation of Chevron’s property was not reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom. The Legislature could have used less restrictive means to deal with unlawful credit agreements. The Court confirmed the order of the High Court. Judgment: Madlanga J (unanimous).