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IN THE NATIONAL CONSUMER TRIBUNAL

HELD IN CENTURION

Case number: NCT/12505/2014/75(1)(b) & (2) CPA

In the matter between:

ESTHER RHULANI TSHWALE (OBO TRUE HARVEST COLLEGE).....................APPLICANT

and

FAITZAN PROPERTIES................................................................................................RESPONDENT

Coram:

Adv J Simpson – Presiding Member

Date of Hearing – 13 August 2014

JUDGMENT AND REASONS

APPLICANT

1. Based on the application forms lodged by the Applicant in this matter the Applicant is Esther Rhulani Tshwale, an adult female, (hereinafter referred to as “Ms Tshwale”) who is acting on behalf of True Harvest College (hereinafter referred to as “the Applicant”). Based on the content of the application in this matter Ms Tshwale appears to be a director of a company called True Harvest Trading Proprietary Limited with registration number 2008/009215/07. True Harvest Trading appears to trade under the name True Harvest College. Throughout the pleadings in the application there are various references to ‘True Harvest College”, “True Harvest Properties” and “True Harvest College (Pty) Ltd”. The exact name and nature of the Applicant is therefore unclear but for the purposes of this judgment it is not materially relevant.

2. At the hearing of the matter Ms Tshwale was present in person and did not have a representative. At a later stage during the proceedings she was joined by Mr Mohale Johnson Tshwale, who is also a director of True Harvest Trading Proprietary Limited.

RESPONDENT

3. Based on the application lodged, the Respondent in this matter is “Faitzan Properties’. When the Tribunal however considered the content of the application, the correct name of the Respondent appears to be Faizan Properties Proprietary Limited with registration number 2006/026419/07 (Herein after referred to as the “Respondent”).

4. At the hearing the Respondent was represented by Advocate Lourens, on instructions from Van Der Walt, Slayton and Ramabulana Incorporated Attorneys.

APPLICATION

5. The application brought before the Tribunal is in terms of section 75(1)(b) of the Consumer Protection Act 68 of 2008 (hereinafter referred to as “the CPA”). The Applicant lodged a complaint with the National Consumer Commission (NCC) and received a notice of non-referral in response. The Applicant is now applying for leave from the Tribunal for the complaint to be referred directly to the Tribunal.

6. In accordance with section 75(5)(b), only the application for leave is being considered at this stage by a single member of the Tribunal.

BACKGROUND

7. The Applicant’s pleadings are composed of hundreds of pages. For the purposes of this summary the Tribunal will only mention the most material aspects of the matter.

8. The Applicant conducts the business of a College in Pretoria which is accredited by the Department of Higher Education and Training to offer further education and training qualifications in various subjects such as management, marketing, tourism and human resources management.

9. During 2011 the Applicant was informed that the Respondent owned a building in Pretoria that would be suitable for the Applicant’s business. During March 2012 the Applicant and the Respondent entered into a written agreement of lease for two floors of the building for a monthly rental amount of R30 000.00 per floor.

10. The lease agreement was entered into between Faizan Properties (Pty) Ltd and True Harvest Trading (Pty) Ltd. The lease agreement states that True Harvest Trading is duly represented by Mohale Johnson Tshwale and Rhulani Esther Tshwale, who both signed the contract.

11. Before the Applicant could make use of the building it first had to be renovated and repaired by the Respondent. The Applicant therefore commenced paying the monthly rental into the Respondent’s account in anticipation of the premises being ready at some future date for occupation.

12. At a certain stage during 2012 the Applicant was unable to make further payments and a dispute arose between the parties. The Applicant then borrowed money and made a further payment.

13. According to the Applicant the building was expected to be ready for occupation during February 2013. The Applicant however found that the building was not completed by that time and then sent a notice to the Respondent cancelling the lease contract between them on 14 February 2013. The total amount paid by the Applicant to the Respondent in monthly rentals at this stage was R794 707.20.

14. The Respondent refused to accept the cancellation and the Applicant lodged a complaint against the Respondent with the NCC.

15. On 5 April 2013 the NCC sent a Notice of Non-referral to the Applicant stating that the complaint “…does not allege any facts, if true, would constitute grounds for a remedy under the Consumer Protection Act,2008.”

