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[2016] ZAGPPHC 1110
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Univision Services Association NPC and Others v National Consumer Tribunal and Another (97574/2015) [2016] ZAGPPHC 1110 (3 November 2016)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NO: 97574/2015
DATE:
3/11/16
UNIVISION
SERVICES ASSOCIATION
NPC
1st
APPLICANT
VACATION
RECREATIONAL SERVICES
2nd
APPLICANT
QUALITY
TIME MARKETING (PTY) LTD
3rd
APPLICANT
QUALITY
VACATION
CLUB
4th
APPLICANT
AFRICAN
CLUB INNOVATIONS
5th
APPLICANT
MULTI
DESTINATION CLUB
6th
APPLICANT
LIFESTYLE
VACATION CLUB
7th
APPLICANT
AFRICAN
VACATION
CLUB
8th
APPLICANT
VIP
EXPRESS
9th
APPLICANT
MILCAR
DEVELOPMENT CC
10th
APPLICANT
INVESTAGE
192 (PTY)
LTD
11th
APPLICANT
AND
THE
NATIONAL CONSUMER TRIBUNAL
1st
RESPONDENT
THE
NATIONAL
CONSUMER
COMMISSION
2nd
RESPONDENT
JUDGMENT
THOBANE
AJ,
Introduction
[1]
This is an application in terms of the
Promotion of Administrative
Justice Act, 3 of 2000
, for judicial review of a decision taken by
the first respondent not to award costs to the applicants in an
application brought
before it by the second respondent.
[2]
The following brief background is necessary;
2.1.
The second respondent brought an application before the first
respondent. In that application
the second respondent sought an
order in terms of which certain conduct of the applicants would be
declared “prohibited conduct".
The details of the conduct
are not necessary for purposes hereof.
2.2.
The aforesaid application was by notice, on the morning of day one of
the three day hearing,
withdrawn. In the notice of withdrawal,
the second respondent did not make a tender for costs.
2.3.
Aggrieved at this, applicants launched an application in terms of
which an order was sought for
the award of costs in their favour. The
application was launched before the first respondent and was opposed
by the second respondent.
2.4.
The tribunal, first respondent, having heard arguments and
submissions found that the National
Credit Act, Act 34 of 2005, does
not allow the awarding of costs in the matter. For that reason, it
refused the application for
the award of costs and directed that each
party pay its own costs.
2.5.
The applicants, who were clearly dissatisfied at the state of
affairs, launched an application
for the review and setting aside of
the decision of the first respondent, the tribunal. In the notice of
motion the following loosely
stated orders are sought;
2.5.1.
That the decision refusing an award of costs be reviewed and set
aside;
2.5.2.
That the matter be remitted back for reconsideration;
2.5.3
That the second respondent be directed to pay costs of the review and
that the first respondent do so in the event it opposes
the
application
2.6.
The review application is opposed by the second respondent. The first
respondent has filed a
notice to abide.
[3]
The above summary is common cause.
Applicable
legal framework
[4]
The genesis of current proceedings is the referral, by the second
respondent of a matter in terms of
section 73
(2) (b) of the
Consumer
Protection Act,
68 of
2008
.
The section reads as follows;
"Outcome
of investigation
73.
(1)
After concluding
an
investigation
into
a
complaint, the
Commission may;
(a)
issue
a
notice
of
non-referral to
the
complainant
in
the prescribed
form;
(b)
refer
the matter
to
the
National
Prosecuting
Authority, if the
Commission alleges that a person has committed an offence in terms of
this Act; or
(c)
if the Commission believes that a
person has
engaged
in
prohibited conduct-
(i)
refer
the
matter
to
the
equality
court, as
contemplated
in
section
10,
if
the complaint
involves
a
matter
in
terms of Part A
of
Chapter
2;
(ii)
propose
a
draft
consent
order
in terms
of
section
7
4;
(iii)
make
a referral
in
accordance
with subsection
(2);
or
(iv)
issue
a
compliance
notice
in
terms
of section 100.
(2)
In the
circumstances
contemplated
in
subsection
(1) (c)
(iii), the
Commission
may
refer
the matter-
(a)
to the consumer court of the
province in which
the supplier has its principal place of business in the Republic,
if
-
-
(i)
there is
a
consumer
court
in
that province;
and
(ii)
the
Commission
believes
that
the issues
raised
by
the complaint
can be
dealt with
expeditiously and
fully by
such
a referral;
or
(b)
to the
Tribunal;"
[5]
With regard to referral of matters
before the tribunal, the
Consumer
Protection Act provides
that;
"Referral
to Tribunal
75.
