CONSUMER

Facts and issue: The applicants are aggrieved by an adverse credit listing recorded against them by the respondents (Credit Bereau) in the credit database. They seek that the submission of the consumer credit information, which resulted in the recording of an adverse credit listing, be declared invalid, unlawful, alternatively unconstitutional. Further, that the respondent be ordered and directed to expunge the adverse credit listing from its records without delay.

Discussion: On behalf of the applicants, it was contended that the Credit Bereau approached the matter from a wrong point of view and misconceived the applicant’s case. It was submitted that the inquiry did not start with section 72(1)(c) but 70(2)(c) of the National Credit Act 34 of 2005. The credit bureau had to satisfy itself that the credit provider properly informed the applicants, as consumers, before the adverse credit consumer information was reported or reflected on their credit profile. There was no evidence that the Credit Bureau took reasonable steps to verify that the credit provider informed the applicants before the adverse credit information was reported to it. The Credit Bureau would not have published the information had it taken reasonable steps to verify its accuracy, it was contended. It was argued on behalf of the Credit Bureau that the applicants’ recourse to the courts was premature as they should have first exhausted domestic remedies provided for by the Act. The second preliminary point is that the first applicant deposed to an affidavit on behalf of the second to the seventh applicants and acted on their behalf even though they did not share a consumer credit profile.

Findings: The Credit Bureau failed to satisfy the threshold requirements in section 70(2)(c) of the NCA. The first special plea is meritless and stands to be dismissed. It is not required that the Commissioner and the deponent must initial every page of an affidavit. The third and fourth points in limine are also meritless and stand to be dismissed. The applicants’ constitutional rights were violated when the adverse credit information was published. They sought the appropriate remedy to enforce their rights. When the application was launched, the legal question persisted as a live issue. It would, therefore, be unfair and improper to suggest that the matter was no longer relevant as it involved legal questions of a constitutional nature having significant policy implications. The applicants were entitled to approach the court for the necessary relief.

Order: The relief sought by the applicant is granted.

Facts: The respondent (Ndlovu) bought a second-hand BMW 320i from the appellant (Toyota Randburg). He however had to bring it in the following day for repairs which included brakes and a loose bonnet latch. Four days later, Ndlovu had a breakdown on the N17. The diagnostic was that the engine seized and required a new engine to be fitted. Pinnacle Auto quoted an amount of R250,000 to fit a new engine which quotation was forwarded to Toyota. Toyota declined to repair, replace or refund Ndlovu, alleging that the damage was caused by Ndlovu’s negligence of driving the motor vehicle into water. Ndlovu denied that he drove the motor vehicle into water and deposed in his affidavit that on the three days that he had the car, there was no rain. As a matter of fact, the vehicle broke down on the national road N17 and it was dry where it was found. Ndlovu referred the dispute to the National Credit Regulator and was subsequently granted leave pursuant to the provisions of section 75(1)(b) of the Consumer Protection Act 68 of 2008 to make an application to refer the complaint directly to the National Consumer Tribunal for the relief that he be refunded the purchase price of the motor vehicle.

Appeal: The Tribunal handed down its judgment in favour of Ndlovu and ordered that he be refunded an amount of R262,172.78. This is an appeal by Toyota against the whole judgment of the National consumer Tribunal and is made pursuant to the provisions of section 148(2)(b) read with section 59(3) of the National Credit Act 34 of 2005.

Discussion: Toyota argued that Ndlovu would only be entitled to the relief that it sought if he successfully overcame the onus which section 117 of the Criminal Procedure Act 51 of 1977, read with the provisions of sections 53, 55 and 56 of the CPA, placed on him. Toyota submitted that Ndlovu failed to show that there was a defect in the engine as defined in section 53 of the CPA and his complaint should have been dismissed with costs. Toyota only sought to challenge the cause of the engine failure. There is undisputed evidence that the engine seized and that it was within four days from when Ndlovu took delivery. It was therefore for Toyota to rebut same and indicate that it was not a defect but through the negligence of Ndlovu. According to Toyota’s expert, the car would not have moved from the place where the water ingress happened. Put differently, the motor vehicle should have been stuck in the pool of water and found there. There is no suggestion anywhere that it could have been moved to where it was found and the onus in that regard would have fallen on the Toyota to discharge. Ndlovu contended that the vehicle was not reasonably suitable for the purposes for which it was generally intended. It was not in good working order and free of any defect and was not usable and durable for a reasonable period having regard to the use for which it would normally be put.

