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[2020] ZANCT 9
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National Credit Reguator v Du Plessis NO and Others (NCT/103940/2018/57(1)) [2020] ZANCT 9 (5 April 2020)
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IN THE NATIONAL CONSUMER TRIBUNAL
HELD AT CENTURION
Case number: NCT/103940/2018/57(1)
In the matter between:
NATIONAL CREDIT REGULATOR APPLICANT
and
LEON ANTONIUS DU PLESSIS Nomine Officii FIRST RESPONDENT
EULIEN DU PLESSIS Nomine Officii SECOND RESPONDENT
PCL TRUST (IT5627/07) THIRD RESPONDENT
Coram:
Dr M Peenze – Presiding member
Mr T Bailey – Tribunal member
Adv J Simpson –Tribunal member
Date of hearing – 05 March 2020
Date of judgment – 05 April 2020
JUDGMENT AND REASONS
THE PARTIES
Applicant
1. The Applicant is the NATIONAL CREDIT REGULATOR (the Applicant), a juristic person established by section 12 of the National Credit Act, 2005 (the Act) with its physical address at 127 - 15th Road, Randjiespark, Midrand, Johannesburg, Gauteng.
2. Ms Leanne Schwartz, who is a senior legal adviser in the Applicant’s Investigations and Enforcement Department, represented the Applicant at the hearing of this application.
Respondents
3. The First Respondent is LEON ANTONIUS DU PLESSIS Nomine Officii, an adult male cited herein in his official capacity as trustee of the PCL Trust, Master’s Office registration number lT5627/07 (Master of the High Court Pretoria), with last known physical address being Afrikaans Protestant Church, 141 Springbokvlakte Drive, Montana, Pretoria.
4. The Second Respondent is EULIEN DU PLESSIS Nomine Officii, an adult female cited herein in her official capacity as trustee of the PCL Trust, Master’s Office registration number IT5627/07 (Master of the High Court Pretoria), with last known physical address being Afrikaans Protestant Church, 141 Springbokvlakte Drive, Montana, Pretoria.
5. The Third Respondent is PCL TRUST (Master’s Office registration number: lT 5627/07), situated at 28 Songozwi street, Louis Trichardt.
6. PCL Trust is a trust as defined in the Trust Property Control Act 57 of 1988, the assets and liabilities of which vest in the First and Second Respondents as trustees. The PCL Trust also trades as “Prestige Cash Loans”.
7. The Third Respondent is a registered credit provider as from the 10th of September 2007 under registration number NCRCP1520 and also seems to have been registered under registration number NCRCP 3061.
8. The Respondents represented themselves at the hearing of this application.
9. The matter was set down on an opposed basis.
JURISDICTION
10. In addition to its other powers in terms of the Act, section 150 gives the National Consumer Tribunal (the Tribunal) the power to make an appropriate order concerning prohibited or required conduct in terms of the Act or the Consumer Protection Act, 2008.
11. This power includes declaring conduct to be prohibited in terms of the Act; interdicting prohibited conduct; confirming an order against an unregistered person to cease engaging in an activity that must be registered in terms of the Act; requiring payment to the consumer of an excess amount charged together with interest set out in an agreement, or any appropriate order required to give effect to the Act.
ISSUES TO BE DECIDED
12. The Tribunal is required to determine whether the Respondent engaged in prohibited conduct by having repeatedly contravened the provisions of the Act, regulations and general conditions of registration; and whether to impose an administrative penalty on the Respondent
13. The allegations of prohibited conduct will become apparent in the course of this judgment.
TERMINOLOGY
14. A reference to a section in this judgment refers to a section in the Act. A reference to a regulation refers to the National Credit Regulations, 2006 (the regulations).[1] A reference to a condition or general condition refers to the Respondent’s conditions of registration as a credit provider in terms of section 40 (the conditions).[2] A reference to a form refers to a Form as prescribed in the regulations.
APPLICATION TYPE AND RELIEF SOUGHT
15. The Applicant lodged an application in terms of section 57 of the Act, dated the 28th of March 2018, to cancel PCL Trust’s registration as a credit provider. [3]
16. The Applicant requests an order in terms of section 150 as follows:
16.1 Declaring the Respondents to be in repeated contravention of the following sections of the Act, regulations and conditions:
16.1.1 Section 52 (5) (c) read with General Condition 7 of its Conditions of Registration;
16.1.2 Section 76;16.1.3
16.1.3 Section 52 (5) (b) read with section 52 (5) (c) and general condition 5 of its Conditions of Registration;
16.1.4 Section 92 (1) read with Regulation 28 (1) (b) and Form 20;
16.1.5 Section 170 read with Regulation 55 (1) (b) (v);
16.1.6 Section 81 (2) (a) (ii) read with regulation 23A;
16.1.7 Section 81 (2) (a) (iii) read with Regulation 23A;16.1.8;
16.1.8 Section 81 (3) read with section 80 (1) (a);
16.1.9 Section 81 (3) read with section 80 (1) (b);
16.1.10 Section 170 read with Regulation 55 (1) (b) (vi); and
16.1.11 Section 92 (2) read with section 90 (2) (l) (i) of the Act;
16.2 Declaring the repeated contraventions as prohibited conduct in terms of section 150 (a);
16.3 Cancelling PCL Trust’s registration as a credit provider with the Applicant in terms of section 150 (g) of the Act;
16.4 Declaring credit agreements to have been recklessly extended in the event of PCL Trust failing to conduct proper affordability assessments. An independent auditor to be appointed to identify all open loans to determine if a proper affordability assessment was granted or whether the loans were extended recklessly. All such identified loans to be deemed reckless and the Tribunal to set aside all of the consumers’ rights and obligations under those agreements; and
16.5 Imposing an administrative fine on the Respondents in the amount which is the greater of R1, 000 000.00 or 10% of the annual turnover of the PCL Trust.
17. The Applicant also requested, in terms of section 150 (i), any other appropriate order required to give effect to the consumers’ rights in terms of the Act.
BACKGROUND
18. The referral has its origins in a complaint initiated by the Applicant in terms of section 136 (2) of the Act, with the subsequent initiation of an investigation in terms of section 139 (1) (c) into the conduct of PCL Trust in the consumer credit market.
19. According to the Applicant, the initiation of the aforementioned investigation followed a previous investigation initiated by the Applicant on the 14th of October 2016 against PCL Trust, which in turn followed a monitoring exercise conducted between 19 and 21 September 2016.
20. The Applicant alleged that the monitoring exercise conducted during September 2016 found that PCL Trust granted credit to consumers whilst it had not paid its annual renewal fees for three subsequent years. The Applicant also contemplated that it obtained information that PCL Trust, operating at 28 Songozwi street in Louis Trichard, retained SASSA cards, bank cards and Identity documents.
21. Confusion erupted during the monitoring exercise in September 2016, due to a difference in the name of the business that was authorized for investigation and the supposed correctly registered name of the business operating at the said premises. The names PCL and Prestige Cash Loans were displayed at the premises, while the investigation certificate was issued for Prestige Konsultante Trust, t/a Prestige Cash Consultants.
22. The Applicant issued a new memorandum initiating the complaint and authorising the investigation against the Trust (certificate number 3036) for PCL Trust t/a PCL Cash Loans: Louis Trichardt on 30 November 2016. The Applicant also placed into evidence the Credit Provider Certificate for the period 09 October 2015 – 09 October 2016; which registration certificate certified that PCL Trust, with IT 5627/07 and NCRCP registration number 1520, was registered to operate the branch PCL Cash Loans – Louis Trichard.
23. Accordingly, on or about the 5th of December 2016, a new investigation was conducted at PCL Trust’s place of business situated at 28 Songozwi street, Louis Trichardt. Interviews were conducted with both the managers of PCL Trust and their assistant. During the investigation 10 (ten) consumer files were randomly selected and assessed. An investigation report was compiled, outlining various forms of prohibited conduct.
24. The Applicant lodged its main application to the Tribunal on the 28th of March 2018. This application listed PCL Trust as the Respondent.
25. The Applicant’s application was accompanied by the Applicant’s founding affidavit, duly signed by Jacqueline Peters, the Applicant’s Manageress in the Investigations and Enforcement Department, on the 27th of March 2018. This founding affidavit listed all the alleged breaches of the Act by the Respondent.
26. The first hearing set down for the 3rd of July 2018 could not proceed on a default basis, as the Respondent had not responded to all the correspondence as served. The Tribunal ordered the Applicant to also serve the application on the verified physical address of the Respondent no later than 13 July 2018.
27. The matter was again set down for a hearing on the 21st of September 2018; but was subsequently removed from the roll on the 20th September 2018 at the behest of the Applicant, and the Respondent consented to the postponement.
28. The matter was set down for the third time for a hearing on the 26th of November 2018.
29. On the 23rd of November 2018 the Respondent, through its attorneys Barnard Incorporated, lodged an application for an order, in terms of Rule 34, allowing the trustees the late filing of an answering affidavit. As part of their motivations for the late filing of their answering affidavit, they stated:
29.1 They would be opposing the main application on grounds of a “non-joinder, misjoinder and improper citation”, arguing that the husband (Leon Antonius Du Plessis) and wife (Eulien Du Plessis), who are trustees, must be cited as the Respondents Nomine Officii; and
29.2 They also argued that they had been improperly cited on grounds that they are no longer credit providers, as they had sold those credit providing businesses as going concerns to other people.
30. The Applicant, in its Rule 15 Application, countered that PCL Trust was a registered credit provider at the time of the investigation; but was nonetheless readily prepared to amend its papers to cite the Respondents as argued by the latter. The Tribunal approved the revised citation of the Respondents to include the nomine officii citation of the First and Second Respondents.
31. The Applicant filed the notice to amend its papers in line with the Rule 15 judgment and provided proper proof of service via email. The Applicant also amended Form Tl.57 and its Founding Affidavit accordingly.
