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[2021] ZAECMHC 40
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Transunion Africa (Pty) Ltd v Ngcenge (CA18/2021) [2021] ZAECMHC 40 (23 November 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
EASTERN CAPE LOCAL
DIVISION, MTHATHA
REPORTABLE
Case
No: CA18/2021
In
the matter between:
TRANSUNION
AFRICA (PTY)
LTD
Appellant
and
MPULANA
MACLENNAN
NGCENGE
Respondent
JUDGMENT
MAKAULA
J:
A.
Background
:
[1] This
is an appeal that concerns, amongst other factors, the interpretation
of certain provisions of the National
Credit Act 34 of 2005 (the
NCA).
[2] In
the court
a quo
,
the Respondent obtained an order in the following terms:
“
1. The
Respondent’s failure to remove adverse information about the
debt review listed with it
against the Applicant be and is hereby
declared unlawful.
2. The
Respondent be and is hereby ordered to forthwith remove adverse
information about the
debt review listed against Applicant from its
files and or records.
3. The
Respondent is directed to forthwith inform the Applicant and all
parties to whom the information
has been reported, including all
other credit bureau of the removal of the adverse information, which
is debt review.
4. The
Respondent is to pay costs of the application”.
[3] The
Appellant, not satisfied with the decision, obtained an order
granting it leave to appeal from the Supreme
Court of Appeal to the
Full Bench of this Court.
B.
Grounds
of Appeal
:
[4] The
appeal is premised on the following grounds that:
“
1. the
court erred in finding that it had the necessary jurisdiction at
first instance to direct the
appellant to remove the adverse
information about a debt review from its files and records in that:
1.1 the
respondent in essence sought an order directing the appellant to
remove the adverse information from
its files in terms of the
provisions of section 72(3)(b) of the National Credit Act 34 of 2005
(“the NCA”).
1.2 in
terms of section 72(4) of the NCA the person who challenges the
information held by a credit bureau
may apply to the National Credit
Regulator to investigate the disputed information as a complaint
under section 136. Such dispute
must then be referred to the National
Consumer Tribunal in terms of section 137(1)(a) for an order
resolving a dispute over information
held by a credit bureau.
1.3 the
process set out above is administrative and not judicial and it is
only the Tribunal that is empowered
to assist a consumer at first
instance and the NCA does not afford the High Court jurisdiction to
deal at first instance with matters
falling within the province of
the Tribunal.
1.4 the
role of the High Court in the legislative scheme was limited to
dealing with judicial reviews of,
or appeals from, the decisions of
the Tribunal.
2. the
court erred in coming to the conclusion that respondent’s debt
review came to an
end after the 31
st
March 2010 and that
the appellant must “remove the name of the applicant from the
credit review” in that 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) of the NCA.
3. The
court erred in failing to consider that the respondent did not
properly challenge the
information held by appellant in terms of the
provisions of section 72(1)(c)(ii) of the NCA, which challenge notice
was sent on
the respondent’s behalf by his attorney, Mr A.S.
Zono of A.S. Zono and Associates, in that:
3.1 he
failed to deliver the challenge notice per hand or by registered
post;
3.2 he
failed to follow the correct processes when he submitted the
challenge notice to the appellant; and
3.3 the
personal information contained in the challenge notice was incorrect
and did not accord with the
personal information of the respondent.
4. the
court erred in failing to place any / sufficient reliance upon the
fact that the respondent
deliberately made a false allegation in his
founding affidavit when he stated that he had at no stage applied to
be placed under
debt review.
5. the
court erred in failing to consider that the respondent should have
placed all the relevant
facts before the court in his founding
affidavit”.
C.
Background
Facts
:
[5] The
genesis of the dispute between the parties is an adverse report
appearing on the website of the Appellant.
The Respondent discovered
the adverse listing when he applied for financial assistance from
ABSA Bank (the bank). The bank rejected
the application on the basis
that there was an adverse report reflecting that the Respondent was
listed by the Appellant as being
under debt review. On 19 July 2019,
the Respondent received a credit report from the bank stating amongst
other information that
the Respondent had:
“
Requested
to be placed under debt review with a registered debt counsellor,
secondly, that the debt review was logged on 31
st
March 2011”.
[6] The
Respondent attacked the report before the court a
quo
as bereft of a lot of information in that there:
“
(a) was
no reference to the name of the Court at which and the date on which
he made an application for a
debt review; and
(b) the
name and contact particulars of the debt counsellor”.
The Respondent states
that lack of such and other information triggered the operation of
section 72(1)(c)(ii) of the NCA in that
he logged a complaint with
the Appellant by writing a letter challenging information (the letter
of challenge).
