McGinn v Motor Finance Corporation (MFC) A Division of Nedbank Ltd (NCT/110462/2018/141(1)(b)) [2019] ZANCT 105 (23 May 2019)

IN THE NATIONAL CONSUMER TRIBUNAL

HELD IN CENTURION

CASE NUMBER: NCT /110462/2018/141(1)(b)

IN THE MATTER BETWEEN:

John McGinn APPLICANT

and

Motor Finance Corporation (MFC) A Division of Nedbank Ltd RESPONDENT

Date of Hearing: 14 May 2019

Date of Judgment: 23 May 2019

Panel:

Presiding Tribunal member: Dr. MC Peenze

Tribunal member: Dr. L Best

Tribunal member: Adv. F Manamela

JUDGMENT AND REASONS

THE PARTIES

1. The Applicant is Mr. John McGinn, and adult male (hereinafter referred to as “McGinn” or the “Applicant”).

2. The Respondent is Motor Finance Corporation (MFC, A Division of Nedbank Ltd) (hereinafter referred to as “MFC” or the “Respondent”).

THE APPLICATION

3. The Applicant brings this application before the National Consumer Tribunal (hereinafter referred to as the “Tribunal”) in terms of section 141(1)(b) of the National Credit Act[1] (hereinafter referred to as the “NCA”).

4. Section 141(1)(b) of the NCA provides as follows –

“If the National Credit Regulator issues a notice of nonreferral in response to a complaint other than a complaint concerning section 61 or an offence in terms of this Act, the complainant concerned may refer the matter directly to—

(a) … ; or

(b) the Tribunal, with the leave of the Tribunal.”

BACKGROUND

5. The Applicant and Respondent entered into a written Variable Rate Instalment Sale Agreement on 21 February 2014, in terms whereof the Respondent sold to the Applicant the following vehicle:

2014 Model Ford Ranger 2.2 TDCI XL

6. After the Applicant repeatedly failed to make payments, a notice in terms of Section 129 was issued by the Respondent to the Applicant, advising the Applicant of his rights, being inter alia to refer the Credit Agreement to a debt counsellor with the intention to develop or agree to a plan to bring the payment under the agreement up to date; alternatively to refer the account to an ombudsman, further alternatively to voluntarily surrender the vehicle to the Respondent.

7. On 18 January 2016, the Applicant agreed to surrender his vehicle in terms of Section 127 of the NCA to the Respondent, by signing

surrender documents. These documents and the options available to the Applicant were allegedly discussed with the Applicant on 13 January 2016 and 18 January 2016 by a debt counsellor, Mr Coetzee, allegedly mandated by the Respondent.

8. According to the Applicant, although he agreed at the time to surrender his vehicle to the Respondent, he is of the view that the debt collector acted unlawfully, by not explaining the options available properly and by misleading him. As the debt collector

represented the Respondent, the Applicant accordingly holds the Respondent accountable for the unlawful conduct of the debt counsellor.

9. According to the Applicant, the surrendering of his vehicle in terms of section 127 of the NCA amounts to unlawful repossession of his vehicle.

10. According to the Applicant, the Respondent made various misrepresentations, including:

10.1 Respondent repossessed the Applicant’s vehicle without a court order;

10.2 Respondent did not comply with section 127 of the NCA;

10.3 Respondent rejected the Applicant’s request for a further 30 days grace period;

10.4 Respondent misrepresented the true nature of its business in that its letter (authorising the recovering of the vehicle) did not identify Mr Leon Coetzee as a debt collector who was authorised to recover the outstanding debt and that this letter simulated a court order; and

10.5 Respondent believed he was misled by the Respondent and its representatives.

11. The Applicant lodged a complaint against the Respondent with the National Credit Regulator (hereinafter referred to as the “NCR” or the “Regulator”) on 16 March 2018. The Regulator issued a notice of non-referral, in response to the complaint, on 15 June 2018.