32. The notice of set down was issued, and the matter was heard on an opposed basis on 5 March 2020.
33. At the hearing only the two Trustees were present. The Respondents informed the Tribunal that they were unable to continue paying their attorney and decided to conduct their own defense. They made various submissions, which essentially can be summarised as a plea for leniency from the Tribunal. Although the Tribunal heard the oral submissions made, it is required to consider the pleadings filed by the Respondent’s attorney on their behalf.
POINTS IN LIMINE
Point in limine 1: Citing and accountability of trustees
Respondent
34. During the hearing of the main matter, the First and Second Respondents appeared eo nomine as cited in the revised application. As eo nomine Respondents, the First and Second Respondents brought a new defence, namely that they were not accountable for the prohibited conduct that was allegedly occurring repeatedly in the name of the Trust.
Applicant
35. According to the Applicant, the Trust exists as a legal institution with legal capacity, and in this sense the PCL Trust:
35.1 Was a registered credit provider at the time of the investigation as per the Applicant’s records;
35.2 Entered into the credit agreements which are the subject matter of this referral to the Tribunal;
35.3 Will (if the Tribunal finds in favour of the Applicant) be found to have committed the contraventions of the Act and Regulations as alleged; and
35.4 Will (again, if the Tribunal finds in favour of the Applicant) be liable to pay the administrative fine as per the relief sought by the Applicant.[4]
Analysis
36. I deal firstly with the law relating to the nature of a Trust and the duties of trustees. It is trite that a Trust is not a legal person. In its strictly technical sense, the Trust is a legal institution sui generis.
37. As outlined in Braun v Blann and Botha NNO & another:
“The trustee is the owner of the Trust property for purposes of administration of the Trust but qua trustee he has no beneficial interests therein.”[5]
38. In Land and Agricultural Bank of South Africa v Parker and others[6] Cameron JA elaborated (para 10):
“. . . . [A Trust] is an accumulation of assets and liabilities. These constitute the Trust estate, which is a separate entity. But though separate, the accumulation of rights and obligations comprising the Trust estate does not have legal personality. It vests in the trustees, and must be administered by them ─ and it is only through the trustees, specified as in the Trust instrument, that the Trust can act . . . .”
39. In Lupacchini NO & another v Minister of Safety and Security[7] (SCA) Nugent JA took this theme further and observed that (para 1):
“. . . . A Trust that is established by a Trust deed is not a legal person ─ it is a legal relationship of a special kind that is described by the authors of Honoré’s South African Law of Trusts as a legal institution in which a person, the trustee, subject to public supervision, holds or administers property separately from his or her own, for the benefit of another person or persons or for the furtherance of a charitable or other purpose.”
40. Where more than one trustee have been specified in the Trust deed, they share a common fiduciary obligation towards the fulfilment of the objects of the Trust and must act jointly.[8]Section 9(1) of the Trust Property Control Act No. 57 of 1988 reads as follows:
“9. Care, diligence and skill required of trustee ─
(1) A trustee shall in the performance of his duties and the exercise of his powers act with the care, diligence and skill which can reasonably be expected of a person who manages the affairs of another.”
41. In Sackville West v Nourse & another[9], Kotze JA stated the position relating to the fiduciary duties of trustees as follows (at 534):
“The effect of this authority is that a tutor must invest the property of his ward with diligence and safety. It is also said that a tutor must observe greater care in dealing with his ward’s money than he does with his own, for, while a man may act as he pleases with his own property, he is not at liberty to do so with that of his ward. The standard of care to be observed is accordingly not that which an ordinary man generally observes in the management of his own affairs, but that of the prudent and careful man; or, to use the technical expression of the Roman law, that of the bonus et diligens paterfamilias . . .’
42. The learned judge of appeal continued (at 535):
“We may accordingly conclude that the rule of our law is that a person in a fiduciary position, like a trustee, is obliged, in dealing with . . . the money of the beneficiary, to observe due care and diligence, and not to expose it in any way to any business risks.”
43. This principle was elaborated upon by this court in Administrators, Estate Richards v Nichol & another[10] where the following was stated (at 557D-F):
“. . . [T]he standard was higher than that which an ordinary person might generally observe in the management of his or her own affairs. Such a person, it was pointed out, was free to do what he liked with his property and not infrequently selected investments which were of a speculative nature, particularly when the potential profits were high. A person in a fiduciary position such as a trustee, on the other hand, was obliged to adopt the standard of the prudent and careful person, that is to say the standard of the bonus et diligens paterfamilias of Roman law, and was accordingly, as Kotze JA concluded at 535, “obliged, in dealing with and investing the money of the beneficiary, to observe due care and diligence, and not to expose it in any way to any business risks”. The need to avoid risks was emphasised in the judgments of both Solomon ACJ and Kotze JA.”
44. The governance responsibilities of a Trust are summarized as follows by Schoeman:
“The governance of a Trust is completely in the hands of its trustees and all assets, liabilities, rights and duties of the Trust reside in them. Consequently, an appointment as a trustee is a position that comes with a substantial amount of responsibility and, therefore, it is an appointment not to be taken lightly. More specifically, the trustees have a greater standard of care than normal people, actually similar to that of a director of a company, and can be sued by the Trust beneficiaries if they do not honour their fiduciary duties or are negligent in any way.”[11]
45. It follows from the above exposition that the main considerations that are decisive in establishing the existence, nature and extent of a trustee’s fiduciary duty, include the following:
45.1 The manner in which he/she conducts the administration of Trust property[12];
45.2 The advantage of Trust beneficiaries;[13] and
45.3 Trust administration being conducted with the utmost good faith[14] and in the best interests of the Trust beneficiaries.[15]
46. In line with the above, the trustees of a Trust are responsible for the proper management and administration of the Trust. Trustees are responsible for the maintenance of accurate accounting records that are necessary to fairly represent the Trust’s state of affairs and to explain its transactions and financial position on request and as required in law.
47. Unsecured creditors of a trustee do not have a direct claim against the Trust assets, unlike secured creditors who have a claim through their security. It is the trustee that is personally liable for debts properly incurred in the administration of the Trust.[16] Therefore the primary claim for creditors is against the trustee personally, not the Trust assets. Creditors may recover from the trustees directly if the trustees have sufficient assets, other than assets that are held on trust. However, if a trustee has few or no assets of its own that are available to satisfy the creditor’s debts, then the creditor must look to the Trust property through subrogation.[17]
48. As it is not in dispute that the First and Second Respondents are the trustees of PCL Trust and that PCL Trust was still registered with the Master at the time of the hearing, these fiduciary responsibilities pertain to the First and Second Respondents. If a Trust is operating as a credit provider, the trustees are expected to maintain accurate business records of the Trust. These records should include any book, record, account or document relating to the administration of the property. In particular, it includes all activities and records relating to the administration of credit lending processes by PCL Trust.
Findings
49. It is trite that a trust is not a juristic person and that its assets vest in the trustees in their capacities as such. Accordingly, the Tribunal correctly joined all trustees in this matter; ensuring that the trustees can protect and enforce the rights of the Trust and also enforce the obligations of the Trust.
50. The rule 15 amendment sought to give linguistic effect to the legal rule that a Trust lacks legal personality, by amending the papers to cite the trustees eo nomine. As outlined by Cameron:
“In legal proceedings the trustees must act nomine officii.... It is usual for the trustees to be cited as "A, B and C" in their capacity as the trustees of the XYZ Trust but cases in which the trust as such is cited are not unknown.”[18]
51. The Tribunal noted that the First Respondent was the contact person who applied to the Applicant for the registration of the PCL Trust as a credit provider, and is also the sole signatory of the conditions of registration.
52. Consequently, the trustees are before the Tribunal eo nominee and the Tribunal has acknowledged the Trust as properly before the Tribunal, represented by its trustees. A trust functions through its appointed trustees and the legal personality thereof requires that all trustees act together for and on behalf of the Trust.[19]
53. Concerning the defence that the trustees of the Trust cannot be held liable for the prohibited conduct of PCL Trust, the First and Second Respondents are displaying serious ignorance of a trustee’s duties. The Respondents, as trustees of PCL Trust, will indeed be personally liable for all liabilities incurred in performing the Trust activities[20], including debts to third parties and in all liabilities resulting from any prohibited conduct towards consumers.
54. Consequently, this point in limine must fail.
Point in limine 2: Trust cannot be de-registered as credit provider because it is no longer so registered
Respondent
55. According to a trustee resolution dated 17 March 2015, Respondent 1 and 2 decided to sell the business of PCL Trust at the respective branches of Sibasa and Louis Trichardt to the relevant managing personnel of the Respondent's branches at Sibasa (Ms Hermari Venter) and Louis Trichardt (Ms Yvonne Pretorius and Eugene Dunhin) as going concerns. The sale of the business was conditional to the employees continuing to manage the business in the absence of the trustees. However, the trustees would continue to receive the profits of the business in an attempt to settle the purchase price ahead of the actual “transfer date” of the business. The transfer date was expected to be in November 2018.
56. Due to difficulty for the Respondents to ensure proper management of the business while based in Pretoria, they resolved to cancel the sale agreements. They advised the NCR on 1 March 2017 that: "We have closed PCL Trust” and “we no longer do business". The annual registration fees to the NCR were also not paid since.
57. The Respondent subsequently submitted that, even if the Applicant failed to cancel PCL Trust’s registration according to the mentioned emails, such registration must have lapsed due to their failure to pay the annual registration fees.
Applicant
58. The trustees attached their resolution on the sale of the business but failed to provide the sale and purchase agreement. Accordingly, the Tribunal cannot ascertain the actual terms of such a contract.
59. The Applicant also denied that the PCL Trust timeously informed it of its closure or revised contact details.
60. However, in its replying affidavit, the Applicant abandoned its request for cancellation against PCL Trust, persisting only with the balance of the relief it was seeking against the PCL Trust and its trustees. The Applicant explained that it acted upon information as received from its Registration Department. The Registration Department of the Applicant confirmed that they were retaining PCL Trust in their records as ‘still registered due to an administrative oversight’.