[7] The
letter of challenge was transmitted to the Appellant on 31
st
July
2019 by the Respondent’s Attorney of record through the
former’s email address and fax numbers, which undeniably
belong
to the Appellant. He contends that the transmission was a success as
confirmed by the transmission slips. In the letter,
the Respondent
demanded that the Appellant should provide him with credible evidence
in support of the information appearing in
its listing and the
removal of the information relating to the debt review in the event
the Respondent does not find credible evidence
in support thereof
within twenty (20) days of such a finding. The Respondent states that
no response was received by him to that
correspondence despite that
the NCA enjoined the Appellant to furnish the information or remove
his name from the listing. The
Respondent argues that keeping that
adverse information is arbitrary, unlawful, without any just cause
and prejudicial to him.
[8] The
Respondent laments that he is prejudiced because amongst other
issues, he is a breadwinner who is married
in community of property
and his family cannot be afforded credit by the banks. The respondent
avers that the procedure that the
Appellant established (i.e.
telephonic and electronic lodgement via the Appellant’s
website) is flawed for two reasons namely:
“
1. that
this procedure is not a condition that is legislatively prescribed;
and
1.2 that
this manner of lodgement is not published in any permissible manners
of putting out information
for public knowledge”.
[9] In
response to the allegations, the Appellant, in the court
a
quo,
raised the following points in
limine:
(a) Firstly,
the Applicant’s failure to observe and comply with the
procedures set down by the Respondent
in challenging the accuracy of
the information retained by it, in terms of the provisions of section
72(1)(c)(ii) of the Act.
(b) Secondly,
the Appellant alleged that the Respondent purposefully misled the
court
a quo
by being dishonest that he was under debt review and misrepresenting
those facts.
On those grounds, the
Appellant argued that the application stood to be dismissed.
[10] In
respect of the first point in
limine,
the Appellant argues that the Respondent failed to follow the
procedure prescribed by Rule 72(1)(c)(ii) of the NCA especially the
user friendly and reliable system devised by the Appellant to address
the provisions of this section. The Appellant asserts that
the
process is readily and easily available to all smartphones, laptops
or tablets by simply visiting the Appellant’s website
or even
doing a google search. In the event that a consumer has no access to
internet, the Appellant has a central helpline, which
may be called
by the consumer for all kinds of queries. Therefore, queries could be
lodged telephonically and electronically. The
Appellant alleges that
the Respondent failed to follow either process. In response to the
process followed by the respondent, the
Appellant submits as follows:
“
17. I
wish to inform this Honourable Court that the Respondent:
16.1 does
permit the lodgement or accept challenges to adverse listings on the
credit reports of consumers
per email;
16.2 does
not receive emails from the public to email address
legal@transunion.co.za
,
even less so that it accept challenges to adverse credit listings to
the stated email address;
16.3 the
Respondent does not accept receipt of documents from the public, per
telefax, at all”.
(
Sic
).
[11] The
Appellant states that even if it had received the notice challenging
the listing (which it denies, having
now seen the letter) it would
not have processed or complied with it because it was defective. The
defect is that the identity
number of the Respondent is incorrectly
stated on the letter and on the Power of Attorney. Furthermore, the
FICA documents were
not attached to the complaint.
[12] The
Appellant, in sum, states in this respect that the Respondent did
not:
“
(a) validly
lodge a challenge in terms of section 72(1)(c)(ii) of the Act;
(b) in
the absence of a valid challenge, the Appellant could not cause an
investigation to be undertaken;
(c) in
the absence of an investigation, the Appellant could not act in
accordance with the provisions
of section 72(3)(a) or (b) of the Act
and therefore, it cannot be said that the Appellant failed to comply
with the Act and retention
of the adverse listing is and remains
lawful”.
[13] Relying
on the second point in
limine,
the Appellant avers that the Respondent clearly and unequivocally
lied in respect of his contentions pertaining to debt review.
The
Appellant alleges that upon receipt of the application it conducted
investigations with the National Credit Regulator (the
NCR) about the
Respondent. The NCR confirmed that the Appellant is under debt
review. Subsequent to the information obtained, it
transpired that Mr
Sodo was the debt counsellor who placed the Respondent under debt
review. The records obtained by the Appellant
reflect that the
Respondent was placed under debt review on 27 January 2009. I shall
deal later with the order placing the Respondent
under debt review as
it formed part of the debate between the parties, which is whether in
fact the Respondent is under debt review.
Mr Sodo at the instance of
the Appellant, filed a confirmatory affidavit confirming that indeed
the Respondent was under debt review.
