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[2017] ZAWCHC 103
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Dlayedwa and Others v Lewis Stores (Pty) Ltd and Another; Eland and Others v Lewis Stores (Pty) Ltd and Another (2823/2016; 5045/16) [2017] ZAWCHC 103 (4 August 2017)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
CASE
NO:
2823
/2016
In
the matter between:
NDUMISO
DLAYEDWA
LEBOSTA
GIFT MAKOLA
First
Plaintiff
Second
Plaintiff
JOHANNES
PETRUS ABRAHAMS
LAURIKA
MONIQUE HARMSE
WINNIFRED
MPELA
CHARLINE
NATASHA JANTJIES
ALPHA
KOCK
FAITH
OFENTSE BULLOCK
MAETIN
ANTHONE MKHABELA
MMAPOTANE
DORICCA PHOLOSI
NOSIHLE
NGWEYI
REITUMETSE
PRETTY GALENG
SEBENZILE
NOTTAH MASHABANE
SISWE
SITHOTI
RACHEL
NOMTHANDAZO
v
Third
Plaintiff
Fourth
Plaintiff
Fifth
Plaintiff
Sixth
Plaintiff
Seventh
Plaintiff
Eighth
Plaintiff
Ninth
Plaintiff
Tenth
Plaintiff
Eleventh
Plaintiff
Twelfth
Plaintiff
Thirteenth
Plaintiff
Fourteenth
Plaintiff
Fifteenth
Plaintiff
LEWIS
STORES (PTY) LTD
First
Defendant
NATIONAL
CREDIT REGULATOR
Second
Defendant
Case
No:
5045/16
In
the matter between:
ERALDO
EDGAR FRANKLIN
ELAND
First
Plaintiff
LAVANIA
GRACE
POTGIETER
Second
Plaintiff
TSHEPISO
LEVY
CHABAKU
Third
Plaintiff
PUSELETSO
MOKOENA
Fourth
Plaintiff
RIAAN
LAKAY
Fifth
Plaintiff
RODZE
VERGOTINE
Sixth
Plaintiff
SUNNYBOY
LENNOX
NONG
Seventh
Plaintiff
ASANDA
PAKATHI
Eighth
Plaintiff
MZIWETHU
NOMABHUNGU
Ninth
Plaintiff
JAN
VAN
NEL
Tenth
Plaintiff
TUMELO
COLLINGS
NZINGELWA
Eleventh
Plaintiff
MALEKO
PETRUS
SESINYI
Twelfth
Plaintiff
ROBERT
PETER JANSE VAN
RENSBURG
Thirteenth
Respondent
v
LEWIS
STORES (PTY)
LTD
First
Defendant
NATIONAL
CREDIT
REGULATOR
Second
Defendant
Coram:
Dlodlo J
Date
of Hearing:
20 June 2017
Date
of Judgment:
04
August 2017
JUDGMENT
DLODLO,
J
INTRODUCTION
[1]
The plaintiffs in case numbers 5045/16 (the Eland action) and 2823/16
(the Dlayedwa action) seek to amend their particulars
of claim as
provided for in notices of intention to amend filed in both actions,
which are in substantially the same form. The
applications are being
heard together. For convenience, the Eland action will be dealt with
on the basis of equal applicability.
The vexed question to be
answered (as Mr De Wet contends) is whether the lack of certificate
in terms of Section 164 (3) of the
National Credit Act 34 of 2005
(‘the NCA’), issued by the National Consumer Tribunal
(‘the Tribunal’),
is an absolute bar for the plaintiffs
who want to proceed with a claim in the High Court based on
prohibited conduct. Mr De Wet
pointed out that the answer lies in the
consideration of the correct interpretation of Section 164 (3) of the
NCA.
THE
NATURE OF THE ACTION
[2]
The plaintiffs are consumers who concluded written agreements with
the first defendant (‘Lewis’) for the purchase
of goods
on credit in terms of agreements subject to the provisions of the
NCA. These agreements constitute credit agreements for
the purposes
of the NCA, and Lewis was a credit provider.