61. The Applicant implored that such oversight does not affect the substance of the Applicant’s case, its findings or the prayers it seeks against the Respondent, save for the prayer for cancellation.
Analysis
62. Despite the Applicant’s abandoning of its plea for cancellation, the de iure cancellation resurfaced during the hearing of the main matter. The Tribunal finds it essential to provide clarity on the actual date, nature and reason for deregistration of this credit provider. Accordingly, the Tribunal decided to deal with the matter.
63. During the hearing, the Respondents consented that they never concluded the actual sale of the business. Further, the Respondents confirmed that PCL Trust remained registered with the Master with its registered trustees unchanged, up to and including the date of the hearing. Accordingly, the Tribunal is satisfied that the trustees did not sell the business of the PCL Trust, as alleged in the answering affidavit of the trustees.
64. The trustees confessed to abandoning the business of PCL Trust while the First Respondent focused on his theology studies. This abandoning of the Trust is construed as serious negligence and a dereliction of their duties as trustees.
65. The Tribunal is convinced of the Respondents’ poor custodianship during the period that the alleged contraventions of the Act occurred. These contraventions occurred while the Respondents were registered trustees.
66. In line with section 52(4) of the Act:
“(4) A registration -
(a) takes effect on the date on which the certificate or duplicate certificate of registration is issued; and
(b) subject to timely payment of the prescribed registration renewal fees, remains in effect until-
(i) the registrant is deregistered; or
(ii) the registration is cancelled in terms of this Act.”
67. Although the initial registration of the PCL Trust as credit provider is common cause, the deregistration of the PCL Trust could not be proven beyond reasonable doubt at the hearing. The intention of section 52 (4) (b) is to regulate the authority of the NCR in the registration and deregistration process, as it pertains to registration requirements, criteria and procedures. The fact that the registration is then “subject to the timely payment of the prescribed registration renewal fees”, implies therefore that administrative action by the NCR is required to approve the actual deregistration in terms of section 52 (4) (b).
68. This interpretation is also apparent from the practice by the NCR to populate and publicly communicate the names of all former credit providers deregistered in line with section 52 (4) (b). The appropriate section, as reflected on the official website of the Applicant, was introduced as follows:
“The following credit providers’ registration has lapsed in terms of section 52(4)(b) of the National Credit Amendment Act. The effect of such lapsing is that credit providers should not engage in previously registered activities and credit agreements concluded are considered unlawful and of no force and effect.”[21]
69. The deregistration process following the non-payment of fees, should not be confused with the cancellation of the registration by the Tribunal. Section 57 outlines the latter process, which process makes provision for the cancellation of registration by the Tribunal on request of the National Credit Regulator, if the registrant repeatedly –
(a) fails to comply with any condition of its registration;
(b) fails to meet a commitment contemplated in section 48( 1); or
(c) contravenes this Act.
70. The difference is that, if the Tribunal has cancelled a registration in terms of section 57, the National Credit Regulator must notify the registrant in writing of –
(a) the cancellation;
(b) the reasons for the cancellation; and
(c) the date of cancellation.
71. The deregistration process should also not be confused with the voluntary cancellation process as regulated by section 58; according to which the National Credit Regulator must –
(a) cancel the registration certificate; and
(b) amend the register accordingly.
72. In line with section 57 (7), registration is cancelled as of –
(a) the date on which the Tribunal issues an order, or
(b) in the case of a cancellation in terms of section 58, the date specified by the registrant in the notice of voluntary cancellation.
Conclusion
73. The NCR is responsible for accurately recording and approving a voluntary deregistration application (section 58) and any deregistration due to non-payment of fees (section 52 (4) (b) ). In this matter, the parties did not agree on the reason for the deregistration. The Applicant failed to provide satisfactory documentary proof to the Tribunal to confirm the reason and date of deregistration of PCL Trust as credit provider. The Respondents, on the other hand, jumped between reasons for deregistration. On the one hand, they contemplated that the NCR deregistered PCL Trust because of non-payment. On the other hand, they submitted that the NCR deregistered PCL Trust following a request for voluntary deregistration. Irrespective the de iure situation regarding its registration, it was not in dispute that PCL Trust was de facto in business and operational at the time of the alleged infringements.
74. Neither the official and documented outcome of the voluntary application for cancellation nor the deregistration communication letters from the NCR, as required in law, could be provided in evidence to the Tribunal. Consequently, the Tribunal perceived the PCL Trust as a registered credit provider with the NCR at the time of the alleged infringements.
75. Further, the Tribunal took note of the alleged cease of business by the PCL Trust during 2017 and the failure by PCL Trust to continue payment of its annual registration fees hence. By failing to pay annual registration fees, a credit provider cannot escape the wrath of the law. A literal interpretation of section 52 (4) (b) may create the impression that an “automatic cancellation” occurs if a credit provider does not pay its annual registration fees in line with the Act. This interpretation is incorrect and displays ignorance of the intention of the legislator.
76. The legislator did not create a loophole to enable a credit provider to stop paying annual registration fees to get “automatically deregistered”. Automatic deregistration would create the risk that credit providers escape investigation by the NCR and scrutiny by the Tribunal. The NCR is responsible for the investigation and brings an application for cancellation of registration to the Tribunal as necessary. Accordingly, one of the reasons for cancellation of registration by the Tribunal, is the credit provider’s failure to comply with any condition of its registration, such as the paying of annual dues.[22]
77. It is further essential to highlight the importance of interpreting the cancellation clauses about credit providers from the point of protecting consumers. The responsibility is foremost to ensure that consumers are not exposed and negatively affected by any cancellation of registration. The NCR must inform consumers of the deregistration of all credit providers. Accordingly, the NCR must provide the credit provider with an official deregistration letter if the latter is deregistered due to its failure to make annual payments. Similarly, the NCR must document every deregistration and remove the credit provider from the public database.
78. Therefore, the NCR can confirm a credit provider’s deregistration in terms of section 52 (4) or 58 after a voluntary application, or the Tribunal can cancel a registration. When alleged prohibited conduct coincides with the request for registration cancellation, the Tribunal will consider both.
79. Concerning the intention of the legislator, the “purpose” of the Act reads as follows:[23]
“ to promote and advance the social and economic welfare of South Africans, promote a fair, transparent, competitive, sustainable, responsible, efficient, effective and accessible credit market and industry, and to protect consumers…”
80. The Tribunal also considered section 150 (f), which empowers the Tribunal to confirm an order against any unregistered person to cease engaging in any activity that must be registered in terms of the Act. Accordingly, the Tribunal is convinced that the parties intended to cancel the registered status of PCL Trust and both attempted to do so. However, as these attempts by the parties did not follow due process in line with the Act, the Tribunal finds any deregistration assumptions by the Respondent and any concessions or confirmations to that effect by the Applicant, as null and void.
81. Consequently, the Tribunal is convinced that it is in the interest of justice to provide clarity and confirm the date and reasons for cancellation of registration of PCL Trust with the Applicant. Therefore, to give effect to consumers’ rights, the Tribunal decided to rule on this matter in terms of section 150(i). Accordingly, this point in limine must fail.
CONTRAVENTIONS OF THE ACT
Introduction
82. The Applicant asserts that the Respondent has failed to operate its business in a manner which is consistent with the purpose and requirements of the Act.
83. According to the Applicant, the conduct exhibited by PCL Trust constitutes critical contraventions in terms of the Act which occurred repeatedly as appears from the investigation report and which are detailed hereunder.
84. The Tribunal proceeds to consider the contraventions that are alleged in the investigation report and the complainant’ affidavit.
Transgression 1: Failure to adhere to conditions of registration
(i) Trading name and advertising practice
(ii) Registration Certificate
The Act
85. Section 52(5) of the Act determines that:
“ A registrant must-
(a) post the certificate or duplicate registration certificate in any premises at or from which it conducts its registered activities;
(b) reflect its registered status and registration number, in a legible typeface, on all its credit agreements and communications with a consumer..”.
Relevant conditions to be highlighted include:
A. General Conditions.
….
5. The registrant must display a registration certificate at a business premises at or from which the registrant conducts registered activities, and must prominently display a window decal supplied by the National Credit Regulator at the entrance to each such business premises…
6. Any significant change in shareholding, ownership, company structure or control of the registrant, or acquisitions and mergers, must be reported to the National Credit Regulator if such changes or events impact upon the criteria for registration as a credit provider, as per section 40 of the Act.
7. The registrant must further notify the National Credit Regulator of any material change in the information provided at the time of the registration, where such change is significant to the registrant’s ability to conduct the business of a credit provider, or ability to comply with the Act or regulations…”[24]
Applicant
86. The Applicant submitted that the conditions of the registration of the Trust were not adhered to, as the registration certificate of the Trust was not properly displayed at the premises at which it conducted its registered activities.
87. The Applicant also submitted that the registered status and registration number was not reflected on all the credit agreements and communications with consumers.
88. The Senior Inspector in the Investigations and Enforcement Department of the NCR, Ms L Odendaal, confirmed that the receipts provided after payment of the prescribed fee and completion of the “Loan Application & Agreement” form in use by the NCR during the 5 December 2016 investigation, referred to “Prestige Cash Loans”, with registered NCR number NCRCP 1520[25] and did not refer to PCL.
Respondent
89. The first Respondent attempted to clarify the matter in stating that: “I admit that the third Applicant traded under the name of prestige Cash Loans. Indeed, its registered name, “PCL”, is simply an abbreviation of Prestige Cash Loans.”[26]
90. The First Respondent also outlined that the required NCR Application Forms as submitted to the NCR stipulated the Trust’s name as “PCL TRUST (IT5726/07 TRADING AS PRESTIGE CASH LOANS).”[27] According to the first Respondent, “Prestige Cash Loans” and “PCL” were used simultaneously and interchangeably.
