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[2012] ZANCT 15
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Provan v First Rand Bank Ltd (NCT/4280/2012/149(1) (P)) [2012] ZANCT 15 (20 July 2012)
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IN THE NATIONAL CONSUMER TRIBUNAL
HELD IN CENTURION
CASE No: NCT/4280/2012/149(1) (P)
DATE:20/07/2012
In the matter between:
George Gillies Provan.................................Applicant
and
First Rand Bank Ltd …..............................Respondent
CORAM:
Prof T Woker (Presiding Member)
Ms D Terblanche (Member)
Mr F Sibanda (Member)
Judgment – Application for Interim Relief
INTRODUCTION
The Applicant in this matter is Mr George Gillies Provan and the Respondent is First Rand Bank Ltd. The matter was set down for a hearing on 8 June 2012. Neither party however attended the hearing. Shortly before the hearing date, the Applicant informed the Tribunal that he was unable to attend the hearing. The Applicant resides in Cape Town.
The Tribunal nevertheless decided to consider the matter on the papers before it with a view to possibly resolving the matter and in order to avoid unnecessary costs being incurred by the parties.
OUTLINE OF FACTS
The Applicant’s son obtained a home loan from First Rand Bank Ltd (the bank) in order to purchase a property, the family home. His son subsequently fell into arrears and the bank applied for summary judgement. The application for summary judgment was opposed on the basis that the loan agreement which formed the basis of the application contained a provision that rendered the whole agreement unlawful in terms of the National Credit Act, 34 of 2005 (the Act).
This matter was considered by the Western Cape High Court in Firstrand Bank Ltd v GG Provan case number 4985/2010. The Court (as per Binns-Ward J) concluded that the loan agreement was not unlawful and granted summary judgment in favour of Firstrand Bank .
Leave to appeal against the decision of the High Court was refused.
The Applicant then lodged a complaint with the National Credit Regulator. In his complaint he raised the unlawful clauses of the agreement relying on s90(2)(a)(ii) read with s90 (3) s 90(4) and s 89(5) of the Act. He also averred that the Bank had engaged in prohibited conduct because the Bank had issued a single statement of account in the joint name of both his son and his son’s wife. This, the complainant alleged, was misleading and contrary to s 107 and 108 of the Act. He also alleged that by issuing such statements the Bank created the impression that his son and his son’s wife were joint debtors under the bond as well as co-owners of the bonded property. The Applicant alleged that this incorrect impression created by the Respondent was contrary to the spirit of the Act as a whole.
The Applicant approached the Regulator because he was of the view that the High Court did not deal with the issue of prohibited conduct and he therefore requested the Regulator to pronounce on the issue of prohibited conduct.
The Regulator found that the issuing of a statement of account in the name of both the son, GG Provan, and his wife, DV Provan was not a contravention of section 107 and 108 of the Act as these sections deal with the credit provider’s duty to provide statements. The Regulator in its reasons stated that ‘the complainant could not aver prohibited conduct which is an act or omission that constitutes an offence under the Act. The Regulator could not ascertain any contravention of the Act. The Regulator also found that the High Court had already delivered judgment in respect of a contravention of s90(2) (a) (ii) and that therefore the complaint was frivolous and vexatious.
The Applicant then approached the Tribunal for interim relief.
The Applicant approached the Tribunal on the basis that the Regulator had erred in its finding that there was no prohibited conduct because the Regulator held that prohibited conduct is an act or omission that constitutes an offence under the Act, whereas prohibited conduct is defined in the Act as an act or omission in contravention of the Act, other than an act or omission that constitutes an offence under the Act.
The Applicant argued that section 107 and 108 of the Act deal with the credit providers’ duty to provide statements and they prescribe the manner of issue and form of such statements and prescribe to whom such statements are to be issued. The applicant further argued that his son is the only debtor for the whole bond and the only party to whom the statements fall to be addressed under the abovementioned sections. As such, the applicant argued that the issuing statements in the joint names of GG Provan and DV Provan does not represent the true factual situation or legal situation and is a ‘blatant untruth which has misled both spouses with damaging consequences’.
The Applicant is requesting an order in terms of which the sale of the Applicant’s family residence be postponed until the final resolution of his complaint of prohibited conduct against Firstrand Bank is dealt with by the Tribunal.
APPLICATION FOR INTERIM RELIEF
Interim relief is granted in terms of section 149 of the Act. This section reads as follows:
At any time, whether or not a hearing has commenced into a complaint, a complainant (emphasis added) may apply to the Tribunal for an interim order in respect of the complaint, and the Tribunal may grant such an order if –
(a) there is evidence that the allegations may be true; and
(b) an interim order is reasonably necessary to –
(i) prevent serious, irreparable damage to that person; or
(ii) prevent the purposes of this Act from being frustrated;
(c) the respondent has been given a reasonable opportunity to be heard, having regard to the urgency of the proceedings, and
(d) the balance of convenience favours the granting of this order.