[3]
Claim 1 of the plaintiffs’ claims is for repayment of all
delivery charges collected, plus interest, alternatively for
repayment by Lewis of portion of such delivery charges and interest,
on the basis that Lewis’s charging and collection of
the
delivery charges from the plaintiffs represented a contravention of
Sections 100 (1), 100 (2), 102 (2) (a), 102 (2) (b) and
102 (2) (c)
of the NCA. Claim 2 of the plaintiffs’ claims is for the
repayment by Lewis of the whole or part of the maintenance
fee as
referred to in paragraph 25 of the particulars of claim, on the basis
that the charging and collection of the maintenance
fee represents a
contravention of Sections 100 (1), 100 (2), 102 (2) (a), 102 (2) (b)
and 102 (2) (c) of the NCA.
[4]
In terms of a notice issued in terms of Rule 23 (1) filed on 14
September 2016 Lewis noted an exception against the plaintiffs’
particulars of claim on the basis that the particulars lacked
averments necessary to sustain an action, on the following basis:
The
plaintiffs’ claims represented claims for loss or damage as a
result of allegedly prohibited conduct or dereliction of
required
conduct, on the part of the first defendant, as contemplated by S 164
(3) of the NCA. (b) In terms of S 164 (6) of the
NCA a person’s
right to damages arising out of any prohibited or required conduct
comes into existence on the date that the
National Consumer Tribunal
makes a determination in respect of the matter that affects that
person, or in the case of an appeal,
on the date that the appeal
process in respect of that matter is concluded. (c) In terms of S 164
(3) (b) of the NCA, a person
who has suffered loss or damage as a
result of prohibited conduct or dereliction of required conduct, if
entitled to commence an
action referred to in paragraph (a) of S 164
(3), when instituting proceedings must file with the registrar of the
court a notice
from the chairperson of the Tribunal in the prescribed
form: (i) certifying that the conduct constituting the basis for the
action
has been found to be a prohibited or required conduct in terms
of the NCA; (ii) stating the date of the Tribunal’s finding;
and (iii) setting out the relevant Section of the NCA in terms of
which the Tribunal made its finding. (d) The plaintiff had failed
to
(i) allege that the conduct constituting the basis for the action has
been found to be a prohibited or required conduct in terms
of the
NCA; (ii) plead the date of any finding to this effect by the
Tribunal; (iii) indicate the relevant Section of the NCA in
terms of
which the Tribunal made its finding. (e) Alternatively, and in any
event, the plaintiffs had not averred that they had
or would when
instituting the action be filing with the registrar a notice from the
Chairperson of the Tribunal in the prescribed
form, complying with
the requirements of S 164 (3) (b) of the NCA.
[5]
The plaintiffs responded to the notice of exception by filing a
notice of intention to amend their particulars of claim. This
elicited a notice of objection from Lewis. The basis of the objection
is that the proposed amendments were insufficient to cure
the
excipiability of claim.
[6]
I general, an amendment to pleadings will not be allowed where its
introduction would render the pleading in question excipiable.
See
Erasmus
Superior Court Practice
at D1-338 and cases collected
in footnote 6. The same principle will apply where a party seeks to
amend particulars of claim in
response to a notice of exception.
Differently stated, the issue proposed to be introduced by the
amendment must be a triable issue.
See
Trans-Drakensberg Bank Ltd
v Combined Engineering (Pty) Ltd
1967 (3) SA 632
(D) at 641A;
Consol Ltd t/a Consol Glass v TWEE Jonge Gezellen (Pty) Ltd
(2)
2005 (6) SA 23
(C) at 36I-J. Indeed the matter raises the proper
construction and application of provisions of the NCA, and in
particular S 164.
It is necessary to deal with these provisions
first, before analysing the plaintiffs’ claims and the proposed
amendments.
THE
PROVISIONS OF THE NCA IMPLICATED IN THIS DISPUTE
[7]
Chapter 7 of the NCA deals with disputed settlement other than debt
enforcement. Part B provides for the initation of complaints
or
applications, while part A provides for alternative dispute
resolution. As to the part B provisions, in terms of S 136 (1) any
person may submit a complaint concerning an alleged contravention of
the NCA to the National Credit Regulator (‘the Regulator’)
in the prescribed manner and form. Upon receipt of the complaint, the
Regulator may issue a notice of non-referral or direct an
inspector
to investigate the complaint as quickly as practicable. See Sections
139 (1) (a) and 139 (1) (c) of the NCA. After completing
an
investigation, the Regulator may issue a notice of non-referral or
refer the matter to the Tribunal. See Section 140 (1) (a)
of the NCA.
