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[2014] ZASCA 114
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Barko Financial Services (Pty) Limited v National Credit Regulator and Another (415/13) [2014] ZASCA 114; [2014] 4 All SA 411 (SCA) (18 September 2014)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case
no: 415/13
Reportable
In
the matter between:
BARKO
FINANCIAL SERVICES (PTY)
LIMITED
....................................................
APPELLANT
and
NATIONAL
CREDIT
REGULATOR
..............................................................
FIRST
RESPONDENT
THE
NATIONAL CONSUMER
TRIBUNAL
............................................
SECOND
RESPONDENT
Neutral
citation:
Barko Financial Services
(Pty) Ltd v National Credit Regulator
(415/13)
[2014] ZASCA 114
(18 September 2014)
Bench:
Ponnan, Shongwe, Wallis, Mbha JJA and
Mocumie AJA
Heard:
18 August 2014
Delivered:
18 September 2014
Summary
:
National Credit Act 34 of 2005
– consumer paying service fee
in excess of the maximum prescribed by the Act pursuant to a
supplementary agreement –
whether supplementary agreement
induced as contemplated by
s 91
(a)
– power of National Consumer Tribunal to order repayment.
ORDER
On
appeal from
: North Gauteng High Court,
(Pretoria) (Pretorius J (Hughes and Vorster AJJ concurring) sitting
as a court of appeal in terms of
s 59(3)
of the
National Credit Act
34 of 2005
.
The
appeal is dismissed with costs such costs to include those consequent
upon the employment of two counsel.
JUDGMENT
Ponnan
JA (Shongwe, Wallis, Mbha JJA and Mocumie AJA concurring):
[1]
On 24 June 2010 the first respondent, the National Credit Regulator
(the NCR),
[1]
issued the
appellant, Barko Financial Services (Pty) Ltd (Barko), a registered
credit provider, with a compliance notice
in terms of s 55 of the
National Credit Act 34 of 2005 (the NCA). The essential issue giving
rise to the issuance of the compliance
notice was whether it was
legitimate in terms of the NCA for persons to whom Barko lent money
to agree to pay, in addition to the
statutorily prescribed fees and
interest, a further fee for the successful processing of the
repayments of their indebtedness.
The NCR regarded this as a breach
of the NCA. Barko contended that this additional fee was paid to a
third party (NuPay) in terms
of a separate agreement and did not
contravene the NCA. For a proper appreciation of the issues raised by
the appeal it is necessary
to consider the relevant provisions of the
NCA and the agreements that formed the basis for Barko’s
business practices and
contentions.
[2]
Section 55(1)
(a)
of the NCA authorises the NCR to issue a
compliance notice in the prescribed form to a person or association
of persons whom the
NCR on reasonable ground believes has failed to
comply with a provision of the NCA or is engaging in an activity in a
manner that
is inconsistent with the NCA. The compliance notice
issued to Barko read:
‘
A.
In terms of section 55(1)(a) and (3) of the Act your attention is
drawn to the fact that you have failed to comply with the provisions
of the Act, in that:
1.
Barko requires consumers to enter into an agreement, in terms of
which consumers are required to pay a fee to NuPayment Solutions
(Pty) Ltd (“NuPay”) which is,
(i)
not listed as a permissible charge under a credit agreement, in
contravention of section 100(1)(a) read with section 101(1)
of the
Act, and/or
(ii)
exceeds the maximum service fee of R50.00 that may be charged, in
contravention of section 100(1)(b) read with sections 101(1)(c)
and
105(1)(b) and regulation 44 of the Act, and/or
(iii)
not a permissible fee, charge, commission, expense or other amount as
contemplated in section 100(1)(d) of the Act.
2.
Barko requires or induces consumers to enter into credit agreements
which contain a provision in terms of which an additional
monetary
liability, not permitted by the Act, is imposed on the consumer which
is unlawful, in contravention of section 90(1) read
with section
90(2)(a) and (b) of the Act, in that
(i)
their general purpose or effect is to defeat the purposes or policies
of the Act;
(ii)
they purport to set aside or override the effect of provisions of the
Act;
(iii)
they purport to waive or deprive a consumer a right set out in the
Act;
(iv)
they authorise the credit provider to do anything unlawful in terms
of the Act.
