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[2014] ZANCT 36
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Mahlangu v Club Leisure Development (Pty) Ltd (NCT/13675/2014/75(1)(P)CPA) [2014] ZANCT 36 (17 August 2014)
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IN THE NATIONAL CONSUMER TRIBUNAL
HELD IN CENTURION
Case number: NCT/13675/2014/75(1)(P)CPA
In the matter between:
DECEMBER DUMISANI MAHLANGU..........................................................................APPLICANT
and
CLUB LEISURE DEVELOPMENT (PTY) LTD.........................................................RESPONDENT
Coram:
Ms P Beck – Chairperson
Adv F Manamela _ Member
Adv J Simpson _ Member
Date of Hearing – 31 July 2014
JUDGMENT AND REASONS
APPLICANT
1. The Applicant in this matter is December Dumisani Mahlangu, a major male residing in Mpumalanga (“the Applicant”).
RESPONDENT
2. The Respondent is Club Leisure Development (Pty) Ltd, a company duly registered in terms of the relevant company laws of South Africa, (“the Respondent”).
APPLICATION TYPE
3. This is an application in terms of section 75(1)(b) of the Consumer Protection Act 68 of 2008 (“the Act” or “the CPA”), for leave to apply directly to the Tribunal on the premise that the National Consumer Commission (“NCC”) issued a notice of non-referral in response to a complaint by the Applicant.
4. The Applicant represented himself at the hearing and the Respondent was represented by Ms Wright.
5. The Tribunal has jurisdiction to hear the Application in terms of section 101(1) of the CPA.
6. This judgment follows the hearing of this matter on 31 July 2014 at the Tribunal, in Centurion.
BACKGROUND
7. The Applicant, Mr Mahlangu, (subsequently referred to as “the Complainant”) entered into a written agreement on or about July 2009, with the Respondent and Flexi Holiday Club, a leisure club which forms part of the Club Leisure Group, for the purchase of 1 500 club points and membership in Flexi Holiday club.
8. The Respondent, a registered credit provider, under registration no. NCRCP 2415, financed the purchase of the club points by entering into a credit agreement with the Complainant.
9. A total amount of R8000,00 (Eight Thousand Rand) was deducted from the Applicant’s credit card as a first payment to the Flexi Holiday Club.
10. On or about a month after entering into the agreement with Club Leisure Development (Pty) Ltd and Flexi Holiday Club, the Complainant sought to cancel the agreement with Flexi Holiday Club on the grounds of fraud, and/or being misled by the marketing agent to conclude the agreement. The complainant was informed that the time period of five (5) days, within which a party is entitled to cancel the agreement, had elapsed and that the agreement could not be cancelled because it was a lifetime agreement.
11. The Complainant offered to pay a penalty that he could afford, to cancel the agreement but this offer was declined by Flexi Holiday Club.
12. The Complainant defaulted in his payments to the Respondent and summons was issued on 19 September 2011, out of the Magistrates Court in Pinetown under case number 12306/11 for the recovery of the debt.
13. Default judgment was granted against the Complainant on 25 June 2012 in the amount of R23 327.32 (Twenty Three Thousand Three Hundred And Twenty Seven Rand, Thirty Two Cents). After obtaining the judgment, a warrant of execution was issued on the date of the judgment where a “Nulla Bona” return was filed by the Sheriff on 26 April 2013.
14. Action is currently being pursued by the Respondent against the Complainant for the recovery of the judgment debt in accordance with the provisions of Section 65A(1) of the Magistrates Court Act 32 of 1944.
15. The Complainant lodged a complaint with the National Consumer Commission (“NCC”) against Flexi Holiday Club. The NCC issued a notice of non-referral and hence the matter is before the Tribunal.
16. The Applicant seeks an order from the Tribunal cancelling the agreement and an order for rescission of the judgment granted against him.