91. As outlined by the First Respondent, it is the case of the Trust that the simultaneous and interchangeable use of “Prestige Cash Loans” and “PCL” does not constitute a “change in the information provided” as envisaged by condition 7.
92. It also contended that, even if it does, “…it was never such a significant change to the registrant’s ability to conduct the business of a credit provider or ability to comply with the Act or regulations” as envisaged by condition 7 ”[28].
Analysis
93. The correct registered name of the Trust seems to have been communicated to the NCR initially as “PCL Trust, trading as Prestige Cash Loans”, with NCR application number 4689.[29] This application was lodged in 2007 while the Respondents were domiciled in Sibasa. Consequently, the NCRCP Registration certificate dated 9 October 2007 reflects PCL - Sibasa in the category provided for “branch”, with NCR registration number NCRCP 1520. However, the approved name of the Sibasa branch changed over time. The NCRCP certificate for the Sibasa branch for the period 09 October 2015 – 09 October 2016, reflects Leopard Cash Loans – Thohoyandou, Sibasa. The registration number of NCRCP 1520 remained the same throughout.[30]
94. However, due to irregularities at the Sibasa branch, as well as failure to pay registration fees for three years, the PCL Trust, operating at the Sibasa branch, was forced to close its Sibasa office.[31] The closing of the Sibasa branch was not placed in dispute. However, the parties did not agree on the reasons for such closure. The First Respondent volunteered that both the Sibasa and Louis Trichardt branches were closed:
“[Due] to ongoing headaches with the businesses and difficulty for me to ensure proper management thereof whilst based in Pretoria, we resolved to cancel the sale agreements and close the businesses in January 2016 (with respect to the Sibasa branch) and on 01 March 2017 (with respect to the Louis Trichardt branch).”[32]
95. According to the parties, the “Sibasa branch” of the PCL Trust was indeed closed and deregistered at the time of the investigation at the “Trichardt Branch” (5 December 2017).[33] The point in dispute is whether the “Trichardt Branch” was also closed and assumed deregistered on 5 December 2017.
96. In line with the evidence placed before the Tribunal, the NCR Credit Provider Certificate issued for Louis Trichardt, is for the period 09 October 2015 – 09 October 2016. The certificate is in the name of PCL Trust, with NCRCP 1520, trading as PCL Cash Loans – Louis Trichardt. The IT 5627/07 number is also reflected on the certificate.[34]
97. The Tribunal confirms that deregistration does not enable a credit provider to open or continue with another office or branch automatically. Deregistration impacts on all branches or offices of a credit provider, as it is the credit provider that is deregistered, and not the branch/office. Accordingly, if the NCR deregistered the PCL Trust after the closure of the Sibasa branch/office, the implication is that the NCR also deregistered PCL Trust for purposes of doing business at its Trichardt (or any other) branch.
98. In the matter at hand, it seems as if the parties confused the “closing of an office” with the “deregistration of a credit provider” and equated the two concepts. Accordingly, both parties seemed to have accepted that, although the Sibasa branch was closed and “deregistered”, the Louis Trichardt branch was still operational and assumed to be lawfully registered. This was indeed the de facto situation, as outlined above. The PCL Trust, therefore, justified its operations in Louis Trichardt by referring to its NCRCP certificate as approved for 9 October 2015 – 9 October 2016, which certificate confirms that PCL Trust was certified under NCR registration number NCRCP 1520 to operate as PCL Cash Loans – Louis Trichard for the period until 9 October 2016, as outlined above. It needs to be noted that no certificate was put in evidence to prove the certification of PCL Trust for operations post 9 October 2016. Accordingly, the only deduction possible was that the NCR did not issue an NCRCP certificate for the period within which the NCR executed the investigation, namely on or about 5 December 2016, presumably due to the non-payment of fees.
99. Further, the Tribunal wishes to comment that the deregistration of a credit provider, when based on alleged unlawful activities, can only occur through an application to the Tribunal and a subsequent cancellation ruling by the Tribunal. The issuing of compliance notices to a branch due to irregularities, on the other hand, is part of the legislative functions and authority of the NCR and does not equate to deregistration of the Credit Provider.
100. In addition to the failure to provide any evidence of lawful deregistration, no evidence was placed before the Tribunal to confirm that PCL Trust applied afresh for approval as credit provider at any point. The only communication put before the Tribunal relevant to this matter, is the email referred to by PCL Trust to the NCR on 23 June 2017, stating that the Trichardt Branch was not in operation after 1 March 2017, and the email of 23 June 2017 to the NCR, confirming that PCL Trust was no longer in business. [35]
101. However, the Tribunal finds the notices to the NCR during 2017 irrelevant for purposes of establishing a reason why the Respondents should not be accountable for the operational deficiencies as found to exist during the NCR investigation on or around 5 December 2016, the previous year.
102. The Tribunal also finds it suspect that the Respondents did not dispute the loan activities that the Branch carried out in the name of the Trust on the day of the investigation of 5 December 2016. The defences put before the Tribunal include various motivations of why the name in use at the office in Trichardt was indeed correct. The trustees also emphatically defended the alternating use of PCL and Prestige Cash Loans by the Trichardt Branch.
103. On the other hand, the Respondents took a strong stance that, irrespective any unlawful activities by the Trichardt branch, the registration of PCL Trust as credit provider cannot now be cancelled retrospectively. The Respondents contemplated that it requested voluntary deregistration in 2017 and did not pay any registration fees to the NCR since 2017. During the hearing, the trustees created the impression that they are justifying the alleged unlawful conduct as discovered at the Trichardt Office on 5 December 2017 on the one hand. On the other hand, they motivated that the business is no more registered, was allegedly “sold” during the time of the incidents and that the PCL Trust has finally seized all activities voluntarily.
104. Further, the Senior Investigator commented in her investigation report, that the Manager at the Trichardt Office could not answer all her questions, at which point the PCL Manager called the First Respondent to request guidance:
“I enquired on the loan agreement provided to consumers as the consumer signs the pre-agreement and quotation but is not provided a loan agreement to sign instead consumers sign Annexure “A”. I pointed out that this document is still in the name of Prestige Cash Loans yet the credit provider is PCL Trust Louis Trichardt. Pretorius phoned the owner of the business Mr du Plessis regarding this and Pretorius said Du Plessis indicated they will sort it out.”[36]
105. The Respondents did not put it in dispute that Managers and staff working at the Trichardt Office were in their employ at the time, or that they advised the team on how to operate and conduct the business.
106. Accordingly, the Tribunal finds that the trustees were well informed of the carrying on of business in the name of the Trust at the Trichardt Office on 5 December 2017. The trustees were informed of the loan processes being conducted at the Trichardt Office and also about the outside notice board of the business, which reflected: “Prestige Cash Loans” and “PCL”.[37] The contact number of the business was also hugely written on the outside notice board as 015 516 4935, unmistakably different from the contact number reflected on agreements with consumers (015 516 0077)[38] and different from the contact number officially communicated to the NCR.
107. The Tribunal is further convinced that the investigation in September and October 2016 was sparked by suspicions that the PCL Trust (formerly operating in Sibasa) was continuing to do business (albeit at another location) after it was closed by the NCR[39] and without any proper certificate. As outlined above, the PCL Trust’s NCRCP certificate for the office in Louis Trichardt terminated 9 October 2016.
108. It was also then that the NCR discovered the second NCRCP registration (NCRCP 3061) for “Prestige Konsultante Trust” t/a “Prestige Cash Consultants”. According to the records of the NCR, this business was lawfully registered for operation as credit provider then, at the same location in Louis Trichardt as the location from which PCL Trust operated. Based on information received regarding unlawful activities, the NCR approved an investigation in October 2016 in respect of “Prestige Konsultante Trust”, registered at the NCR to operate at the same location as PCL Trust.
109. It is only on arrival at the location in Songozwa street that the incumbents at the location told the NCR that the credit provider on site was “PCL Trust” and not “Prestige Cash Consultants”. The NCR could also not find any signage or NCRCP certificate relating to “Prestige Cash Consultants” or “Prestige Konsultante Trust” on site. The trustees vehemently denied any knowledge of this business, how it got registered or that it was operating at the same premises in Louis Trichardt as PCL Trust.
110. Understandably, confusion about the name existed at the time, and it is unacceptable that the NCR cannot explain the registration of a different credit provider with a different NCRCP number with a blatantly confusing name at the same location.
111. The Tribunal noted with concern the existence of what seemed to have been a second credit provider that was domiciled at the same location as the Trust, referred to as “Prestige Cash Consultants” or “Prestige Konsultante Trust” with NCRCP number 3061.
112. The use of the full name of the Trust, namely “Prestige Cash Loans”, confused the NCR in that it was very close to the other credit provider registered for the same location, namely “Prestige Cash Consultants”. Only the last word in the name was different (‘Consultants’ instead of “Loans”). Confusion by consumers can also be assumed.
113. Although the trustees provided evidence that they advised the NCR as far back as 2007 of the full trading name of the Trust (namely “Prestige Cash Loans”), this “full” name of PCL was not contained on any NCRCP certificate provided in evidence to the Tribunal. When asked why the “full” name of “Prestige Cash Loans” was placed on the exterior notice board and the entrance of the branch in Louis Trichardt, the trustees explained that it was their practice to use the full name of “Prestige Cash Loans” interchangeable with PCL. However, they denied ever using the name “Prestige Cash Consultants”.
114. According to the official, public records of the NCR, the credit provider registered as “Prestige Konsultante Trust”, was also trading as “Bent Store Giyani 0826”, with contact number 015 851 1281 and was deregistered only on 3 March 2018.