3.
Barko requires or induces consumers to enter into supplementary
agreements or sign a document that contains a provision that
would be
unlawful if it were included in the agreement or Barko permits NuPay
to require or induce consumers, to enter into such
agreements in
contravention of section 91(a) or (c), read with sections 90(1),
(2)(a) and (b) of the Act.’
[3]
The compliance notice required Barko to take the following steps to
address its non-compliance with the NCA:
‘
1.
With immediate effect, cease requiring consumers to pay the NuPay
service provider fee;
2.
Within 30 business days of the date of this notice, reimburse all
consumers who have been required to pay the NuPay service provider
fee;
3.
Within 45 business days of the date of this notice furnish the NCR
with a written affidavit, by Jacobus Ignatius De Wet [who
describes
himself as the sole director and shareholder of Barko], to the effect
that such amounts were refunded, attaching a list
of the names and
the amounts of refunds made;
4.
Within 60 business days of the date of this notice, require that the
auditor of Barko furnish the NCR with a certificate providing
assurance, and setting out the procedures underlying such assurance
that:
(i)
the practice of charging service provider’s fees has been
terminated and the date of such termination;
(ii)
the calculation of the service provider fees which were unlawfully
imposed is correct, and
(iii)
such service provider fees have been repaid by Barko.’
[4]
Barko lodged an objection to the compliance notice with the second
respondent, the National Consumer Tribunal (the Tribunal).
The
Tribunal declined to set aside the compliance notice but modified it
to read:
‘
THAT
BARKO:
52.1.
With immediate effect, cease requiring consumers to pay the Nupay
service provider fee where such fee, if added to the service
fee
charged by Barko, would increase the service fee payable under credit
agreements to an amount above the prescribed maximum
service fee of
R50.
52.2.
Within 60 business days of the date of this judgment, cause its
auditor to provide the NCR with a list of all consumers who
have paid
the NuPay service provider fee on credit agreements entered into on
or after 1 June 2007 where such fee, if added to
the service fee
charged by Barko, increased the service fee payable under the credit
agreements to an amount above the prescribed
maximum service fee of
R50, and the amounts paid.
52.3.
Reimburse all such consumers as contained in the list provided to the
NCR under 52.2 of the amount of the service provider
fee paid by such
consumers on credit agreements entered into on or after 1 June 2007
where such fee, if added to the service fee
charged by Barko,
increased the service fee payable under the credit agreements to an
amount in excess of the prescribed maximum
service fee of R50 within
60 business days of the provision of the list to the NCR.
52.4.
Furnish the NCR with a written affidavit to the effect that the
amounts paid by its consumers in excess of the prescribed
maximum
service fee of R50, in respect of credit agreements entered into on
or after 1 June 2007, have been refunded.
52.5.
Cause its auditor to furnish the NCR with a certificate providing
assurances, and setting out the procedure underlying such
assurances
that:
(a)
The practice of charging service provider fees which increases the
service fees under credit agreements to an amount above the
prescribed maximum service fee of R50, has been terminated and the
date of such termination;
(b)
The calculation of amounts due to consumers paid by them in excess of
the prescribed maximum service fee of R50 which in terms
of this
judgment were unlawfully imposed is correct; and
(c)
Such amounts due to consumers paid by them in excess of the
prescribed maximum service fee of R50 in terms of this order have
been repaid by Barko to its consumers.’
[5]
Barko thereupon appealed to the North Gauteng High Court (Pretoria)
in terms of s 59(3) read with s 148 of the NCA. The high
court
(Pretorius J (Hughes and Vorster AJJ concurring)) dismissed the
appeal but granted leave to Barko to appeal to this court.
Although
cited as the second respondent, the Tribunal, having filed a notice
of intention to abide the decision of this court,
took no part in the
appeal. Micro Finance South Africa (MFSA), a company not for profit
representing some 1700 credit providers
who are registered with and
subject to the jurisdiction of the NCR, sought and obtained leave
from the President of this court
to intervene as an
amicus curiae
.
Pursuant to that order, MFSA filed heads of argument and instructed
counsel to address argument to us at the hearing of the appeal.