“Complainant” is defined in the Act1 as a person who has filed a complaint in terms of section 136(1) namely a person who lodged a complaint with the National Credit Regulator in the prescribed manner and form.
The important point to note from the above quoted section is that interim relief is granted at any time when there is a complaint, whether or not a hearing has commenced into a complaint (before the Tribunal).
At the date of adjudication of this interim relief application there was no complaint before the Regulator. The Regulator had already issued a certificate of non-referral in respect of the complaint.
Section 27(a)(i) of the Act provides that the Tribunal may adjudicate in relation to any matter that may be made to it in terms of the Act, and may make any order provided for in the Act in respect of such application.
In the instant case the application before the Tribunal is for interim relief and the Tribunal may grant an interim relief order which must not extend beyond the earlier of the conclusion of the hearing into the matter or a date that is six months after the date of the interim order.2
Section 149 provides that the Tribunal may grant such an order if there is evidence that the allegations relating to the complaint may be true i.e. if there is evidence that the allegations of prohibited conduct may be true.
The Act in section 167 thereof prescribes the standard of proof in any (emphasis added) proceedings before the Tribunal namely on a balance of probabilities. As the relief sought however is of an interim nature akin to urgent relief in the High Court it stands to reason that before the relief sought is granted, the Applicant must have a prima facie case. A prima facie case is a case where there is sufficient evidence before trial to prove the case against the alleged wrongdoer unless he can show substantial contradictory evidence at trial.
PROHIBITED CONDUCT
Prohibited conduct is defined in the Act3 as an act or omission in contravention of the Act other than an act or omission that constitutes an offence under the Act.
The Applicant has correctly pointed out that the Regulator incorrectly defined prohibited conduct in its notice of non-referral. However, the Tribunal must still consider whether the Respondent’s conduct constitutes prohibited conduct under the Act.
The Applicant alleges that the Respondent was engaged in prohibited conduct because it contravened section 107 and 108 of the Act by issuing statements in the joint name of GG Provan and DV Provan.
107 Limited application of this Part
(1) This Part does not apply in respect of a credit guarantee, until the time that the credit provider first calls on the guarantor to satisfy an obligation in respect of that guarantee.
(2) Sections 108, 109 and 110 do not apply in respect of-
(b) a discounted transaction or an incidental credit agreement, until the time that interest is first charged on the principal debt owed to the credit provider.
(3) In the case of joint consumers or guarantors, a statement required under this section need only be given to one of them, but a joint consumer or guarantor who does not receive such statement may require the credit provider to deliver a duplicate of that statement without charge.
(4) Sections 108 to 114 do not apply to a developmental credit agreement to the extent that-
(a) the National Credit Regulator has pre-approved the form of all documents and the procedures to be used by the credit provider for such credit agreements in terms of this Part; and
(b) the credit provider has used only those pre-approved forms and followed those pre-approved procedures in dealing with the particular consumer.
(5) When pre-approving any form of documents or procedures as contemplated in subsection (4), the National Credit Regulator must balance the need for efficiency of the credit provider with the principles of this Part.
108 Statement of account
(1) A credit provider must offer to deliver to each consumer periodic statements of account in accordance with this section.
(2) The maximum period between issuing statements of account is-
(a) one month, except as otherwise provided for in this subsection;
(b) two months, in respect of an instalment agreement, lease or secured loan; or
(c) six months in respect of a mortgage agreement.
(a) a consumer and credit provider may agree to reduce the frequency of statements of account referred to in subsection (2) (a) or (b), but no such agreement may provide for more than three months between delivery of successive statements of account; and
(b) a statement of account need not be delivered in respect of a credit facility if no amount has been debited or credited to the account during the statement period.
A perusal of these sections indicates that, for the purposes of this judgment, a credit provider is obliged to give consumers statements of account and that, where there are joint debtors, the credit provider fulfils this obligation when it gives a statement of account to one consumer subject to the proviso that the other joint debtor can request such a statement.
These sections do not prohibit credit providers from sending an account which includes the name of both a husband and a wife.
It cannot therefore be said that by issuing the account in the name of both the husband and wife, the Respondent was engaged in prohibited conduct.
CONCLUSION
The Tribunal, for the reasons as set out above, finds that the Applicant –
Is not a complainant as defined in the Act as required to find his standing to bring an application for interim relief; and
Has failed to establish a prima facie case of prohibited conduct
ORDER OF THE TRIBUNAL
28. The application for interim relief is refused.
There is no order as to costs.
Dated this 20th day of July 2012
[signed]
_____________________
T Woker
Presiding Member
Ms D Terblanche (Member) and Mr F Sibanda (Member) concurring.
1 Section 1 of the Act
2 Section 149(2) of the Act
3 Section 1 of the Act.