16. It appears however that the NCC continued dealing with the complaint despite the Notice of Non-referral. The NCC further sent a letter to the Respondent dated 28 May 2013, summarising the NCC’s involvement in the matter and recommending that the Respondent refund the amount of R794 707.20 to the Applicant by 18 June 2013.

17. A number of exchanges by written correspondence took place between the NCC and the Respondent during August 2013 but it is not clear from the pleadings at what stage it ended.

18. It appears the NCC issued another Notice of Non-referral to the Applicant dated 10 October 2013. This notice states that the NCC would not be pursuing the matter as:

“The complaint does not allege any facts which, if true, would constitute any grounds for remedy under the Consumer Protection Act, 2008

The matter arose before the commencement of the consumer protection Act (sic), because the lease contract was signed on 11 March 2011.”

The original Notice of Non-referral dated 5 April 2013 was attached to this letter.

19. The Applicant then lodged the current application with the Tribunal on 30 January 2014.

20. The NCT Registrar issued a Notice of Complete Filing to the parties on 13 February 2014.

APPLICATION FOR CONDONATION

21. The Applicant filed an application for the Tribunal to condone the fact that the application was brought more than 20 days after the date of the Notice of Non-referral from the NCC.

22. The application was considered by a single tribunal member, Ms Laura Best, who when granted the condonation in a written judgment dated 4 June 2014.

THE HEARING

23. Ms Tshwale requested the Tribunal to arrange an interpreter to interpret for her during the hearing. The interpreter is Ms Doris Tsakane Nkwe who was duly sworn in at the commencement of the hearing.

24. It stands to be noted at this stage that both Mr and Ms Tshwale requested the presiding member to assist them with their application and presentation. Mr Tshwale stated that he was a layperson and expected the Tribunal to assist them with the entire matter. The Tribunal advised the Parties that the Tribunal would assist them in trying to identify and isolate the issues for consideration by the Tribunal but it could not represent them as such or argue their case for them.

25. The Respondent raised points in limine and the Tribunal explained these points to Ms Tshwale, where after she then addressed the Tribunal on these aspects. She further addressed the Tribunal on the merits of her application for leave. The Tribunal permitted Ms Tshwale to explain what had happened from inception of the complaint to try and discern the material aspects relating to the application for leave. The Tribunal explained to Ms Tshwale that the Tribunal would not be making any findings of fact based on her version as this would only be considered should leave be granted and the matter proceed to a full hearing on the merits of the complaint.

26. The Respondent in turn addressed the Tribunal on the points raised in limine and on the merits of the application for leave.

POINTS IN LIMINE

27. The Respondent raised three points in limine at the hearing and in the pleadings.

28. The Respondent firstly submitted that the lease agreement was entered into by Mr and Ms Tshwale on behalf of True Harvest Trading (Pty) Ltd. The application was however brought by Ms Tshwale on behalf of True Harvest College. The Applicant therefore does not have the necessary locus standi to bring the application. The Respondent further submitted that Ms Tshwale was not entitled to represent the Applicant as there was no evidence of a resolution by the company confirming that Ms Tshwale could do so.

29. The Respondent secondly submitted that the Applicant was a juristic person and had a turnover in excess of R2 million per annum. In accordance with section 5(2)(b) of the CPA, the CPA was therefore not applicable to the agreement of lease between the parties.

30. The third submission related to the jurisdiction of the Tribunal and whether any contravention of the CPA had taken place. The Tribunal regards this aspect as inherent to the application for leave and will therefore deal with it when it considers the application for leave.

31. The Applicant submitted an annual financial statement to the Tribunal showing that the annual turnover for True Harvest Trading was in the amount of R1 000 017.00 in 2012 and R1 000 249.00 in 2013. The Applicant therefore submitted that the turnover did not exceed the limit and that the CPA was applicable to the transaction. The Applicant further tried to submit various documents to the Tribunal relating to the resolution but none of the documents submitted or referred to by the Applicant could be regarded as a resolution. Ms Tshwale and Mr Tshwale however submitted that they were both the only directors of the company and were, by their presence, therefore duly authorised to represent the company and the Applicant in this matter.

