Naidoo v ABSA Bank Ltd

The appellant, Selvin Laban Naidoo, was sequestrated by order of the KwaZulu-Natal High Court at the instance of ABSA Bank Ltd after he failed to meet his payment obligations under several instalment sale agreements for motor vehicles and two home loan agreements. These agreements were credit agreements governed by the National Credit Act 34 of 2005 (NCA). Naidoo opposed his sequestration but did not initially raise reliance on section 129(1)(a) of the NCA. Only at the stage of applying for leave to appeal did he contend that ABSA was obliged to comply with the section 129 notice and debt-enforcement procedures before instituting sequestration proceedings.

The appeal against the sequestration order was dismissed with costs. The application to lead further evidence was dismissed, with each party ordered to pay its own costs in respect of that application.

This decision authoritatively clarifies that sequestration proceedings do not constitute debt enforcement under the National Credit Act. It confirms that credit providers are not obliged to comply with section 129 notice procedures before instituting insolvency proceedings. The case is significant for delineating the boundary between credit-law protections and insolvency law, and for guiding courts and practitioners on the interaction between the NCA and sequestration proceedings.