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[2013] ZANCT 27
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Krige and Another v Direct Axis and Others (NCT/7267/2012/148(1)(P)NCA) [2013] ZANCT 27 (3 September 2013)
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IN THE NATIONAL CONSUMER TRIBUNAL
HELD IN CENTURION
Case Number: NCT/7267/2012/148(1)(P)NCA
Date:03/09/2013
In the matter between:
HENNIE KRIGE (Debt Counsellor)...................................................................................1st APPELLANT
TILIGAVITHY CHELLAN (Consumer)...............................................................................2ND APPELLANT
and
DIRECT AXIS...............................................................................................................1ST RESPONDENT
EDCON …....................................................................................................................2nd RESPONDENT
FNB..............................................................................................................................3rd RESPONDENT
FOSCHINI......................................................................................................................4th RESPONDENT
MR PRICE GROUP..........................................................................................................5th RESPONDENT
NEDBANK......................................................................................................................6th RESPONDENT
RCS................................................................................................................................7th RESPONDENT
SANLAM ….....................................................................................................................8th RESPONDENT
STANDARD BANK...........................................................................................................9th RESPONDENT
TRUWORTHS................................................................................................................10th RESPONDENT
WOOLWORTHS …..........................................................................................................11th RESPONDENT
Coram:
Prof J Maseko – Presiding member
Adv F Manamela – Member
Adv J Simpson – Member
Date of hearing – 25 July 2013
APPEAL JUDGMENT AND REASONS
APPELLANTS
1. The First Appellant is Hendrik Johannes Nieuwstadt Krige, a debt counsellor (hereinafter referred to as “First Appellant”) residing in Doringkloof, Centurion.
2. The T.I 148 form was completed by the debt counsellor on behalf of the consumer, a registrant in terms of Section 40 of the National Credit Act, 34 of 2005 (the “NCA” or the “Act”) with registration number NCRDC 673.
3. The Second Appellant is Tiligavithy Chellan, the consumer (hereinafter referred to as “Second Appellant”).
RESPONDENTS
4. The Respondents consist of Direct Axis and 10 others who are registered credit providers with the National Credit Regulator (hereinafter referred to as “the Respondents”).
JURISDICTION OF TRIBUNAL
5. This Tribunal has jurisdiction to consider this appeal in terms of Section 148(1) of the Act. Section 148(1) of the Act provides that:
“A participant in a hearing before a single member of the Tribunal may appeal a decision by that member to a full panel of the Tribunal.”
BACKGROUND
6. On 20 September 2012, the Second Appellant, through the hand of the First Appellant, had applied to the Tribunal for a consent order in terms of Section 138(1) of the NCA under case number NCT/6404/2012/138(1)(P).
7. On 28 November 2012, Presiding member, Professor Tanya Woker, refused to confirm the consent order. The reasons advanced in that ruling were that:
7.1 In that Application (of 28 November 2012), the First Appellants had not submitted information about the consumer’s income and expenditure to enable the presiding member, to satisfy herself that the consumer was not over-indebted;
7.2 The Member had not been assured that the Tribunal had been the correct forum for that application;
7.3 It had also not been clear whether the consumer would be in a position to service the restructured debt repayments. And part of the concern on this aspect had been that section 160(1) of the Act makes failure to comply with an order of the Tribunal a criminal offence; and
7.4 In another part of the draft consent order, there had been a provision that certain monthly payments were going to cascade. And the Member had found it impossible to establish from the documents what these cascading payments would be after confirming such order. This in turn also meant that she could not establish whether the consumer would be in a position to meet such cascading payments.
THE LAW ON THE MATTER
8. Section 86(8)(a) of the Act expressly provides that:
“If a debt counsellor makes a recommendation in terms of subsection (7)(b) – and the consumer and each credit provider concerned accept the proposal in the form of an order; and if it is consented to by the consumer and each credit provider concerned, file it as a consent order in terms of section 138.”
9. Section 138(1) of the Act Provides that:
“If a matter has been-
a) Resolved through the ombud with jurisdiction, consumer court or alternative resolution agent; or
b) investigated by the National Credit Regulator, and the National Credit Regulator and the respondent agree to the proposed terms of an appropriate order, the Tribunal or a court, without hearing any evidence, may confirm that resolution or agreement as a consent order.”(Our own emphasis)
10. Rule 27 of the National Consumer Tribunal Regulations states the following:
“27 Decisions of the Appeal Panel
(1) The appeal panel may refer any matter to a panel appointed by the Chairperson for reconsideration or for such action as the appeal panel may decide.
