Exclusion of an Installment Agreement as Defined in the National Credit Act from the Landlord's Hypothec in Terms of the Security by Means of Movable Property Act

In Janse van Rensburg v Mahu Exhaust CC 2014 3 SA 431 (NCK) the court had to determine what the exact meaning of section 2(1)(b) of the Security by Means of Movable Property Act was, which provides that a landlord’s hypothec cannot exist over movable property if the property is subject to an installment agreement as defined in section 1 of the National Credit Act (NCA). In doing so, the court considered what the legislature initially aimed to achieve with section 2(1)(b) of the Act, before it was amended by the NCA, and also carefully analysed whether the amendment made any difference to its purpose or application. This case is the first (and so far only reported) case dealing specifically with section 2(1)(b) of the Act and is therefore deserving of a further discussion. In this note we pay particular attention to the purpose of section 2(1)(b) and we also consider the correctness of the court’s judgment. We briefly point out certain shortfalls of this section and conclude that the section is in dire need of revision as it ought to apply also to other third parties’ movable property, especially property that forms the subject-matter of financial or operating leases.