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[2018] ZAWCHC 1
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Phaladi v Lamara and Another (20480/2017 & 20481/2017) [2018] ZAWCHC 1; 2018 (3) SA 265 (WCC) (12 January 2018)
Republic
of South Africa
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Before:
The Hon. Mr Justice Binns-Ward
Hearing:
9 January 2018
Judgment:
12 January 2018
Case
No: 20480/2017
In
the matter between:
KAMOGELO
ISAAC
PHALADI
Applicant
and
ASIA
LAMARA
First
Respondent
AFRICAN
BANK
LTD
Second
Respondent
Case
No. 20481/2017
And
in the matter between:
NEO
GLORIA
MOSHESHA
Applicant
and
ASIA
LAMARA
First
Respondent
FOSHINI
(PTY)
LTD
Second
Respondent
OLD
MUTUAL (PTY)
LTD
Third
Respondent
JUDGMENT
BINNS-WARD
J:
[1]
Application
was made in two matters
[1]
enlisted
on Tuesday’s unopposed motion roll for orders:
(a)
Declaring
that the applicant is no longer over-indebted and that the records be
expunged; and
(b)
Directing
that the debt counsellor (the first respondent) update the status of
the applicant with its creditors, the credit bureaux
and the National
Credit Regulator within one month hereof by forwarding the relevant
Form 17.W.
[2]
[2]
The
factual bases of both applications were essentially identical.
In each case the applicant had applied to the debt counsellor
in
terms of s 86 of the National Credit Act 34 of 2005 (‘the
NCA’) to be declared to be over-indebted. Having
assessed
their applications, and given notice to the applicants’
creditors and all the registered credit bureaux as required
in terms
of s 86(4), the debt counsellor accepted their applications.
An application to the magistrates’ court
for a
debt-rearrangement order did not follow, however. This was
because in each case a voluntary rearrangement was agreed
with the
creditors pursuant to a recommendation by the debt counsellor in
terms of s 86(7)(b). These arrangements were
apparently
satisfactorily adhered to under the auspices of the debt counsellor.
Matters have reportedly proceeded so satisfactorily
in fact that the
applicants claim that they are now ‘financially sound’,
and in a position to demonstrate that they
are able to punctiliously
fulfil their outstanding obligations. They contend that it
would be reasonable in the circumstances
for their records at the
credit bureaux to be expunged so that they would be enabled to
responsibly incur additional obligations
by entering into fresh
credit agreements in the ordinary course. In one of the
matters it is alleged, without any substantiating
particularity, that
the applicant’s ‘negative credit rating’ also
‘potentially affect[s] [her] job applications
to further [her]
career’. They submit that the only manner in which their
objects can be achieved is with the aid of
a court order.
[3]
The
question that arises is whether it is at all within the power of the
court to grant them the relief they seek.
[4]
A
similar application was recently refused in this Division by
Thulare AJ in
Du Toit
v Benay Sager t/a Debt Busters and Others
[2017] ZAWCHC 141
(17 November 2017). The essence of the
reasoning of the court in
Du
Toit
was
that the relief sought was inconsistent with the scheme of the NCA.
It was held in particular that it had been inappropriate
for the
applicant to have brought the application to the High Court.
[5]
In
the Gauteng Division, however, there have been at least three
judgments handed down in which relief of the nature sought in the
current application has been granted. In
Magadze
v ADCAP, Ndlovu v Koekemoer
[2016] ZAGPPHC 1115 (2 November 2016), Neukircher AJ
granted the applicants precisely the same relief as that sought
by
the applicants in the matters before me, and Mbongwe AJ followed
suit in
Mokubung
v Mamela Consulting and Others
[2017] ZAGPPHC 462 (14 June 2017) and
Manamela
v Du Plessis t/a Debt Safe and Others
[2017] ZAGPPHC 289 (21 June 2017).