115. To add to this confusion, a different branch of the PCL Trust, namely North Centre Sibasa 0970, was also still operating under NCR registration number NCRCP1520 at the time and only deregistered on 31 October 2019.[40] What is evident from the official public records of the NCR, is that the email address of the latter credit provider is recorded as jalien@worldonline.co.za.[41] This is of particular relevance in that the First Respondent confirmed unequivocally that his email address is jalien@worldonline.co.za.[42] By confirming his email as jalien@worldonline.co.za, the Tribunal believes that the registration of “PCL Trust: North Centre Sibasa” was probably linked to the First Respondent’s email. The Tribunal is also advised of the registration of “Prestige Cash Loan (Pty) Ltd”, with NCRCP 8057, registered on 2016/06/02 in Nelspruit. The latter is still registered with the NCR.
116. The Tribunal is left with the impression that various entities with the same or similar name to that of PCL Trust (trading as Prestige Cash Loans) had been registered with the NCR. Further, the Tribunal is convinced that PCL Trust is in the business of opening various branches at irregular intervals and in multiple places, the detail and magnitude of which could not be established by the Tribunal. PCL Trust further believes that it is at liberty to continue to open or continue with other branches, despite being deregistered by the NCR, and that failure to pay annual fees will be an easy way to get deregistered and escape investigation by the NCR or the Tribunal. It is further disconcerting that the records of the NCR and administrative control mechanisms do not seem to pick up that a credit provider has closed shop and then opened-up shop elsewhere.
117. It also seems as if the NCR considers a new application without double-checking whether the person applying for registration as credit provider is involved in a pending or completed deregistration process. The NCR should implement stricter measures to ensure that persons are not “double-dipping” and so obtain more than one registration number as credit provider, eventually continuing with one business if the NCR would shut down the other.
118. Also, stricter controls should be considered to ensure that the NCR prevents deregistered credit providers from being easily registered again under a different trading name, without an interrogation of the reasons for its deregistration or its capacity to start operations again.
119. Consequently, the Tribunal is satisfied that the Respondent has contravened section 52(5) and General Conditions 5-8 of the Conditions of Registration.
Findings: Trading name and advertising practice
120. The Tribunal is satisfied that the name “Prestige Cash Loans” is clear from a pamphlet advertising the business of the entity, an advertising board on the outside of PCL Trust's business premises and the expressed acknowledgement of said name upon the answering of telephone calls as evidenced by Odendaal during the investigation.
121. The fact mentioned above is further clarified with reference to the photographs attached to the memorandum marked as Annexure "FA4" of the founding affidavit of the Applicant, as amended. It is also apparent with reference to the receipts signed by Consumers as proof of the extended loans attached to the investigator’s report marked as Annexure "A".
122. As per the registration information provided to the Applicant, the trading name for purposes of its registration with the NCR, is PCL Trust, Louis Trichardt and said details were not updated with the current status.
123. PCL Trust accordingly failed to inform the Applicant of the information mentioned above which information materially differs from the information provided to the Applicant by the First, Second and Third Respondents.
124. Accordingly, the Tribunal finds that the aforementioned trading name is not just misleading but causes confusion as to which registrant one is dealing with as it had in this instance.
125. By advertising the availability of credit under the name and style of Prestige Cash Loans when the said name is not reflected on the NCRCP certificate, PCL Trust contravened section 76 of the Act in that the advertisement is misleading and deceptive.
126. As a result of the aforementioned, the Tribunal finds that PCL Trust contravened General Condition 7 of its Conditions of Registration read with section 52 (5) (c) of the Act.
Findings: Registration Certificate
127. The Tribunal finds that the PCL Trust displayed the registration certificate of the wrong branch at its business premises in Louis Trichardt.
128. As per the information and evidence attached to the memorandum marked as Annexure FA4 of the Applicant’s founding affidavit, as amended, it is clear that PCL Trust displayed a certificate for PCL Trust situated in Sibasa at its premises, which branch was closed at the time of the investigation.
129. The Tribunal finds that PCL Trust, therefore, with the knowledge of its voluntary deregistration status, displayed the incorrect registration certificate at the business premises of PCL Trust situated in Louis Trichardt. This is not only misleading and deceptive; but causes confusion to anybody that enters the business premises of PCL Trust. The Tribunal is further convinced by the written and oral evidence put before it, that the correct certificate could not be produced upon request.
130. The Tribunal, therefore, finds that PCL Trust contravened section 52 (5) (b) and section 52 (5) (c) read with General Condition 5 of its Conditions of Registration.
Contravention 2: Reckless credit and the prevention of reckless credit
The Act
131. Section 80 deals with reckless credit. Section 80 (1) provides that a credit agreement is reckless if, at the time, the new agreement is made:
(a) the credit provider failed to conduct an assessment as required by section 81 (2), irrespective of what the outcome of such an assessment might have concluded at the time; or
(b) the credit provider having conducted the assessment as required by section 81 (2), entered into the credit agreement despite the available information having indicated that:
(i) the consumer did not understand or appreciate the consumer’s risks, costs or obligations under the credit agreement; or
(ii) entering into the credit agreement would make the consumer over-indebted.
132. Section 81 deals with the prevention of reckless credit. Section 81 (2) (a) provides that a credit provider must not enter into a credit agreement without first taking reasonable steps to assess the proposed consumer’s:
a) general understanding and appreciation of the risks and costs of the proposed credit, and of the rights and obligations of a consumer under a credit agreement;
b) debt repayment history as a consumer under credit agreements; and
c) existing financial means, prospects and obligations (in relation to the credit to be granted).
133. Regulation 23A deals with the criteria to conduct an affordability assessment. Regulation 23A (8) deals with the consumer’s existing financial obligations. It provides that a credit provider must calculate the existing financial means, prospects and obligations as envisaged in section 78 (3) and section 81 (2) (a) (iii).
134. Regulation 23A further provides for a minimum expense norms table which requires credit providers to ascertain gross income, statutory deductions and minimum living expenses to be deducted to arrive at a net income, which must be allocated for payment of debt instalments. Regulation 23A requires the Respondent explicitly to take into account the consumer’s debt repayment history as a consumer under credit agreements, as envisaged in section 81 (2) (a) and stipulates that this requirement must be performed within seven business days immediately prior to the initial approval of credit.
135. Section 82 (1) provides that a credit provider may determine the mechanisms, models and procedures to be used in meeting its assessment obligations under section 81, provided that the mechanism, model or procedure results in a fair and objective assessment.
136. Section 81 (3) precludes a credit provider from entering into a reckless credit agreement.[43]
137. Section 170 places obligations on credit providers concerning record keeping and provides as follows:
“A credit provider must maintain records of all applications for credit, credit agreements and credit accounts in the prescribed manner and form and for the prescribed time”.
138. Regulation 55 (1) (b) (vi) provides that credit providers must keep records which demonstrate that they have complied with section 81 (2).
Applicant
139. Ms Schwartz submitted that PCL Trust contravened section 80 (1) because PCL Trust concluded the agreements without conducting an assessment in accordance with regulation 23A to determine whether the consumers could afford to service their debts under the agreements. As it appears from the investigation report, no evidence could indeed be found from the sample of consumer files obtained from PCL Trust that it had obtained credit bureau reports to determine the consumers’ ability to repay the loans. As a result, PCL Trust failed to assess the debt repayment history of consumers under credit agreements and failed to ascertain statutory deductions.
140. Further, the procedures that PCL Trust applied to assess affordability did not result in a fair and objective assessment under section 82 (1), because PCL Trust stated that the consumers had no debts “at the time of” granting the applications for credit, which was not the ‘’true state of affairs’’.
141. The Applicant raised questions as to the expenses provided by the consumers and PCL Trust’s acceptance of same. The Applicant provided evidence of various instances where consumers listed “no expenses” or where consumers failed to give reasons for minimal expenses.
142. The Applicant also provided evidence of documented debits listed on the consumers’ SASSA printouts, while PCL Trust neglected to include same during its affordability assessment. In this regard, the Applicant outlined that should the debits as reflected on the SASSA printouts have been included, many consumers would have been over-indebted and not have been able to afford the extended loan.
Respondents
143. According to the Respondents, PCL Trust’s managers were under an obligation to conduct credit bureau enquiries and to obtain such statements. The Respondents could not explain the reason for such failure, other than that the managers were remiss.
144. The Respondents outlined that the consumers' SASSA receipts were always obtained, checked and copies thereof made. The Respondents, therefore, submitted that the consumers' repayment history relating to any and all debts advanced by registered credit providers would reflect thereon and were assessed accordingly.
145. The Respondents pointed out to the Tribunal during the hearing that the consumers, most of whom were recipients of SASSA grants, had no statutory deductions. Accordingly, where no expenses were listed on consumers' affordability assessments, the Respondents submitted the reasons were “because there were none”. The Respondents argued that most of the SASSA grant holders were living with children, spouses or siblings, who paid all their living expenses. Accordingly, where debits were reflected on consumers' SASSA receipts but not included in their affordability assessments, the Respondents claimed that it was because all such debits were 30-day loans and, therefore, not applicable.
Analysis
146. As outlined above, section 81 (3) precludes a credit provider from entering into a reckless credit agreement. Section 81 (2) imposes an obligation on the credit provider to conduct an affordability assessment to determine whether the credit to be granted would be reckless.[44] When conducting the affordability assessment, the credit provider must take reasonable steps to assess the proposed consumer’s appreciation of the risks and costs of the proposed credit, and the consumer’s rights and obligations under a credit agreement. The credit provider must also assess the consumer’s existing financial means, prospects and obligations concerning the credit to be granted. Section 81 (2) is read together with regulation 23A. Regulation 23A (8) requires the credit provider to calculate the existing financial means, prospects and obligations when conducting the affordability assessment.
147. The affordability assessment must, therefore, determine whether the consumer will be able to afford the proposed credit and not make the consumer over-indebted.
148. In the Tribunal’s view, as is evidenced in all the sampled files and more specifically as expressed by the Manager of the Trust, PCL Trust failed to conduct a credit bureau enquiry or obtain a credit bureau statement.
