Uys N O and Others v National Credit Regulator and Another

Complaints were lodged with the National Credit Regulator (NCR) alleging that the Cornelis Family Trust, through arrangements facilitated by Loans Acceptable Funding (Pty) Ltd, had contravened the National Credit Act 34 of 2005 (NCA). The Trust purchased immovable properties from financially distressed owners, paid them lump sums, and simultaneously leased the properties back to the sellers with an option to repurchase within 12 months. Monthly payments comprised rental and an amount attributed to the repurchase option. The complainants alleged they believed the transactions were loans secured by their properties and that the Trust, an unregistered credit provider, had unlawfully extended credit. The NCR approached the National Consumer Tribunal, which found the transactions to be unlawful credit agreements and imposed wide-ranging sanctions. The Trust’s appeal to the High Court failed substantially, leading to a further appeal to the Supreme Court of Appeal (SCA).

The appeal was upheld with costs. The order of the Gauteng Division of the High Court was set aside. The judgment and order of the National Consumer Tribunal were set aside, and the National Credit Regulator was ordered to pay the costs of the appeal, including the costs of two counsel.

The judgment clarifies the boundary between genuine sale-and-leaseback transactions and credit agreements under the National Credit Act. It reinforces long-standing South African law on simulation, confirming that avoidance of statutory regulation is permissible if transactions are genuine. The case is significant for credit regulation, property transactions, and the proper limits of the NCA’s application.