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2024
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[2024] ZAFSHC 283
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Manamela and Others v Transunion Credit Bureau and Others (4434/2023) [2024] ZAFSHC 283 (12 September 2024)
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Reportable:
YES/NO
Of
Interest to other Judges: YES/NO
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to Magistrates: YES/NO
Case
No. 4434/2023
In
the matter between:
DIPITSENG
MAROPENG MANAMELA
1
ST
APPLICANT
LEMAKATSO
MOOROSI
2
ND
APPLICANT
MMATHEBE
ANNAH FAITH MOJA
3
RD
APPLICANT
THEDA
NTIKILE SANDLANA
4
TH
APPLICANT
PUSELETSO
MATETE
5
TH
APPLICANT
LUVUYO
XOLA NTOYI
6
TH
APPLICANT
LOUIS
EVELYN VAN RHEEDE VAN OUDTSHOORN
7
TH
APPLICANT
and
TRANSUNION
CREDIT BEREAU
1
ST
RESPONDENT
KEOLEBOGILE
CONSORTIUM (PTY)LTD
2
ND
RESPONDENT
HENDRICK
NKOMO
3
RD
RESPONDENT
NATIONAL
CREDIT REGULATOR
4
TH
RESPONDENT
JUDGMENT
BY:
MHLAMBI, J
HEARD
ON:
25 APRIL 2024
DELIVERED
ON:
12 SEPTEMBER 2024
[1]
The applicants, aggrieved by an adverse credit listing recorded
against them by the respondents in the credit
database, sought the
following orders:
1.1. That the
submission of the consumer credit information by the second
respondent, represented by the third respondent,
to the first
respondent, resulted in the first respondent recording an adverse
credit listing styled ‘Bad debt written off’
in its
records on its credit database with regards to the first to seventh
applicants, be declared invalid, unlawful, alternatively
unconstitutional.
1.2 That the first
respondent be ordered and directed to expunge the adverse credit
listing referred to in paragraph 1 above
regarding the first to
seventh applicants from its records without delay.
1.3 The
second respondent take steps that are required or reasonably
necessary to remove the credit listing, if applicable.
1.4 The first
and second respondents pay the application costs, jointly and
severally, with the third respondent if
the latter opposes the
application on the scale between attorney and client or on such scale
as the Court deems just.
[2]
The first respondent opposed the application and raised
four special pleas and a plea on the merits. The applicants
pursue
only prayers 1 and 4 of the notice of motion.
[3]
The applicants were all non-executive directors of Bloem
Water, a state-owned entity and a categorized national
government
enterprise with offices within the Bloemfontein district. The first
respondent is a duly registered credit bureau with
the principal
place of business in Johannesburg. The second respondent is a duly
registered company with its principal place of
business in
Bloemfontein. The third defendant is the sole director of the second
defendant. The fourth respondent is the national
credit regulator.
The third and fourth respondents did not oppose the application, and
a cost order was not sought against them.
[4]
On 13 November 2018, the second respondent
instituted a legal action against the Board of Directors of Bloem
Water in the Free State
High Court for contractual damages arising
from an alleged breach of contract for the supply of traveling and
accommodation services
to Bloem Water.
[5]
The Board of Directors defended the action and
excepted to the second respondent’s Particulars of Claim
because the latter
had sued the Board of Directors of the corporate
entity instead of suing the corporate entity. On 11 September 2020,
the court
granted an order withdrawing the action, and the plaintiff
was to pay the costs. The second respondent did not pursue any
further
actions against Bloem Water, the corporate entity.
[6]
In September 2022, the applicants noted an adverse credit listing
styled “Bad debts written off” in the first respondent’s
records displayed on its database. 20 August 2022 was reflected as
the purported default date. It was established that the third
respondent, as the only active director of the second respondent,
provided the consumer credit information to the first respondent.
Some applicants only became aware of the adverse credit
listing when they applied for credit, which was refused. The second
respondent
never notified any of the applicants of its intention to
submit the adverse credit information to the first respondent to be
reflected
on the applicants’ credit profiles.
[7]
The first respondent stated in its answering affidavit
that the applicant’s attorney failed to file a dispute
notice
to challenge the accuracy of the applicant’s credit
information. Therefore, no challenge was lodged with the first
respondent. The application was fatally defective as it affected the
applicants’ right to apply or
locus standi
, and it
failed to comply with the basic requirements of class proceedings or
class actions. The founding affidavit was improperly
commissioned as
neither pages 1 to 25, nor the annexures bore the initials of the
Commissioner of Oaths. Furthermore, the confirmatory
affidavits by
the second and third respondents did not bear the initials of the
Commissioners of Oaths on two pages. The thrust
of the first
respondent’s defence on the merits is that on the day the
application was instituted, i.e. 22 August 2023, it
was without
purpose, as the credit listing forming the subject matter of the
application was removed on 21 August 2023 because
the retention time
had expired.
