About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Western Cape High Court, Cape Town
SAFLII
>>
Databases
>>
South Africa: Western Cape High Court, Cape Town
>>
2018
>>
[2018] ZAWCHC 41
|
|
Truworths Limited and Others v Minister of Trade and Industry and Others (4375/2016) [2018] ZAWCHC 41; 2018 (3) SA 558 (WCC) (16 March 2018)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
CASE
NO:
4375/2016
In
the matter between:
TRUWORTHS
LIMITED
First
Applicant
THE
FOSCHINI GROUP LIMITED
Second Applicant
MR
PRICE GROUP
LIMITED
Third
Applicant
and
THE
MINISTER OF TRADE
AND
INDUSTRY
First Respondent
THE
NATIONAL CREDIT
REGULATOR
Second Respondent
THE
SOUTH AFRICA HUMAN
RIGHTS
COMMISSION
Amicus Curiae
JUDGMENT
- 16 MARCH 2018
ENGERS,
AJ
[1]
According to the Oxford Dictionary, 'credit' is defined as
"the
ability of a customer to obtain goods or services before payment,
based on the trust that payment will be made in
the future;
money lent or made available under such an arrangement".
[2]
Credit, used responsibly, enables a person to enjoy the benefit of
goods and/or services which he might not otherwise be able
to afford
from his immediate means. Unfortunately, credit used irresponsibly
can plunge a person into a spiral of debt from
which he or she
will be unable to extricate themselves.
[3]
In order to promote the benefits of responsible credit, and to
prevent, or at least minimise, the proliferation of irresponsible
credit, various legislation has been enacted. The current framework
for regulating credit is to be found in the
National Credit Act, No.
34 of 2005
, read together with regulations promulgated thereunder.
[4]
Section 3
of the Act, headed "Purpose of Act" echoes and
elaborates on the preamble to the Act. Section 3 begins:
The
purposes of this Act are to promote and advance the social and
economic welfare of South Africans, promote a fair, transparent,
competitive, sustainable, responsible, efficient, effective and
accessible credit market and industry, and to protect consumers,
by-
(a)
promoting the development of a credit market that is accessible to
all South Africans,
and in particular to those who have historically
been unable to access credit under sustainable market conditions;
(b)
ensuring consistent treatment of different credit products and
different credit providers;
(c)
promoting responsibility in the credit market by-
(i)
encouraging responsible borrowing, avoidance of over
indebtedness and fulfilment
of financial obligations by consumers;
and
(ii)
discouraging reckless credit granting by credit providers and
contractual default
by consumers;...
[5]
This Act regulated many aspects of the credit industry, including the
granting of credit by a credit provider to a consumer,
in an attempt
to eliminate what is termed "reckless credit". One of the
ways in which this was done was to place a duty
on a credit provider
to ascertain whether the consumer could afford the credit he was
seeking.
[6]
In this regard, section 81 of the Act, headed "Prevention of
reckless credit" provides that a credit provider must
not enter
into a credit agreement without first taking reasonable steps to
assess
"(a)
the proposed consumer's -
(i)
General understanding...
(ii)
Debt re-payment history as a consumer under credit agreements;
(iii)
Existing financial means, prospects and obligations..."
[7]
Section 82 deals with "Assessment mechanisms and procedures",
and in its original form provided that
"A
credit provider may determine for itself the evaluative mechanisms or
models and procedures to be used in meeting its assessment
obligations under section 81, provided that any such mechanism,
model or procedure results in a fair and objective assessment."
[8]
According to the Minister, it became apparent to him that the
assessment procedures being used by credit providers
were not
sufficient to reduce the level of reckless credit. For that reason he
determined to, inter alia, prescribe in more detail
how a credit
provider should assess the prospective credit receiver. To this end,
he promulgated amendments to the regulations,
including some that set
out how affordability assessments must be conducted. These are
referred to as the "affordability assessment
regulations".
Section 82(1) was at the same time amended by
adding the words
"and
must not be inconsistent with the affordability assessment
regulations made by the Minister."
