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[2013] ZANCT 16
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Yako v Mercedes Benz Financial Services (Pty) Ltd (NCT/4044/2012/128(1)) [2013] ZANCT 16 (1 July 2013)
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IN THE NATIONAL CONSUMER TRIBUNAL
HELD IN CENTURION
Case number: NCT/4044/2012/128(1)
DATE:01/07/2013
In the matter between:
PATIENCE NTOMBIFIKILE YAKO..................................................................................................Applicant
and
MERCEDES BENZ FINANCIAL SERVICES (PTY) LTD............................................................Respondent
Coram:
D Terblanche – Presiding member
L Best – Member
P Beck – Member
Date of Hearing – 18 June 2013
JUDGMENT
APPLICANT
1. The Applicant in this matter is Patience Ntombifikile Yako, a major female person residing in Sandton, Gauteng (“the Applicant”) in her personal capacity.
RESPONDENT
2. The Respondent is Mercedes Benz Financial Services (Pty) Ltd, a company duly registered and incorporated in terms of the company laws of the Republic of South Africa with principal place of business at Centurion, Gauteng (“the Respondent”).
APPLICATION TYPE
3. This is an application in terms of section 128 of the National Credit Act, 34 of 2005 (hereinafter referred to as “the Act”) for the review of a sale of goods by the Applicant.
4. The basis for the claim is that the “… Credit Provider (Respondent) allegedly did not sell the goods at the best price reasonably obtainable.”1
5. The application was rendered complete on 02 April 2012.
6. According to Rule 13 of the Rules2 (hereinafter referred to as “the Rules”) the Respondent was required to file its answering affidavit in reply to the Applicant’s application by 23 April 2012. The Respondent failed to oppose the application timeously.
7. The Applicant filed an application for default judgment as is required by Rule 25(2) of the Rules on 05 October 2012.
8. The Respondent filed a Notice of Intention to Oppose, setting out the grounds for opposing the application. It was filed out of time on 09 October 2012. The Respondent filed an application for condonation for the late filing of its opposition on 27 March 2013, attaching a copy of its Notice of Intention to Oppose.
9. The Respondent applied for condonation of the late filing of its answering affidavit, which application is dealt with further below–
9.1 Without setting out the reason for the extensive delay in filing its opposition;
9.2 Submitting that it is bona fide in opposing the application and that it has good prospects of succeeding with its case
9.3 Submitting further that the Applicant will not suffer any prejudice as a result of the delay in the delivery of its Notice of Intention to Oppose.
BACKGROUND
10. The Applicant filed the documents required in terms of Table 2 of the Rules. The background of the matter can be derived from Applicant’s filing.
11. According to Applicant:
11.1 On 24 March 2005, the Applicant’s late husband entered into a finance agreement with the Respondent.
11.2 She and her late husband were married in community of property which they disclosed to the Respondent and therefore they jointly entered into the credit agreement.
11.3 In June 2007, the Applicant’s husband passed away. The Applicant, being the executrix of her late husband’s estate, contacted the Respondent and notified the Respondent of the death of her husband. She provided the Respondent with the necessary documentation, i.e. marriage certificate and death certificate.
11.4 She continued making payment of the monthly instalments in respect of the vehicle.
11.5 In January 2008, she was telephoned by an employee of Respondent who advised her to discontinue payments of the monthly instalments as -
11.5.1 The vehicle was settled in full by the Applicant’s deceased husband’s insurance,
11.5.2 Any payments that were made in terms of the agreement by the Applicant to the Respondent from June 2007 are claimable and that the Applicant should accordingly submit a claim for such a refund, and
11.5.3 Applicant submitted the claim but never received any refunds.
11.6 She did not receive any correspondence from the Respondent for a period of 16 months thereafter (January 2008 to July 2009).
12. On 03 July 2009 the Applicant took the vehicle to Mercedes Benz Sandton for a service. Whilst the vehicle was at the dealership the Applicant was contacted and notified that the vehicle is being repossessed. The Applicant denies having received any notice in terms of section 129 of the Act or a court order.
13. The Applicant lodged an urgent application in the South Gauteng High Court for the return of the vehicle. The matter was set down for hearing on 08 July 2009. Two days before the hearing date, an employee of Respondent contacted the Applicant and said that the Applicant can come and collect the vehicle.
14. The Applicant collected the vehicle from the Respondent on 09 July 2009 and was told to sign an acknowledgement of debt which the Applicant refused to do as she was unsure of whether it was “the right thing to do”.
15. Subsequently, the Applicant received a summons for payment of the outstanding debt. The Applicant was thereafter served with notice of motion on 02 October 2009 by the sheriff who once again attached the vehicle on such date.
