Moodley v First National Bank - A division of Firstrand Bank Limited (NCT/169102/2020/141(1)(b)) [2021] ZANCT 27 (24 August 2021)

IN THE NATIONAL

CONSUMER TRIBUNAL

HELD

IN CENTURION

Case number: NCT/169102/2020/141(1)(b)

In the matter between:

MORGAN

MOODLEY

APPLICANT

and

FIRST NATIONAL BANK–A DIVISION OF FIRSTRAND BANK LIMITED RESPONDENT

Coram

Prof B Dumisa - Presiding Tribunal Member (IN CHAMBERS)

Prof K Moodaliyar - Tribunal Member

Mr A Potwana - Tribunal Member

Date of Hearing In Chambers - 23 August 2021

Date of Judgment - 24 August 2021

RULING

AND REASONS ON LEAVE TO REFER

THE

PARTIES

1. The Applicant in this matter is MORGAN MOODLEY, an adult male who resides in Harmelia, in the Gauteng Province (hereinafter to be referred to as "the Applicant" or "Mr Moodley").

2. The Respondent is First National Bank, a division of FIRSTRAND BANK LIMITED, a company with limited liability, duly registered and incorporated in accordance with the company laws of the Republic of South Africa, a bank as defined in the Banks Act, 94 of 1990 and duly registered as a credit provider in terms of the National Credit Act, 34 of 2005 ("the NCA" or "the Act") with registration number NCRCP20 (from now on referred to as "the Respondent").

TYPE

OF APPLICATION

3. The Application was brought before the Tribunal, in terms of Section 141(1)(b) of the NCA, for leave to refer the complaint directly to the Tribunal.

THE

HEARING IN CHAMBERS

4. There was no hearing; the matter was dealt with on papers submitted by the Applicant and the Respondent.

THE APPLICANT'S SUBMISSIONS

5. The Applicant lodged his application with the National Credit Regulator ("the NCR"), on 20 February 2020, alleging inter alia that, during the period December 2019 and January 2020, the Respondent recklessly granted him the following credit facilities, for which he cannot afford to pay the monthly instalments:

5.1 Credit Card R240 000.00;

5.2 Revolving Loan R100 000.00;

5.3 Personal Loan R100 000.00;

5.4 Overdraft R100 000.00.

6. The Applicant's relief sought was for the Respondent to write off the credit facilities given and reimburse him all payments made to date. He made the following points to motivate why he had to be granted the relief sought:

6.1 He alleged that the Respondent failed to comply with Section 80(1)(b) of the NCA, which deals with Reckless Lending;

6.2 He alleged that the Respondent failed to do a proper assessment of his income and expenditure;

6.3 He alleged that he will not be able to pay the monthly instalments, hence risking his assets (house and car) being repossessed; and

6.4 He is worried that this will lead to him being blacklisted and thus being not being able to purchase any assets from financial institutions in the future.

THE NCR's NON-REFERRAL NOTICE

7. The NCR issued a Notice of Non-Referral in terms of Section 139(1)(a) of the NCA, on 24 August 2020, contending that the complaint does not allege any facts which if true would constitute a remedy under the NCA, on numerous grounds:

7.1 The NCR comprehensively dealt with the Personal Loan Account number 4000-094-117-627 agreement, electronically accepted and dated on 26 December 2019, for an amount of R100 000.00, payable over 66 monthly instalments of R3 381.04, at an annual fixed interest rate of 22.00%;

7.2 The NCR comprehensively dealt with the Overdraft Account number 62412559918 agreement, electronically accepted and dated the 07th day of January 2020, for an amount of R100 000.00, payable at an illustrative monthly instalment of R1 694.00, including credit limit, interest fees, and at an annual variable interest rate of 19.50%;

7.3 The NCR comprehensively dealt with the Credit Account Limit Increase to Account number 4483 8101 0152 7000, signed and dated the 15th day of January 2020, through which the Respondent advanced an amount of R240 000.00 payable at a minimum monthly instalment of R14 617.00, assuming 100% of credit limit usage at an instalment of 5.00%;

7.4 The NCR comprehensively dealt with the Revolving Loan Account number 4000-095-177-186, electronically accepted and dated the 28th day of January 2020, in terms of which the Respondent advanced an amount of R100 000.00, payable at a minimum monthly instalment of R2 857.00 including capital and interest (excluding fees);