[6]
Neukircher AJ
noted that debt counsellors enjoyed no power under the NCA to release
a debtor from debt review proceedings
[3]
and, correctly, with respect, held held that s 71 of the NCA did
not afford an adequate remedy in the circumstances to expunge
the
record that the applicants were in debt review. She considered
that the High Court nevertheless enjoyed ‘wide powers’
to
grant the relief sought by the applicants. The learned acting
judge expressed the opinion that it would be ‘untenable’
were s 71 of the Act to ‘carry more weight than an order
issued out by the High Court’.
[4]
The judgment does not identity the source of the wide powers that
were purportedly invoked to grant the orders that were
made,
effectively overriding the statutory provision.
[7]
In
the other two judgments, Mbongwe AJ, citing
Universal
City Studios Inc v Network Video (Pty) Ltd
[1986] ZASCA 3
;
1986 (2) All SA 192
;
1986 (2) SA 734
(at 754 SALR),
explained that the orders made were granted ‘using [the
court’s] inherent reservoir of power to regulate
procedures in
the interest of the proper administration of justice’.
[8]
The
High Court does indeed have an inherent jurisdiction, and in
appropriate circumstances even a duty, to develop the common law
taking into account the interests of justice.
[5]
It also has an inherent jurisdiction to regulate its own procedures
and processes – it was only of
that
aspect of its powers that Corbett JA was treating in
Universal
City Studios
supra loc cit.
[6]
In the
area of law regulated or determined by statute, it is under a duty to
interpret and apply legislative enactments in
a manner that promotes
the spirit, purport and objects of the Bill of Rights,
[7]
but in striving to do so it cannot by procrustean construction do
violence to the language used by the legislature Its powers do
not
extend to improving legislation by providing measures or remedies
that the statutory enactments do not afford, merely because
the court
considers it would just or equitable that they should be afforded.
To purport to do so would be in effect to assume
a legislative
function and thereby trench impermissibly on the domain of the
legislative branch of government. The powers
exercisable in
terms of s 172 of the Constitution to read down or read in
provisions to render legislation constitutionally
compatible, or to
provide just and equitable interim relief following on a declaration
of constitutional incompatibility are quite
distinguishable; as is
the approach of the courts to strictly or narrowly interpret
legislation that limits or curbs common law
rights. Any
contemplation of the width of the superior courts’ powers that
fails to acknowledge and respect these limitations
of their bounds is
likely to lead to a fundamentally misconceived conception of their
actual extent, and, if by judges, can result
in their being exceeded.
[9]
The
concepts of ‘over-indebtedness’ (including that of
financial difficulty falling short of ‘over-indebtedness’
contemplated by s 86(7)(b)) and the attendant remedy of ‘debt
review’ within the meaning of the NCA have no foundation
in the
common law. They are statutory creations. How they work
is governed entirely by the NCA and, in the absence
of a challenge to
their constitutionality, the courts’ powers in respect of them
are delineated by the provisions of the
enactment.
[10]
It
is plain, if regard is had to the Act, that the debt review process
under the NCA is provided as a remedy whereby the over-indebted
can
obtain an opportunity to settle their credit agreement related debt
in a responsible, dignified and ordered manner. In
many cases
it affords an alternative to voluntary sequestration that is mutually
beneficial to debtor and creditor.
[8]
In
all cases in which a rearrangement order or agreement is made, the
over-indebted (or financially challenged) consumer is thereupon
provided with conditional protection from harrying and distressing
litigation. A support system for the debtor is afforded
through
the assistance provided by debt counsellors and payment distribution
agents. The responsibilities of the debt counsellor
include
investigating whether any of the consumer’s debt has been
incurred as a result of reckless credit extension and,
if it has,
assisting the debtor to obtain the special relief provided for such
cases by the NCA. The role given to the magistrates’
court in the debt review procedure is to enable orders of a binding
character to be made in respect of debt rearrangement in matters
in
which the creditors fail to enter into a voluntary debt rearrangement
that can be made an order by consent by the National Consumer
Tribunal in terms of s 138. In the nature of judicial
proceedings, a court is, of course, not bound to rubber-stamp
whatever is put before it. The Act acknowledges this by its
express provision for the rejection of applications to the
magistrate,
and for the consequences that follow upon any such
dismissal of the applications.