[6]
In its founding affidavit filed with the Tribunal in support of its
objection to the compliance notice in terms of s 56 of the
NCA, Barko
explained:
‘
6.3
As a background I must explain that on the 17 April 2009 the
Applicant received a request for information from the NCR indicating
that the NCR had identified a number of areas in respect of which the
Applicant`s compliance with the NCA would be assessed . .
. The
Applicant complied with the request and furnished the information.
.
. .
6.5
On 7 September 2009 the Applicant received an email from the NCR
addressed to Bernard de Wet (the Applicant`s General Manager)
in
which the NCR made enquiries regarding the fee charged by Altech
NuPayment Solutions (Pty) Limited (“NuPay”) for
the
rendering of payment deduction in terms of AEDO (“service
provider fee”). In particular, the NCR requested confirmation
in respect of the section of the NCA being used by the Applicant to
charge service provider fees pursuant to the NuPay Service
Agreement
which is concluded between NuPay and consumer (“the NuPay
Service Agreement”) . . .
6.6
The Applicant responded to the NCR confirming that the NuPay Service
Agreement is an agreement between NuPay and the consumer
and is not
part of the credit agreement and therefore not regulated by the NCA.
6.7
During 2010 the NCR requested that the Applicant furnish it with its
credit agreement and the NuPay Service Level Agreement
presently in
place between the Applicant and NuPay with which request the
Applicant duly complied. At the same time the Applicant
was informed
that an investigation was being conducted by the NCR and that legal
opinions were being sought. The Applicant furnished
the NCR with the
requested documents.
.
. .
9.1.1
In formulating the objection of the Applicant to the Compliance
Notice I will attempt to respond to each of the allegations
of
non-compliance alleged by the NCR. In support thereof I have annexed
sample documentation pertaining to an agreement of loan
entered into
between the Applicant and one of its consumers. The aforesaid set of
documentation is marked as
Annexure “D1”
to “
D11”
and includes:
9.1.1.1
Quotation & Pre Loan Agreement reflecting the loan amount as
R500.00 (five hundred rand) and the total amount repayable
as R637.94
(six hundred and thirty seven rand and ninety four cents). (
Annexure
“D1”
hereto);
9.1.1.2
Credit Agreement, reflecting the loan amount as R500.00 (five hundred
rand) and the total amount repayable as R637.94 (six
hundred and
thirty seven rand and ninety four cents) (
Annexure “D2”
hereto);
9.1.1.3
Loan Application & Agreement (
Annexure “D3”
hereto);
9.1.1.4
Loan Affidavit (
Annexure “D4”
hereto);
9.1.1.5
NuPay Service Agreement concluded between NuPay and the consumer,
reflecting the combined value of the total monthly consumer
payment
on the loan and the NuPay service provider fee in the amount of
R652.49 (six hundred and fifty two rand and forty nine
cents) being
the amount of the single payment instruction to be processed by NuPay
and debited to the consumer`s nominated account
(
Annexure “D5”
hereto);
.
. .
9.2
Before dealing with the alleged grounds of non-compliance I shall
briefly set out the background and process followed by the
Applicant
and NuPay in relation to the provision of AEDO services by NuPay
based on
Annexures “D1” to “D11”
(AEDO
means: “Authenticated Early Debit Order”). I understand
that this is a system designed by BankServ specifically
for the micro
lending industry on request of the Reserve Bank. The system is highly
accurate and fraud is limited because it is
confirmed that the
consumer’s details are correct and that with the information
provided by the consumer the bank concerned
will be able to secure a
successful transaction):
9.2.1
the Applicant has been making use of the payment system services of
NuPay since October 2001. One of the services provided
by NuPay
consists of a payment deduction in terms of an AEDO system. Through
the AEDO system, NuPay provides a secure and effective
payment
solution to the benefit of both the credit provider and the consumer.