[14] Mr
Sodo states in his affidavit that during or about June 2019, he was
approached by the Respondent. The Respondent
enquired from him
whether he was still under debt review. Mr Sodo confirmed. The
Appellant submits that the application should
have been dismissed on
the basis of dishonesty because the Respondent knew and had been
reminded by Mr Sodo three months before
the Application was moved
that he had been placed under debt review.
D.
The
Order
:
[15] For
the reason that the order of the magistrate is central to the dispute
between the parties, I need to refer
to it as it stands. The order
reads:
“
IT
IS ORDERED THAT
:-
Mr
Ngcenge’s debt obligations be arranged as follows:-
2.1(a) That
in terms of section 86(7)(c)(ii)(aa) the period of all the agreements
listed below are extended and the
amount of each payment due is
reduced pro rata against the amount of R3 707.00 available per
month less distribution cost
– see annexure “B”
Standard
Bank
African
Bank
Motor
Finance Corporation
2.1(b) That
in terms of section 86(7)(c)(bb) all payments due under all the
agreements be postponed until the end of
the month following the
month in which this order is made.
3.
That the monthly payments be reviewed by the
31
st
March 2010
, failing which this order shall lapse
.
4.
Applicant pay costs of this application.
DATED AT NGQELENI ON THIS
27
TH
DAY OF JANUARY 2009”. (Emphasis added)
[16] The
Respondent argues that the above order self-regulated its
effectiveness and life span in that the order
stipulates that it
would be effective and valid from 27 February 2009, until 31 March
2010. In this regard, the Respondent places
reliance on paragraphs
2.1(b) and 3 of the order. The Respondent reasons as follows:
“
The
natural consequence of that failure is internally ordained in
paragraph 3 of the court order. It stands to reason that from
31
March 2010, by reason of the failure to review monthly payments under
debt review, I was not under debt review. There is no
conceivable
legal basis in the records of the Respondent that I am under debt
review. I firmly submit that I am not under debt
review as there is
no credible evidence to that effect. In these circumstances, the law
provides that the information of adverse
nature must be removed from
credit bureau files.
5. It is fitting to
submit that Regulation 18(2) places the entire responsibility on the
shoulders of the Respondent to “
take all responsible steps
to ensure that all records are kept up to date
”. The
Respondent has failed to keep its records concerning me up to date
for a period exceeding ten (10) years. The information
about my over
indebtedness or debt review status is obviously not accurate, and it
should be removed”. (
Sic
)
[17] The
Respondent categorically denies that he misrepresented the facts and
was dishonest about the debt review.
He states that such allegations
are based on distortion and misunderstanding of his founding
affidavit. He is adamant that at the
time of the launch of the
application he was not under debt review especially after 31 March
2010. The Respondent states that:
“
I
could not have conceivably been aware that this refers to the debt
review that lapsed on 31 March 2010, especially that my credit
profile reflects that the debt review was logged on 31
st
March 2011, a date long after the expiry of debt review order date
27
th
January 2009 . . ., that after logging debt review or as at the time,
the debt review was logged I was not on debt review, and
I did not
apply for debt review at any time near that period”. (
Sic
)
[18] Regarding
Mr Sodo, the Respondent admits that during June 2019, he approached
him but not for the reason Mr
Sodo advances in his affidavit. The
Respondent submits that he approached him for assistance, (as his
attorney) because the bank
informed him that he was listed with the
Respondent as being under debt review. He testifies thus in this
regard:
“
I
sought assistance from him as a person who truly understands the
provisional order of 27 January 2009. Surprisingly, Mr Sodo did
not
know anything about the debt review I was talking about and
ultimately informed me that because of his age he has retired as
a
debt counsellor. I am taken aback now that he has been able to assist
the Respondent when he refused to help me as his client”.
[19] In
the same breath, the Respondent states that he could not have asked
Mr Sodo if he was still under debt
review because Mr Sodo on 27
January 2009, made him aware of the contents of the provisional debt
review, that, absent a review,
the order would lapse. That awareness,
so submits the Respondent, made him to know that there was no debt
review order against
him. The Respondent disagrees with the view
expressed by Mr Sodo that he was still under debt review.
[20] Pursuant
to the realisation that the Respondent was erroneously under debt
review, his current attorney penned
a letter to the Appellant’s
attorneys, Mr Rudi Heerschop asking him to prevail upon the Appellant
to remove his name. Mr
Heerschop refused to remove the Respondent’s
name from the listing hence the application.
[21] The
respondent contends that furnishing evidence in terms of section 72
of the NCA together with its consequence
of removing adverse
information when evidence to support it cannot be found, are
constitutional imperatives with their roots in
section 32 of the
Constitution. Therefore, such rights cannot be limited by the law of
general application. The Respondent concludes
that the limitations
relied upon by the Appellant are legally incomprehensible and
unlawful for failure to provide credible evidence
within the legally
prescribed time period coupled with its failure to remove the adverse
inaccurate information about him.