Findings: Ndlovu’s contention cannot be faulted, given Toyota’s explanation of the problem. It is not unreasonable to expect a motor vehicle to be able to perform on the road for a period much longer than what happened in this case. On the balance of probabilities, the motor vehicle was defective as envisaged in section 53 of the CPA and it failed to perform in the intended manner. The consumer cannot reasonably be expected to know or show the cause of the seizure of the engine and whether this cause existed at the time the vehicle was sold. The issue that remains to be dealt with is the remedy that the Tribunal ordered. Without doubt and on the facts of this case, it erred and misdirected itself. The Tribunal ordered Toyota to refund Ndlovu in the amount of R262,172.78 representing the purchase price. The motor vehicle had already been sold in default of payment to the financier thereof. However, no evidence was led before the Tribunal in relation to the price that it was sold for. Thus, the amount of R262,172.78 would be an unjust enrichment for Ndlovu. A remittal in this instance is a more practical order that the court can grant to ensure that the consumer’s rights in terms of the CPA are realised and to ensure that an injustice is minimised.

Order: The appeal is dismissed. The matter is remitted back to the Tribunal to determine an appropriate amount to be paid to Ndlovu.

KUMALO J (MBONGWE J concurring)

Facts: The applicant concluded an instalment sale agreement with the Volkswagen Financial Services South Africa for the sale of a brand-new Volkswagen Polo Vivo. NTT Volkswagen Kimberley (NTT) is the dealership that assisted with the transaction and delivery of the vehicle. When the applicant attempted to start the motor vehicle, it would not start, and a brash noise emanated from the ignition. The applicant reported the incident to the NTT and the motor vehicle was towed to the NTT’s premises. A technician reported that the vehicle would not start, but instead made a "clack clack noise" when an attempt was made to start it at the NTT’s premises. The workshop foreman (Barry Wessels) assessed the vehicle and the diagnosis revealed that the fuse pin was not making secure contact, resulting in a lack of power to the ignition when an attempt was made to start the vehicle. The fuse was replaced and inserted in a different vacant fuse socket, which allowed for a secure connection. The applicant was contacted and informed of the status of the vehicle and that the matter had been rectified, but the applicant refused to take delivery of the vehicle. Thereafter, the applicant requested cancellation of the instalment sale agreement. NTT had declined the applicant’s request for cancellation of the agreement. After complaints by the applicant, a representative of NTT offered to replace the vehicle, but when it emerged that the replacement vehicle was not available in the applicant’s choice, the applicant referred the matter to her legal representatives. The applicant lodged a complaint with the Motor Industry Ombudsman of South Africa. In its report, MIOSA resolved that as the vehicle was repaired, it could not support the applicant’s expectation that the supplier must cancel the deal.

Application: The applicant brought an application for an order for the delivery of a new Volkswagen Polo Vivo motor vehicle without latent or patent defects, that the recommendation made by the Ombudsman be set aside, and, if specific performance cannot be tendered, that the sale agreement between the parties be cancelled and that the applicant be refunded.

Discussion: The respondents have raised as a preliminary point, being the applicant’s failure to comply with section 69(d) of the Consumer Protection Act 68 of 2008. They contend that the applicant is non-suited on amongst others, the basis that she approached court for the relief sought in the notice of motion without first exhausting all the other remedies available to her in terms of national legislation. Mr Olivier who appeared on behalf of Volkswagen, submitted that the implication of section 69(d) is to require a consumer to first exhaust all the internal remedies before approaching the civil courts. He further submitted that the "other remedies" referred to in section 69(d) would include those provided in sections 70 and 71 of the CPA, like initiating a complaint with the National Consumer Commission, approaching the Consumer Court and approaching the National Consumer Tribunal. Mr Olivier further submitted that the import of section 69(d) of the CPA is to limit the rights of a consumer to approach a court for redress, before exhausting the remedies in section 69(a)-(c). The obligation imposed on a litigant to first exhaust internal remedies before approaching the courts is not an unnecessary burden. It serves an important purpose of ensuring that the administrative dispute resolution mechanism provided for in the relevant legislation is not undermined.