149. The next question is in terms of section 80 (1) (a): “Did the credit provider first conduct an assessment as required by section 81 (2), irrespective of what the outcome of the assessment might have concluded at the time?”
150. Although a credit provider may under section 82 (1) determine the mechanisms, models and procedures under section 81, these must result in a fair and objective agreement. In the Tribunal’s view, the Respondent did not assess affordability fairly and objectively, because the Respondent did not obtain any credit bureau records.
151. The Tribunal is convinced that the Respondent also granted credit to the consumers without conducting affordability assessments in accordance with the regulations. Regulation 23A (8) obliges the Respondent to calculate the consumer’s existing financial means, prospects and obligations as envisaged in terms of section 78 (3) and 81 (2) (a) (iii). When calculating the consumer’s existing financial obligations, the regulations compel the Respondent to utilise the minimum expense norms table contained in the regulations.
152. The regulations oblige the Respondent to follow the methodology when using the table. This includes assessing the consumer’s gross income as well as statutory deductions and minimum living and other expenses to calculate the discretionary income for the consumer to satisfy new debt.
153. The consumer’s monthly debt repayment obligations in terms of credit agreements that a registered credit bureau may reflect on the consumer’s credit profile are included in this calculation.[45] The Tribunal is not convinced that the PCL Trust followed the prescribed methodology.
Findings
154. As a result of its failure to conduct a credit bureau enquiry or obtain a credit bureau statement, the Respondents failed to assess the debt repayment history of consumers under credit agreements. It also failed to ascertain statutory deductions and assumed that the consumers had none because many consumers were SASSA grant holders of Child Support Grants and Old Age Grants. The Respondents accordingly contravened section 81 (2) (a) (ii) read with Regulation 23A and 23A 13 of the Act.
155. The Tribunal found that the Respondents were not able to provide adequate explanations to questions raised as to the expenses provided by the Consumers, as evidenced in Annexure "Bl" to "Bl0" of the Applicant’s founding affidavit. As evidenced in Annexures "82", "83", "85", "86", "87" and "B10", zero expenses were listed or completed by the consumer without any reasons for same.
156. Further, in for example Annexures "87", "B8", "89" and "B10", there are clear debits listed on the Consumers' SASSA printouts; however, PCL Trust neglected to include same during its affordability assessment.
157. As evidenced per Annexure "B7", "B8" and "B10" for example, the Tribunal finds that, should the debits reflected on the SASSA printouts have been included, the consumer would have been over-indebted and not have been able to afford the extended loan.
158. By extending credit, where the preponderance of information available indicated that entering into the credit agreement would make the consumer over-indebted, the Respondents contravened section 81 (3) read with section 80 (1) (b) (ii) of the Act.
159. Consequently, the Tribunal is satisfied that PCL Trust does not properly assess the Consumers' financial means, prospects or debt obligations. As a result, the Tribunal finds that PCL Trust contravened section 81 (2) (a) (iii) read with Regulation 23A of the Act.
160. The Tribunal is further convinced that, as a result of not conducting proper affordability assessments, PCL Trust entered into reckless credit agreements in contravention of section 81 (3) read with section 80 (1) (a) of the Act.
161. The Tribunal is also not convinced that PCL Trust followed the prescribed methodology as required when using the minimum expense norms table contained in the regulations, as outlined above. Consequently, the Tribunal is satisfied that the Respondent contravened section 80 (1) (a) because the Respondent failed to conduct an assessment as required in section 81 (2).
Contravention 3: Supplementary Agreements
The Act
162. Section 91 deals with the prohibition of unlawful provisions in credit agreements and supplementary agreements. Section 91 (b) of the Act determines that a credit provider must not request or demand a consumer to –
(i) give the credit provider temporary or permanent possession of an instrument referred to in section 90 (2) (l) (i) other than for the purpose of identification, or to make a copy of the instrument;
(ii) reveal any personal identification code or number contemplated in section 90 (2) (l) (ii); or
(iii) direct, or knowingly permit, any other person to do anything referred to in this section on behalf or for the benefit of the credit provider.
163. Section 90 (2) (l) (i) of the Act determines that a provision of a credit agreement is unlawful if it expresses an agreement by the consumer to deposit with the credit provider, or with any other person at the direction of the credit provider, an identity document, credit or debit card, bank account or automatic teller machine access card, or any similar identifying document or device;
The Applicant’s submission
164. According to the Applicant, PCL Trust required or induced the consumers to sign a document titled “Mandate and Power of Attorney”, which document contained a provision that would be unlawful if it were included in a credit agreement. In the aforementioned document, consumers mandated PCL Trust to keep their cards.
The Respondent’s submission
165. The Respondents contemplated that PCL Trust never retained customer cards. It submitted that the reason why the Respondent’s consumers signed the Mandate and Power of Attorney is that such document formed part of the bundle of documents processed on the Delfin system, but that it had no practical or nefarious purpose or effect.
166. The Respondent submitted that the Nupay system (of automatically paying the Trust from customers’ SASSA cards) was sufficient to ensure payment from SASSA grant holders and that it was therefore not necessary for the Trust to retain the cards or obtain any other security from consumers.
Analysis and findings
167. The Tribunal is convinced that PCL Trust requires or induces the consumers to sign a document titled 'Mandate and Power of Attorney', which document contains a provision that would be unlawful if it were included in a credit agreement.
168. The Tribunal is convinced that consumers mandate PCL Trust to keep their cards, as evident from Annexures "B1" to "B10" of the investigation report.
169. Consequently, the Respondents contravened section 91 (2) read with section 90 (2) (l) (i) of the Act.
Contravention 3: Pre-agreement statement and quotation
The Act
170. Section 92 (1) and regulation 28 preclude a credit provider from entering into a credit agreement with a consumer without first giving a consumer a pre-agreement statement and quotation in the prescribed form. The prescribed form is form 20.
171. Section 93 (2) and regulation 30 requires a small credit agreement to be in the prescribed form. The prescribed form is form 20.2.
172. Both forms 20 and 20.2 must contain the respondent’s full name and NCR registration number.
Applicant
173. According to the Applicant, the Respondent failed to provide consumers with pre-agreement statements and quotations which comply with the Format set out in Form 20, in that the following information was omitted:
(i) The NCR number of the Respondent; and the
(ii) Contact number of the Respondent.
174. By omitting the aforementioned information, the Applicant submitted that the trustee contravened section 92 (1) read with Regulation 28 (1) (b) and Form 20 of the Act.
Respondent
175. According to the Respondents, the process followed by PCL Trust in concluding credit agreements can be explained as follows:
(i) A prospective consumer would visit the Trust’s premises and complete an application form;
(ii) The Trust would make copies of the prospective consumer’s identity document as well as his/her SASSA receipt and SASSA card;
(iii) The Trust would then provide the prospective consumer with a document entitled “LOAN APPLICATION & AGREEMENT”, to consider and to sign if acceptable;
(iv) If those terms were accepted and signed by the prospective consumer, the Trust would import the prospective consumer’s information as per the application form into the Delfin system, to generate a “QUOTATION AND LOAN AGREEMENT”;
(v) The Trust would thoroughly explain the content of that quotation to the prospective consumer and afford him/her to go and consider it at his/her leisure;
(vi)
(vii) After consideration, the Trust would then swipe the consumer’s SASSA card through the Nupay system, which would record the amount that would be deducted from the card and paid to the Trust after 30 days;
(viii) A receipt would accordingly be printed and handed to the consumer with the case amount loaned and the consumer’s documentation; and
(ix) At the end of the 30 days, the amount due to the Trust less Nupay’s fee would automatically be deducted from the consumer’s SASSA card and paid into the Trust’s account.
176. According to the Respondents, the failure to reflect the NCR number on the quotation must have been a “glitch” on the Delfin system, which went unnoticed by PCL Trust’s staff members. However, according to the Respondents, the “Mandate and Power of Attorney” document as signed by consumers included the Trust’s NCR number.
Analysis
177. The Tribunal has held that the Applicant provided adequate evidence that neither the “Loan Application & Agreement” form nor the “Quotation and Loan Agreement” adhered to all the requirements of the Act, the regulations and the prescribed conditions.
178. The “Loan Application & Agreement” has been confirmed as the form that the consumer considers and signs when consulting first with the Trust.
179. Non-compliance relating to consumer Nkomi Rasethlapa, as an example of a consumer who receives a child grant, can be summarized as follows:
(i) contains the name of the credit provider, namely “PCL Trust”; and
(ii) contains the IT 5627 number (registration with the Master); and
(iii) does not include the NCR registration number of the Trust; and
(iv) does include the following number: “NLR Registration Number of Accredited Lender: 946”
(v) details the address as 28 Trichardt street (which seems to be the former name of the present street, namely ‘Songozwi Street’);
(vi) details the telephone number as 015-516 0077 (which is also different from the officially confirmed contact number of the credit provider, as registered with the NCR, namely 015-963 2209).[46]
180. The Respondents could not explain “NLR Registration Number of Accredited Lender: 946”, as reflected on the “Loan Application and Agreement” form, save to confirm that the registered NCR number was not reflected on the form and further that the Third Respondent’s registered IT number and name were indeed used on the form.
As an example, the “Quotation and Loan agreement” form of the consumer Nkomi Rasethlapa is summarized as follows:
(i) It reflected the name of the credit provider as PCL: Louis Trichard (the lender);
(ii) It did not reflect the IT Registration Number;
(iii) It did not reflect the NCR Registration Number;
(iv) It reflected the address as 28 Songozwi Str Louis Trichard;
(v) It did not reflect any telephone, fax or email address; and
(vi) It included Credit Life Insurance to the amount of R180, which amount was added to the loan amount.
181. By its own admission, the PCL Trust confirmed that this “Quotation and Loan agreement” document was used prior to populating the Delfin system. Accordingly, the only deduction is that the consumer was only advised of the NCR registration number after the Delfin system would have populated the “Quotation and Loan Agreement” form.