The payment solution is only available from other
AEDO payment
service providers and is not currently available directly through any
banking or financial institution because their
systems do not make
provision for AEDO payment services. To the best of my knowledge and
belief, there are only three companies
in South Africa who can assist
a credit provider with AEDO payment services, of which NuPay is one;
9.2.2
a consumer wishing to enter into a Credit Agreement with the
Applicant (“the Credit Agreement”) has the option
of
simultaneously entering into a NuPay Service Agreement (“NuPay
Service Agreement”) which is separate to the Credit
Agreement;
9.2.3
should the consumer choose to effect payment in respect of the Credit
Agreement by utilizing the NuPay systems, the consumer
concludes the
NuPay Service Agreement. It is important to note that the consumer
can pay in cash, by cheque (in which case there
would be fees payable
in respect of the cheque), by EFT, by means of the service offered by
NuPay or any other means. NuPay makes
its service available to the
consumer should the consumer wish to avail itself of such service and
the fee charge by NuPay is not
within the control of the Applicant
and does not accrue to the Applicant. The fee charged by NuPay could
therefore never be said
to constitute a charge which is inextricably
linked to the credit offered by the Applicant as it is not within
Applicant’s
control;
9.2.4in
terms of the NuPay Service Agreement, NuPay charges the service
provider fee in consideration for the AEDO services conducted
by it
on behalf of the consumer as set out in the NuPay Service Agreement
with the consumer. The service provider fee is levied
only on
successful transactions to the consumer`s account. This fee is
calculated as a percentage of the successful value of the
transaction; . . . .’
[7]
Against that backdrop two broad issues arise for determination,
namely: whether there was an agreement between NuPay and the
consumer
as contended by Barko; and whether the Tribunal had the power under
the NCA to order Barko to repay to the respective
consumers the NuPay
service provider fee. Each of those issues will be considered in
turn.
[8]
Barko’s case is that in each instance three distinct
agreements, each with its own purpose, find application, namely:
(a)
a credit agreement between it and a consumer (the credit agreement);
(b) a service level agreement between it and NuPay (the
SLA); and (c)
Annexure D5 to Barko’s founding affidavit, allegedly an
agreement concluded between NuPay and the consumer
(Annexure D5).
These agreements must be construed in order to determine the
correctness of the parties’ respective contentions.
The SLA
determines the relationship between Barko and NuPay. The credit
agreement sets out the relationship between Barko and the
consumer.
The key issue is the nature and status of Annexure D5 and whether it
is part of the agreement between Barko and the consumer
or is a
separate transaction between the consumer and NuPay. I stress that we
are not concerned with the individual transaction.
The documents are
analysed because they were said by Barko to contain and illustrate
the contractual relationships between itself,
the consumer and NuPay.
[9]
The credit agreement stipulates in clause 11.3 that ‘[t]he
maximum monthly service fee is the amount of R50.00 monthly
payable
in terms of regulation 44, plus VAT’. In terms of the SLA,
which regulates the relationship between Barko and NuPay,
the former
is obliged to pay a successful transaction processing fee to the
latter in respect of the management services rendered
to it. Thus
clause 6.1.1 provides that ‘NuPay will be entitled to charge a
fee for the Management Services provided as follows:
a successful
transaction processing fee that will be collected by the relevant
bank’. That fee, at Barko’s election,
was either 2,5% or
2% ‘per successful transaction’, which Barko was obliged
to pay without deduction and/or set off
by debit order every month.’
[10]
The last of the trilogy of agreements, Annexure D5, which is headed
‘NuPay Service Agreement’ and lies at the heart
of the
present controversy, provides to the extent here relevant:
‘
1.1
The Consumer has entered into a Credit Agreement (identified by the
Credit Agreement reference), with the Credit Provider and
has
instructed NuPayment Solutions (Pty) Ltd (“NuPay”) to
process the Consumer’s Payment Obligation in terms
of the
Credit agreement for the benefit of the Credit Provider.
1.2
NuPay is entitled to a Service Provider Fee
for the processing of every Payment Obligation and the Consumer has
agreed to the payment
of the Service Provider Fee, subject to the
terms and conditions set out below.
2.
TERMS AND CONDITIONS
2.1
The Consumer acknowledges and agrees that –
2.1.1
the Service Provider Fee is due to NuPay and has not been included in
the cost of credit charged by and due to the Credit
Provider;
2.1.2
in order to save bank charges, the Service Provider Fee due to NuPay
and the relevant Payment obligation of the Consumer in
terms of the
Credit Agreement will be processed as a single payment instruction
and the Total Amount as indicated above will be
debited to the
Consumer’s nominated account;
2.1.3
service charges levied by the Consumer’s bank are not governed
by this agreement.
