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[2013] ZAECMHC 11
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Nkume v Transunion Credit Bureau (Pty) Ltd and Another (2866/11) [2013] ZAECMHC 11; 2014 (1) SA 134 (ECM) (11 July 2013)
IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE HIGH COURT-MTHATHA
Case
No: 2866/11
Date
heard: 14 September 2013
Judgment
Delivered: 11 July 2013
In
the matter between:
SAKHELE
PRECIOUS NKUME
........................................................................
Applicant
and
TRANSUNION
CREDIT BUREAU
(PTY)
Ltd
...................................................................................................
1
st
Respondent
PRESLES
(PTY) Ltd
...............................................................................
2
nd
Respondent
________________________________________________________________
JUDGMENT
DUKADA
J:
[1] Applicant instituted these
proceedings seeking mainly the following orders:-
That the first respondent’s
action of retaining in its records adverse information concerning
applicant be declared unlawful,
invalid and of no force and effect;
That the second respondent’s
action of submitting or reporting adverse information concerning
applicant to the first respondent
be declared unlawful, invalid and
of no force and effect;
That the respondents be directed to
expunge forthwith or cause to be expunged from the first
respondent’s records adverse
information concerning applicant;
That the respondents be ordered to
pay costs of this application, jointly and severally, the one paying
the other to be absolved.
[2] The application is vigorously
opposed by the 2
nd
respondent, and it was withdrawn later
against the first respondent for the reasons that will be dealt with
later in this judgment.
[3] The background facts of this
matter are largely common cause. During July 2006 the applicant
entered into an agreement with
the second respondent in terms of
which the second respondent would supply goods to the applicant,
which would be paid for by the
applicant. Some goods were then
supplied by the second respondent to the applicant in terms of the
said agreement. Second respondent
later instituted legal proceedings
against the applicant for the recovery of moneys due and owing in
respect of goods supplied
by her to applicant. A default judgment
against the applicant and in favour of the second respondent was
granted.
It is this judgment by default which
was later submitted to the first respondent who recorded it in her
records.
Applicant got to know of this default
judgment against him when he applied for a credit facility with the
African Bank Limited.
Applicant later successfully applied for the
rescission of that default judgment. There is a dispute of fact
between the applicant
and the second respondent about whether or not
applicant owed the money involved in that default judgment, however,
that is not
an issue for the purposes of this judgment. After the
default judgment was rescinded the applicant communicated with the
first
respondent to expunge the information about the default
judgment in her records but the first respondent did not do so
timeously
as a result the applicant had to launch this application.
Later the first respondent expunged the information about the default
judgment in her records. Applicant subsequently filed a Notice of
Withdrawal withdrawing this application with the second respondent
to
pay costs of this application.
ISSUES
[4] The adverse information that the
applicant mainly complained about has now been expunged by the first
respondent. It seems to
me that the merits in the orders mentioned in
paragraph1 above are live only for the question of costs. Sometimes
a judgment for
costs involves a decision on the merits (see
Bedeaux
v McChesney 1939 WILD 128 at 132
;
Develing v Central
White Lime Works 1912 WLD; Cats v Cats
195 (4) SA 375
© 379 and
Anthony Johnson Contractors (Pty) Ltd v D’ Oliveira
199 (4) SA
728
(C) 733 C-D)
.
In order to find justification for
second respondent to be ordered to pay costs of this application, in
my view, I have to establish
whether second respondent supplied the
adverse information to the first respondent and, if so, whether such
conduct was unlawful.
[5] Mr D.C Botma, Counsel for the
second respondent, has argued that there is no allegation in
applicant’s founding affidavit
that it was the second
respondent who supplied the adverse information to the first
respondent. He contended that the whole case
of the applicant against
the second respondent is based upon an inference drawn by him that it
was the second respondent who submitted
the information.
He submitted that in the absence of
such an allegation, the applicant has failed to prove a case against
the second respondent and
that there exists no grounds for a costs
order to be awarded against the second respondent.
Mr Zono, attorney for the applicant,
in response, argued that it is clear from the papers that the second
respondent reported adverse
information concerning the applicant. He
referred to paragraph 6.2 of Applicant’s founding affidavit
which states:-
“
It is therefore clear from
the provisions of paragraphs 5 and 6 above that the second
respondent’s actions of submitting adverse
information
concerning me were/are unlawful.”
He
further referred to a letter from the first respondent to Applicant’s
attorneys, annexed to the applicant’s replying
affidavit, which
states:-
“
We have investigated the
allegation regarding the default notation submitted by Presles and
they have informed us that your client
had only one account with them
under account number UH 4421; they further confirmed that they had
incorrectly listed the default
notation electronically against your
client and have instructed us to remove it, which we have duly done.”