7.5 The NCR noted that the Respondent accessed the TransUnion Credit Bureau (Pty)Ltd (NCRCB04) records on 19 December 2019, and Compuscan Information Technologies (Pty)Ltd (NCRCB06) records on 07 January 2020, the 15th day of January 2020, and on 27 January 2020, in determining the Applicant's debt repayment history as a consumer under credit agreements; and as contemplated in Section 81(2)(a)(ii) of the NCA and considered the Applicant's credit obligations in line with Regulation 23A(13)(a) of the NCA;

7.6 The NCR concluded, after doing its own affordability assessment of the Applicant for each one of the four accounts listed above, and collectively for all, that at the time of concluding those four agreements, the Applicant would still have had a surplus available after deducting the new instalments in terms of the NCR affordability assessment; and

7.7 Based on the above, the NCR concluded that the credit agreements entered into between the Applicant and the Respondent would not have resulted in the Applicant's over-indebtedness at the time the credit agreements were entered into. Hence no reckless lending.

THE RESPONDENT'S SUBMISSIONS

8. The Respondent made submissions that more or less confirmed the conclusions by the NCR, but went further to state the following:

8.1 The Applicant spent R18 000.00 at Grand West Casino on 29 February 2020;

8.2 He spent R30 100.00 at the Galaxy Bingo on 14 March 2020 and 17 March 2020;

8.3 The Respondent argued that "The Applicant spent a greater amount on his luxurious and unnecessary gambling and entertainment expenses than what he spent on the payment of his debt obligations. The wasted R48 100.00 could have been used to reduce the Applicant's debt obligations"; and

8.4 The Applicant is an owner of at least two immovable properties, jointly valued at approximately R2 465 000.00. The Respondent submitted that the Applicant could have liquidated his property investment in an attempt to reduce his debt obligations.

ISSUES

TO BE DECIDED

9. The issue to be decided is whether, based on a balance of probabilities, the Applicant has shown sufficient cause to be granted leave to refer this complaint to the Tribunal.

THE LAW

APPLICABLE TO THE APPLICATION

10. Section 141(1)(b) of the NCA states-

"If the National Credit Regulator issues a notice of non-referral 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 the Tribunal, with the leave of the Tribunal."

11. When considering whether to grant an applicant leave to refer, the Tribunal will be guided by the decision of the Supreme Court of Appeal ("SCA") in the matter of Lewis Stores (Pty) Ltd v Summit Financial Partners (Pty) Ltd[1] and Others, where the SCA's Eksteen AJA opined that:

11.1 The Tribunal has a wide, largely unfettered discretion to permit a direct referral;

11.2 It is not desirable to circumscribe the factors to which the Tribunal should have regard to in making such a decision;

11.3 There is no test to be applied in deciding whether or not to grant a direct referral to it in respect of a complaint;

11.4 Circumstances that may influence the Tribunal ruling may include:

11.4.1 The importance of the issue;

11.4.2 The public interest to have a decision on the matter;

11.4.3 The Applicant's interest in the relief sought;

11.4.4 The Applicant's reasonable prospects of success with the referral;

11.4.5 The allocation of resources; and

11.4.6 Any other factors that the Regulator could have considered but did not.

ANALYSIS

OF THE EVIDENCE AND REASONS FOR JUDGEMENT

12. It is apparent from the submissions made by both the Applicant and the Respondent that this matter is of substantial importance to each of the parties.

13. The NCR's Notice of Non-Referral was thorough and convincing on why they chose to issue a Notice of Non-Referral.

14. The Respondent's submissions put it beyond any shadow of a doubt, that on a balance of probabilities, the Applicant has a very slim chance, if any, probability of success on this matter.

CONCLUSION

15. The Applicant has failed to satisfy the requirements for the granting of leave in terms of Section 141(1)(b) of the NCA.

ORDER

16. The Tribunal makes the following order:

16.1 The Applicant's application for leave to refer this complaint to the Tribunal is NOT GRANTED; and

16.2 There is no order made as to costs.

Thus done and signed, on this the 24th day of August 2021

Prof B Dumisa

Presiding Member & Judgment Writer

Prof K Moodaliyar (Tribunal Member) and Mr A Potwana (Tribunal Member) concurring.

[1] Case Number 314/2020 [2021] ZASCA 91 (25 June 2021). Reportable.