Findings: It is plain from the scheme of the CPA, that the CPA contains a comprehensive dispute resolution mechanism to resolve disputes between consumers and suppliers. The legislative intention behind the dispute resolution scheme of the CPA must have been that disputes between consumers and suppliers must, as the first port of call, be resolved through the dispute resolution mechanism provided for in the CPA. It is only in cases where the CPA does not provide a remedy or, after exhausting all the internal remedies, that a consumer will be entitled to approach the civil courts for redress. Allowing a consumer to approach the civil courts for redress in circumstances where the CPA provides redress, without first resorting to the dispute resolution mechanism in the CPA, will undermine the scheme of the CPA. Save for lodging a complaint with MIOSA, the applicant did not refer the matter to the Consumer Tribunal, which is the next level of the internal remedies provided for. Once it is so, then it follows that the applicant did not exhaust all the internal remedies provided for in the CPA before approaching this court for redress. That is precisely the type of conduct that is prohibited in terms of section 69(d) of the CPA. Consequently, the applicant’s right to approach court for redress is limited by section 69(d) of the CPA. She may not approach court until she has exhausted all the remedies in the CPA, including those referred to in sections 70 and 71.

Order: The application is refused for failure to exhaust all the internal remedies provided for in the CPA.

RAMAEPADI AJ

Facts: The respondent bought a new Ford Everest from the appellant in November 2017, assisted by a Mr Wolmarans. On 28 January 2018, he observed corrosion on the bolts of the vehicle's rear loading compartment under the carpet cover. The respondent informed Mr Wolmarans of the defect and was asked to bring the vehicle for evaluation. On the same day it was returned with the appellant denying any liability on the basis that the rust was a result of a spillage of pool acid by the respondent. The respondent then sent photos to the appellant as proof of further rusting and corrosion on other vehicle parts including the undercarriage. He was requested to bring back the vehicle to the dealership so that a further investigation and evaluation can be done by a representative from Ford South Africa. The claim was subsequently rejected by Ford South Africa after the respondent refused an offer that they repair the vehicle on condition he pays for the costs of repair whilst they supply the labour. His referral of the matter to the Motor Ombudsman did not yield any result due to the appellant not cooperating with the Ombudsman’s investigation. A formal complaint he lodged with the National Consumer Commission was rejected on the basis that the complaint does not constitute a ground for a remedy under the Consumer Protection Act 68 of 2008 (CPA). The National Consumer Tribunal granted leave for referral to consider the complaint.

Appeal: This appeal is against the decision handed down by the National Consumer Tribunal granting an award in favour of the respondent. The decision came about because of the respondent referring a complaint regarding a disagreement with the appellant under section 75(1)(b) of the CPA, in terms of which the appellant was ordered to remove the rust in the respondent’s car. The issues are whether the National Consumer Tribunal correctly applied section 55 of the CPA; whether the Tribunal award neglected the evidence presented before the Tribunal; and whether the repair remedy awarded by the Tribunal is appropriate.

Discussion: It is the buyer's responsibility to demonstrate that the defect was present at the time the contract was signed and that the buyer was unaware of it. Since the respondent purchased a brand-new vehicle, he qualified for the protections provided by section 55(2) and carried the onus to demonstrate the existence of the defect at the time of delivery or receipt of the vehicle. Considering section 55, the appellant submitted that the vehicle does not fall short of the sub-provisions of this section. It is claimed that the purpose of the respondent's purchase of the vehicle was primarily for transportation from point A to point B. Despite the rust, the car could nevertheless transport him, and it has done so for 170,000 kilometres. The appellant relies on the record of the appeal to support these submissions and to show that the respondent agreed that the vehicle was in good working order and of good quality. The appellant stated that the respondent bears the onus of proving a defect in the vehicle. Further, it was stated that the respondent confirmed that nothing prevented his use of the vehicle. The appellant also pointed out that no indication exists as to whether the vehicle did not fulfil any of the relevant standards. It is not appropriate to disregard any defects found in the vehicle, including the rust on certain parts of the vehicle, even if it is still functional and fulfilling its intended purpose. Based on an analysis of the annexures, the rust has spread extensively throughout the vehicle, affecting the metals. Although the vehicle can still be used to get the respondent from point A to point B, it is not meant to have a rusting or corrosion on any of its parts as a new vehicle.