[8]
If the Regulator issues a notice of non-referral in response to a
complaint other than a complainant concerning S 61 or an offence
in
terms of the NCA, the complainant concerned may refer the matter
directly to the consumer court or to the Tribunal, with leave
of the
Tribunal. The Tribunal must conduct a hearing into any matter
referred to it under Chapter 7, in accordance with the requirements
of the NCA. See Section 140 (1) (a) of the NCA.
[9]
Part D of Chapter 7 contains detailed provisions regulating the
Tribunal’s consideration of complaints, application and
referrals. In terms of Section 148 (1) a participant in the hearing
before a single member of the Tribunal may appeal a decision
by that
member to a full panel of the Tribunal. In terms of Section 148 (2),
subject to the rules of the High Court, a participant
in a hearing
before a full panel of the Tribunal may apply to the High Court to
review the decision of the Tribunal, or may appeal
to the High Court
against the decision of the Tribunal.
[10]
In terms of Section 150, the Tribunal may in addition to its other
powers in terms of the NCA, make an appropriate order in
relation to
prohibited conduct or required conduct in terms of the NCA, including
requiring repayment to the consumer of any excess
amount charged,
together with interest at the rate set out in the agreement, or any
other appropriate order required to give effect
to a right, as
contemplated in the NCA or the consumer Protection Act 2008. See
Section 150 (i) of the NCA. Any decision, judgment
or order of the
Tribunal may be served, executed and enforced as if it were an order
of the High Court. See Section 152 (1) of
the NCA.
[11]
Section 164 of the NCA provides as follows:
‘
164 Civil actions and
jurisdiction
(1) Nothing in this Act renders
void a credit agreement or a provision of a credit agreement that, in
terms of this Act, is prohibited
or may be declared unlawful unless a
court declares that agreement or provision to be unlawful.
(2) In any action in a civil
court, other than a High Court, if a person raises an issue
concerning this Act or a credit agreement
which the Tribunal-
(a) has previously considered
and determined that court-
(i) must not consider the
merits of that issue; and
(ii) must apply the
determination of the Tribunal with respect to the issue; or
(b) has not previously
determined, that court may-
(i) consider the merits of that
issue, or
(ii) refer the matter to the
Tribunal for consideration and determination.
(3) A person who has suffered
loss or damage as a result of prohibited conduct or dereliction of
required conduct or dereliction
of required conduct-
(a) may not commence an action
in a civil court for the assessment of the amount or awarding of
damages if that person has consented
to an award of damages in a
consent order; or
(b) if entitled to commence an
action referred to in paragraph (a), when instituting proceedings,
must file with the registrar or
clerk of the court a notice from the
Chairperson of the Tribunal in the prescribed form-
(i) certifying that the conduct
constituting the basis for the action has been found to be a
prohibited or required conduct in terms
of this Act;
(ii) stating the date of the
Tribunal’s finding; and
(iii) setting out the relevant
section of this Act in terms of which the Tribunal made its finding.
(4) A certificate referred to
in subsection (3) (b) is conclusive proof of its contents, and is
binding on a civil court.
(5) An appeal or application
for review against an order made by the Tribunal in terms of section
148 suspends any right to commence
an action in a civil court with
respect to the same matter.
(6) A person’s right to
damages arising out of any prohibited or required conduct comes into
existence-
(a) on the date that the
Tribunal makes a determination in respect of a matter that affects
that person; or
(b) in the case of an appeal,
on the date that the appeal process in respect of that matter is
concluded.
(7) For the purposes of section
2A (2) (a) of the Prescribed Rate of Interest Act, 1975 (Act 55 of
1975), interest on a debt in
relation to a claim for damages in terms
of this Act will commence on the date of issue of the certificate
referred to in subsection
(3) (b).’