.
. .
4.
The consumer hereby authorises NuPay to process the Service Provider
Fee due to NuPay and the Payment Obligation due to the Credit
Provider as a single payment instruction and to deliver the payment
instruction for collection at the Consumer’s bank. .
. .’
[11]
Matters, certainly as far as the various agreements are concerned,
did not rest there. To that suite of documents must be added
what
Barko termed an addendum to the SLA that it attached to its replying
affidavit. Barko explained:
‘
6.
I refer to an Addendum to the Service Level Agreement entered into
between NuPayment Solutions (Pty) Ltd (“NuPay”)
and the
Applicant, entitled “Service Provider Fee Facility” on 29
April 2009, which I annex hereto marked “
J”
(“the Addendum”). The
Addendum was inadvertently omitted from the founding affidavit for
which I apologise. The terms
of the Addendum, I respectfully submit,
clarify the relationship between NuPay and the Applicant, and deal
with the Regulator`s
concerns.’
Paragraph
1.2 of the addendum (Annexure J) reads:
‘
This
agreement governs the collection of the service provider fee due to
NuPay, which is processed by NuPay together with the consumer’s
payment obligation due to the Credit Provider in terms of the credit
agreement as a single payment instruction (“Service
Provider
Fee Facility”), subject to the terms and conditions below.’
In
clause 2.1 of Annexure J, Barko acknowledges and agrees that:
‘
2.1.3
the service provider fee shall not be included in the cost of credit
charged by the Credit Provider; and
2.1.4
the service provider fee, even though processed together with the
payment obligation of the consumer in terms of the credit
agreement
as a single payment instruction, and credited to the nominated
account of the Credit Provider, is due and payable to
NuPay.’
And
clause 3 provides:
‘
The
Credit Provider hereby authorises NuPay to submit payment
instructions for collection to the Credit Provider’s bank and
the Credit Provider hereby authorises its bank to debit its nominated
account . . . with the amounts due in terms of this agreement.’
[12]
Quite how Barko could characterise Annexure D5 as a contract between
NuPay and the consumer is difficult to comprehend. On
the face of it,
Annexure D5 does not purport to be an agreement between the consumer
and NuPay, as contended by Barko. It was signed
by the borrower in
person and on behalf of Barko as the lender and recorded that the
conditions contained therein were accepted
by the lender and the
borrower. Clause 1.2 records that NuPay
is entitled
to the
payment of a Service Provider Fee, that is, that it already had an
entitlement to payment of such a fee. But that entitlement
could only
have arisen under the SLA, which provided for Barko to pay such a
fee. In those circumstances Annexure D5 is quite clearly
an agreement
between Barko and the consumer in which the consumer authorises the
fee payable in terms of the SLA by Barko to NuPay
to be met from the
consumer`s bank account. Consequently, the purpose of that agreement
is not to enable Barko`s customers to discharge
their obligations to
NuPay, but to enable Barko to ensure that its obligations to NuPay
are discharged by its customers. It is
no doubt for that reason that
the NuPay agreement is signed by the consumer and Barko and not by
the consumer and NuPay.
[13]
The characterisation by Barko of Annexure D5 as an agreement between
NuPay and the consumer was plainly untenable. Undaunted,
however, it
persisted in its replying affidavit with that characterisation by
stating:
‘
16.
The Regulator`s compliance notice is premised upon the Regulator`s
contention that the Applicant is requiring consumers to enter
into
agreements in terms of which consumers are required to pay charges or
fees not permitted under the NCA. In the first instance,
the
Regulator fails to appreciate the identity of the contracting party
with whom the consumer concludes a service agreement in
the form of
annexure “D5” to my founding affidavit. There can be no
dispute that such agreement is one concluded between
the consumer and
NuPay and the Applicant is not a party to that agreement, nor does it
receive payment of any amount payable by
the consumer under that
agreement, which is payable to NuPay for the services it renders to
the consumer directly.’
What
is more is that that was said after Barko had earlier in that
self-same affidavit introduced Annexure J for the first time
in order
to address the NCR’s concerns.