16. The Applicant opposed the Respondent’s civil court application and a rule nisi was confirmed on 24 May 2010, with a return date of 14 June 2010.
17. The Applicant and Respondent met at the Respondent’s premises on 26 May 2010 and the Applicant offered to pay the Respondent an amount of R 3000.00 per month as from 02 July 2010. The Applicant was told that this is standard procedure and that such arrangements are often made with deceased client’s spouses. The Respondent would then draft an acknowledgement of debt containing all of the terms that were agreed on between the parties and would have sent it to the Applicant. On 31 May 2010 the Applicant contacted the Respondent to find out when she will receive such acknowledgement of debt. The Applicant was told that the Respondent’s attorney, Mr. Rob Laubscher, is demanding payment of the full outstanding amount.
18. The Applicant then awaited the return date of the civil court matter and explained the above to the court. The Applicant attended court on 14 June 2010 but the Respondent was not present. The Applicant learned afterwards that the Respondent attended court on 15 June 2010 and obtained a final order in her absence.
19. On 24 November 2011 the Respondent addressed a letter to the Applicant informing her that the vehicle was sold on public auction for the amount of R 98 013.00. Furthermore, that the balance due to the Respondent amounted to R 107 108.10.
RELIEF SOUGHT
20. The Applicant seeks the following relief:
20.1 Review of the sale
20.2 Declaration of prohibited conduct on the part of the Respondent.
ISSUES TO BE DECIDED
Preliminary matters
21. The Tribunal would have to determine whether the matter can be heard on the basis of an application for default judgment or whether to grant the condonation application brought by the Respondent.
22. The Tribunal would have to determine whether it has jurisdiction to adjudicate on this matter.
The main application
23. If the Tribunal finds it has jurisdiction to hear the matter the questions to be determined are whether –
23.1 The Applicant has made out a case in terms of section 128 of the Act that the Respondent did not sell the goods for the best price reasonably obtainable; and
23.2 There is an additional amount with which the Credit Provider has to credit the Applicant.
APPLICABLE SECTIONS OF THE NCA
24. Section 131 of the Act provides in respect of repossession of goods as follows –
“If a court makes an attachment order with respect to property that is the subject of a credit agreement, section 127(2) to (9) and section 128, read with the changes required by the context, apply with respect to any goods attached in terms of that order.”
25. Section 127(2) to (9) provide as follows-
“(2) Within 10 business days after the later of-
Receiving a notice in terms of subsection (1)(b)(i); or
Receiving goods tendered in terms of subsection (1)(b)(ii)
A credit provider must give the consumer written notice setting out the estimated value of the goods and any other prescribed information.
Within 10 business days after receiving a notice under subsection (2), the consumer may unconditionally withdraw the notice to terminate the agreement in terms of subsection (1)(a), and resume possession of any goods that are in the credit provider’s possession, unless the consumer is in default under the credit agreement.
If the consumer-
Responds to a notice as contemplated in subsection (3), the credit provider must return the goods to the consumer unless the consumer is in default under the credit agreement; or
Does not respond to a notice as contemplated in subsection (3), the credit provider must sell the goods as soon as practicable for the best price reasonably obtainable.
After selling any goods in terms of this section, a credit provider must –
Credit or debit the consumer with a payment or charge equivalent to the proceeds of the sale less any expenses reasonably incurred by the credit provider in connection with the sale of goods; and
Give the consumer a written notice stating the following:
The settlement value of the agreement immediately before the sale ;
The gross amount realised on the sale ;
The net proceeds of the sale after deducting the credit provider’s permitted default charges, if applicable, and reasonable costs allowed under paragraph (a); and
The amount credited or debited to the consumer’s account.
If an amount is credited to the consumer’s account and it exceeds the settlement value immediately before the sale, and-
Another credit provider has a registered credit agreement with the same consumer in respect of the same goods, the credit provider must remit that amount to the Tribunal, which may make an order for the distribution of the amount in a manner that is just and reasonable; or
No other credit provider has a registered credit agreement with the same consumer in respect of the same goods, the credit provider must remit that amount to the consumer with the notice required by subsection (5)(b), and the agreement is terminated upon remittance of that amount.
If an amount is credited to the consumer’s account and it is less than the settlement value immediately before the sale, or an amount is debited to the consumer’s account, the credit provider may demand payment from the consumer of the remaining settlement value, when issuing the notice required by subsection (5)(b).
If a consumer-
Fails to pay an amount demanded in terms of subsection (7) within 10 business days after receiving a demand notice, the credit provider may commence proceedings in terms of the Magistrate’s Court Act for judgment enforcing the credit agreement; or
Pays the amount demanded after receiving a demand notice at any time before judgment is obtained under paragraph (a), the agreement is terminated upon remittance of that amount.