[9]
[11]
An
important object of debt review-related relief in terms of the Act is
to ensure that persons in debt review do not incur further
debt until
they have recovered from their predicament. This is sought to
be achieved, in part, by prohibiting persons who
have applied for
debt review from entering into fresh credit agreements.
[10]
A person who has applied for debt review who incurs debt in
contravention of the prohibition is deprived of the benefits
and
protection of Part B of Chapter 4 of the NCA in respect of the
additional debt so incurred.
[11]
Any credit extended to a person subject to the prohibition is treated
by the Act as reckless credit, with the attendant adverse
potential
consequences to the creditor’s rights of recovery.
[12]
Potential creditors are afforded a means of protection against
finding themselves considered to have extended credit recklessly
by
being able to refer to the information made available by the credit
bureaux. That is the reason for the obligation on
debt
counsellors in terms of s 86(4) to inform the credit bureaux
when they receive an application for debt review.
The
activities of the credit bureaux are also regulated in terms of the
NCA. All of these provisions are directed at giving
effect to
various of the purposes of the Act listed in s 3.
[13]
[12]
The
disabilities that follow for an allegedly over-indebted consumer
after he or she has applied to a debt counsellor for debt review
are
regulated in the first instance by s 88(1) and (2) of NCA, which
provide:
Effect
of debt review or rearrangement order or agreement
(1)
A
consumer who has filed an application in terms of section 86 (1), or
who has alleged in court that the consumer is over-indebted,
must not
incur any further charges under a credit facility or enter into any
further credit agreement, other than a consolidation
agreement, with
any credit provider until one of the following events has occurred:
(a)
The
debt counsellor rejects the application and the prescribed time
period for direct filing in terms of section 86 (9) has expired
without the consumer having so applied;
(b)
the
court has determined that the consumer is not over-indebted, or has
rejected a debt counsellor's proposal or the consumer's
application;
or
(c)
a
court having made an order or the consumer and credit providers
having made an agreement re-arranging the consumer's obligations,
all
the consumer's obligations under the credit agreements as re-arranged
are fulfilled, unless the consumer fulfilled the obligations
by way
of a consolidation agreement.
(2)
If a consumer fulfils obligations by way of a consolidation agreement
as contemplated in subsection (1) (c), or this subsection,
the effect
of subsection (1) continues until the consumer fulfils all the
obligations under the consolidation agreement, unless
the consumer
again fulfilled the obligations by way of a consolidation agreement.
(The
reference in s 88(1)(a) to s 86(9) is plainly erroneous,
and falls to be construed as referring to s 86(10).
It is
regrettable that the legislature has not taken the opportunity on
either of the occasions on which the NCA has been amended
to correct
this error, despite it having been pointed out in several judgments
of the courts.)
[13]
The
effect of s 88 in matters like the present would therefore
appear to be that the applicants are prohibited from entering
into
any fresh credit agreements, apart from a consolidation agreement,
until they have fulfilled all their obligations under the
existing
credit agreements as rearranged. That effect is ameliorated by
the provisions of s 71 (as amended), which reads
as follows:
Removal
of record of debt adjustment or judgment
(1)
A
consumer whose debts have been re-arranged in terms of Part D of this
Chapter, must be issued with a clearance certificate by
a debt
counsellor within seven days after the consumer has-
(a)
satisfied
all the obligations under every credit agreement that was subject to
that debt rearrangement order or agreement, in accordance
with that
order or agreement; or
(b)
demonstrated-
(i)
financial
ability to satisfy the future obligations in terms of the
rearrangement order or agreement under-
(aa)
a
mortgage agreement which secures a credit agreement for the purchase
or improvement of immovable property; or
(bb)
any
other long term agreement as may be prescribed;
(ii)
that
there are no arrears on the re-arranged agreements contemplated in
subparagraph (i); and
(iii)
that
all obligations under every credit agreement included in the
rearrangement order or agreement, other than those contemplated
in
subparagraph (i), have been settled in full.
[Sub-s.
(1) substituted by s. 21 of Act 19 of 2014 (with effect from 13 March
2015).]