[22] The
Respondent submits that he has a right to access the information and
incidences of that right cannot be
limited by Appellant’s
creation of systems only known to itself. He avers that he has a
right in terms of section 72(1)(b)
of the NCA to inspect Appellant’s
files or records concerning him and such should be done without
charge to him in terms
of section 72(5)(iii). However, the process
the Appellant requires the Respondent to have followed when he lodged
a dispute required
him to purchase data to access internet. He has no
money, no high tech phone nor the technological known how to do so.
[23] The
Respondent states that it was incumbent on the Appellant to have
informed him once it has received the
fax or email (sent to it on 31
July 2009), of the proper process it has designed to be followed when
lodging a challenge. Furthermore,
the Respondent alleges that even
though his identity number was incorrectly written, his names and
date of birth were correct and
the Appellant does not say that based
on that information, it was impossible to use it to process the
challenge.
[24] In
his founding affidavit, the Respondent states that pursuant to him
having applied for a credit facility
with ABSA Bank, he received a
report from which he made two observations, first that he requested
to be placed under debt review
with a registered debt counsellor,
secondly that the debt review was logged on 31
st
March 2011. Apart from the observations the Respondent made, he
pertinently responded as follows to the report.
“
I
was taken aback that I am listed as being under debt review. As I
had,
at no stage
,
applied to be placed under debt review. I would have definitely
recalled if I had made such an application. I would have known
the
court in which I made such an application. The debt counsellor would
have come to mind once this information crops up”.
[25] Furthermore,
the Respondent sent the letter challenge to the Appellant on 31 July
2019 challenging the accuracy
of the adverse information. In it, the
Respondent’s attorney makes the following statement of fact:
“
Our
client rejects that he ever applied for and placed under debt
review”.
[26] The
Appellant in answer, pointed out that the Respondent did apply for
debt review and obtained a confirmatory
affidavit from Mr Sodo as
reflected above. Mr Sodo states that in June 2019 he was approached
by the Respondent to enquire whether
he was still under debt review.
The version of the Respondent is that he sought assistance from Mr
Sodo, as his Attorney, because
the bank advised him that he was
listed as stated before. That was three months before the application
was launched.
E.
Discussion
:
[27] The
application papers were issued on 9 September 2019. It is surprising
for the Respondent to state that
he was never under debt review and
for his attorney to state that he denied ever being under debt review
considering that three
months before the launch of the application,
he approached Mr Sodo in connection with the same issue of debt
review. The Respondent’s
approach to Mr Sodo, should have
jogged his memory that he was once listed and placed under debt
review.
[28] This
should be viewed further in the backdrop that this issue was never
mentioned by him in his founding papers.
This came from the answering
affidavit. [29] The issue of debt review or the
Respondent being under debt review
was not new to the Respondent. He
knew that he once applied for the rearrangement of his finances. A
few months before the launch
of the application as alluded to, he had
approached Mr Sodo. It is therefore inconceivable that it did not
dawn to the Respondent
that he once applied for debt review, for him
to use words like “he never at any stage” and “I
would have definitely
recalled if I had made such an application”.
[30] The
Respondent authorised his present attorneys through a Power of
Attorney dated 11 July 2019, “(t)o
investigate the placing of
my name by the credit bureau(s) and receive the names of the credit
bureau(s) from which adverse credit
record or report has been
received”. Strangely, in his founding affidavit, the Respondent
states that:
“
On
the same date of 19
th
July 2019, I was caused to receive my credit report obtained from the
Respondent”.
The two statements of
facts are inconceivable because he could not have asked for
investigations before he received the report (about
being under debt
review) from the bank. I do not view this sequence of events as an
error in the light of what is stated in paragraph
27 above.
[31] The
contention by the Appellant that the Respondent was dishonest should
be viewed in the backdrop of the
facts as stated by the Respondent.
The Respondent states in his founding affidavit that at no stage had
he applied for debt review
and if he had done so, he would have
recalled. When the Appellant put up the information and the court
order in their answering
affidavit, the Respondent suddenly recalled
that he once applied for the debt review and approached Mr Sodo. It
is undoubtedly
so that I have to accept the version of the Appellant
in this regard.
F.
Provisions
of the NCA
:
[32] Section
70 basically deals (amongst others) with (a) what constitutes
“consumer credit information”;
(b) how that information
is registered with the various credit bureaus; (c) the steps the
credit bureau should take to verify its
accuracy; and (d) expunge it
if it turns out to be inaccurate. The section further deals with the
duties of the Minister with regard
to the prescription of the
standards for filing, retention, fees to be charged to a consumer
etc. It deals with the duties of the
National Credit Regulator (NCR)
and the periodical information it may require from the credit bureau.