182. It further is clear that the information on the two forms used by the credit provider is not the same. Confusion is apparent.
183. Failure to include all the required detail on the “Loan Application and Agreement” form, is perceived in a very serious light and seen as a serious transgression of the conditions by the credit provider.
184. Consequently, the Trust contravened section 92(1).
Findings
185. The Tribunal finds, as it appears on annexures "Bl" to "B10" of the investigation report, that PCL Trust failed to provide consumers with pre-agreement statements and quotations which comply with the Format set out in Form 20.
186. The Tribunal finds that the NCR number and contact number of PCL Trust were omitted from the prescribed Form 20.
187. By omitting the aforementioned information, PCL Trust contravened section 92(1) read with Regulation 28 (1) (b) and Form 20 of the Act.
Contravention 5: Failure to retain records
The Act
188. Section 170 read with Regulation 55 (1) (b) (viii) respectively provides that a credit provider must maintain records of all applications for credit, credit agreements and credit amounts in the prescribed manner and form for a prescribed period of time.
189. General Condition 2 of the Respondent’s Conditions of Registration require of the Respondent to operate its business in a manner consistent with the purpose and requirements of the Act.
Applicant
190. The Applicant submitted that the Respondent had not kept any documentation in support of the steps taken to assess a consumer’s financial position prior to entering into a credit agreement with a consumer.
191. The Respondent has failed to retain documents and has failed to operate its business in a manner that is consistent with the purpose and requirements of the Act, and has therefore contravened General Condition 2 of its Conditions of Registration read with section 52(5) of the Act.
Analysis and findings
192. It is clear from the evidence before the Tribunal; that the Respondent was unable to provide any current and relevant documentation or copies of documentation that led to proper affordability assessments having been undertaken by the Respondent.
193. The Tribunal is therefore satisfied that the Respondent has contravened section 170 read with Regulation 55 (1) (b) (viii); General Condition 2 of its Conditions of Registration read with section 52 (5) of the Act.
CONCLUSION
194. Consequently, the Tribunal is satisfied that the Respondent engaged in reckless lending and other prohibited conduct by contravening the sections referred to in the preceding paragraphs and has therefore repeatedly contravened the Act.
195. The Tribunal proceeds to consider an appropriate order.
CONSIDERATION OF AN APPROPRIATE ORDER
Applicant’s requested orders
196. The Tribunal has set out the Applicant’s requested orders in paragraph 16 of this judgment. The Tribunal proceeds to consider them.
Administrative fine
Applicant
197. The Applicant requested the Tribunal to impose an administrative fine. The conduct of PCL Trust repeatedly contravenes the Act, the regulations as well as PCL Trust's conditions of registration.
198. This conduct has caused harm to consumers and undermines the purpose of the Act, and it is evident that all the contraventions of the Act committed by PCL Trust are serious.
Respondent
199. The PCL Trust opposes the imposition of an administrative fine. It submitted that the Applicant failed to produce any evidence of prejudice, damage, loss or harm to consumers and denied any allegation of such prejudice, damage, loss or harm.
200. According to PCL Trust, the Applicant refers to only a couple of transactions concluded by the Trust and expects the Tribunal -
(a) to draw conclusions of extreme misconduct therefrom;
(b) to speculate as to whether such conclusions can be drawn from all the transactions ever concluded by the Respondent; and
(c) to exact severe punishment on the Respondent.
201. According to PCL Trust, the Applicant produced no evidence that any of the trust’s consumers have suffered a loss or damage and particularly suffered such loss or damage as a result of unlawful conduct on the part of PCL Trust.
202. PCL Trust submitted that it never conducted its business with any nefarious or devious intent, but at all times endeavoured to act under the law.
203. PCL Trust submitted that its customers were never exploited or taken advantage of, and that the Applicant advanced no evidence from which that can be established.
204. PCL Trust also confirmed that it has never been found in contravention of the NCA or the Consumer Protection Act, 2008, as the case may be. PCL Trust submitted that the allegation by the Applicant, that "the nature and duration of the contraventions dictate that the conduct of the Respondent has been ongoing for a substantial period”, is opportunistic and baseless.
205. Concerning a potential fine, PCL Trust reconfirmed in the alternative to the Tribunal that PCL Trust is not conducting any business and that it has not conducted any business since 01 March 2017.
Analysis
206. In line with the findings made concerning PCL Trust’s contraventions of the Act, the Tribunal is satisfied that the nature of PCL Trust’s contraventions and the consequent financial implications for consumers justify the Tribunal imposing an administrative fine on PCL Trust. The Act was introduced into the South African legislative landscape to curb precisely the types of excesses that the Tribunal has found PCL Trust to have perpetrated. Consequently, the Tribunal has to send a clear message to PCL Trust that the Tribunal will not tolerate contraventions of the Act.
207. Section 151 (3) sets out the factors the Tribunal must consider when determining an appropriate fine. The Tribunal proceeds to consider each in turn.
Nature, duration, gravity and extent of the contraventions
208. The inspection report and the findings in this judgement reveal that PCL Trust’s approach to responsible credit provision, appears to be an ongoing and common practice. PCL Trust was initially registered during 2007 and seemed to have been continuing operations as a credit provider for around ten years. The Trust’s contraventions are extremely serious and go to the heart of PCL Trust’s business practices.
209. The Tribunal is alive to the small sample files extracted and the contraventions identified in those files. However, the nature and extent of the contraventions warrant serious action against PCL Trust. A registered credit provider must not engage in conduct likely to bring the Applicant or credit provision industry into disrepute.
210. The Tribunal is satisfied that PCL Trust’s conduct is made worse by the failure of its trustees to timeously and diligently advise the NCR of any changes to its operations, structure or any possible confusion relating to its trading name. This failure placed financially stressed consumers at risk of suffering further prejudice and losses and inhibited the NCR from efficiently and adequately fulfilling its legislative functions of oversight and control.
211. The contraventions are serious and include, inter alia, trading under a name not registered with the National Credit Regulator, not providing pre-agreement statements and quotations, not conducting proper affordability assessments, and inducing consumers to sign documents which mandate the retention of consumer instruments and personal belongings. Consumers are being exploited by the Trust.
Loss or damage suffered as a result of the contraventions
212. The Applicant did not place specific evidence before the Tribunal concerning the actual loss or damage consumers suffered. However, it is reasonable for the Tribunal to conclude that consumers have suffered loss because the Respondents at the very least charged consumers fees without fulfilling the services required in the Act.
213. Consumers’ loss and damage are unquantifiable. By not conducting proper affordability assessments and granting reckless credit, consumers are exposed to financial risk.
Respondents’ behaviour
214. The Respondents, as trustees of the PCL Trust, have not persuaded the Tribunal that they did not know the Applicant’s expectations of PCL Trust as credit provider. The Tribunal has found that the Respondents failed to comply with the Act’s prescripts and that their failure to act diligently binds the Trust which is the entity they registered as credit provider and which they represent as trustees.
215. There exists no plausible reason for the Respondents to be unaware of the provisions of the Act and its statutory obligation to adhere to each of those provisions. One of its branches closed down due to the irregular activities that were exposed, and one would believe that the Respondents would have ensured that any other branch complied with the provisions of the Act.
The level of profit derived from the contraventions
216. The Applicant did not place specific evidence before the Tribunal concerning the level of profit the Trust has derived from the contraventions. Nevertheless, it is reasonable for the Tribunal to conclude that PCL Trust derives significant profit from the activities as credit provider.
217. It does not help the trustees to implore the Tribunal to consider PCL Trust as “not having been in operation”. At the same time, they are informed of the fact that it de facto operated despite any proclamations by the trustees to the alternative. It does not help the trustees either to attempt distancing themselves from the operations of PCL Trust once it becomes clear that PCL Trust was used as the legal vehicle to conduct unlawful activities.
218. As trustees, the fiduciary and diligent responsibility to manage PCL Trust with the utmost of integrity cannot be waived. Similarly, the financial accountability for prohibited conduct by PCL Trust will vest in its trustees.
219. The Tribunal found that there was no overcharging by the Trust. However, profit is derived by entering into credit agreements with consumers who might not even qualify for a loan should a proper affordability assessment have been conducted.
The degree to which the Respondent co-operated with the applicant
220. The Tribunal has considered that both the Applicant and the Respondents seemed to have been frustrated by the lengthy process to conclude this matter. Concerning the investigation processes, the Applicant indicated that the Respondent provided its co-operation during the investigation.
Respondent’s prior contraventions
221. There were no prior investigations or enforcement instituted by the Applicant against PCL Trust.
222. However, the nature and duration of the contraventions dictate that the conduct of PCL Trust has been ongoing for a substantial period before the investigation.
Conclusion
223. Having regard to the foregoing factors, the factual evidence and conduct displayed, it is a reasonable and valid contention that the Tribunal should impose an administrative fine against the Trust. The purpose of an administrative fine is a punitive measure and one which is warranted in this instance, especially in the interests of justice
224. The Respondents’ conduct has displayed little or no regard for the spirit and purpose of the Act. The Respondents’ continued participation in the credit market places consumers at substantial risk of further financial harm.
The amount of the fine
225. The Applicant did not produce evidence concerning the Respondent’s financial turnover during the previous financial year. Consequently, the Tribunal may impose a fine that is limited to a maximum fine of R1 000 000.00.[47]
226. The preamble of the Act is important. Parliament introduced the Act to, amongst other things, promote a fair and non-discriminatory marketplace for access to consumer credit, prohibit certain unfair credit and credit marketing practices, promote responsible credit granting, and prohibit reckless credit granting. Consequently, protecting vulnerable consumers and ensuring that debt counsellors and credit providers act fairly runs to the heart of the Act.