(2)
A
debt counsellor must for the purposes of the demonstration envisaged
in subsection (1) (b), apply such measures as may be prescribed.
[Sub-s. (2) substituted by s. 21 of Act 19 of 2014 (with effect from
13 March 2015).]
(3)
If
a debt counsellor decides not to issue or fails to issue a clearance
certificate as contemplated in subsection (1), the consumer
may apply
to the Tribunal to review that decision, and if the Tribunal is
satisfied that the consumer is entitled to the certificate
in terms
of subsection (1), the Tribunal may order the debt counsellor to
issue a clearance certificate to the consumer. [Sub-s.
(3)
substituted by s. 21 of Act 19 of 2014 ((with effect from 13 March
2015).]
(4)
(a)
A
debt counsellor must within seven days after the issuance of the
clearance certificate, file a certified copy of that certificate,
with the national register established in terms of section 69 of this
Act and all registered credit bureaux.
(b)
If
the debt counsellor fails to file a certified copy of a clearance
certificate as contemplated in subsection (1), a consumer may
file a
certified copy of such certificate with the National Credit Regulator
and lodge a complaint against such debt counsellor
with the National
Credit Regulator.
[Sub-s.
(4) substituted by s. 21 of Act 19 of 2014 ((with effect from 13
March 2015).]
(5)
Upon
receiving a copy of a clearance certificate, a credit bureau, or the
national credit register (sic), must expunge from its
records-
(a)
the
fact that the consumer was subject to the relevant debt rearrangement
order or agreement;
(b)
any
information relating to any default by the consumer that may have-
(i)
precipitated
the debt rearrangement; or
(ii)
been
considered in making the debt rearrangement order or agreement; and
(c)
any
record that a particular credit agreement was subject to the relevant
debt rearrangement order or agreement.
(6)
Upon
receiving a copy of a court order rescinding any judgment, a credit
bureau must expunge from its records all information relating
to that
judgment.
(7)
Failure
by a credit bureau to comply with a notice issued in terms of section
55, in relation to this section, is an offence.
[14]
Prior
to its substitution in terms of the National Credit Amendment Act 19
of 2014, s 71(2) had provided:
A
debt counsellor who receives an application in terms of subsection
(1), must-
(a)
investigate
the circumstances of the debt rearrangement; and
(b)
either-
(i)
issue
a clearance certificate in the prescribed form if the consumer has
fully satisfied all the obligations under every credit
agreement that
was subject to the debt rearrangement order or agreement, in
accordance with that order or agreement; or
(ii)
refuse
to issue a clearance certificate, in any other case.
[15]
It
is clear that s 71(2) in its original form was entirely
congruent with ss 88(1)(c) and 88(2). The evident
intention
in substituting the subsection with the current provision
was to enable credit receivers who had made debt review applications
to achieve the expungement of the record of their debt rearrangement
orders or agreements once they had fulfilled all their obligations
in
respect of those credit agreements that were not mortgage agreements
or any other so-called ‘long term agreements’
as might be
prescribed.
[14]
[16]
It
is implicit that upon the expungement of the record of the debt
rearrangement in terms of s 71 the credit receiver may enter
into fresh credit agreements. This must be so, because if
potential credit providers are to be deprived of access to
information
at the credit bureaux that the consumer to whom they are
considering proving credit is the subject of an extant debt
rearrangement,
the provision in s 88(4) that a credit provider
who enters into a credit agreement with a consumer who is subject to
a subsisting
debt rearrangement is exposed to having all or part of
that new credit agreement declared to be reckless credit
[15]
could not otherwise be applied consistently with the stated purposes
of the Act
[16]
. The
legislature might have made matters clearer had it also amended s 88
when it wrought changes to s 71. Its
failure to do that has
given rise to a tension between the two provisions. That
tension falls to be resolved in the manner
that I have described by
applying the enjoinder in s 2(1) that the Act ‘be
interpreted in a manner that gives effect
to the purposes set out in
section 3’.