Of relevance for the purposes
hereof are the provisions of section 70
(2) (c), (f) and (i). The sections read:
“
Credit
bureau information
70(1)
. . .
70(2) A
registered credit bureau must –
(c) take
reasonable steps to verify the accuracy of any consumer credit
information reported to it;
. . .
(f) promptly
expunge from its records any prescribed consumer credit information
that, in terms
of the regulations, is not permitted to be entered in
its records or is required to be removed from its records;
. . .
(i) not
knowingly or negligently provide a report to any person containing
inaccurate information”.
Section 71 of the NCA, as
shall be dealt with below, deals with the removal of record of debt
adjustment or judgment.
[33] The
contention by the Respondent is that the listing occurred on 31 March
2011 after the court order had lapsed
on 31 March 2010. The
Respondents therefore argues that the Appellant contravened the
provisions of section 70(2)(c) by not verifying
the information
before it logged it.
[34] There
is no evidence that at the time the Appellant logged the information,
it had verified its accuracy.
Suffice to state that subsequent to the
receipt of this application, as part of its own investigation into
the credit affairs of
the Respondent, the Appellant made enquiries
with the NCR about the Respondent and the latter confirmed that their
records reflected
that he was under debt review. The Appellant, as
stated before, contacted the debt councillor, Mr Sodo who confirmed
that the Respondent
is indeed under debt review.
[35] It
is undoubtedly so, that the court order states in paragraph 3 that
the monthly payments should be reviewed
on 31 March 2010 failing
which the order shall lapse. This order says what it says but the
matter does not end there. One has to
establish whether at the time
of the launch of that application the Respondent intended the order
to lapse on 31 March 2010 or
wanted his financial circumstances to be
re-arranged so as to pay his debts in full.
[36] That
is easily ascertainable in the application papers of the debt review
before the Magistrate at Ngqeleni
and the NCA. I shall briefly
examine these aspects. Clause 1.1 of the agreement between the
Respondent and the Consumer Protection
Excellence (CPE) as a PDA,
that states:
“
This
agreement will commence on the date. The first effective payment is
received by the PDA in accordance with the debt
order
instruction and/or court order
, and
shall terminate when the debt review
process is cancelled for any reason specified in terms of the
National Credit Act
”. (Emphasis
added)
[37] The
PDA is defined in the agreement as a Payment Distribution Agency. The
agreement in this regard is couched
in peremptory terms regarding how
the review process is cancelled. It states that it shall be in terms
of the NCA. Section 71 of
the NCA provides for the removal of record
of debt adjustment or judgment.
[38] Section
71(1) provides that a debt counsellor may upon an application by a
consumer issue a clearance certificate
relating to that debt
re-arrangement. Sections 71(2)(a) and (b) stipulate that upon receipt
of an application in terms of section
71(1), a debt counsellor must
investigate the circumstances of the debt re-arrangement and
either
,
issue a clearance certificate if the consumer has fully satisfied all
the obligations under the credit agreement that was subject
to the
debt re-arrangement order or agreement in accordance with that order
or agreement;
or
refuse
to issue a clearance certificate.
[39] Section
71(3) deals with an appeal mechanism where the debt counsellor for
whatever reason refuses to issue
a clearance certificate. This sub
section allows the consumer the right to apply to the Tribunal
[1]
to review that decision. This is an internal arrangement agreement in
terms of the NCA and the agreement between the parties. Paragraph
1.3
of the agreement between the Respondent and the CPE as the PDA
referred to, endorses this procedure. It does not refer to any
court
order which has to be relied upon to terminate the debt review as
espoused by the Respondent.
[40] Section
71(6) however provides:
“
Upon
receiving a copy of a court order rescinding any judgment, a credit
bureau must expunge from its records all information to
that
judgment”.
[41] This
is the only provision which talks to the removal of adverse
information based on a court order. The submission
by Mr Zono that
the effect of a lapsed provisional order can be no different from
that of a rescinded and set aside order, because
neither advantage
nor disadvantage may flow from it, may be correct. However, the
provisions of section 71 of the NCA are clear
and unambiguous as
shown above. Even if the court order had lapsed, fulfilled or
rescinded, the debt counsellor would still have
to be notified so as
to issue a clearance certificate which would in turn empower or
require the credit bureau (the Appellant in
this instance) to remove
the adverse information appearing on its data. Therefore, it is my
finding that in terms of the NCA and
the agreement between the
Respondent and the CPE, the Respondent was required to obtain a
clearance certificate from Mr Sodo or
any other debt counsellor who
took after him. The issue of the lapsed order does not avail the
Respondent of a right not to obtain
a clearance certificate and if
refused, to approach the Tribunal (not the court
a
quo
) for the review of the decision of
the debt counsellor.