[8]
In their reply, the applicants maintained that the
application was not without purpose when it was issued. Prayer
1 of
the notice of motion was still alive and well. The regulations
governing the administration of an oath or affirmation did
not
require every page of an affidavit to be initialed by the
commissioner and the deponent. The first applicant testified on her
own behalf and the second to the seventh applicant, and she needed no
authority to do so. The attorney decides which evidence to
lead. The
first respondent failed to appreciate that it was responsible for
ascertaining the veracity of the information it received
before
publishing it.
[9]
Section 70 of the National Credit Act, No. 34 of 2005,
(“the Act”), deals with credit bureau information
and the
duties of a credit bureau. A credit bureau must accept the filing of
consumer credit information from any credit provider
on payment of
the credit bureau’s filing fee, without charge for the filing
of consumer credit information from the consumer
concerned, for
correcting or challenging information otherwise held by that credit
bureau concerning that consumer. It must take
reasonable steps to
verify the accuracy of any consumer credit information reported to it
and retain it for the prescribed period,
irrespective of whether that
information reflects positively or negatively on the consumer. It
must maintain its records of consumer
credit information that
satisfies the prescribed standards and promptly expunge from its
records any prescribed consumer credit
information that, in terms of
the regulations, is not permitted to be entered into its records or
is required to be removed from
its records.
[10]
Section 72 regulates the right to access and the challenge to credit
records and information. It provides that 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 by
it to a credit bureau and to receive a copy of that information upon
request. That person has a right
to challenge the accuracy of any
prescribed adverse information about that person that a credit
provider reports to a credit bureau
or
the credit bureau or national credit register holds.
[1]
[11]
On behalf of the applicants, it was contended that the first
respondent approached the matter from a wrong point of view and
misconceived the applicant’s case. It was submitted that the
inquiry did not start with section 72(1)(c) but 70(2)(c) of
the Act.
In other words, the credit bureau had to satisfy itself that the
credit provider properly informed the applicants, as
consumers,
before the adverse credit consumer information was reported or
reflected on their credit profile. There was no evidence
that the
credit bureau took reasonable steps to verify that the credit
provider informed the applicants before the adverse credit
information was reported to it.
[12]
The first respondent would not have published the information had it
taken reasonable steps to verify its accuracy, it
was contended. That
would have been so for the following reasons:
12.1 The second
respondent was not a credit provider vis-à-vis the applicants.
No credit agreement existed between the second
respondent and the
applicants as the contract that gave rise to the claim successfully
excepted to, was concluded with Bloem Water.
12.2 The first respondent
would have known that the second respondent (purported credit
provider) did not inform the applicants
(purported consumers) of its
intention to report an adverse credit listing.
12.3 It would have been
known that the action was never pursued after it was instituted. If
the second respondent gave false information
and the first respondent
was unaware thereof, having taken reasonable steps to verify the
accuracy of the information, the applicants
would have been
constrained to challenge the accuracy of the information in terms of
section 72(1)(c) of the Act.
[13]
The first respondent, in its supplementary heads of argument, argued
that the provisions of the NCA should not be read
in isolation. Even
though section 70(2)(c) provides that credit bureaus must take
reasonable steps to verify the veracity of the
information reported
to them, that information, according to section 72, must only be
investigated once the consumer challenges
it. To expect credit
bureaus to investigate all credit information provided to them,
numbering thousands per day, would cause the
industry to halt and
consumer credit profiles to be severely outdated, opening floodgates
for reckless credit lending.
[14]
The first respondent contended further that section 72(5) provided
that credit bureaus cannot report information that
has been
challenged until the investigation has been completed. The applicants
were misinformed that the remedy in section 72 was
ineffective as the
information was retained on the consumer credit profile while the
credit bureaus investigated the challenged
information. However,
section 72(5) provides that the challenged information may not be
reported until the challenge has been resolved
in terms of subsection
(3)(a) or (b). The latter subsection provides that the credit
provider, credit bureau or national credit
register, as the case may
be, must take reasonable steps to seek evidence in support of the
challenged information and, within
the prescribed time after the
filing of the challenge, must provide a copy of any such credible
evidence to the person who filed
the challenge or remove the
information, and all record of it, from its files if it is unable to
find credible evidence in support
of the information. This means that
the information is retained on the consumer credit profiles during
the investigation.
