In Nedbank Limited v Jones and Others, the Western Cape
Division of the High Court held that a court hearing an application
for debt review in terms of section 86 of the National Credit Act,
2005 ("NCA") cannot vary the
contractually agreed interest rate in a credit agreement and cannot
grant a debt review order in terms of which a debtor's monthly
repayments do not cover the interest on the outstanding balance.
The court held that any such order is ultra vires the NCA,
and is therefore null and void. In FirstRand Bank Ltd v
McLachlan and Others, the Supreme Court of Appeal affirmed the
correctness of the decision in the Jones decision.
Background
In the McLachlan decision, the second and third
respondents, Roshen and Komarie Maharaj, concluded a loan agreement
with FirstRand Bank Ltd in order to fund the purchase of an
immovable property. After the Maharajs experienced financial
difficulties, they lodged an application with a debt counsellor in
terms of section