[9]
It is one of these regulations that is the subject of the challenge
made by the applicants in this matter. In particular
the
applicants challenge subregulations 23A (4), (5) and (7).
Virtually the entire thrust of the challenge was directed
at
(4), with an almost perfunctory attempt
to have the other two subregulations
set aside because they flow from (4). In my view,
no case has been made out for setting aside
subregulations (5) and (7), as will appear below.
[10]
The applicants are three of the largest retail clothing companies in
South Africa. Each has a multitude of stores operating
nationwide.
Their customers purchase for cash and on credit. Where a customer
wishes to purchase on credit, he or she may apply
for a card (known
as a store card) which enables him or her to open an
account, to purchase goods on account from that
company up to a given
limit, and pay for them later according to the terms governing
the use of that card.
[11]
The first respondent is the Minister who is responsible for the
regulations in question.
[12]
The second respondent is the National Credit Regulator ("NCR"),
a body established in terms of Chapter 2 of the Act.
Section 13 of
the Act makes the NCR responsible to -
"promote
and support the development, where the need exists, of a fair,
transparent, competitive, sustainable, responsible,
efficient,
effective and accessible credit market and industry to serve the
needs of -
(i)
Historically disadvantaged persons;
(ii)
Low income persons and communities; and
(iii)
Remote, isolated or low density populations and communities."
[13]
The South African Human Rights Commission was granted leave to
participate in the proceedings as
amicus curiae,
and
presented written and oral submissions during argument.
[14]
Before dealing with the main application, I need to deal with certain
interlocutory matters.
[15]
When the review was launched, The Foschini Group Limited ('TFGL') was
cited as the second applicant in the notice of
motion and in
the description of the parties in paragraph 8 of the founding
affidavit.
[16]
In its answering affidavit in the review, the NCR raised, as one of
its grounds of opposition to the review, the allegation
that TFGL
lacked
locus standi.
In essence, this ground of
opposition was based on the fact that Foschini Retail Group (Pty) Ltd
('FRG') should have been
cited as an applicant and not, as was the
case, TFGL.
[17]
Application was then made to substitute the correct second applicant,
by joining FRG. Respondents opposed this, but notwithstanding
their objections, it seems to me that this was a case of
a simple mistake in identity in that FRG was always intended
to be
the applicant. It is the retail arm of the Foschini Group
and as such is registered with the NCR.
The
allegations in the papers in fact related to FRG,
and I can see no prejudice to the respondents in
making the
substitution. Indeed, it seems to me in the interest of all the
parties that the correct applicant
be cited.
In the circumstances I do not feel it was reasonable for
respondents to have opposed the substitution/joiner.
I
accordingly grant leave to make the substitution.
[18]
As far as costs are concerned, this aspect was a relatively minor
one. I consider that the second applicant
should be
liable for the costs of an unopposed application,
and the respondents, should be liable for the
costs of
opposition.
[19]
Applicants have also brought a conditional condonation application.
It is contended by the respondents that the applicants
launched
proceedings out of time, that is outside of the 180-day limit in
PAJA, and that they in any event delayed unreasonably
long in
launching the application.
[20]
By my calculation, the date on which the application was launched
falls just inside the 180-day period from the coming
into
effect of the regulations. The 180-day period is of
course a maximum, and even where proceedings commence within
that
period, the delay may have been unreasonable .
[21]
In the present case, I do not consider that the applicants delayed
unreasonably in bringing the application. The regulations
in question
were promulgated and were to take effect from 13 March 2015. However,
industry representatives were in negotiations
with the Minister
regarding a moratorium to allow credit providers time to adapt
their businesses, and the result was that
the Minister, in August,
granted, as it were, a retrospective six-month moratorium from 13
March, so that the regulations came
into effect on
14
September
2015.