(2) The appeal panel is not restricted to the record of the proceedings before a single
member and may:
(a) call for additional documentation and representations from the parties on any matter relevant to the complaint; or
(b) procure expert evidence and further research.”
APPELLANTS’ GROUNDS OF APPEAL
11. From the plain reading of the contents of Form T.l 148(1) that commenced this appeal, the grounds on which the Appellants rely for this appeal are, in summary, that:
11.1 The (Case Management of the) Tribunal had accepted the rejected consent order application as complete and issued a notice of complete filling without requesting an income and expenditure statement. The said statement had since been attached to the Appeal application and reflects the consumer’s ability to service the restructured debt repayments.
11.2 In one of the grounds for refusing to confirm the draft consent order, the Tribunal Member had cited her inability to satisfy herself that the consumer was not over indebted. However, the Appellants were of the view that Section 86(6) of the Act requires of the Debt Counsellor (not the Tribunal) to make a determination on whether or not the Applicant appears to be over-indebted. And to this end, the Debt Counsellor had established that the consumer was experiencing financial difficulty and had consequently acted in accordance with Section 86(7) (b) of the Act. And section 86(7)(b) is the one that accords the debt counsellor the discretion to:
“...recommend that the consumer and the respective credit providers voluntarily consider and agree on a plan of debt rearrangement...” (Our own emphasis)
11.3 The Appellant submitted that the Act does not vest the Tribunal with the jurisdiction to assess the consumer’s ability to service the restructured debt payments, in that Section 138 of the Act merely requires of the Tribunal to confirm the resolution or agreement as a consent order, without hearing any evidence.
11.4 Section 86(8)(a) of the Act does not require that the Debt Counsellor submit a recommendation to the Tribunal. Another plain reading of section 86(8)(a) shows that the recommendation that the debt counsellor has to make is to the consumer and the credit providers. And once there is consent to that recommendation, then the debt counsellor should file this consent to the Tribunal.
11.5 It is not the responsibility of the Tribunal to establish whether the consumer will be able to service a restructured debt repayment.
THE HEARING
12. The matter was set down for hearing on 25 July 2013 at the National Consumer Tribunal in Centurion. Only the First Appellant appeared unopposed at that hearing.
13. New information was placed before the Tribunal, sitting as an Appeal panel, in order to assist it in reaching a decision. This is permitted by Rule 27(2).
ISSUES TO BE DECIDED
14. In the absence of any preliminary issues, the issue which the Tribunal was to decide in this appeal was whether the appeal panel should grant the prayers of the Appellants. The prayers of the appellants were for this Appeal Tribunal, based on the abovementioned grounds of appeal, to:
14.1 Set aside the earlier ruling by the single member; and
14.2 Grant the consent order as initially applied for in line with section 138(1) of the Act.
15 As already pointed out above, the Respondents did not oppose the appeal application. And, due to the fact that the matter was not opposed there was no explicit agreement or disagreement between the parties, regarding this appeal. The application of Rule 13(5) of the Rules for the Conduct of Matters before the Tribunal however deems the entire application to have been admitted.
ANALYSIS OF THE LAW AND FACTS
16 This Appeal Panel has on the day of the hearing of this matter, been supplied with a copy of the Draft Order that is the subject of this Appeal. The First Appellant confirmed at the hearing that the Second Appellant had consistently paid the Credit Providers (Respondents) in terms of the contents of that Draft Order as agreed between the Second Appellant and each of the Respondents.
17 One of the questions to be answered in determining whether to grant the prayers of the appellants or not, was whether there is an obligation upon the debt counsellor to submit an income and expenditure statement for the determination of the consumer’s indebtedness and the appropriate forum? The answer to this question after the above analysis seems to be in the negative. The reasons for this are that Table 2 of the Regulations to the NCA contains the requirements for applications directly to the Tribunal. But both the requirements for an application in terms of Section 138(1) and Table 2 of the Regulations do not require the submission of an income and expenditure from the debt counsellor.