Findings: Due to the existence of the rust, the vehicle is less acceptable and unsafe than people generally would reasonably be entitled to expect from the goods of that type, a brand-new car. This indicates a defect in the vehicle. The appellant claimed rust developed from pool acid spilling, but the respondent denied any acid spill and requested proof. The fact that, because Mr Heinus has never encountered this problem or heard of a complaint regarding rust on a manufactured car, does not imply that it will never occur. The respondent's signature on the pre-delivery inspection certifies that he acknowledged there was no problem when the car was purchased. The respondent is not an expert in cars or the manufacturing process. As such, he could not have known, if he was a fair buyer, where and how to check for defects when he bought the car. This fault is a latent defect, the rust was hidden under the carpets, it was not visible or apparent upon inspection of the vehicle. As stated in section 55(5)(a) of the CPA, it is irrelevant whether the defect could have been detected by the consumer at the time of purchase. The rusting of the vehicle is directly linked to the definition of a defect. It is unpersuasive for the appellant to claim that the respondent had spilled the acid. If there was an acid spill, one would have wondered why the rust started manifesting under the carpet lid and not on the carpet, chairs and seatbelts. Therefore, the vehicle should be repaired by the appellant in accordance with the order of the Tribunal. All that the appellant did was investigate what was causing the car's corrosion. It never tried to repair the defects. The Tribunal was therefore correct that repairing the defect is the appropriate remedy available to the respondent.

Order: The appeal is dismissed with costs. The order of the Tribunal stands. The appellant is ordered to remove the rust and repair the respondent’s car back to the standard it should have been if there was no rust.

KHUMALO J (LENYAI J concurring)

Facts: A commercial property was rented from the plaintiff by the defendants in terms of a written agreement of lease and the defendants conducted a restaurant business from the premises. The defendants state that at the time that the lease agreement was negotiated there was another restaurant business operating from the same building. The plaintiff undertook that it would evict this tenant (referred to as Yonas) as soon as the defendants had paid their rental deposit for their premises. It ultimately took approximately nine months to evict Yonas, who continued to trade unlawfully and in direct competition with the defendants from premises on the ground floor in the same building. As a result of this, the defendants were unable for a period of approximately nine months “to trade freely without interference from unlawful occupiers.”

Application: In this summary judgment application, the plaintiff seeks judgment against the first and second defendants in the amount of R1,108,382.28 plus interest and costs, for arrear rental and other agreed charges. The defendants pleaded that the circumstances around Yonas entitled them to a rental reduction as contemplated in section 54 of the Consumer Protection Act 68 of 2008 (CPA). They pleaded further that there was an agreement in writing that they would be entitled to a reduction in rental. Lastly, the defendants pleaded that they have a lien over the property, having invested approximately R1,2 million in the property in respect of renovations and improvements.

Discussion: The defendants rely in particular on section 54(1)(b) read with section 54(2)(b) of the CPA which provide for the consumer’s right to demand quality service. The definition of “service” in the CPA includes “access to or use of any premises or other property in terms of a rental.” Section 54 accordingly applies to this matter. The defendants contend that the Whatsapp messages between the parties persuaded them to sign the lease agreement, pay the rent and also agreed to assume liability for an amount of R430,000 which was due to the plaintiff by the same Yonas, as provided in the lease agreement. For the same reason they allowed the plaintiff to set off their cash deposit of R75,000 against the arrears still owing by Yonas. The plaintiffs contended that the lease agreement regulated the relationship between the parties and that the circumstances relied upon by defendants had no impact on the “service” rendered by the plaintiff. The approach of the National Consumer Tribunal at least supports the notion that regard can be had to conduct that does not amount to breach of contract. See the cases discussed at para [27].

Findings: The defendants have done enough to raise a defence based on section 54(1)(b) read with 54(2)(b) of the CPA. The defendants need not locate their defence in the terms of the lease agreement and it does not assist the plaintiff to refer to the “no misrepresentation”, “non-variation” and other clauses, which would serve to deny the defendants a remedy in contract. In the words of section 54(1)(b) of the CPA the plaintiff’s conduct fell short of performance of the rental service in a manner and quality that persons are generally entitled to expect, having regard to the circumstances and particularly conditions agreed upon between the parties before and after the signing of the lease agreement. Section 54 must be interpreted against the backdrop of section 3, which sets out the purposes of the CPA, namely the maintenance of a “consumer market that is fair, accessible, efficient, sustainable and responsible for the benefit of consumers generally.”

Order: The application for summary judgment is refused. The defendants are given leave to defend the action.