17. For the purposes of this judgment and because of the findings of the Tribunal, it is not necessary to explain how Flexi Holiday Club operates and how it forms part of the Club Leisure Group.
ISSUES TO BE DECIDED
Preliminary issues
18. The Respondent raised three points in limine :
(a) Firstly, that the Complainant lodged the complaint with the NCC against Flexi Holiday Club and on the basis of this complaint a notice of non-referral was issued by the NCC. The matter before the Tribunal is an application against Club Leisure Development (Pty) Ltd and not against Flexi Holiday Club who are two separate legal entities. Accordingly, the incorrect party is before the Tribunal.
(b) Secondly, the agreement which is the subject matter of the complaint against the Respondent is a credit agreement in terms of the National Credit Act 34 of 2005 (“the NCA”).The CPA does not apply to a transaction that constitutes a credit agreement under the NCA and judgment has already been granted against the Complainant on 25 June 2012 and the matter is before the Magistrates Court.
(c) The CPA is not applicable to this matter because the agreement was signed in July 2009 before the general effective date of the CPA being, 31 March 2011.
19. Accordingly, The Tribunal must first determine the points in limine raised before the Tribunal considers the main application.
The Complainant’s response to the points in limine
20. The Complainant submitted in reply to the first point in limine that he dealt with a Flexi Holiday Club agent and that he believed he had the correct party before the Tribunal. In reply to the second point in limine, the Complainant submitted that he was not familiar with the operations of the CPA but on the advice of the NCC thought that the CPA applied to the matter, hence the application before the Tribunal. The Complainant submitted that he was misled by the agent of Flexi Club and that he had no funds to travel to Belfast to the Magistrates Court because he is unemployed hence judgment was granted against him unfairly. The Complainant left the matter of whether or not the correct party was before the Tribunal in the hands of the Tribunal as well as the aspect of whether the CPA applies to the matter before the Tribunal. The Complainant requires an order from the Tribunal cancelling the contract and rescinding the judgment granted against him by the Magistrate’s Court.
CONSIDERATION BY THE TRIBUNAL
The Applicability of the CPA
21. The Tribunal will consider the third point in limine first.
22. The general effective date upon which the CPA came into operation is 31 March 2011.
23. The contract which forms the basis of this complaint was concluded on or about July 2009. The
issues raised by the Complainant in this matter relate to circumstances surrounding the conclusion of the contract which was concluded before the general effective date of the CPA.
24. Item 3 of Schedule 2 of the CPA determines the extent to which the CPA applies to “pre-existing transactions and agreements.” The CPA does not apply to any transaction concluded, or agreement entered into, before the general effective date of the CPA being 31 March 2011.
25. Sections 53 and 58 of the CPA apply to pre-existing transactions: “only with respect to goods and services supplied to the consumer in terms of the agreement, on or after the effective date.”
26. Accordingly, the CPA does not apply retrospectively in this matter. On this point alone the Tribunal finds that the application before the Tribunal cannot succeed.
27. However, for the sake of completeness the Tribunal will deal with the granting of leave to refer as well as the balance of the points in limine raised.
Leave to Refer
28. In terms of Section 69(1)(a) of the Act, a consumer, which includes a franchisee, may seek to enforce any right in terms of the Act or in terms of an agreement, by referring the matter directly to the Tribunal, if such a direct referral is permitted by this Act in the case of the particular dispute.
29. The NCC issued a Notice of Non-referral to the Applicant on 17 February 2014, as provided for in Section 72(1) of the Act. The specific notice of non-referral avers that the NCC held the view that the NCC does not have jurisdiction to provide the complainant with redress where a judgment has already been granted. Section 75(1)(b) of the Act 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.