[15]
Relying on the
dictum
in
TransUnion
Africa (Pty) Ltd Ngecenge,
[2]
it
was argued on behalf of the first respondent that the applicants’
recourse to the courts was premature as they should have
first
exhausted domestic remedies provided for by the Act. The application
was, therefore, premature and served no purpose. On
the other hand,
the applicants believed that their constitutional rights had been
violated and the first respondent’s conduct
was unlawful in
failing to satisfy the threshold requirements before publication,
thus violating their rights to privacy and dignity.
[16]
Having considered the relevant provisions of the Act, I am persuaded
that the first respondent failed to satisfy the
threshold
requirements in section 70(2)(c) of the NCA. The first special plea
is meritless and stands to be dismissed.
[17]
The
second preliminary point is that the first applicant deposed to an
affidavit on behalf of the second to the seventh applicants
and acted
on their behalf even though they did not share a consumer credit
profile. It was argued that each applicant should have
brought a
stand-alone application to remove the adverse credit listing. It was
held in
Ganes
and Another v Telecom Namibia Ltd,
[3]
that the deponent to an affidavit in motion proceedings need not be
authorised by the party concerned to depose to the affidavit.
It is
the institution of the proceedings and the prosecution thereof which
must be authorised. A party will have legal standing
(
locus
standi
)
if he or she has a direct and substantial interest in the
subject-matter of the judgment sought.
[4]
The applicants have such a substantial interest.
[18]
I have perused the Regulations Governing the Administering of an Oath
or Affirmation
[5]
and agree with
the applicants’ counsel that it is not required that the
Commissioner and the deponent must initial every
page of an
affidavit. The third and fourth points
in
limine
are also meritless and stand to be dismissed.
[19]
The first respondent believes that when the application was filed on
22 August 2022, it was without purpose, as the credit
listing was
removed on 21 August 2023. The fact is that the applicants’
constitutional rights were violated when the adverse
credit
information was published. They sought the appropriate remedy to
enforce their rights. When the application was launched,
the legal
question persisted as a live issue. It would, therefore, be unfair
and improper to suggest that the matter was no longer
relevant as it
involved legal questions of a constitutional nature having
significant policy implications.
[20]
On 7 March 2024, the court granted an order for the applicants’
attorneys to file written reasons on/before 22
March 2024 why an
order should not be issued that they pay the wasted costs occasioned
by the postponement of the application on
the scale of the costs
order which the court had already determined would be costs as
between attorney and client,
de bonis propriis.
A detailed
affidavit setting out the chronology of events and reasons was filed.
It would appear that two days before the hearing
of the application,
the attorneys had requested a postponement, which was refused, as
they experienced challenges from obtaining
instructions from their
clients. Most of the co-applicants had left the Board of Bloem Water
since the application was issued.
On the day of the hearing of the
application, the applicants tendered wasted costs for its
postponement.
[21]
A costs order
de
bonis propriis
against an attorney is generally granted in cases that involve gross
incompetence or gross disregard for professional responsibilities,
dishonesty, willfulness or negligence of a serious degree.
[6]
It takes extraordinary circumstances for such costs to be justifiably
awarded.
[7]
The circumstances in
this case do not justify a costs order
de
bonis propriis
against the attorney. The appropriate order is that the applicants
should pay the wasted costs as tendered.
[22]
I am satisfied that the applicants were entitled to approach the
court for the necessary relief. The second respondent
did not oppose
the application. The applicants are entitled to an order regarding
prayers 1 and 4 of the notice of motion against
the first and second
respondents.
[23]
I, therefore, grant the following order:
ORDER:
1.
Prayers 1 and 4 of the notice of motion are
granted.
2.
The first and second respondents are to pay
the applicants’ application costs jointly and severally, with
counsel's fees on
scale C, the one paying the other to be absolved.
3.
The applicants must pay the wasted costs
occasioned by the postponement of the application on 7 March 2024 on
a scale between party
and party, jointly and severally, the one
paying the other to be absolved.
JJ
MHLAMBI, J
APPEARANCES:
On
behalf of the Applicant,
Mr.
Snellenburg
Instructed
by:
Moroka
Attorneys
84
President Reitz Avenue
BLOEMFONTEIN
On
behalf of the Respondent,
Ms.
Macacati
Instructed
by:
C/O
Lovius Block Attorneys
31
First Avenue
Westdene
BLOEMFONTEIN
[1]
Section 72 (1)(c)(i) and (ii).
[2]
(CA/2021)
[2021] ZAECMHC 40.
[3]
2004 (3) SA 615
SCA para 10.
[4]
Supra, para 9.
[5]
Published under GN R1258 in GG 3619 of 21 July 1972 promulgated in
terms of section 10 of the Justices of the Peace and Commissioners
of Oaths Act 16 of 1963.
[6]
CB and Another v HB
2021 (6) SA 332
(SCA), para 21.
[7]
Public Protector v SA Reserve Bank 2019(6) SA 253 (CC), para 40.