12. The Applicant then launched an application with the Tribunal for leave to refer his complaint directly to the Tribunal in terms of section 141(1)(b) of the NCA.

13. The Tribunal granted the Applicant leave to refer his matter directly to the Tribunal on 21 February 2019.

14. In the main application the Applicant seeks an order in the following terms against the Respondent:

14.1. “To set aside and nullify the surrender of goods that occurred by mutual agreement;

14.2. To set aside and nullify the judgement of the ombudsman of banking services; and

14.3. To set aside and nullify the judgement of the National Credit Regulator.”

15. The merits of this section 141(1)(b) application now fall to be decided by the Tribunal.

ISSUES TO BE DECIDED

16. The matter before the Tribunal at this hearing is for the Tribunal to determine, –

16.1. Whether the Respondent contravened the NCA through the alleged unlawful repossessing of a motor vehicle and the making of a number of alleged fraudulent misrepresentations; and

16.2. Whether the Applicant is entitled to the relief he seeks, namely the setting aside and nullification of the “surrender of goods by mutual agreement”, the “judgment of the ombudsman of banking services” and the “judgment of the NCR”.

THE HEARING

17. The matter was set down for hearing and heard on 14 May 2019, at the Tribunal’s premises.

18. The Applicant was present at the hearing and represented himself.

19. Willem Herman van Herman of VHI Attorneys represented the Respondent at the hearing.

20. At the outset of the hearing the Respondent indicated that they wanted to raise three (3) points in limine:

20.1. Jurisdiction;

20.2. Compliance to the Rules for the Conduct of Matters before the NCT (Tribunal Rules); and

20.3. Discretion by the Tribunal to subpoena witnesses.

21. The Tribunal decided first to determine the validity of the points in limine and, only if it finds that there is no merit in them, to proceed to a determination of the merits and the relief sought.

SUBMISSIONS BY THE PARTIES ON THE POINTS IN LIMINE

RESPONDENT

First point in limine:

22. The Respondent submitted that the Tribunal lacks jurisdiction to entertain the Applicant’s complaint, as Section 127(10)

provides that a Credit Provider who acts in a manner contrary to Section 127 is guilty of an offence; and that the only section that entitles the Tribunal to hear a matter relating to Section 127 is Section 128 of the NCA. Section 128 indicates that the Tribunal can only hear a matter relating to Section 127 for purposes of reviewing a sale of goods on the basis that the goods were not sold as soon as reasonably practicable or for the best price reasonably obtainable. According to the Respondent, the purpose of this review is to provide for compensation to the consumer of an additional amount exceeding the net proceeds of the sale. As the Applicant’s complaint does not relate to a request for the review of the sale as provided for in Section 127, the Respondent is of the view that the complaint falls outside of the jurisdiction of the Tribunal.

Second point in limine:

23. It is the Respondent’s submission that the Applicant has failed to comply with the Rules for the Conduct of Matters before the NCT, as he has failed to initially submit his supporting affidavit properly commissioned.

Third point in limine:

24. It is the Respondent’s submission that the Applicant will advance oral evidence at the hearing as provided for in Rule 21(7) of the Rules of the Tribunal. In the interest of justice, the Respondent is therefore requesting the Tribunal’s indulgence to exercise its powers in terms of Rule 17(a) of the Rules of the NCT to issue subpoenas for certain particular employees of Nedbank and other witnesses in the matter to testify at the hearing in order to assist the case and to ensure the complete ventilation of all the aspects before the Tribunal.

APPLICANT

First point in limine: Jurisdiction

25. The Applicant indicated that the Tribunal already determined the jurisdiction question in the leave to refer hearing and that the judgment of that hearing confirmed that the Tribunal has jurisdiction to adjudicate the matter.[2] According to the Applicant, the Tribunal cannot now have a different view.