227. The Tribunal is satisfied that it must send a strong message to all credit providers, whether large or small, that they cannot escape complying with the Act. Credit providers such as PCL Trust, which operate through its trustees, must comply strictly with the Act.[48]
228. These considerations persuade the Tribunal that it is appropriate to impose an administrative fine of R200 000.00.
ORDER
Accordingly, the Tribunal makes the following order towards the First and Second Respondents, jointly and severally in their capacities as trustees, who are responsible for the due performance of the Third Respondent’s obligations to the Applicant:
229. The Respondents have repeatedly contravened the following sections of the Act:
229.1 Section 81 (2) (a) (ii) and (iii) read with Regulation 23A;
229.2 Regulation 23A (3); Regulation 23A (8); Regulation 23A (9); Regulation 23A (10); Regulation 23A (12) (a); (b) and (c); and 23A (13)
229.3 Section 81 (3) read with section 80 (1) (a);
229.4 Section 81 (3) read with section 88 (4);
229.5 Section 170 read with Regulation 55 (1) (b) (vi);
229.6 Section 92 (1) read with Regulation 28 (1) (b) and Form 20;
229.7 Section 101 (1) (c) (ii) read together with Regulation 44; and
229.8 Section 100 (1) (c), section 100 (1) (a), section 102 and section101 (1) (d) (ii) read with section 105, section 52 and Regulation 42 (1).
230. The repeated contraventions are prohibited conduct in terms of section 150 (a) of the Act;
231. The Respondents’ credit agreements with consumers contained in annexures “B1” to “B10” of the Applicant’s founding affidavit, are reckless in terms of section 80 (1) (a) and set aside.
232. The Respondent is:
232.1 Within 30 days of the date of issue of this judgment to appoint an independent auditor, who is registered as a Chartered Accountant, to identify all open loans to determine if an affordability assessment was conducted. All such identified loans are deemed reckless and all of the consumers’ rights and obligations arising under those, are hereby set aside.
232.2 Within 120 days of the Tribunal’s order; to provide a written report to the Applicant that details:
(i) Any and all branches that were established by the Trust to operate as credit providers up and including the present; and
(ii) A complete list of its consumers’ identities and other contact details, in addition to any other contractual or other documents required by the NCR.
233. PCL Trust's registration as a credit provider with the Applicant is cancelled in terms of section 150 (g) of the Act; which cancellation is to be applied to all and any of the branches that the PCL Trust, also trading as Prestige Cash Loans, might have established and registered with the NCR.
234. The PCL Trust, also trading as Prestige Cash Loans, and any branch that it might have established or new credit provider identity that it could have registered with the NCR, are interdicted from continuing its business as a credit provider with immediate effect;
235. The Respondents are ordered to cease engaging in any activity that requires registration with the NCR.
236. The Third Respondent is to pay an administrative fine of R100 000.00 (one hundred thousand rand) into the National Revenue Fund referred to in section 213 of the Constitution of the Republic of South Africa, 1996 within 30 days of the date of this judgment. The Banking Details of the National Revenue Fund are as follows:
Bank Name : The Standard Bank of South Africa Limited
Account Holder : Department of Trade and Industry
Branch Name : Sunnyside
Branch Code : 05100
Account Number : 370 650 026
Reference : NCT/128378/2019/57(1) and Name of Person or Business making payment
237. There is no order as to costs.
DATED AT CENTURION ON THIS 5th DAY OF APRIL 2020
Dr MC Peenze
Presiding member
With members Adv J Simpson and Mr T Bailey concurring.
[1] Published under Government Notice R489 in Government Gazette 28864 of 31 May 2006
[2] Section 40 empowers the National Credit Regulator to impose conditions on the registration of an applicant as a credit provider
[3] Section 57 (1) empowers the Tribunal to cancel a registrant's registration if the registrant fails to comply with a condition of its registration; contravenes the Act; or fails to comply with a commitment the registrant made when applying to be registered as a credit provider
[4] Par. 9.2 of the replying affidavit
[5] See in this regard: Braun v Blann and Botha NNO & another [1984] ZASCA 19; 1984 (2) SA 850 (A) at 859D-H; Commissioner for Inland Revenue v Friedman & others NNO [1992] ZASCA 190; 1993 (1) SA 353 (A) at 370D-H)
[6] Land and Agricultural Bank of South Africa v Parker and others [2004] ZASCA 56; 2005 (2) SA 77
[7] Lupacchini NO & another v Minister of Safety and Security [2010] ZASCA 108; 2010 (6) SA 457 (SCA)
[8] Compare: Hoosen & others v Deedat & others [1999] ZASCA 49; 1999 (4) SA 425 (SCA) paras 23, 24 and 26
[9] Sackville West v Nourse & another 1925 AD 516
[10] Administrators, Estate Richards v Nichol & another [1998] ZASCA 82; 1999 (1) SA 551 (SCA)
[11] Arinda Truter | SchoemanLaw Inc 2016. https://www.schoemanlaw.co.za/wp-content/uploads/2016/09/The-General-Duties-and-Obligations-of-Trustees.pdf
[12] Hofer v Kevitt 1996 2 SA 402 (C) 407F; Olivier 2001 SALJ 224 229. See also Lorentz v TEK Corporation Provident Fund 1998 1 SA 192 (W) 221A-B; Welch’s Estate v Commissioner, South African Revenue Service 2005 4 SA 173 (SCA) 195J-196A
[13] Olivier 2001 SALJ 224 229; Ware & Roper “The World of Offshore Sham Trusts” 1999 Insurance and Tax 17 18. See also Jowell v Bamwell-Jones 1998 1 SA 836 (W) 891B 894E; Bafokeng Tribe v Impala Platinum Ltd 1999 3 SA 517 (BHC) 545J-546A; Nel v Metequity Ltd 2007 3 SA 34 (SCA) 38G
[14] Doyle v Board of Executors 1999 2 SA 805 (C) 813B. See also Daewoo Heavy Industries (SA) (Pty) Ltd v Banks 2004 2 All SA 530 (C) 533c
[15] Olivier 2001 SALJ 224 229. See also Jowell v Bamwell-Jones 1998 1 SA 836 (W) 891B 894E; Bafokeng Tribe v Impala Platinum Ltd 1999 3 SA 517 (BHC) 545J-546A; Nel v Metequity Ltd 2007 3 SA 34 (SCA) 38G
[16] Levin v Ikiua [2010] 1 NZLR 400 (HC) at [120]
[17] Ibid
[18] See Cameron et al Honores South African Law of Trusts 5th Edition (2002) at 256
[19] Steyn and Others NNO v Blockpave (Pty) Ltd 2011 (FB)
[20] Also see Octavo Investments Pty Ltd v Knight [1979] HCA 61; (1979) 144 CLR 360 (HCA) at 367
[21] With respect to PCL Trust, trading as “North Centre Sibasa 0970”, the website communication of the NCR reflects a cancellation date of 31 October 2019. See https://www.ncr.org.za/register_of_registrants/
[22] See section 57(1)(a) of the Act
[23] See section 3 of the Act
[24] See conditions of registration of the Third Respondent (PCL Trust) on page 305 of the Tribunal Bundle
[25] See page 343 of the Tribunal bundle
[26] See page 259 of the Tribunal bundle, paragraph 38 of the answering affidavit
[27] See page 259 of the Tribunal bundle, paragraph 39 of the answering affidavit
[28] See page 261 of the Tribunal bundle, paragraph 43 of the answering affidavit
[29] See page 308 of the Tribunal bundle
[30] See pages 199 and 39 of the Tribunal bundle for the NCR Credit Provider Certificates for the Sibasa branch
[31] See page 335 of the Tribunal bundle, paragraph 6.5.15 of Ms Odendaal’s investigation report
[32] See page 258, paragraph 34.7 of the answering affidavit
[33] Also see page 198 of the Tribunal bundle, containing the termination of lease letter for the Sibasa premises, dated 3 February 2019, confirming that business seized 2 February 2016
[34] See page 24 of the Tribunal bundle for the NCR Credit Provider Certificate
[35] See page 258 of the Tribunal Bundle, paragraph 34.8 of the Answering Affidavit
[36] See page 334 of the Tribunal bundle, paragraph 6.5.11 of the Investigation Report of the Senior Investigator
[37] See page 38 of the Tribunal Bundle, which contains a photo of the outside view of the business in Louis Trichardt Street.
[38] See an example of an agreement on page 389.
[39] See Annexure FA8 to the Founding Affidavit of Jacqueline Peters, containing the deregistration letter of the branch situated at Sibasa.
[40] See page 11 of the Applicant’s replying affidavit, paragraph 19.2 and 19.3, as contained on page 796 of the Tribunal bundle. The NCR website [https://www.ncr.org.za/register_of_registrants/lapsed_cp.php?page=98] lists Credit Providers whose registration has lapsed in terms of section 52(4)(b) of the National Credit Amendment Act. The effect of such lapsing is that credit providers should not engage in previously registered activities and credit agreements concluded are considered unlawful and of no force and effect.
[41] Ibid
[42] See page 272 of the Tribunal bundle, paragraph 85 of the answering affidavit
[43] See also National Credit Regulator v Standard Bank of South Africa Limited (NCT/29041/2015/140(1) NCA) (2017) ZANCT 118 at paragraph 78
[44] Standard Bank, Ibid at paragraph 78.2 and National Credit Regulator v Mobimoola Financial Services (Pty) Ltd NCT/18256/2014/140 at paragraph 53
[45] Regulation 23A (10) read with regulation 23A (12)
[46] See page 395 of the Tribunal bundle for the Loan Application and Agreement as signed by consumer Nkomi Rasethlapa and the acceptance letter of the conditions of service by the First Respondent on behalf of the Trust on page 308 of the Tribunal bundle
[47] Section 151 (2) empowers the Tribunal to impose an administrative fine that may not exceed the greater of 10% of the Respondent’s annual turnover during the preceding financial year, or R1 000 000.00
[48] Section 163 (1C) provides a debt counsellor may only use agents for administrative tasks relating to debt review