30. The Tribunal considered the basis upon which it may grant leave to refer. The Tribunal found guidance in previous decisions of this Tribunal[1], in which the panel quoted from the decision of Westinghouse Brake and Equipment (Pty) Ltd v Bilger Engineering (Pty) Ltd[2], where the following was held: "It is a general rule in the construction of statutes that a deliberate change of expression is prima facie taken to import a change of intention”.[3] The specific provisions of Section 75(1)(b) of the Act and the requirement of the granting of leave to refer contained therein is such a “deliberate change of expression”. 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
31. When 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.”
32. 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. The Applicant’s reasonable prospects of success with the referral;
2. Whether the matter is of substantial importance to the Applicant or Respondent.
33. The matter is evidently of substantial importance to the Complainant, should the value of the amount paid by the Complainant be considered.
34. The Applicant’s prospects of success with the referral depends on whether the Tribunal is of the view that the issue at hand falls within the ambit of a dispute related to goods and services, or whether the Applicant may be assisted with a certificate in terms of Section 115(2) of the Act, following a declaration of prohibited conduct. The Tribunal confirms its view as explicated above and reiterates that the CPA is not applicable to this matter.
35. Section 115(2) of the Act provides that if a person is entitled to commence an action in the civil court, the applicant must file with the Registrar of the Court or the Clerk of the Court, a notice from the Chairperson of the Tribunal in the prescribed form, specifying the following:
1. Certifying whether the conduct constituting the basis for the action has been found to be a prohibited or required conduct in terms of this Act; and
2. Stating the date of the Tribunal’s finding.
36. No evidence was led that the Respondent, before the Tribunal, contravened the Act and therefore no finding can be made that the Respondent’s conduct constitutes prohibited conduct in terms of the Act. Accordingly, Section 115(2) of the Act does therefore not find application.
37. The reasonable prospects of success, based on the current application before the Tribunal, are therefore doubtful.
Consideration of the remaining points in limine
38. It is evident, that firstly, the complaint was lodged by the Complainant against Flexi Holiday Club and that the party before the Tribunal is not Flexi Holiday Club but Club Leisure Development (Pty) Ltd, a separate legal entity. The incorrect party is before the Tribunal and it follows that the Tribunal cannot make an order in favour of the Complainant against a party who is not properly before the Tribunal or at all. On this point alone the first point in limine should succeed.
39. On the second point in limine, the agreement between the Complainant and the Respondent is a credit agreement, governed by the NCA and is not a dispute about goods and services governed by the CPA. The second point in limine should succeed.
CONCLUSION
40. On the basis of the evidence before the Tribunal the Tribunal finds that:
(i) The CPA is not applicable to this matter because the CPA does not apply retrospectively to this matter;
(ii) The parties before the Tribunal concluded a credit agreement where the NCA has application and thus falls to be determined in terms of the NCA.
(iii) The incorrect party is before the Tribunal and it follows that the Tribunal cannot make an order in favour of the Complainant against a party who is not properly before the Tribunal or at all.
(iv) The matter, in so far as it relates to the judgment being granted, is correctly before the Magistrate’s Court and falls to be determined by the Magistrate’s Court.
The Tribunal notes that the Magistrate’s court judgment against the Applicant was granted in Pinetown and not in Belfast where it appears the cause of action arose and where the Applicant appears to reside.
ORDER
41. Accordingly, the Tribunal makes the following order-
41.1 Leave to refer is not granted to the Applicant.
41.2 No order as to costs is made.
Dated and signed at Johannesburg on the 17th day of August 2014.
[signed]
Ms PA Beck
Presiding Member
Adv. John Simpson (Tribunal Member) and Adv F Manamela (Tribunal Member) concurring.
[1] MV Chauke v Standard Bank et al NCT/4658/2012/141(1)(P) and Coertze and Burger v Young NCT/7142/2012/73(3)&75(1)(b) CPA
[2] 1986 (2) SA 555 (A) at par 15.
[3] See Barrett, N .0. v Macquet, 1947 (2) SA 1001 (AD) at p 1012; Port Elizabeth Municipal Council v Port Elizabeth Electric Tramway Co Ltd 1947 (2) SA 1269 (AD) at p 1279