[17]
The
upshot is that if the applicants have fulfilled all their obligations
under the credit agreements that are subject to the debt
rearrangement that are not mortgage agreements or long term
agreements identified in regulations made under the Act,
[17]
they are entitled to obtain a clearance certificate in terms of s 71
of the Act. If they succeed in obtaining such a
certificate,
the record of the debt rearrangement will be expunged from the
records in the credit bureaux. If they encounter
problems in
obtaining the relief to which they might contend they are entitled
under s 71, their remedy lies in an approach
to the National
Consumer Tribunal.
[18]
It is only the Tribunal that is empowered to assist them at first
instance. The process is an administrative one.
As
pointed out by Thulare AJ in
Du
Toit
supra, the role of the High Court in the legislative scheme is
limited to dealing with judicial reviews of, or appeals from the
decisions of the Tribunal; see s 148(2) of the NCA. The
NCA does not afford the High Court jurisdiction to deal at first
instance with matters falling within the province of the Tribunal.
[18]
Mr
Bruinders
,
counsel for the applicant in case no. 20480/2017, sought to rely
on s 88(1)(b) of the NCA
[19]
and
Paragraph 4.2 of the ‘Explanatory Note to the Withdrawal
Guidelines’ issued by the National Credit Regulator.
[20]
(The
National Credit Regulator is empowered in terms of s 16(1)(a)
and (b) of the Act to issue guidelines and explanatory notes.
The Regulator is obviously bound by the Act and its published
opinions bearing on the interpretation of the Act are expressly
acknowledged, in s 16(1)(b), to be ‘non-binding’.)
[19]
Paragraph
4.2 of the ‘Explanatory Note to the Withdrawal Guidelines’
reads as follows:
Post
declaration of over-indebtedness
•
The
debt counsellor has the statutory power to recommend that the
consumer be declared over-indebted, however, the Magistrates Court
in
terms of Section 85(b), Section 87(1) and/or Section 88(1)(b) of the
Act has powers to declare the consumer over-indebted or
not
over-indebted.
•
If
the debt counsellor has recommended that the consumer be declared
over-indebted and the Form 17.2 has been issued to credit providers,
the consumer must approach the Magistrates Court with the relevant
jurisdiction to be declared not over-indebted and no longer
under
debt review.
•
A
court application in terms of Section 87(1)(a) of the Act must be
made to the Magistrates Court with relevant jurisdiction requesting
the Court to reject the debt counsellor’s recommendation that
the consumer be found over-indebted; and declare the consumer
no
longer over-indebted.
•
The
application must advise the Court that the consumer had been found
over-indebted by the debt counsellor and a copy of the Form
17.2 is
to be attached as an annexure.
•
The
application must advise the relevant Magistrates Court that the
consumer is no longer over-indebted and must include the consumer’s
financial circumstances at that time in motivation of the aforesaid.
•
The
application must further advise the relevant Magistrates Court that
the consumer no longer needs to be under debt review.
[20]
It
is convenient first to consider counsel’s reliance on
s 88(1)(b). It is clear, if the provision is read
contextually,
that it does
not
contemplate an application to the magistrates’ court for the
purposes of declaring an already established state of
over-indebtedness
to have come to an end, nor does it contemplate an
application to bring an end to debt review pursuant to an agreed debt
rearrangement
pursuant to a recommendation in terms of s 86(7(b).
Indeed, having regard to the provisions of s 71 of the NCA,
discussed above, such a procedure would be superfluous. As
mentioned, the legislative scheme is that the lifting of the
consumer’s disabilities attendant on debt review occurs by way
of an administrative, not a judicial, process. Having
regard to
what is entailed that seems to me in any event to be entirely
fitting. Whilst acknowledging that the separation
of powers
does not give rise to a hermetic compartmentalisation, it would, in
my view, have been an inappropriate allocation of
constitutional
functions to give the courts a surrogate role in the administrative
framework of national credit regulation structures.
The
appeal/review role accorded to the High Court in terms of s 148
is, by contrast, constitutionally appropriate. (I
have already
dealt with the basis for the role given by the statute to the
magistrates’ court.