JOUBERT AJ

Facts and issue: The applicant and the deceased concluded three credit agreements. The deceased breached the terms of the credit agreements. The deceased was declared to be over-indebted pursuant to a debt review order. It is the applicant’s case that, the debt review order terminated ex lege upon the death of the deceased therefore, the applicant is entitled to enforce the credit agreements and it is in that regard that the applicant has launched this application seeking termination of the debt review order.

Discussion: A party who seeks declaratory relief must satisfy the court that it is a person interested in an ‘existing, future or contingent right or obligation’ and then if satisfied on that point, the court must then decide whether the case is a proper one for the exercise of the discretion conferred on it. As a party to the credit agreements which culminated in the debt review order, the applicant is an ‘interested person’ as contemplated in section 21(1)(c). If the court is satisfied that the applicant is an interested person then in its discretion, the court must consider whether the order should be granted or not. Having regard to the facts of this matter, the applicant’s contention is correct that a debt review order does not survive a consumer’s demise for the reason that, the underlying purpose of the NCA is to protect the interests of a consumer within the consumer credit industry by preventing and also alleviating over indebtedness. It is common cause that that the deceased estate is indebted to the applicant as claimed therefore a declaratory as prayed for in prayer 1.2 or 2.2. is superfluous.

Findings and order: It is declared that the debt re-arrangement order granted by the Magistrates Court terminated upon the death of the late Myburgh on 25 January 2022.

Facts and issue: The applicant entered into a credit facility agreement with the respondent. The applicant alleges that the respondent enticed him in taking credit of R29 000. The applicant said the respondent advised him that the credit account will have an insurance which will cover the debt. The applicant took up the respondent’s offer as he was running a tuck shop which had closed down. The applicant’s main contention is that the respondent’s conduct was unlawful and deceiving and having been reckless with its lending.

Discussion: The applicant’s reliance on sections 80(1)(a), 164(1) and 90(2)(a) of the NCA, has no merit as the respondent had conducted an assessment as required in terms of section 81(2) and took reasonable steps to ensure that the applicant understood and appreciated the risks involved. The applicant gave the information of his finances as being in a position to afford and accepted the credit facility. The applicant applied for an increase on his credit card facility. Based on the information the applicant provided, the credit limit was increased to R29 000. In this instance the applicant gave his income and expenses and accepted the credit card, to the extent that he went to the bank to activate the credit card. The applicant has failed to prove that the respondent was reckless in granting the credit facility.

Findings and order: The application is dismissed, including the interlocutory application. 

Facts: The respondents are registered credit providers under the National Credit Act 34 of 2005. Having received complaints from clients of the respondents that they were engaged in various contraventions of the Act, the National Credit Regulator (NCR) instituted an investigation against the respondents. Upon conclusion of the investigation, a report was produced. The NCR referred the matter to the National Consumer Tribunal and filed an application seeking the cancellation of the respondents’ registration as a credit provider. Shortly prior to the hearing, the NCR delivered the supplementary affidavit together with an application for condonation. It applied to the Tribunal for an order to condone a departure from the rules and procedures. The Tribunal regarded the filing of the supplementary affidavit as a departure from its rules and procedures. It decided that it had the power to grant the application. It granted condonation, finding, in addition, that good cause had been shown.

Appeal: The respondents launched review proceedings in the High Court to set aside the Tribunal’s decision. The Hight Court found that because of the lack of a detailed explanation relating to the delay, good cause had not been shown. It set aside the decision of the Tribunal and remitted it back to the Tribunal to decide whether to grant condonation to the NCR for the filing of the supplementary affidavit. The appeal concerns whether the National Consumer Tribunal has the power to condone the filing of a supplementary founding affidavit by the National Credit Regulator in proceedings before it.

Discussion: The thrust of the respondents’ contention before the High Court was that as a creature of statute, the powers of the Tribunal are those specifically assigned to it in terms of the Act and the regulations. The rules governing proceedings before the Tribunal did not make provision for the filing of a supplementary founding affidavit. Accordingly, so the contention proceeded, the Tribunal’s order permitting the NCR to file a supplementary founding affidavit constituted a nullity and was thus susceptible to review. Both the NCR and the Tribunal misconceived the enquiry. Properly construed, the NCR was seeking leave of the Tribunal to file a further affidavit. Under the guise of a condonation application, the NCR was seeking the permission of the Tribunal to do something that may have fallen outside the scope and ambit of the rules, namely, the admission of a further affidavit. It is therefore doubtful that the Tribunal was empowered to permit the filing of a supplementary founding affidavit.