32. The Respondent submitted that the Applicants had previously represented to the Respondent that it had a turnover in excess of R2 million. The Respondent submitted that the financial statements handed up by the Applicant at the hearing differed from the statements previously received by the Respondent. The Respondent further submitted that the average number of students enrolled with the Applicant suggested that the turnover was in excess of R2 million. The Respondent did not submit any specific evidence in relation to these submissions or tender any financial statements to show the Applicant’s turnover. Under the circumstances no evidence has been placed before the Tribunal to show that the Applicant had a turnover in excess of R2 million per annum at the time the agreement of lease was entered into. Based on the evidence submitted by the Applicant the Tribunal therefore finds that the Applicant’s turnover does not exclude the agreement from being covered by the CPA.

33. Rule 4(3) of the Rules of the Tribunal[1] requires of an applicant who is a company or other corporate entity to append a copy of the board resolution or other proof of authority to act on behalf of the company. Ms Tshwale did not produce any such proof of authority at the hearing and it has not been attached to the application. The Application being brought before the Tribunal was however lodged by Ms Tshwale on behalf of True Harvest College. As stated previously, the exact nature of the Applicant is unclear, as is the nature of True Harvest College as a corporate entity. The Applicant has made numerous allegations in the pleadings which appear to relate to her as an individual and others which relate to a company. It is therefore possible that some of the allegations made are not in respect of a corporate entity and a resolution would therefore not be required. For the purposes of this specific judgment the Tribunal will accept that Ms Tshwale has the necessary locus standi to bring the application for leave. It can further be noted that the Applicant can easily file the necessary proof of authority should the leave be granted.

34. The Tribunal further noted the discrepancy regarding the dates on which the agreement of lease was signed as raised by the NCC in its correspondence and requested the parties to address it on this aspect. The agreement reflected that the lessor signed the agreement on 1 March 2012 and the lessee signed the agreement on 1 March 2011. Both parties confirmed that the actual date of signature was 1 March 2012 and that the date of 2011 was in fact a typing error. Any question as to whether or not the CPA was applicable to the matter by virtue of the date on which the contract was signed therefore falls away and need not be considered.

THE LAW APPLICABLE TO THE APPLICATION

35. The question now before the Tribunal is whether or not leave should be granted for the matter to be heard by the Tribunal.

36. The question whether the application for leave is a separate step in a section 75(1)(b) application has been considered in many previous Tribunal cases.[2] Section 75(1)(b) of the CPA stipulates that the Applicant may, in the event of the issuing of a Notice of non-referral by the NCC, refer the matter directly to the Tribunal, with the leave of the Tribunal. In the matter of Westinghouse Brake and Equipment (Pty) Ltd v Bilger Engineering (Pty) Ltd^[3], the following was held:

 "…that, if possible, a statutory provision must be construed in such a way that effect is given to every word or phrase in it.... The reason is, of course, that the lawgiver, it must be supposed, will choose its words carefully in order to express its intention correctly, and will therefore not use any words that are superfluous, 'meaningless or otherwise otiose "(per TROLLIP JA in S v Weinberg 1979 (3) SA 89 (A), at p 98 E - F).. ^[4]

37. The specific provisions of Section 75(1)(b) of the Act and the requirement of the granting of leave to refer contained therein must be construed as a specific intention of the legislature. By including this requirement, the legislature expressed its intention of a separate requirement namely that a section 75(1)(b) referral cannot be adjudicated on without the Applicant in a specific matter first having obtained leave from the Tribunal to make such a referral.

38. In determining whether the Applicant should be granted leave to refer the matter to the Tribunal, the Tribunal must consider the requirements for the granting of “leave”. A similar application can be found in the High Court practice, where an Applicant applies for leave to appeal a judgment. It was held in the Westinghouse Brake and Equipment (Pty) Ltd – matter, as cited above, that -

“in applications for leave to appeal properly brought before the appropriate court in terms of the old sec 20, read with sec 21 as it then was, the only relevant criteria were whether the applicant had reasonable prospects of success on appeal and whether or not the case was of substantial importance to the applicant or to both him and the respondent.”