(1) If the Commission issues a notice of non-referral in response to
a complaint, other than on the grounds contemplated in
section
116
, the complainant concerned may refer the matter directly to-
(a)
the consumer court, if any, in the province within which the
complainant resides, or
in which the respondent has
its principle place of business in the Republic, subject to the
provincial legislation
governing the operation of
that consumer court;
or
(b)
the Tribunal, with leave of the Tribunal.
(2)
If a matter is referred directly to a consumer court in terms
of subsection (1), the respondent may apply to the
Tribunal,
in the prescribed manner and form and within the
prescribed time, for an order that the matter
be referred to
the Tribunal, and the provisions of
section 73(4)
apply to such an
application.
(3)
A referral to the Tribunal, whether by the Commission or by a
complainant in terms of subsection (1), must
be in
the prescribed form.
(4)
The Tribunal-
(a)
must conduct a hearing into any matter referred to it under this
Chapter, in
accordance with the requirements of
this Act, and the applicable provisions of the National
Credit
Act pertaining to the proceedings of the Tribunal;
and
(b)
may make any applicable order contemplated in this Act or in section
150 or 151 of
the National Credit Act, read with the changes required
by the context. "
[6]
Regulation 19 of the Regulations for matters Relating to the
Functions of the Tribunal and Rules for the Conduct of Matters
Before the National Consumer Tribunal, reads as follows;
"Withdrawal
of matters
19.
(1) An Applicant, before an application
has been decided, may withdraw all or part of the application
by-
(a)
serving a notice of withdrawal in Form Tl.r19 by hand delivery, fax
or email; and
(b)
filing with the Registrar a copy of the notice of withdrawal with
proof of service.
(2)
A notice of withdrawal may include a consent to pay costs, or the
other party may
apply to the Tribunal for an order for costs. "
[7]
Section 147
, of the
National Credit Act, 34 of 2005
, states the
following with regard to costs;
"Costs
147.
(1) Subject to subsection (2), each party participating in
a hearing must bear its own costs.
(2)
If the Tribunal-
(a)
has not made a finding against a respondent, the member of the
Tribunal complainant
who referred the complaint in terms of
section
141(1)
; or
section 75
(1) (b) of the
Consumer Protection Act, 2008
,
as the case may be; or
(b)
has made a finding against a respondent, the member of the Tribunal
presiding at a
hearing may award costs against the respondent and
to a complainant who referred the complaint in terms of
section
141(
1
) or
section 75
(
1
) (b) of the
Consumer Protection
Act, 2008
, as the case may be."
Applicants’
submissions
[8]
The applicants submit that the finding by the tribunal to the effect
that it does not have the power to grant costs, amounts
to an error
of law. The applicants are of the view that where a notice of
withdrawal has been filed without a cost tender, in that
event an
application may be brought before the tribunal by the aggrieved party
for an order of costs. The second submission is
that from the onset,
applicants warned that the application that was brought by the second
respondent before the first respondent,
is frivolous and vexatious.
They indicated at the time in their opposing
papers, that
they would be asking for
a punitive costs order. The applicants make
the point
that
section 147
, on which the
tribunal relied in dismissing the application for an award of costs,
is not applicable in this case. Put differently,
the applicants
contend that
section 147
applies when there is an application before
the Tribunal. They argue that in this instance since the matter was
withdrawn, there
was no hearing before the tribunal hence its
non-applicability. What was before the tribunal, so the argument
goes, was an application
for the award of costs, which is a separate
application.
Respondent’s
submissions
[9]
The second respondent is of the persuasion that the application must
fail for the following reasons;
9.1.
That the tribunal was correct in its finding that it did not have the
power to award costs. This
is so because the tribunal is allowed to
award costs only in circumstances where the referral is in terms of
section 75.
Since the referral that led to the application for the
award of costs being launched was brought in terms of
section
73
(2) of the
Consumer Protection Act, the
contention is that the
tribunal was not clothed with the power to deal therewith when the
regulations are interpreted in a manner
that is consistent with the
empowering provision in the legislation.
9.2.
That it can not be successfully argued that the application was
vexatious or frivolous.
The second respondent argues that the
referral was
bona
fide
and that it follows that
a costs order should not ensue, at all, let alone on a punitive
scale. In this regard the submission is
that in order to arrive at a
conclusion as to whether the second respondent acted vexatiously or
frivolously, one must examine
the merits of the referral. The
referral, according to the second respondent, had been triggered and
preceded by 281 complaints.
The second respondent lists the criticism
aimed at it by the applicants as follows;
9.2.1.
That the deponent to the founding affidavit had used
intemperate language and had made unfounded allegations;
9.2.2.
That the application was brought frivolously and on hearsay
evidence;
9.2.3.
that the second respondent had breached the constitution;
9.2.4.
That the referral suffered from defects in law.