[22]
It was argued on behalf of respondents that the applicants should
have already taken steps to review the regulations
during the
6-month period from March to September. I do not agree. The effect of
the Minister's moratorium was that the regulations
were not in effect
during that period, and for most of that period credit providers
would not have fully complied with the new
requirements. It
would not have been possible for the applicants to begin to
assess the effect the regulation
was having.
[23]
The respondents levelled criticism at the data put forward by
applicants in support of their contention that the
regulation has negatively affected their business. An important
aspect of this is that insufficient time had elapsed when
the
application was launched, to make a meaningful comparison between the
pre-existing requirements and the new affordability
assessment
regulations. It was submitted, and common sense tells us,
that the least that one should have is a comparison
between a trading
quarter before, and after, the regulations came into effect. That
being the case, one cannot fault the applicants
for waiting to
collect as much data as possible before commencing
proceedings.
[24]
It was submitted on behalf of the first respondent that the delay has
caused or will cause prejudice to other credit
providers who have
already adapted their business to conform to
the new regulations. As I see it, there
is nothing to stop those
credit providers from continuing to implement whatever systems they
have devised. Those systems
may well comply with any
replacement regulation (If the presently impugned regulations are set
aside).
[25]
To the extent that any condonation is necessary, I would grant it.
The application was necessitated by the defence put up by
first
respondent, and I therefore consider that he should bear the
costs.
[26]
The
documents in this case run to 15 full lever-arch files
[1]
.
The main application contains several expert reports, by accountants
and economists, filed by applicants and first respondent.
Shortly
before the hearing, the Minister sought to file yet another
report as well as an affidavit dealing with "new
matter''
contained in the replying affidavits. The report was one by
Hilton Greenbaum, an
accountant.
[27]
Applicants objected to the late production of these, and the Minister
accordingly made a formal application to file the affidavit
and the
report.
[28]
In terms of an order made by Papier AJ on 25 April 2017, the
applicants were to provide certain documents by 3 May. The Minister
was given leave to file additional reports, if considered necessary,
by 12 June. Respondents were given leave to file
a fourth
set of affidavits, "addressing the new matter in reply", by
30 June.
[29]
Both the affidavit and the report are dated 4 August 2017, three days
before the hearing commenced.
[30]
On the first day of the hearing, 7 August, counsel for the Minister
advised the court that an application for the condonation
of the late
filing of the Minister's affidavit and Greenbaum's report would be
brought. The hearing lasted three days until
9
August. However, it was only on 18 August that the condonation
application was brought. The delay was partly due to the
absence of
the attorney who had been handling the matter, due to a family
crisis.
[31]
In the application for condonation, the Minister's attorney lays at
least part of the blame for the late filing of the report
on
non-compliance by the applicants with the order of Papier AJ.
Applicant's attorney deals with each of the categories of document,
indicating that these were provided. Although it seems clear that
applicants did not meet the deadline of 3 May, the delay was
not such
as to cause Greenbaum's report or the Minister's affidavit to
be delayed until 4 August.
[32]
There is clearly a dispute as to exactly by when all the documents
had been provided by the applicants. There is
also an email of
9 June which applicants' attorney says she sent, but first
respondent's attorney denies having received.
[33]
Whilst I am of the view that there may be potential prejudice to the
applicants by admitting the report, it seems to me the
preferable way
to deal with the matter.
[34]
As far as the Minister's further affidavit is concerned, the only
explanation for its lateness is the Minister's unavailability
during
a particular week, and the necessity for various
officials to check the affidavit before the Minister signed
it.
This is hardly a satisfactory explanation. I am thus
inclined not to permit it to be filed. There will
be
little prejudice to the first respondent, since, as the
founding affidavit points out, it deals largely
with two aspects which were no longer being pursued.
[35]
As far as costs are concerned, each party has achieved some measure
of success.
The
opposition to the filing of the report was also not unreasonable .
I consider that a fair order would be that each
party bear
their or his own costs of the application for condonation
for filing these further documents.