39. The Tribunal will therefore, when considering whether to grant the Applicant leave to refer or not, use the same test as applied in the High Court for applications for “leave” and will therefore consider:

1. Whether the matter is of substantial importance to the Applicant or Respondent;

2. The Applicant’s reasonable prospects of success with the referral.

40. Based on the lengths the Applicant has gone to lodge the complaint with the NCC and ultimately the Tribunal, the value of the claim and finally the volume of pleadings placed before the Tribunal, it is clear that the matter is of substantial importance to the Applicant. The Tribunal therefore finds that this requirement has been met.

41. The second question, as to the reasonable prospects of success, is a far more intricate one to answer.

42. During the hearing the Applicant was requested to address the Tribunal on which sections of the CPA were applicable to the matter and may have been contravened by the Respondent. The Applicant submitted that they had never read the CPA and requested the Tribunal to assist them in this regard.

43. The Respondent submitted that no sections of the CPA had been contravened and therefore there was no basis on which the matter could be heard by the Tribunal.

44. The Applicant has made numerous allegations regarding the content of the agreement of lease signed by the parties and the conduct of the Respondent. The Applicant made various allegations of dishonesty, fraud and intimidation against people who appear to be employees or owners of the Respondent, being Mr Carrim, Hammad Azeem, Dick Putter and others. The Tribunal will not attempt to list all of the allegations, merely the following that can possibly be regarded as material and relevant to the CPA:

• Ms Tshwale was not provided with an opportunity to read the contract before she signed it. She was told they did not have time to wait for her to read it and the contract could not leave the Respondent’s offices.

• After reading the contract at home she realised it was a “dangerous contract’. When she tried to cancel it she was told it was too late as she had already signed.

• She did not know it was a 10 year contract.

• She realised the building was leased to her on a “voetstoots” basis.

• The contract had different signature dates on it.

• There is no termination clause in the contract.

• The contract is unclear as to when occupation could be taken.

• The building cannot be used as it is still under construction.

• Despite having paid the monthly rental she was never able to occupy the building due to the ongoing construction.

45. The Tribunal could not find any reference in the pleadings to any allegation by the Applicant that the CPA had been contravened. Even the extensive correspondence between the NCC, the Applicant and the Respondent, does not disclose any allegation that any specific provision of the CPA has been contravened. The Applicant has therefore apparently chosen to merely relate what happened and trust that the Tribunal will find some causal connection between the events surrounding the lease agreement and the CPA.

46. The Tribunal can only assess the reasonable prospects of success by considering whether the CPA finds application in the dispute and may therefore be adjudicated on by the Tribunal.

47. The question that arises is whether the Tribunal can judicially come to the assistance of the Applicant in this regard by applying the facts to the CPA and making a finding on whether the CPA finds application in the dispute. In this regard in must further be noted that the Tribunal is merely considering the application for leave at this stage and is not engaging in a determination of the merits of the main dispute between the parties. At this stage the Tribunal is merely assessing whether the Applicant has made out a case which should be considered by the Tribunal.

48. Section 142(1) of the National Credit Act 34 of 2005 (“NCA”), requires the Tribunal to conduct its hearings in an inquisitorial manner, as expeditiously as possible, as informally as possible and in accordance with the principles of natural justice. The nature of the inquisitorial process and the principles of natural justice are however not defined in the NCA. There is further little guidance to be found in South Africa law on these concepts. The Tribunal is empowered by Section 2(2) of the CPA to consider appropriate foreign and international law when interpreting or applying the CPA and will therefore turn to relevant foreign law for guidance.

49. There is no all-embracing definition of an inquisitorial process but an article published by the Australian Institute of Judicial Administration Incorporated, entitled Inquisitorial Processes in Australian Tribunals^[5], provides a useful description of the inquisitorial and adversarial approaches -

“The inquisitorial process, which has its origins in Canon Law, is characterised by the following factors. First, the fact-finder enjoys an active role in the proceedings in terms both of controlling the proceedings and of participating in the investigation and the collection of the evidence so that the judge is not restricted to the evidence presented by the parties. This does not compromise the neutral role of the judge who is only concerned with the collection of all of the relevant and significant evidence irrespective of whether it is in favour of or against either party. Moreover, the judicial investigation of the facts does not replace but merely supplements and integrates the evidence produced by the parties who remain free to tender any relevant and significant evidence. Secondly, the process strives towards a decision based on a full and complete judicial inquiry with its related power-duty to ascertain the truth. Finally, and contrary to the beliefs of common lawyers, the inquisitorial process contains all the usual procedural guarantees such as the right of a party not to give evidence or remain silent.