The
issue
[10]
The issue for determination is whether the tribunal is correct in its
judgment that the NCA does not allow for the awarding
of costs in the
matter brought before it by the applicants, which judgment is now the
subject of this review. If it is, the application
should be
dismissed. However if it is not, then its decision should be set
aside. In that event processes will ensue. The determinative
finding
of the first respondent is captured in paragraph 22 of its judgment
(page 35 of the bundle);
"Section
147
therefore
only
provides
for
the
awarding
of
costs
in very limited
circumstances
where
a
complainant
refers
a
matter
to the
tribunal
after
having
received
a
notice
of
non-referral
from
the National Credit
Regulator
or
the
National
Consumer
Commission. If the
circumstances
do
not
fall
within this exception
the general rule,
that
each
party
bears
its
own
costs,
must
be
observed.
This interpretation
is
unavoidable
because
section 147
(1)
uses
the word "must"
and
not
"may".
This
indicates
that
the
tribunal
is
not granted
a
discretion
regarding
when
it
may
award
costs."
Evaluation
[11]
It is a generally accepted principle of our law that a party
that withdraws its action or application, such party is
in the same
position as an unsuccessful litigant, and therefore the other party
is ordinarily entitled to costs. A departure from
the principle that
costs must be awarded to the party which has been put to the expense
of defending withdrawn proceedings, is
only warranted in exceptional
circumstances. In this regard, see
ABSA
Bank
and
others
vs
Robb
2013
(3)
SA
619
(GSJ)
at paragraph [8];
Germishuysvs
Douglas
Besproeiingsraad
1973
(3)
299
(NKA)
and
Waste
Products
Utilisation
(Pty)
Ltdvs Wilkes
and Another
(Biccari
Interested
Party)
2003
(2)
SA
590
(WLD)
at 597 A
- B.
[12]
In the matter of
Gamlan
Investments
(Pty)
Ltd
and
Another vs Trilion Cape (Pty) Ltd
1996
(3) SA 692
(CPD)
at
700G
the court referred with approval to the judgment of
Jenkins vs
SA
Boiler
Makers,
Iron& Steelworkers
&Ship
Builders Society
1946
WLD
15
where it was held (as paraphrased by the court in Gamlan)
that
'where a
disputed
application
is
settled
on
a
basis
which
disposes
of
the merits except
insofar
as
the
costs
are
concerned,
the
Court
should
not
have
to hear evidence to
decide
the disputed facts in
order to
decide
who
is liable for costs,
but the Court
must,
with
the
material
at
its disposal, make
a proper
allocation
as
to
costs.'
[13]
In
Wildlife
&
Enviromental
Society
v
MEG
for
Economic
Affairs
2005 (6)
SA 123
(ECD)
at 131 B-C, Pickering J,
after referring to various authorities, said the following:
"It
is clear from the above, in my view, that, even in cases where
litigation has been withdrawn, the general rule is of application,
namely, that a successful litigant is entitled to his costs unless
the Court is persuaded, in the exercise of its judicial discretion
upon a consideration of all the facts, that it would be unfair to
mulct the unsuccessful party in costs."
[14]
The principles to legal costs were summarised as follows in
Goldfields Ltd
and
Others
v
Motley
Rice
LLC
2015
(4)
SA
(GJ)
at
para 29 and 32 :
"
The starting
point
for
an
analysis
of
the
South
African
legal position
for
legal
costs
is
the general
rule
that:
(a)
In ordinary
cases
costs
should
follow
the
event
-
the successful party is
ordinarily
entitled to
costs
against the
unsuccessful
party;
(b)
Costs
are
awarded
in
the
discretion
of
the
court
which may
in
appropriate
cases
not
award
costs
to a successful
part
y
or
even
award
costs
against
such party........
The
existence
of
a
discretion
of
the
court
in
all
cases
(constitutional
and
otherwise)
ensures
that
the court is always in a
position to balance the interest of the parties and to protect its
own process, if necessary through costs
orders. In this context there
is no party which is a priori immune from the court's power to
protect its own process through costs
orders."
[15]
The Constitutional Court has summarized the position
pertaining to costs as follows in
Ferreira
v
Levin
NO
and
Others
[1996] ZACC 27
;
1996
(2)
SA
621
CC.;
"The
Supreme Court has, over the years, developed a flexible approach to
costs which proceeds from two basic principles,
the
first being that the award of costs, unless expressly otherwise
enacted is in the discretion of the presiding judicial
officer
and the second that the successful party should, as a
general rule, have his or her costs. Even
this second principle
is subject to the first. The second principle is subject to a large
number of exceptions where the successful
party is deprived of his or
her costs. Without attempting either comprehensiveness or
complete analytic accuracy, depriving
successful parties
of their costs can depend on circumstances such as,
for example, the conduct of
the parties, the conduct of their legal
representatives, whether a party achieves technical success only, the
nature of the litigants
and the nature of the proceedings."