[36]
I now turn to the impugned regulations. They should
perhaps be seen in the context of regulation
23A as a whole, which reads as follows:
23A
Criteria to conduct affordability assessment
Application
(1)
These Regulations apply to-
(a)
current, prospective and joint consumers;
(b)
all credit providers; and
(c)
all credit agreements to which this Act applies, subject to
Regulation 2.
(2)
These Regulations do not apply to a credit agreement in respect of
which the consumer is a juristic
person...
Existing
financial means and prospects
(3)
A credit provider must take practicable steps to assess the consumer
or joint consumer's discretionary
income to determine whether the
consumer has the financial means and prospects to pay the proposed
credit instalments.
(4)
A credit provider must take practicable steps to validate gross
income, in relation to-
(a)
consumers that receive a salary from an employer:
(i)
latest three (3) payslips; or
(ii)
latest bank statements showing latest three (3) salary deposits;
(b)
consumers that do not receive a salary as contemplated in (a) above
by requiring:
(i)
latest three (3) documented proof of income; or
(ii)
latest three (3) months bank statements;
(c)
consumers that are self-employed, informally employed or employed in
a way through
which they do not receive a payslip or proof of income
as contemplated in (a) or (b) above by requiring:
(i)
latest three (3) months bank statements; or
(ii)
latest financial statements.
(5)
Where the consumer's monthly gross income shows material variance,
the average gross income over the period
of not less than three (3)
pay periods preceding the credit application must be utilised.
(6)
The consumer must accurately disclose to the credit provider all
financial obligations to enable the credit
provider to conduct
the affordability assessment.
(7)
The consumer must provide authentic documentation to the credit
provider to enable the credit provider to conduct
the affordability
assessment.
Existing
financial obligations
(8)
A credit provider must make a calculation of the consumer's existing
financial means, prospects and obligations as envisaged
in sections
78(3) and 81(2)(a)(iii) of the Act.
(9)
The
credit provider must utilise the minimum expense norms table
below
[2]
, broken down by monthly
gross income when calculating the existing financial obligations of
consumers.
(10)
The methodology in the table requires for:
(a)
credit providers to ascertain gross income;
(b)
statutory deductions and minimum living expenses to be deducted to
arrive at a net
income, which must be allocated for payment of debt
instalments; and
(c)
when existing debt obligations are taken into account, the credit
provider
must
calculate discretionary income to enable the consumer to satisfy any
new debt.
(11)
The credit provider may however on an exceptional basis, where
justified, accept the consumer's declared
minimum
expenses which are lower than those set out in table 1
provided the questionnaire set out in the Schedule,
as issued from
time to time, is completed by the consumer or joint consumers.
(12)
When conducting the affordability assessment, the credit
provider must-
(a)
calculate the consumer's discretionary income;
(b)
take into account all monthly debtrepayment obligations in terms of
credit agreements
as reflected on the consumer's credit profile held
by a registered credit bureau; and
(c)
take into account maintenance obligations and other necessary
expenses.
[37]
The assessment thus involves finding the consumer's discretionary
income, and then taking certain specified obligations
into
account. Discretionary income is calculated by taking gross
income and deducting expenses, either
in
accordance with the table or otherwise. The starting
point is gross income, and subregulations
(3) and
(4) set out what the credit provider must do to validate the gross
income.
[38]
The Minister has explained in great detail how he went about drafting
the affordability assessment regulations.
Included in the
process was a public participation in which interested parties were
invited to submit comments on the proposed
draft. The record of
decision contains these comments, which are voluminous.
[39]
The original draft regulations were published for comment on 1 August
2014 and contained the following precursor of 23A (4):
"...
a credit provider is required to
take practical steps to validate
gross
income by referring to:
1.1.1.
recent three months' consumer's payslips;
1.1.2.
recent three months' bank statements; or
1.1.3.
any other similar credible information."
[40]
As I stated, voluminous comments were received from a great number of
organisations, businesses and people. Reading through
these, I noted
that many of the comments in relation to the above wording was that
it would be too restrictive.