[42] Failure
by the Respondent to comply with the provisions of section 71, the
information contained in the Appellant’s
data base remains
extant. It cannot be said that the Appellant flouted the provisions
of sections 70(2) (c), (f) and (i) of the
NCA. As at the time the
judgment lapsed (according to the Respondent) the Respondent needed
to do more by following the procedure
provided for in section 71 of
the NCA.
G.
Jurisdiction
:
[43] It
remains to be determined whether the court
a quo
had
jurisdiction to deal with the issue in view of the provisions of the
NCA as a forum of first instance.
[44] Section
148 of the NCA deals with Appeals and Reviews and thus touches on the
role of the High Court in this
regard. I shall be terse and refer to
section 148 of the NCA as is. It provides:
“
Appeals
and Reviews
148 (1) A
participant in a hearing before a single member of the Tribunal may
appeal a decision
by that member to a full panel of the Tribunal.
(2) Subject
to the rules of the High Court, a participant in a hearing before a
full panel of the Tribunal
may-
(a) apply
to the High Court to review the decision of the Tribunal in that
matter; or
(b) appeal
to the High Court against the decision of the Tribunal in trial
matter, other than a decision
in terms of section 138”.
[45] The
provisions of section 138, which have been excluded deal with a
resolution that has been taken through
an Ombud with jurisdiction,
consumer court or alternative dispute resolution or investigated by
the NCR and the Respondent agree
to the proposed terms of an
appropriate order. Section 138 provides that a Tribunal or court,
without hearing evidence, may confirm
that resolution or agreement
as
a consent order
.
[46] It
is apparent therefore from the provisions of section 148 and the
other relevant provisions of the NCA,
that the process of removing
adverse information is Administrative and the only role the High
Court plays is limited to the Appeals
and Reviews of the decision of
the Tribunal. I agree with the following statement by Thulare AJ
[2]
:
“
[27] In
my view, the general thrust of the NCA, and in particular the
consumer credit policy under Chapter 4, places
the primary
jurisdiction of consumer rights, consumer credit records and
over-indebtedness and reckless credit, in the debt counsellor,
National Credit Regulator, the Tribunal and the Magistrate’s
Courts, the latter two being subject to the supervision and
inherent
jurisdiction of the High Courts. The nature of the work set out for a
debt counsellor, the NCR or the Tribunal in such
circumstances, in my
view, is necessary for a credible market place. Such an investigation
cannot be avoided by simply crying lacuna
and running to the High
Courts, and thereby avoiding a proper investigation by the debt
counsellor, the NCR or the Tribunal into
the credibility of the
information that sustains the alleged change in the financial
position of a consumer. Under the circumstances,
in my view, there is
no good cause for the quantum leap out
of the domestic remedies available to the applicant by statute
,
into the recourse to the courts,
until
the final stage and until the applicant had exhausted his statutory
remedies. The application to the High Court is premature
.
[28]
It
follows, in my view, that the High Court is not the forum of first
instance on matters which both the Tribunal and the Magistrate’s
Courts should deal with
. Under
circumstances where there are various tribunals which under the NCA
are open to an applicant,
it is
preferable that the intervention of the High Court be deferred until
the domestic remedies provided for in the NCA have been
exhausted
,
unless the very complaint is the illegality or fundamental
irregularity of the decision sought to be challenged (
Welkom
Village Management Board v Leteno
1958
(1) SA 490
(A) at 501C-503H).
[29]
Where
the Legislature has spared the High Courts from such primary tasks as
a forum of first instance in such elementary investigations
,
in my view, that ordination should not be departed from at the
slightest invocation and for light and flimsy reasons.
The
applicant had an option to simply challenge the information held by
the
credit
bureau
,
and
if the credit bureau did not remove the information
,
it would have
led to an investigation of his true
financial position by the NCR leading up to
,
if needs
be
,
the
full panel of the Tribunal deciding the matter
.
There is no explicable reason given by the applicant as to why this
path was not followed. Secondly, the refusal of the first
respondent
to issue the applicant with a clearance certificate is a decision
that is reviewable by the Tribunal. There is no reason
advanced as to
why the applicant did not approach the Tribunal for intervention”.
(Emphasis added)
[47] The
submission by the Respondent that reliance on section 71 is misplaced
because it deals with the rearrangement
and payments of the debts in
cases where there is an order declaring indebtedness and a debt
counsellor appointed in terms thereof,
cannot be correct in view of
what is set out in the paragraphs above.