By contrast, an adversarial system focuses more heavily on the hearing as the locus for the identification of issues and the bringing out and testing of the evidence. The judge is impartial and has not been involved in the collection or the sifting of evidence or the interviewing of witnesses. The rules, including the rules of evidence, play a key role, and centre on protection of the accused, at times at the expense of the truth.18 The adversarial methodology, then, is party and rules of evidence centred, and the rationale for this style of hearing is the protection of the rights or interests of the accused person or the applicant”.

50. The Competition Tribunal has processes which are very similar to the National Consumer Tribunal. In the matter of Competition Commission of South Africa v Senwes Limited^[6] the Constitutional Court considered the powers of the Competition Tribunal and held that Section 52 of the Competition Act 89 of 1989 “…gives the Tribunal freedom to adopt any form it considers proper for a particular hearing, which may be formal or informal.  Most importantly, it also authorises the Tribunal to adopt an inquisitorial approach to a hearing.  Confining a hearing to matters raised in a referral would undermine an inquisitorial enquiry.”

One can further consider Section 4(2) of the CPA which provides guidance as to the Tribunal’s approach when considering cases in terms of the CPA –

Realisation of consumer rights

(2) In any matter brought before the Tribunal or a court in terms of this Act—

(a) the court must develop the common law as necessary to improve the

realisation and enjoyment of consumer rights generally, and in particular by persons contemplated in section 3(1)(b); and

(b) the Tribunal or court, as the case may be, must—

(i) promote the spirit and purposes of this Act; and

(ii) make appropriate orders to give practical effect to the consumer’s right of access to redress, including, but not limited to—

(aa) any order provided for in this Act; and

(bb) any innovative order that better advances, protects, promotes and assures the realisation by consumers of their rights in terms of this Act.

(3) If any provision of this Act, read in its context, can reasonably be construed to have more than one meaning, the Tribunal or court must prefer the meaning that best promotes the spirit and purposes of this Act, and will best improve the realisation and enjoyment of consumer rights generally, and in particular by persons contemplated in section 3(1)(b).

52. The courts in Canada have however expressed views that appear to caution against the liberal exercise of inquisitorial powers. In Rajaratnam v Canada (Minister of Citizenship and Immigration)[7] the Federal Court of Appeal expressed concerns as to the propriety of a board member intervening in the questioning of a claimant.  Here the court was concerned that by the board member questioning of the claimant she may have removed her judicial hat and put on the hat of an advocate.  The court cited Lord Justice Denning in Jones v National Coal Board[8]:

“The judge's part in all this is to hearken to the evidence, only himself asking questions of witnesses when it is necessary to clear up any point that has been overlooked or left obscure; to see that the advocates behave themselves seemly and keep to the rules laid down by law; to exclude irrelevancies and discourage repetition; to make sure by wise intervention that he follows the points that the advocates are making and can assess their worth; and at the end to make up his mind where the truth lies. If he goes beyond this, he drops the mantle of a judge and assumes the robe of an advocate; and the change does not become him well. Lord Chancellor Bacon spoke right when he said that *: "Patience and gravity of hearing is an essential part of justice; and an over-speaking judge is no well-tuned cymbal."[9]

53. The principles of Jones[10] were applied in Rajaratnam[11] and the court stated:

“It seems to me that these constraints are as applicable to a member of the Board in the exercise of the judicial function at a hearing as they are to a judge even though…. a power is conferred on the Board and each of its members under subsection 67(2) of the Immigration Act to "administer oaths and examine any person on oath" and to "...do any other thing necessary to provide a full and proper hearing".

54. The principles of natural justice as mentioned in Section 142(1) of the NCA also needs to be considered. Guidance can be found in South African and international law.

55. Natural justice is a common law doctrine that provides for procedural rights in administrative decision-making.  In terms of Roman law certain basic legal principles were required by nature and logically needed to be applied universally without needing to be formally enacted into law.  Lord Evershed, in Vionet v Barrett,[12] remarked on what is natural justice:

“Natural Justice is the natural sense of what is right and wrong.”