[21]
)
[21]
For
the interpretation of s 88(1)(b) contended for by Mr
Bruinders
to be able to apply, the phrase ‘the court has determined that
the consumer is not over-indebted’ would require to
be read as
‘the court has determined that the consumer is
no
longer
over-indebted’, thereby necessitating the deletion of the word
‘not’ and its replacement with ‘no longer’.
To deal with debt review following on an agreed debt rearrangement in
terms of s 86(7)(b), it would have to containing wording
‘has
determined that the consumer is no longer subject to the effects of
debt review’ or other words to that effect.
It is well
established that in this context words cannot be read into a statute
unless the implication is a necessary one in the
sense that without
it effect cannot be given to the statute as it stands.
[22]
Mr
Bruinders
’
argument did not fulfil the requirements of that test. The
unambiguous effect of the statute is that an over-indebted
or
financially challenged consumer under debt review who enters into a
debt rearrangement agreement can only terminate the debt
review by
settling his or her obligations to the extent required in terms of
s 71 and demonstrating that he or she has satisfied
the other
requirements of s 71(1)(b).
[22]
The
determination that a consumer is not over-indebted referred to in
s 88(1)(b) is a determination that a magistrate might
make when
deciding an application in terms of s 86(8)(b) or 86(9). A
determination that the applicant was not over-indebted
would be a
ground for rejecting a proposal by the debt counsellor or an
application for relief by the consumer directly in terms
of s 86(9).
It makes sense if the consumer is found not to be over-indebted and
denied debt review that the consequences
of having applied for debt
review should thereupon fall away. The only purpose of
s 88(1)(b) is to make that clear.
(It would seem that if
that were indeed the basis for rejecting the proposal or refusing the
application, the magistrate would
be enjoined to expressly make the
determination; preferably as part of the court’s order.
Like many other things in
the NCA, the matter might have been more
clearly expressed.) As it is, the applicants’ debt
reviews have been confirmed
in terms of s 86(7)(b); sub-secs
86(8)(b) and/or 86(9) have played no role.
[23]
Turning
now to the National Credit Regulator’s explanatory note.
It postulates an application being made in terms of
s 87(1)(a).
[23]
Section
87(1)(a) of the NCA does not make provision for an application.
As already explained, s 87(1) sets forth what
the magistrate may
do in regard to an application made to the court by a debt counsellor
in terms of s 86(7)(c) read with
s 86(8)(b), or a consumer
in terms of s 86(9). The relief sought in such an
application would be that provided
for in s 86(7)(c).
[24]
Section
87(1)(a) merely acknowledges the magistrate’s power to refuse –
or as the statute puts it, ‘reject’
- such an
application.
[24]
Notionally,
there would be nothing to prevent a person who has applied for debt
review adducing evidence in an application brought
by his debt
counsellor in terms of s 86(8)(b) that he or she is in fact not
over-indebted. And if the magistrate were
convinced by such
evidence, it would afford a basis for the court to determine that the
consumer was not over-indebted and reject
the application. That
would bring an end to the effects of debt review by reason of
s 88(1)(b).
[25]
An
application by the consumer in terms of s 86(9) occurs only if
the consumer’s application to the debt counsellor has
been
rejected. Unless such application is brought within the
prescribed time the consumer is automatically excluded from
the
effects of debt review by reason of s 88(1)(a). An
application can be brought in terms of s 86(9) only with
the
leave of the court. To obtain such leave the consumer would
have to satisfy the magistrate prima facie that, notwithstanding
a
debt counsellor’s determination to the contrary, he was in fact
over-indebted. Despite granting the consumer leave
to bring the
application, the magistrate might nonetheless eventually reject it,
in which event s 88(1)(b) would be triggered
and the effects of
debt review terminated.
[26]
Section
87(1)(a) provides for a
negative
response by the court to the application brought before it. It
is to that provision that s 88(1)(b) effectively
cross-references.
The Act most certainly does not contemplate
an application to the magistrates’ court for a declaration that
the consumer
is not over-indebted. Any such declaration would
require a
positive
response to an application for which the Act makes no provision.