Findings: Unlike the High Court, the Tribunal has no inherent jurisdiction to regulate its own process in the interests of justice. The power of the High Court in that regard is derived from the common law and now entrenched in section 173 of the Constitution. It also has the power, unlike the Tribunal, in the exercise of its inherent jurisdiction to grant procedural relief where the rules of court make no provision for it. Had the matter served before either the High Court or the magistrates court, the NCR would not have been entitled as of right to file a further affidavit. The statements of the NCR fall far short of a satisfactory explanation as to why it was unable to secure the information prior to deposing to the founding affidavit, the preparation of the original notice of motion, and the launching of the application for the deregistration of the respondents. By that stage, the investigation by the NCR into the conduct of the respondents had been completed. As the Tribunal misconceived the nature of the enquiry, it failed to consider whether it had the power to permit the NCR to file a supplementary founding affidavit, the source, nature, extent, and scope of such power and if it had such power, the relevant considerations that it had to have regard to in exercising that power. The order by the High Court remitting the matter to the Tribunal must stand.

Order: The appeal is dismissed.

PONNAN JA (HUGHES JA and NHLANGULELA AJA concurring)

WEINER JA (MBATHA JA concurring): If regard is had to the nature of the allegations contained in the supplementary affidavit, they seek to amend the notice of motion and founding affidavit, by adding the necessary declarators of the contraventions. The application falls within the category of any departure from the rules and procedures. The Tribunal correctly exercised the general powers of condonation contained in the Rules in holding that the filing of the supplementary affidavit was a departure from its rules and procedures which it could condone. In setting aside the decision of the Tribunal to grant condonation, the High Court failed to appreciate that its power to substitute the determination for that of the High Court is constrained. See Florence v Government of RSA [2014] ZACC 22, where Moseneke DCJ stated that an appellate court may not interfere unless the choice the court has preferred is at odds with the law. The High Court was accordingly not at large to interfere with discretion, which was not at odds with the law. A further reason why the High Court erred was that the decision of the Tribunal was interlocutory. It had no final effect and was therefore not reviewable. The appeal ought to have been upheld.

Facts: The National Credit Regulator (NCR) initiated a complaint in its own name and an investigation of First Group Investment Holdings (FGI) was authorised. The inspector interviewed a representative of FGI and requested certain documents which were subsequently furnished. The inspector completed his investigation and submitted a report in which he found contraventions of the National Credit Act 34 of 2005 (NCA Act). The matter was referred to the National Consumer Tribunal (NCT). At the hearing before the NCT the only documents before the NCT were the NCR’s referral together with the attached founding affidavit and FGI’s answering affidavit.

Appeal: Against orders by the NCT dismissing five points in limine that were argued before it. The points were that: the deponent to the founding affidavit had not been properly authorised; the referral was predicated on unconfirmed and inadmissible hearsay evidence; the referral failed to meet the threshold of establishing “a reasonable suspicion” that FGI had engaged in prohibited conduct; the inspector exceeded the scope of the investigation; and the inspector’s report was materially incomplete and defective.

Discussion: That having elected to proceed by way of motion, both the NCR who referred the matter and the NCT who subsequently dealt with it as such, must have been mindful of the nature of the proceedings before it; that the NCT recognised the shortcoming in the founding affidavit but regarded it as merely a procedural irregularity; the NCT found that whether the evidence tendered constitutes inadmissible hearsay evidence could be determined in the main application; and that the entirety of the NCT’s reasoning for the dismissal of the third, fourth and fifth points in limine was predicated upon the admissibility of what was before it.

Findings: If the proceedings were motion proceedings, then what was required was a finding that the evidence was either admissible or it was not. The proceedings in this matter were conducted as motion proceedings and the affidavits would have constituted the entire body of both allegations and evidence in support as well as FGI’s answer to be considered. It offends natural justice for a party to be subjected to an ever-changing procedure, the exigencies of which are tailored to accommodate the interests of one of the parties.

Order: The appeal is upheld. The decision of the NCT is replaced with one upholding the five points in limine and dismissing the application. The NCR is ordered to pay the appellant’s costs of the appeal on the scale as between party and party, including those of two counsel.