56. In the 2003 High Court case of Re Minister for Immigration and Multicultural Affairs; Ex parte Lam[13], Chief Justice Gleeson explained the notion of natural justice at paragraph 37 in his reasons for the decision:

“Fairness is not an abstract concept. It is essentially practical. Whether one talks in terms of procedural fairness or natural justice, the concern of the law is to avoid practical injustice”.[14]

57. In an article by Baxter titled Fairness and Natural Justice in English and South African Law[15] the writer provided the following useful description of natural justice –

The primary procedural safeguards in South African administrative law are expressed by the twin principles of natural justice: audi alteram partem and nemo iudex in causa sua: that is, that one should hear the other side, and that no one should be a judge in his own cause (or, in other words, that the decision-maker should be free of bias).

58. In Turner v Jockey Club of South Africa[16] the principles of natural justice were dealt with (with regard to domestic tribunals).  Botha JA stated:

“What the fundamental principles of justice are which underlie our system of law, and which are to be read as tacitly included in the respondent’s rules, have never been exhaustively defined and are not altogether clear.”

59. The court further referred to Russell v Duke of Norfolk and Others[17] where Lord Tucker stated:

“The requirements of natural justice must depend on the circumstances of the case, the nature of the enquiry, the rules under which the tribunal is acting, the subject matter that is being dealt with, and so forth.  Accordingly, I do not derive much assistance from the definitions of natural justice which have been from time to time used, but, whatever standard is adopted, one essential is that the person concerned should have a reasonable opportunity of presenting his case.”

60. The court in Turner said that the principles of natural justice do not require a domestic tribunal to follow the procedure and to apply the technical rules of evidence observed in a court of law, but the principles of natural justice do require such a tribunal to adopt a procedure which would afford the person charged a proper hearing.

61. It is a common occurrence in the Tribunal that parties are not represented by legal counsel. It is indeed within the very nature of the Tribunal, as set out in Sections 4(2) of the CPA, that the Tribunal offer a forum where unrepresented parties are able to state their case without the need for carefully drafted legal argument and to receive redress where appropriate. When considering these aspects and the various sources of guidance identified, it would appear that a carefully balanced approach should be followed by the Tribunal. In accordance with the inquisitorial process mandated by the NCA it must always strive to ensure that all the required facts are available and placed before it so as to determine the truth of the matter. It can do this, for example, by questioning witnesses and raising issues which may not have been considered or argued by the parties beforehand. It can further come to the aid of an unrepresented party in appropriate circumstances by providing guidance and direction so as to ensure that the full facts and applicable law may be placed before the Tribunal. This approach must however always be balanced against the principles of natural justice in that the parties must be granted an opportunity to be heard on all the issues raised and there must never be any possibility of a perception of bias on the part of the Tribunal. The Tribunal must therefore always take heed not to advocate for any party or be perceived to be doing so.

62. The Tribunal will proceed to apply this balanced approach to the matter before it. The Applicant in this matter is unrepresented. Allegations have been made against the Respondent regarding the signing of a lease contract and the content of the agreement. While the Applicant does not have the required legal knowledge to apply the allegations to a possible contravention of the CPA, it is clear to the Tribunal that a case can be argued in this regard. The Applicant, based on the allegations made, deserves an opportunity to argue the matter on the merits before a full Tribunal. The Respondent in turn will be granted full opportunity to submit contrary argument. As this is only a consideration of the application for leave, the Tribunal, for the purposes of establishing reasonable prospects of success, will confine itself to noting that the provisions of Section 54(1) read with the definition of “service” in the CPA could be argued to find application in the matter.

CONCLUSION

63. The Tribunal finds that the Applicant has satisfied the requirements for the granting of leave in terms of Section 75(1)(b) of the CPA.

ORDER

Accordingly, the Tribunal makes the following order:

64. The application for leave from the Tribunal is granted and the Registrar may proceed to set the matter down for hearing before a full panel of the Tribunal.

65. No order is made as to costs

DATED 30 SEPTEMBER 2014

[signed]

Adv. J Simpson

Presiding Member

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