Mr Zono further argued that there is
no denial in the whole tenur of the second respondent’s
answering affidavit that the
second respondent did not report or
submit adverse credit report about the applicant to the first
respondent.
Mr Botma, in reply, argued that it is
trite law that an applicant must make out her case in the founding
affidavit and that a replying
affidavit is not the place where
defects can be cured. He submitted further that the letter from the
first respondent is not “
evidence
” that can be
regarded as proof of the fact.
[6] Further to the extracts from the
applicant’s founding affidavit to which Mr Zono has referred
to, the applicant states
as follows in paragraph 3.2 of his founding
affidavit:-
“
I emphasize that I did not
owe the second respondent at the time I was reported by the second
respondent to the first respondent
or at any time to have defaulted
fulfilling my contractual obligations with the second respondent.”
In paragraph 5.1 of applicant’s
founding affidavit, he states:-
“
I make this submission
against the second respondent that it failed to give me its notice of
intention to submit the adverse information
concerning me to the
first respondent, and it further failed to give me a copy of
information as it has failed to notify me.”
[7] Mr Botma is correct in his
submission that “
it is trite law that an applicant must make
out its case in the founding affidavit”
Diemont JA put this point aptly as
follows
in Director of
Hospital Services v Mistry.
”
1
“
When, as in this case, the
proceedings are launched by way of notice of motion, it is to the
founding affidavit which a Judge will
look to determine what the
complaint is. As was pointed out by
Krause
J in Pountas’ Trustee v Lahanas
1924 WLD 67
at 68
and as has been said in many other
cases: ‘…….an applicant must stand or fall by his
petition and the facts
alleged therein and that, although sometimes
it is permissible to supplement the allegations contained in the
petition, still the
main foundation of the application is the
allegation of facts stated therein,
because those are the facts which
the respondent is called upon either to affirm or deny.’ ”
2
It lies, of course, in the discretion
of the Court in each particular case to decide whether the
applicant’s founding affidavit
contains sufficient allegations
for the establishment of his case.
3
[8] Reverting to the case at hand, in
my view, although the applicant does not specifically, clearly and
separately set out his
complaint against the second respondent, he,
however, discloses his complaint or cause of action in the extracts
from his founding
affidavit quoted above. Except to aver that the
applicant has failed to allege that it is the second respondent who
delivered the
adverse information regarding the applicant to the
first respondent, the second respondent fails to deny or admit that
allegation
specifically in her answering affidavit.
As far as the letter by the first
respondent to the applicant’s attorneys which was annexed to
applicant’s replying
affidavit, its contents stating that it
was the second respondent who submitted the adverse information, in
my view, such contents
merely expand on the complaint set out by the
applicant in his founding affidavit in response to the second
respondent’s
allegations in her answering affidavit.
The second respondent was expected to
admit or deny or confess and avoid the allegations in the applicant’s
founding affidavit.
In my view, the second respondent has
raised no dispute of fact on the applicant’s complaint or cause
of action against her,
which she could have done in a number of
ways.
4
[9] Section 72 of the National Credit
Act 34 of 2005 (NCA) gives to consumers right to access and challenge
credit records and information.
Subsection (1)(a) provides:-
“
Every person has a right to
be advised by a credit provider within the prescribed time before any
prescribed adverse information
concerning
the
person is reported to a
credit bureau, and to receive a copy of that information upon
request.”
Regulations 17(3) of the NCA includes
“
default
” as one of the adverse classifications of
consumer behaviour. Consequently, in my view, the adverse information
complained
about by the applicant falls within the definition in
section 17(3).
[10] Regulation 19 of the NCA provides
for the submission of consumer credit information to the credit
bureau. Sub-regulation 4
provides:-
“
All sources of information
as set out in Section 70(2) of the Act and Regulation 18(7) must give
the consumer at least 20 business
days notice of its intention to
submit the following adverse information concerning that person to a
credit bureau:-
Classification of consumer
behaviour, including classifications such as ‘deliquent’,
‘default’, ‘slow
paying’, ‘absconded’
or ‘not contactable’.”
Thus, in my view, in terms of this
sub-regulation the second respondent, being the credit provider,
should have given the applicant,
being the consumer, notice of her
intention to submit the adverse information, viz default, concerning
the applicant, to the credit
bureau
,
namely the first
respondent. The legislature used the word “
must
”
in regulation 19 (4) which, in my
view, makes that requirement to be peremptory in respect of the
credit provider. Consequently,
in my view, the second respondent
flouted the said peremptory legal provision and such conduct was
unlawful. This is re-inforced
by the view (which I agree with) that
the NCA is consciously constructed and designed for the protection of
consumers.