[16]
The first respondent exercises its powers within the realm of the
National Credit Act, the
Consumer Protection Act as
well as
applicable regulations. From the reading of the NCA it is clear that
the tribunal is empowered to award costs. This is
also common cause
between the parties. The divergence however comes where the second
respondent is of the view that costs can be
awarded only in limited
circumstances. In this regard the second respondent contends, this is
contained in the opposing affidavit,
that the following obtains;
16.1.
The general principle is that each party must bear its own costs;
16.2.
The above principle can be deviated from only when there has been a
referral in terms of
section 141
(1) of the NCA and
section 75
(1) of
the CPA.
16.3.
The power of the tribunal to award costs to a respondent is triggered
where the tribunal has made
no finding against a respondent.
Since
the referral of the applicants to the first respondent was neither in
terms of
section 141
(
1
) of the NCA nor
section 75
(1) of the CPA,
it is argued that the first respondent correctly held that it
was not empowered to award costs.
[17]
I align myself with the contention that the general principle is that
each party must pay its own costs. In fact it is more
than just an
alignment. It is the provision of
section 147(1)
of the NCA
that says so. However it does not end there. The NCA must be read
together with applicable regulations, in terms of
which in the event
of a withdrawal costs may be awarded either by consent or on
application. Provision is further made for the
award of costs where
there is an application brought on the basis of
vexatiousness or frivolity. I see no reason why
the tribunal
should not, when dealing with an application for an award of costs
brought after a matter is withdrawn, adjudicate
over the application
and determine whether or not an award of costs is warranted in the
given circumstances. The same bar, would
again in my view, not exist
where a party seeks such an award of costs on the basis of
vexatiousness and frivolity, in which event
such costs may be
punitive in nature.
[18]
At the core of the challenge of the applicants to the finding that
the tribunal was not clothed with powers to award costs
are two
issues. Firstly, the contention that the second respondent does have
the power to make a determination. Secondly, that
the applicants had
been warned from the commencement of the proceedings before the
tribunal, of an intention to not only seek costs
but to seek such
costs on a punitive scale. This court is not at liberty
to deal with the question of costs, let alone
the punitive nature
thereof. This court is called upon to determine if the first
respondent does have the power to award costs,
in the circumstances
of this case, and if the finding is to the
effect
that
it does, to set aside the finding that it does not have such powers
and to then remit the matter for reconsideration.
[19]
The notice of withdrawal, (page 59 of the paginated pages), reads as
follows;
"PLEASE
TAKE NOTE THAT the Applicant hereby withdraws the
application/referral.
PLEASE
TAKE FURTHER NOTE THAT the Applicant does not consent to pay
costs, pending the award of costs by the Tribunal."
It
seems to me clear that the second respondent was alive to the
provisions of
regulation 19
particularly subsection 2 thereof,
when the notice to withdraw the application or referral was crafted,
in terms of which
it could have consented to costs. The option second
respondent took, was to defer to the tribunal.
[20]
In opposing the application, the second respondent has touched on the
merits of the matter in an endeavor to show that a costs
order is not
warranted. Second respondent makes a further point that its actions
have always been in good faith and that the accusation
of having
acted vexatiously or frivolously simply does not stick. While the
second respondent is entitled to take the view that
punitive costs
are not warranted and in making such a submission to make a reference
to the merits, that approach is skewed. Determination
of the type of
costs to be awarded is a secondary issue. At issue in this matter is
whether the tribunal is correct in its finding
that it can not
determine costs.
[21]
A litigant that gets hauled before the tribunal and have a matter
withdrawn is empowered by the regulations to bring an application
for
an award of costs. Whether such an award should be made is a matter
best left to the tribunal. The primary issue is that it
would not be
ultra vires
unlike what the tribunal found.
[22]
I do not agree with the submission that the second respondent
is not empowered to consider an award of costs. I find
that in terms
of the regulations the first respondent is empowered to consider an
award of costs and that the finding that it is
not, falls to be set
aside.
[23]
I therefore make the following order;
1.
the decision of the first respondent made on 16 November 2015,
is reviewed and set aside;
2.
the application for the award of costs is remitted back to the first
respondent to make a decision in respect
of the applicants
application for costs against the second respondent;
3.
the second respondent is directed to pay costs of this application.
______________________
SA
THOBANE
ACTING
JUDGE
OF
THE
HIGH
COURT
Date
of hearing :
25th August 2016
Date
of judgment :
3rd November 2016
Applicant's
Counsel :
Adv. Cohen
First
respondent's Counsel :
Adv. Govender