In either event contemplated in subsection (8), interest is payable by the consumer at the rate applicable to the agreement on any outstanding amount demanded by the credit provider in terms of subsection (7) from the date of the demand until the date that the outstanding amount is paid.”
26. Section 128 provides for compensation to a consumer as follows -
“(1) A consumer who has unsuccessfully attempted to resolve a disputed sale of goods in terms of section 127 directly with the credit provider, or through alternative dispute resolution under Part A of Chapter 7, may apply to the Tribunal to review the sale.
(2) If the Tribunal considering an application in terms of this section is not satisfied that the credit provider sold the goods as soon as reasonably practicable, or for the best price reasonably obtainable, the Tribunal may order the credit provider to credit and pay to the consumer an additional amount exceeding the net proceeds of sale.”
THE HEARING
27. This matter was heard on 18 June 2013.
28. The Respondent’s condonation application was considered before the main issues were considered.
APPLICANT’S SUBMISSIONS
29. The cause of action that this application is based on, is that the vehicle “….had not been sold for the best price reasonable obtainable.”
30. Throughout her extensive submissions there are no submissions pertaining to the basis upon which she asserts that cause of action.
RESPONDENT’S SUBMISSIONS
31. The Respondent submitted that –
31.1 The Applicant has no legal standing as the action in this matter was taken against the deceased estate of her late husband and that she acted in her capacity as executrix of the deceased estate and not in her personal capacity as she is purporting to do in this application.
31.2 There is a pending matter before the High Court North Gauteng in respect of the quantum portion of the Respondent’s claim in terms of Section 129 of the Act. In this respect, the Respondent contends that the Tribunal does not have jurisdiction to entertain this issue.
31.3 The Applicant laid no basis for compensation in terms of the Act or adduced any evidence in support of her application
APPLICATION OF LAW
Condonation application
32. The Applicant served the application on the Respondent on 03 April 2012. The application was deemed complete on 02 April 2012 and, in terms of the provisions of Rule 13 of the Rules, the Respondent was supposed to file its response by 23 April 2012. This was not done.
33. The Respondent filed a formal condonation application on 27 March 2013 attaching its Notice of Intention to Oppose and the basis for their opposition to the application filed and served on 09 October 2012. The applicant disputed receipt of the aforesaid application for condonation and Notice of Intention to Oppose.
34. At the hearing, the Applicant was provided with the Notice of Intention to Oppose and an opportunity to consider whether she is in a position to proceed on the day of the hearing. The Applicant elected to proceed on the day.
35. The Tribunal considered whether the condonation application and the submissions made in respect thereof constitute good cause in terms of Rule 34 of the Rules empowering the Tribunal to condone the late filing of the Notice of Intention to Oppose.
36. The Tribunal expressed its displeasure with the Respondent not putting forward any reasons for the substantial delay of the filing of its Notice of Intention to Oppose.
37. Having considered the submissions by both parties the Tribunal decided to condone the late filing of the Notice of Intention to Oppose on the basis –
37.1 That it is in the interest of the administration of justice to allow the parties to fully ventilate their issues and address it at the hearing;
37.2 That there is a reasonable prospect that the Respondent may succeed in its opposition of the matter; and
37.3 That there appears to be no prejudice to any party resulting from the granting of such condonation.
Does the Tribunal have jurisdiction?
38. The Tribunal considered the Respondent’s submissions in this respect and concluded that the pending matter before the High Court is different to the present application.
39. Whether the Tribunal has jurisdiction is answered in the affirmative with reference to section 131 of the Act referenced and quoted above.
40. What the Tribunal is requested to do, and is indeed mandated to do, is to review the sale of the goods in terms of section 128 of the Act.
41. From a reading of the section it is clear that the Tribunal has jurisdiction. It provides that if the court makes an attachment order with respect to property under a credit agreement -
41.1 Section 127(2) to (9) and section 128 apply with respect to any goods attached in terms of that order.
41.2 Section 128 (1) unambiguously provides that -
“(1) A consumer who has unsuccessfully attempted to resolve a disputed sale of goods in terms of section 127 directly with the credit provider, or through alternative dispute resolution under Part A of Chapter 7, may apply to the Tribunal to review the sale.
May the Tribunal make a finding of prohibited conduct in respect of a contravention of section 127(2) to (9)
42. It is debatable whether the Tribunal may make a finding of prohibited conduct in respect of a contravention in terms of section 127(2) to (9) –
42.1 Section 127(10) provides that “… a credit provider who acts in a manner contrary to this section is guilty of an offence.”