[41]
The
Minister says that he considered all the representations and produced
the final version of the regulations. As far as the changes
to 23A
(4) are concerned, it is not difficult to see how those came about.
One of the many comments was by Capitec Bank, and their
proposed
wording for the regulation was almost word for word what appears
in
the
final
regulation
s
[3]
.
The
only
apparent
(but
not
material)
difference seems to be the replacement of the word
'recent' with
'latest'.
[42]
This was taken, virtually verbatim,
and incorporated in the revised
regulations. These revised regulations were not circulated
for further comment by stakeholders or interested
parties.
[43]
It was submitted, correctly, on behalf of the respondents, that the
Minister is not obliged to re-advertise for comment.
However,
where the Minister changes the draft
regulations in a material respect, calling for further
comment might
under certain circumstances be advisable.
[44]
The applicants seek to impugn the regulation on various
grounds:
a.
unfair discrimination and unreasonableness;
b.
failure to take into account relevant considerations;
c.
That they are
ultra vires
the Act;
d.
procedural unfairness.
[45]
The attack based on discrimination and unreasonableness centres on
the fact that category (c) consists largely of the poorer
and less
privileged members of society. In respect of those persons, the
regulations prescribe a form of validation which
is inappropriate
and, in many cases, impossible for them to comply with.
[46]
In my view, the attack is well founded. If for example, a flower
seller in Adderley Street does not. have a bank account, it
is
unlikely in the extreme that they would have financial statements.
This would then be an insurmountable obstacle to even obtaining
credit in a relatively small amount, even if they are earning a
reasonable amount each month. One thinks of a parent
who
needs to buy school uniform for his or her child in January,
and would easily be able to pay the price over the next
few months,
but who cannot afford the entire amount in one go.
[47]
.
In
the light of the criticism that the regulation discriminates against
those without bank accounts and who are informally or self-employed,
the Minister in his answering affidavit said that in drafting
the regulations he bore in mind the "unbanked", i.e.
those
people who do not have banking
accounts
[4]
[48]It
is unfortunate that in doing so he removed from the draft a provision
which would have enabled a flexible approach to such
persons (any
other similar credible information), and imposed a rigid set of
requirements which on the face of it, could well exclude
them from
obtaining credit. No doubt Capitec Bank, from whom the inspiration
for the final wording came, had in mind its own customers
when
putting forward the proposed wording. Its customers, by
definition, have bank accounts, and hence
bank
statements, so it might not have been so aware of the impact of
requiring financial statements.
[49]
Respondents
justified the regulation by contending that 'financial
statements' did not necessarily mean audited
financial
statements. That seems correct
[5]
•
But they further contended that a financial statement could be
something else, such an affidavit by one's employer, or even
a letter
from one's
employer.
[50]
I fail to see that such an affidavit or letter could possibly
be a financial statement.
Financial statements are specific documents which are produced
on a regular (usually annual) basis, usually by an accountant.
The core financial statements are a balance sheet, an income
and expenditure statement, and a statements showing the use
and
application of funds. The use of the term "
latest
financial statements" in the regulation is an
indication that it refers to statements being produced from
time to time, and not just a single document such as a letter or
affidavit. It is even more difficult
to
understand the respondents' interpretation of financial statements in
relation to self-employed people. Must they themselves
write a
letter to confirm their gross income? That hardly seems to
serve the purpose
intended by the
regulation.
[51]
It was argued by applicants that if the Minister's interpretation is
correct, then the regulation is so vague as to be unreasonable.
I
consider that there is some merit in this submission although, in my
view, the term 'financial statements' cannot support the
Minister's
interpretation.
[52]
Respondents also pointed out that the regulations as a whole,
including 23A (4), do promote the stated aim of preventing reckless
credit. That may be so,. but in my view 23A (4)
frustrates another aim of the Act, namely
promoting the development of a credit market that is accessible
to all South Africans, and in particular to those who have
historically been unable to access credit under sustainable market
conditions. In my view, the evidence shows that 23A (4)
has
the potential to eliminate
any
credit being
granted to many in that category, instead of merely preventing
reckless credit. As such, it is neither
reasonable,
nor rationally connected to the purpose which it is
intended to serve.
