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“A bank is a place that will lend you money if you can prove that you don’t need it” (Bob Hope)

A recent High Court decision has settled the knotty question of whether your bank can take money it holds for you in one account to cover your debt to it in another, without your permission and without notice to you.

Firstly, what is “set-off”?

To understand how important this new decision is, we need to go back to our common law (unwritten law) principle of set-off. In simple terms, common law set-off allows one debt to be cancelled out by another. So if for example I owe you R1,000 and you owe me R900, I am both your creditor and your debtor, and vice-versa. If we come to blows, I can then set the one debt off against the other with the net effect that I owe you R100.

Credit-lenders, and in particular banks, used to make extensive use of this to collect debt. If for instance you fell behind in your mortgage bond or credit card payments, your bank could, if it was so inclined, take the arrears out of your current account as soon as your salary was paid into it – without your consent and without notice to you.

Banks have always argued that this ability has made it easier for them to lend money to us when we ask for it, as it reduces their risk by giving them more security if things go wrong. Giving notice or asking for consent would, they argue, allow a recalcitrant debtor to quickly withdraw the funds and frustrate the debt collection. But the other side of the coin of course is that you could suddenly find yourself without money to live, let alone to service your other debt payments – a situation particularly hard on lower earners and those struggling with mountains of debt.

Enter the NCA (National Credit Act) in 2005…

How the NCA changed things

In broad terms, the NCA (when it applies – see next paragraph) restricts set-off in such a way as to give the consumer the right to choose whether or not to consent to set-off, which accounts it may be applied to, in respect of which amounts, when it is to be applied, and in respect of which debts.

But does the NCA apply to your particular debt? In most cases, yes. In a nutshell (there are some “ifs” and “buts” here so ask your lawyer for specific advice) the NCA applies to most personal loans, home loans, overdrafts, credit card debt, asset finance agreements, lease agreements and so on. It covers consumers who are individuals and some – not all – “juristic persons” (companies and the like – take advice for details).

Which brings us to the High Court…

Nevertheless at least one bank (which is unlikely to be alone in this practice) has continued until now to apply common law set-off without consent, in other words they would take money from a customer’s account to cover the customer’s debt on a separate credit agreement. The bank argued that the NCA’s set-off restrictions did not apply on its interpretation of the NCA, in its circumstances and to its credit agreements. Importantly, its agreements omitted any mention of set-off (where an agreement does mention set-off, there is no argument – the NCA restrictions definitely apply).

Having received complaints from consumers to this effect, the National Credit Regulator asked the High Court to interpret the NCA’s provisions and to rule on the legality of the bank’s practice.

The High Court’s decision

Common law set-off without your consent as above cannot happen if the NCA applies to your credit agreement.

In a nutshell – you have the choice! Banks and other credit-lenders must ask you before taking money from one account to cover your debts in another.

For professional legal advice, contact Goldberg & de Villiers Inc on 041 5019800

Credit: LawDotNews


What you need to keep in mind!

The Road Accident Fund (RAF) compensates for losses suffered due to bodily injuries or death as a result of a road accident.

Anybody who suffered any injury or financial loss as a result of a road accident and caused by the negligence of someone else may have a claim.

Dependants of a deceased victim may also lodge claims for loss of support and recovery of funeral expenses.

When a claimant is a minor and or a person incapable of conducting his or her affairs, the parent, legal guardian or curator will lodge a claim on the victim’s behalf.

You can claim directly from the Road Accident Fund (RAF), but if you do it yourself this is what you need to keep in mind about so-called “direct claims”:

  1. There are statutory time limits that apply to your claim and if you or the fund do not comply with these statutory time limits your claim will prescribe;
  2. Claiming from the RAF appears to be straightforward, but in practice, it is a complex process;
  3. Medical records need to be obtained from hospitals and doctors medical reports (RAF 1 and RAF 4) need to be completed by doctors, and paid for;
  4.  Documents need to be obtained from the South African Police Service, and paid for;
  5. An affidavit setting out the facts of how the accident took place must be prepared and lodged with your claim;
  6. Not equipped with the relevant know – how you will be required to quantify your claim by declaring in your claim form what you are claiming for various heads of damages such as pain and suffering, loss of amenities of life, disfigurement, disability and shock (general damages), loss of income, loss of earning capacity, future medical costs and past expenses (special damages);
  7. It is important to note that to be eligible to claim general damages for pain and suffering, loss of amenities of life, disability, disfigurement and shock you are required to obtain, pay for and lodge a serious injury assessment report (RAF 4) by a suitably qualified medical expert who has assessed your injury as ‘serious’;
  8. A proper assessment of the quantum of your damages can only take place once your injuries have stabilised, in some cases injuries may only stabilise after a passage of time;
  9. Injuries need to be thoroughly investigated by appropriately qualified medical specialists, and reports obtained and paid for;
  10. Compensation for loss of earnings and income need to be thoroughly investigated and calculated on the correct assumptions by a qualified actuary and reports need to be obtained and paid for;
  1. The acceptance of settlements without independent and competent advice and in the mistaken belief that it is the best possible outcome by victims could result in inadequate compensation;
  2. You are allowing the RAF autonomy to determine whether they owe you anything and determine how much they owe you;
  3. Once a matter is finalised, the RAF must make payment of the agreed amount or amount awarded. Regrettably, the RAF may need some encouragement to pay victims, and in this situation, it is not a bad idea to have an attorney in your corner to enforce the collection of the compensation due to you.