[14]
Annexure J, however, did nothing of the sort and, far from allaying
the NCR’s concerns, may well have heightened them.
It will be
recalled that the SLA provides expressly in clause 6.1.1 for Barko to
pay to NuPay a successful transaction processing
fee in respect of
the management services rendered to it by the latter. There was
nothing in Annexure J that purported to modify
or extinguish that
obligation of Barko to NuPay. That obligation thus remained
unaltered. It is that obligation that Barko sought
to pass on to the
consumer. It is not disputed that the NCA precludes Barko from
passing on to the consumers to whom it lends money
its own
obligations to pay fees to the service provider it had contracted to
recover payment on its behalf by means of the ADEO
system of
processing bank payments.
[15]
I may add that even if Annexure D5 could rightly have been
characterised as an agreement between NuPay and the consumer it
would
be hit by the provisions of S 91
(a)
of the NCA. Section 91
(a)
reads:
‘
A
Credit Provider must not –
(a)
directly or indirectly require or induce a
consumer to enter into a supplementary agreement, or sign any
document, that contains
a provision that would be unlawful if it were
included in a credit agreement; . . .’
[16]
It is undisputed that the general practice of Barko is to present a
suite of documents, including Annexure D5, to its customers.
It is
also so that the vast majority of those customers when being
presented with Annexure D5, sign it. That Annexure D5 is a
supplementary agreement as envisaged in s 91
(a)
was conceded by counsel for Barko. He rather took issue with two of
the other requirements contained in s 91
(a)
,
namely: (a) whether it could be said that Barko had induced the
consumer to conclude Annexure D5; and (b) that Annexure D5 contained
a provision that would be unlawful if it were included in the credit
agreement. As to (a): What is at issue is the ordinary meaning
of the
word ‘induce’ - that which it bears in ordinary speech.
The normal and permissible method available to a court
to ascertain
the ordinary meaning of words is to turn to authoritative
dictionaries for aid (
Association
of Amusement and Novelty Machine Operators v Minister of Justice
1980
(2) SA 636
(A) at 660F-G). To ‘induce’, according to the
Shorter
Oxford English Dictionary
6
ed, is to succeed in persuading or leading someone to do something.
In presenting the suite of documents to the consumer, it is
Barko’s
employees who explain the advantages to the consumer of Annexure D5.
That exercise, no doubt, is intended to persuade
the consumer that it
is in their best interests to sign that agreement. The stress laid in
the affidavits on the advantages of
the ADEO system from the
perspective of the consumer would undoubtedly have been at the
forefront of the presentation to prospective
customers and informing
them that ADEOs were less expensive than other forms of payment would
clearly be directed at inducing them
to agree to use this system. In
view of the benefits to Barko of that system it is inconceivable that
it would adopt a neutral
stance in regard to the use of an ADEO in
preference to some other means of payment. The fact that a consumer
may have been free
to decline to conclude the agreement is, in my
view, thus irrelevant to the question whether or not they were
induced to do so.
As to (b): The ‘transaction processing fee’
in the SLA is, on the face of it, a fee in respect of the same
services
encompassed by the ‘service fee’ in the credit
agreement. And as R50 is the maximum amount permitted by Regulation
44,
[2]
any additional fee in
that regard is prohibited by the NCA. Appreciating, it would seem,
that it would have been impermissible
for a transaction processing
fee to have been levied in addition to a service fee in a single
agreement, Barko concluded a further
agreement with the consumer. It
was in terms of that agreement (Annexure D5) that Barko purported to
pass on to the consumer the
transaction processing fee for the
management services rendered to it by NuPay in terms of the SLA. But
the simple expedient of
two agreements could hardly have rendered
lawful what would have been unlawful in terms of a single agreement.
[17]
I now turn to the second issue, namely, whether the Tribunal is
empowered to order repayment: According to s 55(3) of the NCA
a
compliance notice issued by the NCR must set out: ‘any steps
that are required to be taken and the period within which
those steps
must be taken’ (subsec
(d)
);
and ‘any penalty that may be imposed in terms of this Act if
those steps are not taken’ (subsec
(e)
).