5
And if not, how can the consumer get
the opportunity to challenge the credit information if he is not
notified by the credit provider
of its intention to submit the
adverse information concerning the consumer to the credit bureau
prior to sub-submission as required
by the said Regulation 19. In the
circumstances, I am of the view that the second respondent has to
shoulder some costs in this
matter.
[11] Regarding costs vis-à-vis
the first respondent, section 70(2) (f) obliges the credit bureau to
promptly expunge from
its records any prescribed consumer credit
information that, in terms of the regulations, is required to remove
from its records.
The first respondent was advised of
the rescission of the default judgment by the applicant’s
attorneys per the letter dated
28 March 2011 which was telefaxed on
11 April 2011 to a correct address given by the first respondent.
After some correspondence and
communication between the applicant’s attorneys and the first
respondent, the latter advised
the applicant’s attorneys per
their letter dated 12 December 2011 that they have removed the
adverse information. The papers
in this matter were served upon the
first respondent on the 6 December 2011. From the date of the letter
advising the first respondent
about rescission of the default
judgment, it took about eight months for the first respondent to
expunge the adverse information
from her records. In my view, the
first respondent failed to act promptly in expunging the adverse
information from her records
as required by Section 70(2)(f) of the
NCA. Had the first respondent acted promptly these legal proceedings
would have been avoided.
In the circumstances, I am of the view
that part of the costs in this matter have to be borne by the first
respondent.
But as far as the second respondent is
concerned, she opposed the application, filed answering affidavits
and argued this matter,
as a result this application was prolonged
longer than necessary. Had the second respondent not persisted in his
opposition after
delivery of the notice of withdrawal against the
first respondent, this matter would have ended there.
In my view, therefore, the second
respondent should carry the full costs of this application but share
them jointly and severally
with the first respondent only up to the
stage when Notice of Withdrawal of this application against the first
respondent was delivered.
[12] Mr Zono has applied for costs to
be awarded against the second respondent on an attorney and client
scale. He submitted that
this matter should not have come to this
Court for determination and it should have been settled between the
parties.
It is trite law that an award of
attorney and client costs are not granted lightly. Such order is
granted by reason of some special
considerations arising either from
the circumstances which gave rise to the action or from the conduct
of the losing party. The
list is not exhaustive
6
.
Although the second respondent has unnecessarily protracted this
application, I am not persuaded that there are any special
circumstances
in the present case which justify such special costs
order.
[13] In the circumstances, the
following order shall issue:-
The action of the second respondent
of submitting or reporting adverse information concerning the
applicant to the first respondent
is hereby declared unlawful;
First and second respondents are
ordered to pay costs of this application jointly and severally, the
one paying the other to be
absolved, up to and including the date of
the delivery of the Notice of Withdrawal of this application against
the first respondent,
and the second respondent is ordered to pay
costs of this application incurred after the delivery of the
aforementioned Notice
of Withdrawal. All such costs are to be paid
on a party and party scale.
_______________________
D.Z. DUKADA
JUDGE OF THE HIGH COURT
Appearances
Mr A.S. Zono Instucted of
For the applicant : A.S. Zono
Attorneys
MTHATHA
For the 2
nd
Respondent :
Adv Botma Instructed by
Smith Tabata Inc
MTHATHA
1
1979
(1) SA 626
(A) at 635 H-636 A
2
See
also Titty’s Bar and Bottle Store (Pty) v ABC Garage (Pty) Ltd
1974 (4) SA 362
(T) at 369 A; Sheperd v Mitchell Cotts Seafreight
(SA) (Pty) Ltd
1984 (3) SA 202
(T) at 205 E; and Bowman NO v De
Souza Roldeo
1988 (4) SA 326
(T) at 327 D- 328 A.
3
See
Titty’s Bar case, supra at 369 A-B
4
See
Room Hire Co. (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd
1949 (3)
SA 1155
(T) at 1163 in fin
5
See
First Rand Bank Limited v Dhlamini
2010 (4) SA 53
(GNP) at para 29;
Absa Bank Ltd v Proshaska t/a Bianca Cara Interiors
2009 (2) SA
512(D)
at para 56; and Zokufa v Compuscan
2011 (1) SA 272
(ECM) at
para 102
6
Rautenbach
v Symington
1995 (4) SA 583
(O) at 588 A-B
9