Once a debt review
has been confirmed, whether by way of court order in terms of
s 87(1)(b) or by voluntary debt rearrangement
in terms of
s 86(8)(a), the only way to end its effect is in terms of s 71
read with s 88(1)(c). There is
no halfway house.
[27]
In
short, the NCA just does not make provision for the sort of
application conjured in paragraph 4.2 of the Explanatory Note.
[28]
Mr
Bruinders
’
last ditch submission was to ask only for declaratory relief in the
form of the first of the two heads of relief sought
in the
application, and described in paragraph [1]
above, shorn of any
direction as to the expungement of the records by the credit
bureaux. In this regard he argued that the
court should come to
the applicants’ assistance exercising its power in terms of
s 21(1)(c)
of the
Superior Courts Act 10 of 2013
. The
simple answer to that argument is that it would be inappropriate to
make such a declaration in the environment regulated
by the NCA while
the applicants are still properly recorded in terms of the Act as
being subject of debt reviews. What could
be the purpose of
such a declaration while the applicants are still in debt review?
Any such declaration would tend to undermine
the scheme of the Act
and its objects. The applicants have declared that they have
brought the applications so as to be enabled
to incur fresh credit.
As explained earlier in this judgment, the Act precludes that until
they have obtained clearance in
terms of s 71.
[29]
The
applicants’ resort to this court was therefore misconceived.
They are limited to the relief provided for in terms
of s 71 of
the NCA, and can seek it only in the manner therein set out. To
the extent that they do not qualify for relief
under that provision,
they are remediless. The courts are not empowered to craft a
remedy that the statute does not allow
for. In my view
therefore the orders made in the Gauteng Division judgments mentioned
earlier should not have been granted.
[30]
In
the result the following orders are made:
1.
In
case no. 20480/2017:
The
application is dismissed.
2.
In
case no. 20481/20:
The
application is dismissed.
A.G.
BINNS-WARD
Judge
of the High Court
APPEARANCES
In
case no. 20480/2017
Applicant’s
counsel:
S. Bruinders
Applicant’s
attorneys:
MTO Attorneys
Rondebosch
In
case no. 20481/2017
Applicant’s
counsel:
M. Alexander
Applicant’s
attorneys:
MTO Attorneys
Rondebosch
[1]
It would seem that four such applications were intended to be
brought, but in the other two matters there were no papers in the
court files when they were called, and they were struck from the
roll.
[2]
Form 17W is a form that has been brought into use in terms of the
‘
Guidelines
for the Withdrawal from Debt Review’ issued by the National
Credit Regulator, discussed in para. [18]-[19]
and
[23]-[27], below.
[3]
In
this regard the learned acting judge agreed with the
(uncontroversial) finding to that effect previously made by Nobanda
AJ in
Rougier
v Nedbank Ltd
[2013] ZAGPJHC 119.
[4]
At
para. 21 of the judgment.
[5]
Sections
39(2) and 173 of the Constitution.
[6]
Section
173 of the Constitution. In
Universal
City Studios
supra, at p.754G, Corbett JA said ‘There is no doubt that the
Supreme Court possesses an inherent reservoir of power to
regulate
its
procedures in the interests of the proper administration of
justice’. (Italicisation supplied for emphasis.
The italicised word was omitted from the quotation in the form in
which it was borrowed by Mbongwe AJ for the purposes of the
judgments in
Mokubung
and
Manamela
supra, with a resultant critical distortion of its actual import.)
[7]
Section
39(2) of the Constitution.
[8]
Cf.
Ex
parte Ford and Two Similar Cases
2009 (3) SA 376
(WCC) and
Ex
Parte Concato and Similar Cases
2016 (3) SA 549 (WCC).
[9]
See s 86(7)(c) read with ss 87(1)(a) and 88(1)(b) of the
NCA.
[10]
Section
88(1) and (2) of the NCA (quoted in para. [12], below).
[11]
Section 88(5) of the NCA.
[12]
Section 88(4) of the NCA.
[13]
See
in particular s3(c) ,(d) ,(f), (g) and (i).
[14]
The
expression ‘long term agreements’ is not defined, but it
would appear from the context that it refers to credit
agreements of
the sort in which the originally agreed period for the redemption of
the debt extends over several years.