MILLAR J (ALLY AJ concurring)

Facts: The National Credit Regulator initiated an investigation into the business practices of CMR Group and agreements relating to its core business known as the “Pawn your car and still drive it” scheme. The investigation revealed that CMR advanced funds to consumers against their fully paid motor vehicles, subject to a pawn agreement. The Regulator alleged that the scheme was in contravention of section 101(1)(d) read with regulation 42 of the National Credit Act 34 of 2005 (NCA) – charging an excessive amount of interest; section 81(2) of the NCA – failing to conduct affordability assessments; and section 100(1)(a) of the NCA – imposing a prohibited charge.

Appeal: The Tribunal proceeded with the hearing in the absence of CMR and granted certain orders against it. Aggrieved by the decision of the Tribunal, the applicants, in their capacity as joint liquidators of CMR (in liquidation), noted an appeal in terms of section 148(2)(b) of the NCA to a full bench of the High Court. The High Court dismissed the appeal with costs.

Discussion: That the issues raised in the High Court for determination were: (a) whether the Tribunal, in terms of its statutory mandate under section 150 of the NCA was empowered to grant the orders against CMR after the granting of the provisional liquidation order; (b) whether the granting of such orders infringed the vested rights arising from the concursus creditorum; and (c) whether the orders granted infringed upon the powers and duties of the liquidators appointed to wind-up the company; and that one of the grounds of appeal raised in the High Court by the applicants was a point of law that there was a conflict between the provisions of the NCA and the Companies Act.

Findings: The applicants ought to have applied to rescind the order of the Tribunal under section 165 of the NCA as opposed to appealing against it in terms of section 148(2)(b) of the NCA. That the Tribunal decided the matter on the merits did not preclude the applicants from seeking to rescind the order in terms of section 165 of the NCA on the grounds that it was erroneously granted in their absence. The only route open to the applicants was to apply for a rescission of the Tribunal’s order, which was made in default of their appearance at the Tribunal hearing. The High Court correctly found that the “rescission of an order granted in the absence of a party, facilitates the rehearing of the matter and affords the absent party an opportunity to present its submissions on an issue in dispute. This, in turn, enables the Tribunal to properly consider the issues and deliver a reasoned judgment in respect of each issue”.

Order: The application for leave to appeal is struck off the roll.

MBATHA JA (MOCUMIE JA and KATHREE-SETILOANE AJA concurring)

MABINDLA-BOQWANA JA and SIWENDU AJA dissenting from para [43]

Facts: Home loan agreements were entered into between Mr Pheto and Nedbank in respect of two immovable properties. Mortgage bonds were registered over the properties and according to the standard agreements Mr Pheto was obliged to effect monthly payments on the outstanding capital. He was in arrears with the payment of the monthly installments in respect of both agreements and Nedbank instituted action against him.

Application: Nedbank applied for default judgment against Mr Pheto as there was no notice of intention to defend. For the first claim he disclosed that he was in the process of disposing of the property and averred that he intended to apply the proceeds of such disposal to settle the arrears, which he later did. The court considers the application on the second claim.

Discussion: Mr Pheto’s contentions that the agreement was reinstated; the issue raised with the modus of service of the notice in terms of section 129 of National Credit Act 34 of 2005; that following a fresh section 129 notice, Mr Pheto effected a payment of R150,000 to the arrears account; the correspondence between the parties over the arrears and the legal fees; and whether on the available facts it can be found that reinstatement of the agreement did take place as contemplated in terms of section 129(4) when the amount of R150,000 was paid by Mr Pheko pursuant to the sections 129 and 130 notices.

Findings: Nedbank had not provided due notice to Mr Pheto on the nature, extent or balance of legal costs prior the date when he effected the payment of R150,000. The costs were not taxed, the parties did not agree on the costs and Mr Pheto was not placed in a position to determine whether or not any costs unilaterally debited by Nedbank were reasonable. The section 129 notice simply refers to an arrears amount of R154,571.63 and no reference is made of the costs. Where such a notice does not contain the necessary information to enable the consumer to agree on the costs, make a reasonable tender for costs, or even attempt to distinguish between arrears and costs, the consumer cannot be penalised when simply settling the arrears and not paying all costs which the credit provider deems due and owing to it.

Order: The application is dismissed. It is declared that the agreement entered into under the loan agreement became reinstated as envisaged in terms of section 129(4) when Mr Pheto made the payment of R150,000.

VAN NIEKERK AJ