18 In the appeal case of Brian Victor Jones and Jacoba Magdalena Jones v ABSA bank and others1 the Tribunal remarked that, a Tribunal member considering such an application may request such an income and expenditure statement to clarify certain issues pertaining to the application. In that Appeal application, the Tribunal, due to two years having elapsed, stated that:
“…it does not appear from the reasons cited that the Tribunal member refused the application as a result of the debt counsellor’s failure to provide an income statement, but the absence of an income statement was merely mentioned as an intimation from the Tribunal member that she was unable to consider the application for a consent order, in the absence of such an income statement and to correctly ascertain whether the consumer was able to pay what the consumer had agreed to pay two years ago. It was correctly noted by the Tribunal member that failure to comply with a consent order, granted by the Tribunal, was a criminal offence in terms of section 160(1) of the Act and the Tribunal member’s concern was justified given the two year time lapse between the agreement to debt re-arrangement and the application for a consent order.”
19 In casu it appears that the Tribunal member refused to grant the order on certain grounds including that the income and expenditure statement was not furnished, a requirement that is not mandatory in terms of the Act or Rules of conduct before the Tribunal as a filing requirement. As indicated in the Jones- decision above, a Tribunal member may however request this information to satisfy any concerns that it may have on a matter. In this particular matter, the presiding member did not request the document from the First Appellant, prior to refusing the consent order. This then excluded the maxim of audi alteram partem.
20 The question whether it is the responsibility of the Tribunal to assess the Appellants’ financial position in terms of section 138(1) of the NCA, once again has to be answered in the negative.
21 The debt counsellor submitted that in his assessment of the consumer’s financial position, he had found the consumer to be merely experiencing a financial difficulty and not over-indebtedness and has since submitted an income and expenditure statement showing the consumer’s financial position. The Tribunal, in the matter of Brian Victor Jones and Jacoba Magdalena Jones v ABSA bank and others, as cited above, stated that:
“Subsection 79(1)(a) refers to having regard to a consumer’s “financial means”. A most logical way of determining a consumer’s financial means is having regard to an income statement as this would assist the Tribunal to determine whether a consumer is over-indebted or not. The mention of the absence of an income statement was not the main reason for the refusal of the consent order in this matter but was in our view, merely mentioned by the Tribunal member due to two years having elapsed between the debt rearrangement agreement and the application for a consent order.
It is our view that the Tribunal does have an implied duty to assess the Appellants’ financial position in order to satisfy itself that a consumer is not over-indebted and that a consumer would be in a position to adhere to the order of the Tribunal. Non-compliance with an order of the Tribunal is a criminal offence in terms of section 160(1) of the Act and thus the Tribunal must satisfy itself that its order can be complied with by the Appellant.”
22 It appears from the submission of the debt counsellor, that he misunderstood the presiding member to indicate that she was refusing the order because she was not in a position to determine over-indebtedness. This is not the reason for the refusal. The presiding member indicated that she was not in a position to determine whether the payment proposal is affordable to the consumer on the one hand, nor whether or not this matter was in the correct forum. As indicated in the Jones-decision, a Tribunal member may request this information (and any other relevant information) to satisfy any concerns which the Tribunal member may have in relation to a matter. As the filing of an income and expenditure statement is not a filing requirement, it seems that the presiding member could have provided the Appellants with an opportunity to place this information before the presiding member, prior to deciding on the order. This process would have been in line with the requirements of natural justice –particularly the audi alteram partem - maxim (op cit).
23 The overarching question of whether there are sufficient grounds to uphold the appeal; the answer is in the affirmative.
ORDER
22. In the light of the above analysis of fact and the applicable law, since the appellants have established valid grounds for appeal; it was ordered, ex tempore, at the hearing on 25 July 2013, as it is now confirmed in the written judgment, that the order of the single member in case Number NCT/6404/2012/138(1)(P) dated 28 November 2012, is hereby set aside.
23. It was further ordered, ex tempore, and is also hereby reiterated in this written judgment, that the draft consent order filed by the Debt Counsellor dated 20 September 2012 was confirmed.
Thus done and duly handed down in Centurion on this 3rd day of September 2013.
[signed]
Prof. Joseph M. Maseko
Presiding Member (Appeal)
Adv. John Simpson and Adv. F. Manamela concurring
1 NCT/4901/2012/148(1)(P)NCA.