[53]
In my view, in discriminating against a section of the population
that represents the less privileged, and probably also
many
previously disadvantaged persons, in a manner that
is not fair, the regulation
falls foul of
s14(2)
and s
14{3
)
of the
Promotion of Equality and Prevention
of Unfair Discrimination Act 4 of 2000
. The applicants also submit
that it contravenes section 9(3) of the Constitution, in that it
effectively discriminates on the basis
of race. It is clear to me
that this could never have been the intention of the Minister, but it
may well be an unintended result.
If so, it would offend against
section 9(3), but I make not finding on this point.
[54]
Finally, the fact that it was taken virtually verbatim from one of
the very many comments received from the public, suggests
that it was
arbitrarily inserted into the regulations.
[55]
On
all the above criteria, regulation 23A (4) falls to be set aside on
the basis that it fails the test of legality, as set out
by Ngcobo J
in Affordable Medicines Trust and Others v Minister of Health and
Others
[6]
.
[56]
The
alleged failure to take relevant considerations into account is
coupled with an allegation that the Minister did not in fact
have
regard to the public input, and the comments of the Department
[7]
.
There are certainly indications in the Record of Decision ("RoD")
that this might be the case. The RoD does not, for
example, bear out
that the consolidated comments of the DTI were placed before the
Minister for his consideration. However, I feel
it unnecessary to
decide this issue in the light of my findings on the other grounds of
attack.
[57]
As far as the regulations being
ultra vires
is
concerned, the applicants submit that section 81 and 82 impose a duty
on credit providers only to "assess" the relevant
parameters of the consumer. Based on a dictionary
definition of 'assess', namely 'to calculate
and place a
value on', they argue that this does not include
validation or verification of those parameters.
Regulation 23A
(4) imposes in terms a duty to verify or validate, and is hence
ultra
vires.
[58]I
do not agree. To my mind, the duty to assess implies that the
assessor come to a correct or accurate assessment. Information
provided by the consumer may not be accurate. It may be that the
consumer makes a mistake, or it may be that the consumer, anxious
to
qualify for a loan or other credit, gives deliberately false
information (despite this being in contravention of regulation
23A
(6)). In order to avoid reckless credit being given (or
obtained), I see no reason why the regulations should not contain
provisions ensuring as far as possible that the
assessment carried out by the credit provider is based on
accurate
information. This seems to me to be
implicit in the sections, and hence is legitimate subject matter for
the regulation.
[59]
The attack on the basis of procedural unfairness centres on the
failure of the Minister to seek and obtain further
comment after amending the draft regulations.
[60]
Respondents submitted that there is no statutory or other provision
that required the Minister to subject the amended regulations
to a further public participation process. Once again, this is
correct. However, there may well be situations where such
a process
is advisable, or even necessary.
[61]
In the present case, the Minister changed what appeared to be a
fairly flexible requirement into a far more rigid and stringent
one.
This must be seen against the background of the comment already
received that the original formulation was already too stringent.
In
the light of my findings on the other grounds, I do not feel it
necessary to make a final decision on this one, save to say
that
there may be merit in the applicants' contention in relation to
subregulation (4).
[62]
There is, predictably, a dispute on the papers regarding the effect
of the impugned regulations. Once again, the
thrust of the
arguments is around subregulation (4).
[63]
Each side has brought experts to bear on the matter. Some have
analysed the effects from a macro point of view. Some have analysed
the actual results of the applicants .
[64]
I
find it extremely difficult to weigh up the conflicting views. What
is common cause, however, is that there is a significant portion
of
the South African population that does not have bank accounts
[8]
.
They therefore would have to produce the alternative form
of validation in whatever category they fall. Should they
be, as
many are, self-employed or in informal employment, they are
going to be unable to obtain credit unless
they produce
their latest
financial
statements.