42.2 Prohibited conduct is defined as
“…an act or ommission in contravention of this Act, other than an act or omission that constitute an offence in terms of this Act…”
42.3 The relief provided for in section 128 of the Act is that the “… Tribunal may order the credit provider to credit and pay to the consumer an additional amount exceeding the net proceeds of the sale.” This relief is different from the type of relief/punishment available when a credit provider is found guilty of committing an offence in terms of the Act.
42.4 The Tribunal accordingly makes no finding on this specific aspect.
Was a case made out by Applicant in terms of section 128 of the Act and the grounds for the review of the sale of the vehicle?
43. An application to review the sale of a vehicle, in terms of section 128 of the Act, may be made to the Tribunal where a consumer has unsuccessfully attempted to resolve a disputed sale of goods in terms of section 127 directly with the credit provider, or through alternative dispute resolution under Part A of Chapter 7.
44. The provisions of section 131 of the Act make the requirements set out in sections 127(2) to (9) and 128 of the Act applicable to a situation where goods were repossessed in terms of an order of court as in the present matter.
45. Section 127 of the Act sets out the requirements for a valid sale of goods and the procedure to be followed by a credit provider before and after a sale. The Tribunal would have to determine whether the Respondent complied with these provisions when the vehicle was sold on auction.
46. The first requirement is that the credit provider must, in terms of section 127(2) of the Act, give notice to the consumer of the estimated value of goods. This must be done within 10 business days of receipt of the goods. There is no indication on the papers filed that the Applicant was given notice of the value of the goods prior to the sale.
47. The second requirement is that the consumer must be granted 10 days to resume possession of the goods, provided that it is no longer in default as provided for in section 127(3) of the Act. It is uncertain as to how exactly this provision should be interpreted where repossession in terms of a court order took place, as applying it in this context would in fact mean that a consumer is granted an additional 10 days to make payment of what is outstanding – this would be in direct contravention of the court order. There is no indication on the papers filed that the Respondent complied with this provision.
48. The credit provider must thereafter sell the goods as soon as practicable and for the best price reasonable obtainable. This is required by section 127(4) of the Act.
49. After selling the goods the credit provider must, in terms of section 127(5) of the Act, give the consumer notice of the settlement value, gross amount realised at the sale, the net proceeds of the sale and the amount credited or debited to its account. This was done on 24 November 2011 as per page 13 and 14 of the paginated case file.
50. Any remaining amount must be remitted to the consumer in terms of section 128(6) of the Act.
51. The consumer is granted 10 days to pay the remaining amount; failing which, the credit provider may institute proceedings in the Magistrate’s Court in terms of section 128(8) of the Act.
52. It is necessary for the Applicant to address the Tribunal on the specific requirements of section 127(4)(b) of the Act and to provide the Tribunal with sufficient evidence to determine whether these requirements have been complied with.
53. The onus and the standard of evidence to be adduced are set out in section 167 of the Act which is on the balance of probabilities.
54. At least objective evidence has to be adduced by the Applicant about the value of the vehicle.
55. If not, the Tribunal may review the sale in terms of section 128(4) and determine an amount to be refunded to the consumer. The Tribunal is of the view that it is not possible to make such a determination on the facts before it.
56. The Applicant’s application and the basis upon which the matter may serve before and be adjudicated upon by the Tribunal is solely on the basis of section 127(4)(b) of the Act. This section of the Act provides that “…the credit provider must sell the goods as soon as practicable for the best price reasonably obtainable…” Furthermore, should a credit provider fail to comply with sections 127(2) to (9) of the Act, such credit provider will be guilty of an offence in terms of the Act as is provided for in section 127(10).
57. The question then is on what basis the Applicant alleges that Respondent did not sell the vehicle for the best price reasonably obtainable.
58. Having studied the extensive papers filed on record as well as further oral submissions by the Applicant, there is a dearth of submissions in this respect and nothing that can point the Tribunal as to why the Applicant is of the view that the vehicle should / could have been sold for a higher price.
59. In the Tribunal’s view the Applicant has not made out a case that the Respondent contravened the Act and particularly section 127(4) thereof.
60. The Tribunal accordingly makes the following order –
60.1 The application for condonation of the late filing of the Respondent’s Notice of Intention to Oppose is granted
60.2 The Applicant’s application is dismissed
60.3 No order is made as to costs
Thus done and signed in Centurion this 1st day of July 2013
[signed]
________________________________________
Ms D. Terblanche
Presiding member
Ms P. Beck and Ms L. Best concurring
1 Page 2 of the record
2 Rules for the Conduct of Matters before the National Consumer Tribunal published under GN789 in GG30225 of 28 August 2007 as amended by GenN428 in GG34405 OF 29 June 2011.