[48] The
least the Respondent should have done upon receipt of a copy of the
information contained in the Appellant’s
records was to comply
with the provisions of section 72(4) by challenging the information
as a complaint under section 136 through
the NCR. Section 136 allows
any person to submit any complaint concerning any alleged
contravention of the NCA to the NCR in the
prescribed manner and
form. Section 137(1)(a) allows the NCR to apply to the Tribunal for
an order resolving the dispute over information
held by a credit
bureau.
[49] Section
72(1)(c)(ii) of the NCR states that every person has a right to
challenge the accuracy of any information
concerning himself or
herself and require the credit bureau or NCR to investigate the
accuracy of any challenged information, without
charge to the
consumer. Section 72(3)(b) requires of the credit bureau to remove
the information or all record of it from its files,
if it is unable
to find credible evidence in support of the information. These
sections say what they say without controversy.
[50] Chapter
1, Part A of the NCA deals with how the provisions of the NCA should
be interpreted especially that,
effect should be given to the purpose
set out in section 3 thereof. There is a lacuna in the NCA, in that,
it is silent on how
a person can challenge information held by a
credit bureau, like the Appellant. The Respondent, however, contends
that the challenge
was successfully delivered by e-mail and facsimile
and that sufficed as service in terms of section 168 of the NCA. The
contention
goes further that section 168 has been complied with in
that the documents were delivered to the Appellants. The Respondent
cited
the definition of “delivered” as it appears in
section 1 of the Regulations of the NCA.
[51] Section
168 of the NCR deals with service of documents and provides:
“
Service
of documents
168 Unless
otherwise provided in this Act, a notice, order or other document
that, in terms of this Act, must be
served on a person will have been
properly served when it has been either –
(a) delivered
to that person; or
(b) sent
by registered mail to that person’s last known address”.
[52] As
stated, “delivered” is not defined in the NCA. The
definition of “delivered” appears
in section 1 of the
Regulations promulgated by the Minister in terms of section 171 of
the NCA. The section 1 definition goes:
“
delivered”
unless otherwise provided for, means sending a document by hand, by
fax, by e-mail, or registered mail to an address
chosen
in
the agreement by the proposed recipient
,
if no such address is available, the recipient’s registered
address. . . .” (Emphasis added).
[53] The
rest of the definition deals with delivery to the National Consumer
Tribunal and NCR which is not relevant
for the purposes hereof. There
is no reference to delivery to the credit bureau. The word deliver in
the Regulation only refers
to instances where a recipient has chosen
an address
in
terms of an agreement between them
.
In the instant matter, there is no agreement between the Appellant
and the Respondent and therefore the definition does not apply.
I
agree with the following reasoning of Andre Gautschi AJ in
Starita
(aka Van Jaarsveld) v ABSA Bank Ltd and Another
[3]
with regard to the definition of “delivered” as appearing
in the Regulations:
“
4. It
is fallacious in my view to apply a definition in the Regulations to
an expression used in the
Act (the
National Credit Act 34 of 2005
).
The Act does not permit the Minister, in making Regulations, to
define expressions in the Act, the Minister is not empowered
to
dictate matters in the domain of the Legislature. The definition of
the word “delivered” in the Regulations also
does not
purport to contain a “prescribed manner” for delivery. It
is only a definition and simply indicates the meaning
to be ascribed
to the word “delivered” as used in the Regulations. In my
view, therefore, no regard can be had to the
definition, of the word
“delivered” in the Regulations in interpreting sections
of the Act”.
[54] The
Respondent seeks reliance on section 65 of the NCR in dealing with
the delivery of the letter. Section
65 deals with the right to
receive documents. In turn, section 65(1) stipulates that “every
document that is required to
be delivered to
a
consumer
in terms of this Act must be
delivered
in the prescribed manner if any
”
. The
section is specific as it relates to delivery to a consumer. The
delivery in this matter was by a consumer to the credit bureau.
Therefore reliance of a section 65 is also misplaced.
[55] Section
168 on the other hand deals with service of a notice, order or other
document and requires that it
must be delivered or sent per
registered mail to that person’s last known address.
[56] In
the absence of a definition of “deliver” in the NCR, the
ordinary meaning of “deliver”
i.e. to personally serve
the letter (in this instance) to the Appellant alternatively per
registered post must prevail.
[57] The
Appellant avers that in order to address the lacuna in the NCA about
how a challenge should be effected,
it devised a system through which
challenges are followed either telephonically or electronically as
dealt and explained in paragraph
10 above.
[58] The
reason addressed by the Respondent for not complying with the
challenge procedure provided for by the
Appellant or in failing to
access the platform created by the Appellant which enables him to
lodge the challenge is disingenuous.