They fall to be
identified (‘prescribed’) in regulations, which, to the
best of my knowledge, have yet to be made.
[15]
Section
80(1) of the NCA provides:
A credit agreement is
reckless if, at the time that the agreement was made, or at the time
when the amount approved in terms of
the agreement is increased,
other than an increase in terms of section 119(4)—
(a)
the credit provider failed to conduct an assessment as required by
section
81(2), irrespective of what the outcome of such an
assessment might have concluded at the time; or
(b)
the credit provider, having conducted an assessment as required by
section
81(2), entered into the credit agreement with the consumer
despite the fact that the preponderance of information available to
the credit provider indicated that—
(i)
the consumer did not generally understand or appreciate the
consumer’s
risks, costs or obligations under the proposed
credit agreement; or
(ii)
entering into that credit agreement would make the consumer
over-indebted.
[16]
See
in particular those stated in s 3(c), (d) and (f) of the NCA.
[17]
I
am not aware that any such regulations have yet been made.
[18]
Sub-secs 71(4) and(7) of the NCA
[19]
See para. [12] above for the text of s 88(1).
[20]
The Explanatory Note is undated, but it would appear from the
information published on the National Credit Regulator’s
website that it was issued in March 2016. The introduction to
the Explanatory Note records that ‘
On
19 February 2015, the National Credit Regulator (“the NCR”)
issued Guidelines 002/2015 for the Withdrawal from
Debt Review.
Subsequently, challenges were experienced by the industry regarding
the implementation of certain aspects of the
guidelines. As a
result, the sub-committee that dealt with the matter reconvened to
find ways to address the identified implementation
challenges.
’
It
follows that the Explanatory Note falls to be read with the issued
Guidelines 002/2015. The introduction to those Guidelines
is
instructive: ‘
The
National Credit Act
(“the Act”) introduced debt review
as a debt relief measure for over-indebted consumers. This is a
statutory process
which is only conducted by registered debt
counsellors. The process to withdraw or terminate debt review by the
consumer or debt
counsellor is not specified in the Act; however the
credit industry has in the past years developed a voluntary
withdrawal process
and a Form 17.4 to facilitate the withdrawal
process either by a consumer or DC. The application of this
voluntary withdrawal
process was overturned by the judgment granted
in the case of Rougier v Nedbank which provided clarity on whether a
debt counsellor
has the statutory power to withdraw or terminate
debt review. In terms of this judgment any act by a debt counsellor
to terminate
or withdraw debt review is beyond the statutory powers
of a debt counsellor as espoused in the Act, therefore the conduct
is
prohibited. Following an intensive review process of this
judgment and its impact by the Credit Industry Forum(CIF), the NCR
is pleased to announce that the paper developed by the CIF has been
signed off and is issued as guidelines to be applied by all
industry
participants effective immediately. These guidelines replace the use
of Form 17.4. Please take note that amendments
to the Act, its
regulations or case law supersede provisions made in these
guidelines and will when necessary be amended.’
[21]
In para. [10].
[22]
See e.g.
Rennie
NO v Gordon and Another NNO
1988 (1) SA 1
(A), at 22E-F and
Geuking
v President of the Republic of South Africa and Others
2003 (3) SA 34
(CC), at para. 20. Reading in the context of
determining constitutional compatibility is an entirely different
issue.
[23]
Refer to the third bullet point of paragraph 4.2 quoted in
para. [19] above.
[24]
Ordering-
(i)
that one or more of the consumer's
credit agreements be declared to be reckless credit, if the debt
counsellor has concluded that
those agreements appear to be
reckless; and
(ii)
that one or more of the consumer's obligations be re-arranged by-
(aa)
extending the period of the agreement and reducing the amount of
each payment due
accordingly;
(bb)
postponing during a specified period the dates on which payments are
due under
the agreement;
(cc)
extending the period of the agreement and postponing during a
specified period
the dates on which payments are due under the
agreement; or
(dd)
recalculating the consumer's obligations because of contraventions
of Part A or
B of Chapter 5, or Part A of Chapter 6.