Collett v Firstrand Bank Ltd

The appellant was indebted to Firstrand Bank under a mortgage bond, a credit transaction regulated by the National Credit Act 34 of 2005 (NCA). After falling into default, she applied for debt review in terms of s 86(1) of the NCA. The debt counsellor notified the bank, proposed a restructuring, and referred the matter to the Magistrate’s Court under s 86(8) when no credit provider accepted the proposal. More than 60 business days after the debt review application, and while the s 87 hearing in the Magistrate’s Court was still pending, Firstrand Bank terminated the debt review in respect of the mortgage bond under s 86(10) and instituted enforcement proceedings in the High Court. The appellant opposed summary judgment solely on the basis that the bank was not entitled to terminate the debt review after referral to the Magistrate’s Court.

The appeal was dismissed. The summary judgment granted by the Eastern Cape High Court in favour of Firstrand Bank, including the declaration of the mortgaged property as executable, was upheld.

This decision resolved conflicting High Court authority on the interpretation of s 86(10) of the National Credit Act and clarified that a credit provider’s right to terminate a debt review continues after referral to the Magistrate’s Court, provided the statutory requirements are met. It also confirmed a purposive and balanced interpretation of the NCA that protects both consumers and credit providers, and authoritatively read the words “or High Court” into s 86(11), thereby clarifying jurisdictional uncertainty in debt enforcement matters.