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Zulu v Lewis and Others (NCT/131413/2019/165) [2019] ZANCT 107 (5 July 2019)

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IN THE NATIONAL CONSUMER TRIBUNAL

HELD AT CENTURION

Case number: NCT/131413/2019/165

In the matter between:

MTHANDENI MBONGENI PATRICK ZULU                                                       APPLICANT

and

LORENCO LEWIS                                                                                   1st RESPONDENT

CAPFIN a DIVISION of CENTURY CAPITAL (PTY) LTD                        2nd RESPONDENT

NEDBANK LIMITED                                                                                 3rd RESPONDENT

WESBANK a DIVISION of FIRSTRAND BANK LTD                                4th RESPONDENT


Panel:

Ms D Terblanche - Presiding Tribunal Member

Ms P Beck - Tribunal Member

Prof T Woker - Tribunal Member

Date of Hearing - 2 July 2019 

 

Judgement and Reasons


THE PARTIES

1. The Applicant is Mr Mthandeni Mbongeni Patrick Zulu, an adult male. He is a consumer as defined in section 1 of the National Credit Act, No 34 of 2005 (“the NCA”). 

2. The first Respondent is Mr  Lorenco Lewis, a Debt Counsellor as defined in section 1 of the NCA.  He is registered as such by the National Credit Regulator (“the NCR”) with Registration Number NCRDC 553.

3. The second, third and fourth Respondents are Credit Providers.

 

BACKGROUND

4. The first Respondent applied during 2016/2017 to the National Consumer Tribunal (“the Tribunal”) to make a debt re-arrangement agreement (“DRA”) entered into between the Applicant and the second to fourth Respondents a consent order of the Tribunal in terms of section 86(8)(a) read with section 138(1) of the NCA.

5. A single member of the Tribunal considered and granted the consent order application on 6 March 2017;  under the case reference NCT/66546/2016/138(1)(P).

6. The Applicant, with the current Application, applied to the Tribunal to rescind the above consent order.

7. The Tribunal has jurisdiction over this Application under section 165 of the NCA, provided the Application meets the requirements of the section.

8. Section 165 of the NCA provides that:

The Tribunal, acting of its own accord or on Application by a person affected by a decision or order, may vary or rescind its decision or order—

(a) erroneously sought or granted in the absence of a party affected by it;

(a) in which there is ambiguity, or an obvious error or omission, but only to the extent of correcting that ambiguity, error or omission; or

(a) made or granted as a result of a mistake common to all the parties to the proceedings.”

9. The Registrar of the Tribunal set the Application down for a hearing by a full panel of the Tribunal for  2 July 2019. 

 

ISSUES TO BE DECIDED

10. In this Application, the Tribunal must determine whether there are grounds to rescind the Tribunal order of 6 March 2017 made under the case reference NCT/66546/2016/138(1)(P).

 

CONSIDERATION OF THE EVIDENCE ON A DEFAULT BASIS

11. The Applicant lodged the current Application with the Tribunal on 26 April 2019 to rescind the consent order the Tribunal granted on 6 March 2017.

12. In terms of Rule 24 (3) of the Tribunal Rules, the Tribunal may make a default order once –

12.1. It has considered the necessary evidence; and 

12.2. If it is satisfied that the Applicant has adequately served the Application documents.

 

Service

13. The Tribunal records reflect that the Applicant delivered notice of the Application to the Second to the Fourth Respondent through registered post.

14. The Applicant, on 16 April 2019, requested the first Respondent to allow him to serve the first Respondent via email. The first Respondent received and accepted the Application via email.

15. The Tribunal is satisfied that the Applicant served the Application documents adequately.

 

The evidence

16. The Applicant, in Part D of the Application, page 2 of the record,  sets out that -

16.1. He entered into debt review with the first Respondent during 2016;

16.2. In September 2016, immediately after he paid the first instalment, he discovered that half of the R 3 221,00 monthly instalment he was paying was going to the debt counsellor for fees;

16.3. Had he known that R1500 of his money would go to the debt counsellor for fees and not towards paying his debts, he would not have gone to the debt counsellor in the first place;

16.4. As a result, he cancelled the debt review. The cancellation of the debt review  happened approximately  six (6) months before the debt counsellor obtained the consent order from the Tribunal;

16.5. He received a call from the debt counsellor confirming that they got his  cancellation communication and that the Applicant’s creditors were going to contact him directly, to settle his accounts;

16.6. He told the First Respondent that he would deal with his creditors directly,  and he did so -

16.6.1. He made arrangements with Wesbank to repay his car debt;

16.6.2. He settled his debt with Capfin; and

16.6.3. He made an arrangement with Nedbank’s lawyers to repay his debt with Nedbank in instalments;

16.7. He got a permanent employment in March 2018 and approached a few credit providers for credit only to find out that he has a debt review order against his name and could therefore not access any credit;

16.8. He did not know about the Application; was not informed of it nor that the first Respondent carried on with the debt review process after he had cancelled the debt review;  and

16.9. It is unfair of the debt counsellor to put him under debt review still 6 months after they had agreed that they are parting ways, and when he then does that he does not contact him.

17. The Respondents did not file answers to the Application.

 

CONSIDERATION OF THE FACTS AND THE LAW

18. Section 86(7)(b) and 86(8)(a) of the NCA provide that  -

(7) If, as a result of an assessment conducted in terms of subsection (6), a debt counsellor reasonably concludes that—

(a) …

(b) the consumer is not overindebted but is nevertheless experiencing, or likely to experience, difficulty satisfying all the consumer’s obligations under credit agreements in a timely manner, the debt counsellor may recommend that the consumer and the respective credit providers voluntarily consider and agree on a plan of debt re-arrangement; or

(8) If a debt counsellor makes a recommendation in terms of subsection (7) (b) and—

(a) the consumer and each credit provider concerned accept that proposal, the debt counsellor must record the proposal in the form of an order, and if the consumer consents to it and each credit provider concerned, file it as a consent order in terms of section 138; or…”

19. Table 2 to the Rules, Part 1A,  contains the requirements an Applicant must meet in s138 applications to the Tribunal. It includes in column g ‘the Parties to be notified’.