[12]
Sections 164 (3) and 164 (6), read together, are to the following
effect:
(a)
A person who has suffered loss or damage as a result of prohibited
conduct or dereliction of required conduct must, if entitled
to
commence an action for the assessment of the amount or the awarding
of damages (‘damages’) in a civil court, file
with the
registrar or clerk of the court a notice from the chairperson
of the Tribunal certifying that the conduct constituting
the basis
for the action has been found to be a prohibited or required conduct
in terms of the NCA, stating the Tribunal’s
finding and
setting out the relevant section of the NCA in terms of which the
Tribunal made its finding. (b) A person’s right
to damages
arising out of prohibited or required conduct comes into existence on
the date that the Tribunal makes a determination
in respect of a
matter that affects that person, or in the case of an appeal, on the
date that the appeal process in respect of
that matter is concluded.
It must be emphasised that a consumer’s cause of action in a
claim for loss or damage arising out
of prohibited conduct does not
derive from contract, delict or unjust enrichment. Rather, it derives
from the provisions of the
NCA.
[13]
It is the NCA which, for example, prescribe the inclusion in a credit
agreement of an obligation to pay delivery fees or a
charge for an
extended maintenance warranty, in particular circumstances. So too,
it is the NCA which effectively provides for
a claim for damage or
loss sustained by a consumer as a result of a credit provider
contracting for fees or charges prescribed
by the NCA. That
entitlement arises, for example, from Section 150 (h) of the NCA, as
well as from Section 164 (3)(b) and Section
164 (6).
[14]
It must be said that not only does the NCA establish the wrong and
the corresponding entitlement to claim in respect of loss
or damage
arising out of the wrong, it requires any such claim to be dealt with
in a particular way. In particular, the right to
claim arising out of
any prohibited or required conduct only comes into existence on the
date that the Tribunal makes a determination
that there has been
prohibited conduct.
A
fortiori
,
this requires a referral of a complaint to the Tribunal, and a
finding by the Tribunal in this regard. Differently stated, a
determination by a Tribunal that the conduct constituting the basis
of a claim for loss or damage has been found to be prohibited
conduct
in terms of the NCA is an integral part of a claimant’s cause
of action when claiming loss or damage.
[15]
On behalf of the plaintiffs it is suggested that the above postulated
construction amounts to the ousting of the jurisdiction
of this
Court. I, however, mention that the plaintiffs are missing the point
in this regard. Their suggestion is clearly a mischaracterisation
of
the true position. The fact is (as pointed out above) the NCA
establishes the cause of action: a consumer has the right to claim
loss or damage arising out of or as a result of conduct prohibited by
the NCA, where such conduct has been found by the Tribunal
to
constitute prohibited conduct. Once this has been established, a
party has a claim, justiciable in a court of law, for damages
or
compensation.
[16]
The above construction is fortified by Section 164 (7). The latter
Section provides that for the purposes of
Section 2A
(2) (a) of the
Prescribed Rate of Interest Act, 1975
, interest on a date in relation
to a claim for damages in terms of the NCA will commence on the date
of issue of certificate referred
to in
Section 164
(3) (b). I agree
with Mr Rosenberg that the plaintiffs’ claims as formulated
plainly represent claims for loss or damage
as a result of allegedly
prohibited conduct or dereliction of required conduct on the part of
Lewis, as contemplated by
Section 164
(3) of the NCA. In terms of
Section 164
(6) any such claims only come into existence on the date
that the Tribunal makes a determination in respect of those claims.
[17]
It remains common cause that the plaintiffs herein do not: (a) allege
that the conduct constituting the basis for the action
has been found
to be a prohibited or required conduct in terms of the NCA; (b) plead
the date of any finding to this effect by
the Tribunal; (c) indicate
the relevant Section of the NCA in terms of which the Tribunal made
its finding. Alternatively and in
any event, it must be stated
categorically, that the plaintiffs do not aver that they have or will
when instituting the action
by filing with the registrar a notice
from the chairperson of the Tribunal in the prescribed form,
complying (as it must) with
the requirements of
Section 164
(3) (b)
of the NCA. Clearly in the circumstances as sketched above a finding
must justifiably be made that the plaintiffs’
particulars of
claim do not at all contain averments necessary to sustain an
action.