Second point in limine: Affidavit not commissioned

26. The Applicant confirmed that, although it is correct that his affidavit was initially not properly commissioned, that it was since corrected as advised by the Registrar in terms of the Rules and that it is presently properly commissioned before the Tribunal.

Third point in limine: Subpoena witnesses

27. The Applicant is also supporting the notion that witnesses are called. The Applicant would like to interrogate in particular the issue whether or not the debt collector who surrendered the vehicle from him, had a mandate from the Respondent to act on its behalf and whether or not the debt collector acted ethically and in terms of the prescriptions of the Act.

ANALYSIS AND RELEVANT STATUTORY PROVISIONS

JURISDICTION

28. In terms of section 27 of the NCA, the Tribunal may –

“(a) adjudicate in relation to any –

(i) application that may be made to it in terms of this Act, and make any order provided for in this Act in respect of such an application; or

(ii) allegations of prohibited conduct by determining whether prohibited conduct has occurred and, if so, by imposing a remedy provided for in this Act.”[3]

29. The NCA allows for matters to be referred to the Tribunal by the NCR. The NCR is an authoritative statutory entity with a comprehensive legislative mandate[4] to which it accounts in specific terms as outlined in the NCA. The NCR does not “make judgments”, but it may inter alia:

(i) Receive complaints concerning alleged contraventions of the NCA;[5]

(ii) Investigate complaints;[6]

(iii) Issue and enforce compliance notices;[7]

(iv) Investigate and evaluate alleged contraventions of the NCA;[8]

(v) Refer matters to the Tribunal and appear before the Tribunal;[9]

(vi) Deal with any matter referred to it by the Tribunal.[10]

30. It is trite that the NCR does not account to the Tribunal. The Tribunal does thus not consider applications to review or appeal “judgments” of the NCR, as put to the Tribunal in the Applicant’s submissions.

31. It follows from the above that the Tribunal does not have the jurisdiction to consider an appeal or review of a judgment from the

ombudsman of banking services or the NCR, as these structures do not issue judgments and further because the Tribunal does not operate as an appeal or review body.

32. Section 141 of the NCA however clearly provides for those instances when the NCR does not feel comfortable referring the matter to the Tribunal. The NCR then issues a “notice of non-referral”; which the Applicant incorrectly referred to as a “judgment of the NCR”. By issuing the “notice of non-referral” to a consumer, the NCR provides the option to the consumer to refer the complaint directly, without any representation, to the Tribunal. The Applicant relied on section 141(1)(b) in

bringing this application before the Tribunal.

33. After receipt of the application for leave to refer, the Tribunal will consider whether or not it will grant the leave to refer. This process of considering the leave to refer application and eventually the consideration of the merits of the matter, do not

constitute or attempt to create the impression to constitute a review or appeal of the conclusions reached by the NCR or any Ombud that investigated, facilitated or considered the merits of the complaint.

33. Further in terms of Section 141, there are two exceptions to the complaints that consumers may refer directly to the Tribunal in terms of the NCA (after the NCR had issued a notice of non-referral):

(i) Complaint concerning section 61 of the NCA; and

(ii) Complaint concerning an offence in terms of the NCA.[11]

34. The implication of the above is that, if a consumer has a complaint regarding an offence in terms of the NCA, then the consumer cannot refer it directly to the Tribunal in terms of Section 141 of the NCA. This in turn, implies that the Tribunal will not have the jurisdiction to adjudicate on such a complaint if it somehow makes it through to the point of adjudication. The fact that the Tribunal made a remark in the Leave to Refer Judgment with regard to jurisdiction does not bind the Tribunal in the Main Hearing if it is found that the Tribunal does not have jurisdiction to adjudicate a matter in terms of the NCA or any other legislation.

35. The Applicant’s application in this matter centres around the alleged unlawful application of section 127 of the NCA. The allegations include the suspect and alleged unlawful surrender of goods by agreement. The Applicant is of the view that surrendering of his vehicle in terms of section 127 of the NCA amounted to the unlawful repossession of his vehicle.