The better option is to let Goldberg & de Villiers Incorporated assist you with your claim.

We specialise in personal injury law and have the knowledge and experience to assist you with ensuring that your claim is calculated correctly and submitted to the RAF in line with the applicable legislation.

At Goldberg & de Villiers Incorporated, we are prepared to incur and carry reasonable costs to take legal action pending finalisation of your case against the Road Accident Fund if we believe that your claim would succeed.

Our role is to represent the client by advancing the claim on behalf of the client to ensure that the client receives just and fair compensation.

For the reasons set out above the decision to claim directly may prove to be a perilous journey for injured victims and the dependants of deceased victims. Your claim could lapse, in which case you will not receive any compensation. You also run the risk of an improper assessment of your injuries or calculation of the loss suffered, which will result in inadequate compensation.

Actionable advice

Our advice is to talk to Goldberg & de Villiers Incorporated before making a decision. Why embark on this unknown and rather complex process on your own. Put your mind at ease during the trying time and appoint one of our qualified and experienced attorneys to assist you with your claim for a better future. Goldberg & de Villiers Incorporated is an established firm with a track record of securing top awards and settlements. We specialise in RAF claims and have over 85 years of accumulated valuable know-how, expertise and skills to achieve top settlements and awards in RAF matters.

If you are a victim of a road accident or dependent of a victim/deceased and wish to submit a claim or instituting legal action against the RAF or have any concerns regarding a direct claim you have submitted to the RAF, please feel free to reach out to us for assistance on 041 5019800.


A deceased estate consists of all the assets and liabilities left behind at the death of a person. Administering a deceased estate involves finalising tax affairs and transferring and distributing assets to heirs after all debts have been settled. This process is regulated by the Administration of Estates Act and other laws and is overseen by the Master of the High Court.


We can assist you in administering a deceased estate by:

  • Compiling and submitting all necessary documents to the Master of the High Court
  • Obtaining the letter of executorship/letter of authority
  • Complying with all the legal requirements of the Master of the High Court
  • finalising the tax affairs of the estate
  • attending to paying all debts and  transferring and distributing all assets to heirs

The administration of a deceased estate is a complex and specialised field. We will assist you with all the legal and administrative requirements so that the estate can be wound up as quickly and easily as possible. Contact the Estates Department at Goldberg & de Villiers Inc to assist you with the administration of deceased estates.

Attorneys, Notaries and Conveyancers

At Goldberg & de Villiers Inc, we proudly offer our clients that state-of-the-art, up to date approach to business and legal services, whilst always keeping our clients’ specific needs as our main focus. With us, experience and innovation go hand in hand, so clients feel comfortable entrusting their business to the firm – knowing the team can offer them the best of both worlds.

It is this unique combination of trusted experience and modern flexibility that makes Goldberg & de Villiers Inc the choice of such a variety of discerning clients, from one-man businesses to multinational listed companies. Since our inception in 1933, our commitment to personal service, practical advice and tailor-made proactive solutions has earned us a stellar reputation in our field.

Our clients include a wide range of top national and regional businesses, national and international insurance companies, various local authorities and parastatals, leading financial institutions and private banks.

In today’s world of techno-acceleration and competitive trends, it is easy to lose sight of the traditional values of yesteryear. At Goldberg & de Villiers Inc we offer our clients the best of both worlds: a solid reputation for personal service excellence, a flexible, contemporary approach to maximising your results and a tradition of excellence.

You’ll find us at Pembridge House, 13 Bird Street, Central, Port Elizabeth.

It’ll be our pleasure to do your business!