20. In respect of NCA s138 applications, amongst others, “the other persons mentioned in form TI. 138(1)” should be notified. The persons mentioned in form 138(1) includes the ”… Consumer” in Part A thereof, and Credit Providers as “Other parties to the consensual agreement” in Part B.

21. Rule 13(5) of the Regulations for Matters Relating to the Functions of the Tribunal and Rules for the Conduct of Matters before the National Consumer Tribunal  (“the Rules”)[1] provides that –

Any fact or allegation in the Application or referral not specifically denied or admitted in an answering affidavit will be deemed to have been admitted. “

22. The Respondents have not filed answering affidavits. The Tribunal accepts the facts and allegations the Applicant made in his founding affidavit in the absence of answers by the Respondents. In brief the Applicant alleges that he had terminated the debt review months before the Tribunal, without him  knowing or notified, granted the order – he became aware of the Tribunal order when he wanted to apply for credit;  and that he had been directly dealing with his creditors, from the time he terminated the debt review to date,  regarding the settlement of his debts.

23. From the Tribunal file, the following appears -

23.1. The Applicant / Consumer signed a Power of attorney in favour of the debt counsellor on  14 July 2016;

23.2. The debt counsellor signed the undated Application;

23.3. It is not clear from the file on what date the debt counsellor launched the Application;

23.4. The Respondents -  Capfin, Nedbank and Wesbank  - agreed to service of the process documents via email. The first Respondent, Applicant in the Application to the Tribunal for the debt re-arrangement agreement (the DRA) to be made an order of the Tribunal, notified the second, third and fourth Respondents of the Application via email on 7 October 2016; and

23.5. There is no indication from the Tribunal records that the first Respondent informed the Applicant that he was going to launch the Application, nor of the actual launching of the Application.

24. The above bears out the Applicant’s assertion that he, as a party affected by the order, was not informed or aware of the Application by the first Respondent of the consent order application, contrary to the requirements of the Tribunal Rules.

25. Section 165 of the NCA  lays down the circumstances under which an order may be varied or rescinded.  It provides that -

The Tribunal, acting of its own accord or on application by a person affected by a decision or order, may vary or rescind its decision or order—erroneously sought or granted in the absence of a party affected by it;…”

26. In interpreting the question of an order that is “erroneously sought or granted”; the Tribunal has previously decided similar applications relying on the decisions and Rule 42 of the High court. Rule 42(1)(b) provides that the court may, on the application of any party affected vary an order or judgment in which there is a patent error or omission.

27. In the matter of Promedia Drukkers & Uitgewers (Edms) Bpk v Kaimowitz [2] (“Promedia”)  this rule was described as follows -

a procedural step designed to correct expeditiously an obviously wrong judgment or order.”

28. The court opined in Promedia that:

Relief will be granted under this Rule if there was an irregularity in the proceedings; if the court lacked legal competence to have made the order; and if the Court, at the time that the order was made, was unaware of facts which, if known to it, would have precluded the granting of the order (see Nyingwa v Moolman).

29. Makgoba, J stated in  The Compensation Fund and Headline Consulting (Pty) t/a Tshwane Air and Others[3]

It is accepted that an order is erroneously sought or granted if there was an irregularity in the proceedings or if it was not legally competent for a court to make that order. See  Nyingwa vs Moolman NO 1993 (3) SA 508 (Tk) and Stander vs Absa Bank 1997 (4) SA873 (E), Lezimin 2557 t/a BG construction and Sheriff of the High Court and Another  (J1469/07) [2008] ZALC 95 (16 July 2008) at para 234; Naidoo v Matlala NO 2012 (1) SA 143 (GNP) at 153C; Celliers, Loots and Nel The Civil Procedure of the High Courts and the Supreme Court of Appeal of South Africa 5Ed (2009) Juta; Cape Town.”(Emphasis added)

30. In the view of the full panel of the Tribunal the order was erroneously granted - the debt counsellor, unbeknown to the Tribunal,  did not serve the Applicant with the Application for the debt re-arrangement agreement to be made an order of the Tribunal.

31. Furthermore, the First Respondent made the Application in the absence of the consumer  - affected by it. The debt counsellor could have averted this by meeting the filing requirements for section 138 applications, which it did not do.

 

ORDER

32. Under the circumstances and for the reasons stated above, the Tribunal orders that -

32.1. The Application for the rescission of the order dated 6 March 2017, under case reference number NCT/66546/2016/138(1)(P); is hereby granted; and

32.2. There is no order for costs.

 

 

Dated at Centurion on 5 July 2019. 

 

 

_______________________ 

MS D TERBLANCHE

Presiding Tribunal member

 

Ms Beck, Tribunal Member and Prof Woker, Tribunal Member,  concur.


[1] Published under GN 789 in GG 30225 of 28 August 2007 as amended by GenN 428 in GG 34405 of June 2011 (published in terms of the Consumer Protection Act 68 of 2008). GN R203 in GG 38557 of 13 March 2015 and GN 157 in GG 39663 of 4 February 2016

[2] 1996 (4) SA 411 (C) 

[3] (27487/2016) [2018] ZAGPPHC 429 (6 June 2018)