Objectively,
it
seems to me likely, as the applicants contend, that this will result
in their having to decline many would-be credit-seeking
ustomers who
actually can afford the credit.
[65]
In my opinion, the data for the limited period from the inception of
the regulations until the application, do show a decline
in the
granting of credit by the applicants. This may well be due in part to
factors other than the impact of the regulations,
but on the
probabilities I find that the regulations have had a detrimental
effect on the business of the applicants.
[66]
It has been said that one can prove virtually anything with
statistics, and the present application is perhaps an illustration.
[67]
While I am of the view that a good case has been made out for setting
aside regulation 23A (4), the same cannot be said for
(5) and (7).
The elimination of (4) removes only the specific provisions for
validating gross income. It does not do away
with the need to
ascertain gross income as· a step towards calculating
discretionary income. Accordingly, subregulations
(5) and (7) will
continue to have application .
[68]
The court wishes to thank the
amicus curiae
for its
contribution to the debate. Mr Magardie referred me to wide-ranging
and extremely interesting material. However, the concerns
of the
amicus
were postulated on the apprehension that applicants
were seeking relief that would have the effect of allowing reckless
credit to
flourish. As should appear from this judgment,
that was not really the nature of the attack on regulation 23A (4).
The costs
incurred by applicants and respondents in respect of the
application by the
amicus curiae
should be costs in the cause.
[69]
Following on all the above, I make the following orders:
a.
The joinder application
i.
The Foschini Retail Group is joined, and substituted for The
Foschini Group Limited
as the second applicant;
ii.
Second applicant is to bear the costs of an unopposed application;
iii.
Respondents are to pay the costs occasioned by opposition.
b.
Applicants' conditional applicant for condonation
i.
This application is granted to the extent that may be necessary;
ii.
First respondent is to pay applicants' costs.
c.
First respondent's application to file further documents
i.
Leave is granted to file the report of Hilton Greenbaum dated 4
August 2017;
ii.
Leave is refused to file the further affidavit of the first
respondent, also dated 4 August
2017;
iii.
Each party is to pay its own costs of this application.
d.
Regulation 23A (4) is reviewed and set aside;
e.
Save as already provided for, first respondent shall pay applicants'
costs.
f.
All of the above costs shall include the costs of two counsel where
two counsel were employed.
____________________
ENGERS
AJ
[1]
The main application papers run to 4 files, and the interlocutory
applications take up 1 file. There are 3 files containing the
record
of decision. Counsel were kind enough to provide copies of the
authorities relied on, which took up another 6 files.
The
heads of argument were in yet another file.
[2]
I have omitted the minimum expense norms table
[3]
Capitec's proposal reads: 23A(4) should be worded as follows: A
credit provider is required to take practicable steps to
validate gross income by referring to:-
(a)
for consumers that receive a salary from an employer;
(i)
recent three (3) payslips; and/or
(ii)
recent bank statements showing recent three (3) salary deposits
(b)
for consumers that do not receive a salary as contemplated
in (a)
above;
(i)
recent three (3) documented proof of income; and/or
(ii)
recent three (3) months bank statements
(c)
for consumers that are self-employed, informally employed
or
employed in a way through which they do not receive a payslip or
proof of income as contemplated in (a) or (b) above;
(i)
recent three (3) months bank statements; or
(ii)
recent financial statements.
[4]
"/
expressly
applied my mind to the fact that a percentage of South Africans do
not have bank accounts or receive regular payslips.
For this
reason I amended draft Regulation 23A(4)(c) to read that consumers
who are self- employed, informally employed or
do
not
receive a payslip or proof of income had to either produce their
latest
three months' bank statements or their
latest
financial statements."
[5]
Although an unaudited statement seems to me to provide hardly any
validation or verification.
[6]
[2005] ZACC 3
;
2006 (3) SA 247
(CC) at p272 - paras [48] and [49]
[7]
The Department of Trade and Industry ("DTI"), i.e. the
Minister's department
[8]
The figure of 20% of the population is mentioned.