It is so for the reason that the
letter of challenge was written and processed by the Respondent’s
attorney of record. The
reasons advanced by the Respondent that he is
technically illiterate, he had no high-tech cellular phone nor money
to purchase
data to access internet, cannot be correct in the light
thereof. Apart from that which is said by the Respondent, there is no
explanation
given by his attorney (as the person who lodged the
letter of challenge) why the attorney did not make attempts to access
the Appellant’s
website.
[59] The
Respondent’s argument that the lodgement process created and
preferred by the Appellant are “no
law and are not binding to
the Respondent” does not hold water in the light of the fact
that the NCR does not provide a process
through which the challenge
must be lodged. The submission made that the system created by the
Appellant has not been published
for public knowledge in any
recognizable platforms and media e.g. Government Gazette is
opportunistic. I say so because it is a
means employed to assist the
Appellant in handling the large volumes of challenges by numerous
consumers and to help the consumers
to access the information
contained in the data of the Appellant. Technology is the order of
the day. It does not avail the Respondent
nor his current attorneys
to plead technological ignorance in this day and age. The website of
the Appellant is easily available
especially to the Respondent’s
attorneys. The measures taken by the Appellant are designed to assist
consumers and not to
frustrate them. Weighing the probabilities of
this matter, I am unable to find that the Appellant received the
letter of challenge
and ignored it.
[60] Based
on the above factors, I find that the Respondent is still under debt
review as he has not followed the
procedure prescribed in section 71
of the NCA. I further find that the court a
quo
erred in its finding that it had the necessary jurisdiction at first
instance to direct the Appellant to remove the adverse information
about the Respondent.
H.
Costs
:
[61] Mr
Botma, for the Appellant urged us to order costs at a punitive scale
against the Respondent and the Respondent’s
current attorneys
jointly and severally, the one paying the other to be absolved. The
reason advanced for such an order is that
the Respondent blatantly
attempted to mislead this court by misrepresenting the facts
surrounding the Respondent being placed under
debt review.
[62] The
motivation for costs
de bonis propriis
against Mr Zono is that:
(a) The
procedure Mr Zono applied is filing the notice challenge was wrong.
(b) The
incorrect contact details of the Appellant were used by Mr Zono.
(c) The
information pertaining to the Respondent supplied in the notice to
challenge was incorrect.
[63] Further
it was argued that Mr Zono had caused unnecessary costs to his client
and the Appellant.
[64] Mr
Zono, on behalf of the Respondent, submitted that if the appeal is
dismissed, the Appellant should be ordered
to pay costs on a punitive
scale.
[65] This
court is vested with a discretion when it comes to the award of
costs. The costs usually follow the result.
There is no evidence that
Mr Zono was actuated by malice or recklessness in the procedure he
followed in submitting the letter
of challenge. He may not have been
astute in submitting the challenge but that does not necessitate that
he be mulcted with costs
de bonis
propriis.
[66] The
Respondent was not honest in saying that he never applied to be
placed under debt review. That was a blatant
untruth. However, I feel
that a cost order other than on a punitive scale would compensate
that. It is clear that the Respondent
had financial difficulties
hence he approached Mr Sodo at the time and also the bank. It appears
to me that he would not in the
circumstances of the cost order sought
be able to meet those costs. I say so without having enquired about
his current financial
standing. In my discretion a costs order on the
normal party and party scale would suffice.
[67] Consequently,
I make the following order.
(1) The
order of the court a
quo
is set aside and substituted with the following order.
“
The
application is dismissed with costs”.
(2) The
Respondent is ordered to pay the costs of this appeal.
M MAKAULA
Judge of the High
Court
Zilwa J: I
agree.
PHS ZILWA
Judge of the High
Court
Flatela AJ: I
agree.
B FLATELA
Acting
Judge of the High Court
Appearances
:
Counsel
for the Appellant: Adv
DC Botma
Instructed
by: Schüler
Heerschop Pienaar Attorneys c/o Mjuleka Attorneys Inc.
Counsel for the
Respondent: Mr AS Zono
Instructed
by: AS
Zono & Associates
Date
heard: 26
April 2021
Date
judgment reserved: 26
April 2021
Date
judgment delivered: 23
November 2021
[1]
National Consumer Tribunal established in terms of section 26 of the
NCA.
[2]
Regard
Du Toit vs Benay Sager t/a Debt Busters and Others
(unreported)
ZAWCHC 141. Case No. 16226/17 delivered on 17 November 2017. See
also
Janse
Van Vuuren v Roets and Others
2019(6)
506 (GJ).
[3]
2010(3) SA 443 (SG) paragraph 184.