THE
PROPOSED AMENDMENTS TO THE PARTICULARS OF CLAIM
[18]
I refer specifically to claim 1. This claim is in respect of delivery
charges. The plaintiffs seek to introduce paragraphs
21A to 21D. It
is here alleged that Summit
Financial
Partners (Pty) Ltd (‘Summit’) filed a complaint with the
Regulator regarding compulsory charging of delivery
fees by Lewis,
but that the Regulator has failed to refer the complaint to the
Tribunal or to direct an investigation or to file
a notice of
non-referral.
[19]
It must be said immediately that these paragraphs do not at all
advance the matter for the plaintiffs. As correctly pointed
out by Mr
Rosenberg, aside from the fact that it is not contended that Summit
submitted as complaint on behalf of the plaintiffs
in question, the
failure of the Regulator to respond promptly in terms of the Act does
not suffice to complete the cause of action.
The cause of action in
this case is a determination that the conduct constituting the basis
for the claim has been found to be
a prohibited conduct in terms of
the NCA. Needless to mention that any failure of the Regulator to
comply with obligations under
the NCA must be dealt with by means of
appropriate remedies directed at the Regulator, to enforce
compliance. Undoubtedly, the
Regulator’s failure to respond
properly cannot establish a cause of action in a claim for damages,
which does not exist outside
the prescripts of the NCA.
[20]
The plaintiffs are engaged in a clear attempt wherein it is sought to
circumvent the above outcome by reformulating the relief
sought by
them in respect of the delivery charges to a declaratory that Lewis
has: (a) charged the plaintiffs compulsory delivery
fees in
contravention of Section 102 (2) (a) and/or (b) of the NCA; (b)
charged the plaintiffs delivery fees in excess of what
is allowed in
terms of Section 102 (2) (c) (i) and (ii) of the NCA; (c) charged the
plaintiffs a higher price for delivery charges
than that charged to
cash clients for the same or substantially the same delivery service,
in contravention of Section 100 (2)
of the NCA; and (d) committed an
offence in terms of Section 100 (3) of the NCA. It must be borne in
mind that Section 164 (1)
of the NCA provides that nothing in the NCA
renders void a credit agreement or a provision of a credit agreement
that, in terms
of the NCA, is prohibited or may be declared unlawful
unless a court declares that agreement or provision to be unlawful.
[21]
It is of importance to note that the plaintiffs themselves do
recognise that the amended relief is not in the form of a declaration
that the credit agreements or delivery charge provisions are per se
unlawful. Mr De Wet submitted as follows in this regard:
‘
Ironically, the
credit agreement (quite correctly in terms of the NCA), expressly
states that delivery fees, and the service on
which it is based on,
is voluntary and not compulsory. Rather, it is the case of the
plaintiffs that, despite the provisions of
a credit agreement, fees
are charged as a compulsory charge.’
Clearly,
the substance of the plaintiffs’ case, notwithstanding the
proposed amendments, remains that Lewis has been guilty
of prohibited
conduct or dereliction of required conducts, as a result of which the
plaintiffs have suffered loss or damage. Thus
the central enquiry
will be whether or not there has been prohibited conduct or
dereliction of required conduct on the part of
Lewis. That is an
enquiry which the NCA requires to be dealt with in a particular way,
culminating in a finding by the Tribunal.
[22]
In truth, while Section 164 (1) of the NCA contemplates that in
appropriate circumstances, a credit agreement may be declared
unlawful by a court, Sections 164 (1), 164 (3) and 164 (6) have to be
read together and harmonised. Where it is plain in the particular
circumstances of a matter (such as the present case) that the purpose
of the declaratory relief is for the court rather than the
Tribunal
to determine whether there has been prohibited conduct or dereliction
of required conduct as the first step in a claim
for recovery,
declaratory relief is neither appropriate nor competent.