36. The Applicant now expects the Tribunal to set aside and nullify the agreement that he entered into, and according to which he surrendered his vehicle.

37. Further in terms of section 127(10) of the NCA, “a credit provider who acts in a manner contrary to this section is guilty of an offence”.

38. Since the Applicant is alleging that the Respondent had acted “in a manner contrary to section 127 of the NCA”, it implies that he is alleging that the Respondent is guilty of an offence. Since Section 127 is thus applicable to this matter, the implication is that the exclusion as contained in Section 141(1) becomes applicable and the Applicant becomes restraint in the sense that his specific complaint falls within the exceptional category that the Tribunal does not have the jurisdiction in to adjudicate on when referred to directly.

39. The NCA defines "prohibited conduct" in section 1 of the NCA as: “an act or omission in contravention of the Act”. The NCA also contains numerous references to non-compliance with the Act constituting an offence. Sections 54(5), 55(6)(a), 68(2) and 70(6) of the NCA are but a few examples. Section 161 of the NCA prescribes the sentences applicable, which could be a fine or imprisonment for a period not exceeding 12 months or to both a fine and imprisonment. Section 162 states that the Magistrates court shall have jurisdiction to impose these sentences. The Tribunal however cannot impose sentences of imprisonment and therefore does not have the jurisdiction to hear matters constituting a criminal offence.[12]

40. It follows from the above exposition that the Tribunal does not have the jurisdiction to adjudicate on this application, as it constitutes a direct application to the Tribunal, following a notice of non-referral from the NCR in terms of Section 141 of the NCA, of a matter relating to a section 127 offence.

AFFIDAVIT NOT COMMISSIONED & SUBPOENA OF WITNESSES

41. The Tribunal is of the view that, as argued in the first point in limine raised by the Respondent; it lacks jurisdiction to adjudicate this application and that the application falls to be dismissed on this ground alone. It follows that it is then unnecessary to consider the other in limine issues the Respondent has raised.

42. For purposes of completeness, the Tribunal considered the arguments presented and wish to remark as follows:

42.1 The Applicant did indeed commission his Affidavit correctly in terms of the Rules of the Tribunal and was in no way penalised for any allegations to the contrary; and

42.2 The Tribunal perceives the prerogative to call witnesses not as a matter to be considered in limine but noted the request by both parties to consider such possibility if the hearing would have continued on the merits of the matter.

FINDING

43. The Tribunal finds that it does not have jurisdiction to entertain the application by the Applicant.

44. In the light of the above finding the Tribunal will not deal with the parties’ submissions regarding the merits of the matter.

ORDER

45. The Tribunal accordingly makes the following order –

45.1. The application is dismissed; and

45.2. No order is made for costs against any party.

Dated at Centurion on this 23rd day of May 2019

SIGNED

_________________________________

Dr. MC Peenze

Presiding Tribunal Member

Dr. L Best, Tribunal member and Adv. F Manamela, Tribunal member, concurring.

[1][1] Act 34 of 2005

[2] Leave to Refer Judgment: John McGinn v Motor Finance Corporation NCT 110462-2018-141(1)(b) - Ms PA Beck Presiding Tribunal Member, at par 44(i): “The Applicant’s claim falls within the jurisdiction of the NCA and the Tribunal”.

[3] Own emphasis

[4] See Section 14 and 15 of the NCA

[5] NCA, section 15(b)

[6] NCA, section 15(d)

[7] NCA, section 15(e)

[8] NCA, section 15(f)

[9] NCA, section 15(i)

[10] NCA, section 15(j)

[11] Section 141(1) of the NCA (own emphasis)

[12] Also see The National Credit Regulator v Wesbank [2018] ZANCT 93 (27 June 2018) & Littlewood Building and Garden Services Projects CC v Hyundai Automotive [2018] ZANCT 91 (26 June 2018): par 14: