“The requirement that credit providers must be registered allows for their control and regulation, especially in relation to their financial probity and integrity, thereby avoiding the unscrupulous exploitation of credit consumers by so-called fly-by-night operators and loan sharks.” (Extract from judgment below)

A recent High Court case highlights once again the dangers of lending money, or granting credit, in contravention of our credit laws. By understanding the pitfalls associated with being an unregistered credit provider and of not complying with the National Credit Act (NCA), you can protect yourself from the potential legal and financial risks.

Close friends fall out, and the lender loses R1.5m

• The parties involved in this unhappy saga were previously close friends. An admitted but non-practicing advocate, who acted as a trustee of his friend’s personal trust, asked the friend (who had just sold his house) for a loan. The friend obliged with loans totalling R2.5m.
  
  
• To simplify a long and complicated factual history, disputes arose and a series of acknowledgments of debt (AODs) were signed to document the loan, the last AOD recording a settlement agreement/compromise.
  
  
• Over time, the borrower had made payments totaling just over R3m to the lender, the dispute went to arbitration, an arbitration award was made, and ultimately the lender sued his ex-friend in the High Court for a balance of R1,535,000.
  
  
• The Court, holding that the loan agreement and AODs were unlawful and invalid, dismissed the lender’s claim – which leaves him R1.5m out of pocket, plus costs and lost interest. That’s a very hard lesson that all would-be lenders should take careful note of.

How do you lose everything by not complying with the NCA?

In protecting consumers from incurring debt beyond their means, our National Credit Act (NCA) requires that, with only a few exceptions, “credit providers” (which would include anyone lending money or giving credit to a friend) must –

1. Register in terms of the NCA; and
   
   
2. Conduct a “credit assessment” to confirm that the borrower is in a financial position to enter into the loan and repay it.

Registration is unnecessary in some circumstances – for example loans between family members who are dependent on each other, whilst only “arm’s length” transactions will as a general rule fall under the NCA. There are other cases in which the NCA won’t apply or will only partially apply, but with all the grey areas involved, get specific legal advice before lending to anyone – friend or not.

Your risk is that any loan made by an unregistered credit provider becomes uncollectable. That means you could lose everything. If you find yourself in that position, there is still a ray of hope for you in that a court normally still has a discretion to help you on the basis of fairness, by making a “just and equitable” order of any sort. But don’t rely on that happening - you will have to justify making the non-compliant loan and hope for the best when it comes to the court weighing up the balance of fairness between the two of you. Rather be safe and check whether you need to comply with the NCA or not before you make the loan.

Besides, sometimes the court has no discretion at all to come to your rescue, which is exactly what happened in this case because the claim here was based not on the original credit agreement but on a settlement agreement. So the Court couldn’t have helped the lender even if it had wanted to.

There are no longer any thresholds – all loans are at risk

Finally, note that no matter what you may read in the media to the contrary, there is no longer any R500,000 debt threshold – any loan of any amount falls into the net since 2016. And since 2014 even one-off loans are at risk (before that, the NCA applied only to providers with one hundred or more credit agreements).

“…in general, ownership of an animal should carry with it strict liability for any harm done by the animal.” (Extract from judgment below)

Owning a pet comes with both joys and responsibilities, and a recent High Court award of almost R100,000 in damages to the victim of a dog attack is yet another reminder of the potential dangers of animal ownership and the legal responsibilities that come with it.

A social invite goes horribly wrong

• 17 years old at the time, a young woman was invited to a social gathering at a private house. As the gate was opened to let her in, two dogs came running out and the one (a large Siberian Husky) ran towards her and without warning launched itself towards her throat. She raised her arms to ward off the attack which resulted in both her forearms being bitten.
  
  
• Rushed to hospital, she was operated on by a plastic surgeon and has been left (nine years on) with scarring, physical disability and pain requiring physiotherapy, as well as counselling for psychological trauma in the form of PTSD (post-traumatic stress disorder).
  
  
• The dog’s owner suggested in court papers that when the dog jumped up to greet the victim, she had provoked it and acted negligently by retaliating, hitting it and pulling its hair. She was, he said, injured when the dog fended off her “unwarranted attack”. However, as the owner led no evidence to support this (the onus being on him to do so) the Court accepted that there was no provocation or negligence from the victim’s side. 
  
  
• On the basis of our law’s general legal principle that “…in general, ownership of an animal should carry with it strict liability for any harm done by the animal”, the Court ordered the dog’s owner to pay the victim a total of just under R100,000 in damages.

The danger for pet owners – liability without fault

To understand that outcome, we need to go back to an old Roman law remedy, the pauperian action (“actio de pauperie”).

Under that action, which is still very much part of our modern law, the victim does not need to prove that the animal’s owner was negligent in any way. If your dog (or any other domesticated animal) causes someone else harm you are held liable on a “no fault” or “strict liability” basis.

There are a few limited exceptions to this rule, so if for example the dog’s owner in this case had been able to show that the victim had provoked the attack, she would no longer have been able to rely on the “no fault” concept. She would then have had to prove negligence and fault on the dog owner’s part – a much harder task.

But the general risk for animal owners remains this – you can be held liable for damage caused by your animals without the slightest fault on your part.

Dog Owners – how to manage the risks

So let’s end off with a few practical tips on how to protect your pet, ensure the safety of others, and reduce your risk of legal liability -

1. Understand the risk: You could be held legally responsible for any harm caused by your pet, including injuries to people and other animals, property damage, and emotional distress suffered by the victims.
2. Check your insurance cover: Make sure you have in place Public Liability insurance that will cover you for any claim of this nature.
3. Socialise and train your dog: Proper socialisation and training are vital to prevent aggressive behavior in dogs. Ensure that your dog interacts well with people and other animals.
4. Supervision and restraint: Keep your dogs supervised and under control at all times. Follow leash laws in public spaces or whenever there is any risk of harm.
5. Watch for the warning signs: Be aware of any signs or history of aggression or fear in your dog, and if necessary, seek professional help from a qualified animal behaviorist or trainer.
6. Take legal advice: If you are ever involved in a dog-related incident, consult immediately with your lawyer to assess your case, explain your legal rights, and guide you through the necessary legal processes.

“Citizenship is the gateway through which a number of rights in the Constitution can be accessed.  It enables a person to enjoy freedom of movement, freedom of trade, and political representation” (Constitutional Court, quoted in judgment below)

Note: Many South Africans who should be aware of this new development will be overseas and/or may not have heard of the Supreme Court of Appeal decision we discuss below. If you know of any such person, please consider forwarding this to them as soon as possible.

Reportedly, thousands of South Africans have lost their citizenship through applying for citizenship or nationality of another country without first obtaining Ministerial permission to do so.

Most will have done so unknowingly, ignorant of the fact that whilst dual citizenship itself is allowed, our Citizenship Act requires you to get permission beforehand. Only minors (under 18s) and persons acquiring foreign citizenship by marriage were exempt.

The good news is that the SCA (Supreme Court of Appeal) has now ordered that –

1. That provision is inconsistent with the Constitution and is invalid retrospectively; and
   
   
2. Citizens who lost their citizenship by operation of that provision “are deemed not to have lost their citizenship.”

But – the Constitutional Court still has to confirm the invalidity order

The SCA’s order of invalidity has no legal force unless and until confirmed by the Constitutional Court (CC), and there is (at date of writing) no indication of when this will go to the CC for confirmation, whether or not Home Affairs will oppose its confirmation in the CC, and whether or not they will continue to enforce the section in the interim. In the interim, tread very carefully if you are either planning to apply for foreign citizenship/nationality, or if you were deprived of SA citizenship and plan to return to the country in the near future.

Another “but” - never let your SA passport lapse! 

That new judgment does not affect in any way the fact that, although you can travel freely around the world on your second passport, you must always enter and depart from South Africa on your valid SA passport.  Keep renewing it!

“Delict” and “Tort”

In South Africa, you will normally come across the term “delict” in cases involving claims for damages. It is different to a “criminal wrong”, which allows the state to prosecute an individual for a crime. It is rather a “civil wrong” which enables private persons to sue each other for compensation for harm wrongfully caused to one person by the other person’s conduct. You also occasionally see references in South Africa to “tort”, but that’s not part of our law and is just an English legal term for the same thing.