[23]
No doubt exist or should exist that the reformulation of the relief
claimed by the plaintiffs and the insertion of paragraphs
21A to 21D
is clearly and solely to circumvent Sections 164 (3) and 164 (6) of
the NCA. I hasten to mention that the submissions
of the plaintiffs
do recognise this to be the case. On behalf of the plaintiffs, it is
contended on the one hand that ‘
it
would be absurd to suggest that the court cannot also grant
consequential relief which flows from such an order’
,
and on the other that Section 164 (3) is not applicable because ‘
only
a declaratory is sought at this stage’.
Consequently, where it is clear that the purpose of the plaintiffs is
to recover loss or damage as a result of alleged prohibited
conduct
or dereliction of required conduct, multi-stage proceedings in the
High Court directed at establishing the conduct in question
and
thereafter the assessment of loss, are against the scheme of Section
164 and are not countenanced by the NCA.
[24]
Section 100 (3) of the NCA creates an offence in that in terms
thereof a credit provider who contravenes Section 100 (1) or
100 (2)
of the NCA is guilty of an offence. In terms of Section 161 of the
same Act, any person convicted of an offence in terms
of the Act is
liable to a fine and/or imprisonment, as provided for in Section 161
(a) and (b). Mr Rosenberg correctly submitted
that a person cannot be
convicted of a criminal offence and certainly not an offence
contemplated by Section 161 of the NCA in
the course of civil
proceedings being conducted before a court.
[25]
It is so that the plaintiffs seek to amend their particulars of claim
to include a declaratory that Lewis is guilty of an offence
in terms
of Section 100 (3) of the NCA. It must be pointed out that for a
person to be found guilty of an offence, as contemplated
by Section
100 (3), a charge must be brought in criminal proceedings,
culminating in a conviction. Mr Rosenberg is of course correct
in
contending that the plaintiffs’ endeavour to secure a
declaratory in civil proceedings that Lewis be found guilty of a
criminal offence is misconceived. In my finding, the proposed
amendment is not competent relief at all.
THE
MAINTENANCE CLAIMS
[26]
With regard to claim 2 (which is in respect of the maintenance
charges), the plaintiffs seek to introduce fresh paragraphs
34 to 37.
These paragraphs allege that Summit has previously referred a
complaint against Lewis relating to the charging of maintenance
fees
to the Tribunal (as opposed to the Regulator). The
plaintiffs plead that as a result, there are matter arising
under a
credit agreement and pending before the Tribunal, that could result
in an order affecting the issues to be determined by
this Court, as
contemplated by Section 130 (3) (b) read with Section 130 (4) (d) (i)
of the NCA.
[27]
In Mr Rosenberg’s contention more particularly, the amendments
do not address the fundamental problem characterising
the plaintiff’s
claims, as referred to above. It is common cause that the plaintiffs
persist with their claim for compensation
or repayment as set out in
paragraphs 33.2 and 33.3 of the particulars of claim. Accordingly,
their claims fall within the reach
of Section 164 (3) and Section 164
(6). The point, in any event, is absent the required determination by
the Tribunal, the plaintiffs
have no claims in respect of the
maintenance charges.
[28]
In addition to the allegation that the maintenance charges represent
prohibited conduct on the basis pleaded in paragraphs
27, 30 and 31
of the particulars of claim, it is further alleged on behalf of
certain of the plaintiffs that the maintenance agreements
are void
for vagueness. It is nevertheless contended for these plaintiffs that
pro tanto
, the court may grant declaratory and consequential
relief. What is concerning is that, however, even to the extent of
this confined
element of the claim, it remains one of loss or damage
as a result of prohibited conduct or dereliction of required conduct.
I
agree that the fundamental problem facing claim 2 as pleaded is in
no way resolved by the request in the proposed paragraph 37 of
the
particulars of claim that this Court should adjourn the matter
pending determination of those proceedings before the Tribunal
which
are referred to in proposed paragraphs 34 to 36.
ORDER
[29]
In the circumstances, the application to amend lodged in terms of
Rule 28 (4) of the Uniform Rules of Court is hereby dismissed
with
costs.
____________________________
D
V DLODLO
Judge
of the High Court
APPEARANCES:
For
the Plaintiffs : Adv. H N De Wet
For
the First Defendant : Adv. S Rosenberg (SC)