The compliance notice issued by the NCR required Barko to ‘within
30 business days . . . reimburse all consumers who have
been required
to pay the NuPay service provider fee’. That was clearly a step
that the notice required Barko to take. The
argument on its behalf
suggested that some limitation not apparent from the text needed to
be read into this provision.
[18]
Section 56(2) of the NCA empowered the Tribunal [a]fter considering
any representations by the applicant and any other relevant
information . . . [to] confirm, modify or cancel all or part of a
notice’. The Tribunal, acting pursuant to that provision,
modified the compliance notice by requiring Barko to [r]eimburse all
such consumers . . . [with] the amount of the service provider
fee
paid by such consumers on credit agreements . . . where such fee, if
added to the service fee charged by Barko, increased the
service fee
payable under the credit agreements to an amount in excess of the
prescribed maximum service fee of R50 within 60 business
days’.
It is immediately apparent that the modification effected by the
Tribunal extended the period for the repayment from
the 45 days set
by the NCR to 60 days and, unlike the NCR, restricted the repayment
only to that amount paid in excess of the maximum
of R50 prescribed
by the Act.
[19]
Section 56(3) provides that: ‘If the Tribunal confirms or
modifies all or part of a notice, the applicant must comply
with that
notice as confirmed or modified, within the time period specified in
it’. It is difficult to comprehend why Barko
contends that the
Tribunal is not empowered to order repayment. Here, aggrieved by the
decision of the NCR to issue it with a compliance
notice, Barko
invoked s 56 of the NCA when it sought to have the compliance notice
set aside, alternatively modified. That immediately
brought into play
sections 142 to 147 of the NCA. Those sections, inter alia, (a)
require the Tribunal, in general, to conduct
its hearings in public,
to make an order permitted by the NCA and to furnish written reasons
for its decision (s 142); (b) afford
persons a right to participate
in a hearing before the Tribunal either in person or through a
representative, to put questions
to witnesses and examine books,
documents and other items presented at the hearing (s 143); (c)
oblige witnesses to answer questions
(s 146); (d) empower the member
of the Tribunal presiding at the hearing to (i) summon persons,
question persons under oath or
affirmation and direct persons to
produce books, documents or any item necessary for the purposes of
the hearing (s 144); (ii)
determine any matter of procedure with due
regard to the circumstances of the case and the requirements of the
applicable sections
of the NCA (s 145); and (iii) award costs in
certain circumstances (s 147). To those provisions may be added
sections 59(3) and
150
(h)
. The former renders the decision of
the Tribunal subject to appeal or review by the high court to the
extent permitted by s 148.
And the latter, headed ‘Orders of
Tribunal’, empowers the Tribunal to make an appropriate order
‘requiring repayment
to the consumer of any excess amount
charged, together with interest at the rate set out in the
agreement’.
[20]
If one assumes, as one must for the purposes of this enquiry, that
the Tribunal was correct in its finding that the recovery
of the
NuPay fee from the consumer is unlawful because it constitutes a
contravention of the NCA, then it ought to follow logically
that it
is for Barko to set matters to right by repaying the relevant
amounts. It would be astonishing if, having correctly found
that the
NuPay service fee is not payable by the consumer and that its
repayment by the consumer was unlawful, for the Tribunal
to have
simply shrugged its shoulders in circumstances where it is empowered
by the NCA to make ‘an appropriate order . .
. including, . . .
. requiring repayment to the consumer of any excess amount charged .
. .’ (s 150
(h)
). Particularly so, where s 2(1) of the
NCA requires it to be interpreted in a manner that gives effect to
the purposes set out
in s 3, the most dominant of which are:
[T]o
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 –
.
. .
(e)
addressing and correcting imbalances and
negotiating power between consumers and credit providers by –
.
. .
(ii)
providing consumers with adequate disclosure of standardised
information in order to make informed choices; and
(iii)
providing consumers with protection from deception, and from unfair
or fraudulent conduct by credit providers and credit bureaux;
. . . ’
[21]
In the ultimate analysis the insuperable difficulty that confronts
Barko is that it sought in its affidavits to advance a version
that
oftentimes was entirely at odds with the various agreements relied
upon by it. It approached the enquiry as if the parol evidence
rule
was no longer a part of our law. But as Harms DP pointed out in
KPMG
Chartered Accountants (SA) v Securefin Ltd
2009 (4) SA 399
(SCA)
para 39 the parol evidence rule remains part of our law. No doubt
mindful of the quandary in which it found in itself, Barko
submitted
that the version advanced by it, albeit at odds with the various
written agreements, should be preferred because it furnished
the
necessary ‘context’. But, as
KPMG
makes plain, a
litigant cannot through the invocation of context adduce extrinsic
evidence to contradict, add to or modify the
meaning of a document
where such document was intended to provide a complete memorial of
the jural act, as Barko has sought to
do in this case. That disposes
of Barko`s case.
[22]
Turning to the amicus: In terms of the order of this court the amicus
was admitted in terms of SCA rule 16. In particular,
the order
directed the amicus to observe rules 16(7) and (8), which read:
(7)
(a)
An
amicus curiae
shall have the right to lodge written
argument, provided that such written argument does not repeat any
matter set forth in the
argument of the other parties and raises new
contentions which may be useful to the Court.
(b)
The heads of argument of an
amicus
curiae
shall not exceed 20 pages unless
a judge, on request, otherwise orders.
(8)
An
amicus curiae
shall be limited to the record on appeal and
may not add thereto and, unless otherwise ordered by the Court, shall
not present
oral argument.’
[23]
That notwithstanding, the initial approach of the amicus as
foreshadowed in its heads of argument was:
‘
4.
MFSA, in participating in the appeal as amicus curiae, does so for
purposes of placing before the Appeal Court relevant and material
facts that are not adequately dealt with or traversed in the appeal
record.’
In
that it unacceptably disregarded the order of this court.
[24]
The crux of the matter for determination by this court was whether
the contracts concluded between Barko and the consumer breached
the
provisions of the NCA. The core submission advanced by the amicus in
its heads of argument, however, is that micro lenders
should not be
obliged to repay the moneys charged in contravention of the NCA.
Underpinning that contention is the suggestion that
certain
provisions of the NCA are inappropriate and that the application of
those provisions will have dire consequences for micro
lenders in
particular and the micro lending industry in general. Fortunately
none of those submissions were pressed in argument
before us.
[25]
From the bar in this court counsel for the amicus restricted himself
to the following submission: In terms of the
South African Reserve
Bank Act 90 of 1989
read with the
National Payment System Act 78 of
1998
, the South African Reserve Bank (the SARB) is required to, inter
alia, implement such rules and procedures as may be necessary to
regulate and supervise payment, clearing or settlements systems in
the Republic of South Africa. Acting pursuant to those powers
the
SARB issued Directive No. 2 of 2007.
[3]
That Directive required that:
‘
3.1
Any person acting as a system operator shall: . . .
3.1.2
have a written agreement with each person to whom the services are
rendered in terms of which it is appointed as a system
operator . . .
. ’
Accordingly,
so the submission ran, that directive had not been complied with. The
short answer to the submission however is that
here the systems
operator, NuPay, did in fact have in place a written agreement,
namely the SLA, with Barko, to whom it was rendering
services. There
was thus compliance with the directive of the SARB. For the reasons
already given it did not have agreements with
the individual
consumers nor did it need to have them in order to comply with the
Directive.
[26]
It follows that the appeal must fail and in the result it is
dismissed with costs such costs to include those consequent upon
the
employment of two counsel.
______________
V
PONNAN
JUDGE
OF APPEAL
APPEARANCES:
For
Appellant: P Louw SC (with him S Cowen)
Instructed
by:
Routledge
Modise Inc
Johannesburg
Matsepes
Inc
Bloemfontein
For
Respondent: C Loxton SC (with him P L Cartstensen)
Instructed
by:
Edward
Nathan Sonnenberg
Johannesburg
Webbers
Attorneys
Bloemfontein
For
Amicus Curiae: G W Amm
Instructed
by:
Bowes
& Turner Inc
Johannesburg
Honey
Attorneys
Bloemfontein
[1]
The
NCR is a juristic person established in terms of
s 12
of the NCA.
[2]
Regulations
promulgated in terms of the
National Credit Act, GNR
489, GG 28864,
31 May 2006.
[3]
GNR
1111,
GG
30261, 6 September 2007.