Morwalele v Imas Co-Operative Limited and Another (NCT/334154/2024/141(1)(b)) [2024] ZANCT 61 (29 October 2024)

IN THE NATIONAL CONSUMER TRIBUNAL

HELD IN CENTURION

Case number: NCT/334154/2024/141(1)(b)

In the matter between:

POLOKO JOEL MORWALELE

APPLICANT

AND

IMAS CO-OPERATIVE LIMITED

1ST RESPONDENT

NATIONAL CREDIT REGULATOR

2ND RESPONDENT

Coram:

Mr S Hockey - Presiding Tribunal member

Date of consideration (In chambers) 29 October 2024

Date of judgment

29 October 2024

CONDONATION FOR APPLICATION FOR LEAVE TO REFER RULING

THE PARTIES AND APPLICATION TYPE

1. The applicant in this application for condonation is Poloko Joel Morwalele (the applicant), a consumer as defined in section 1 of the National Credit Act, 34 of 2005 (the NCA)[1].

2. The first respondent is Imas Co-operative Limited (the respondent), duly incorporated under the Co-operatives Act of 2005. The respondent is a credit provider, as defined in section 1 of the NCA.

3. The National Credit Regulator (NCR), a juristic person established under section 12 of the NCA, is cited as the second respondent. The NCR is not participating in these proceedings, and a reference to the respondent, therefore, shall be a reference to the first respondent.

4. The parties to this application are the same parties as the applicant and first and second respondents in the main matter to which this application for condonation relates.

5. The main matter was filed with the National Consumer Tribunal (the Tribunal) in terms of section 141(1)(b). In terms of this section, if the NCR issues a notice of non-referral in response to a complaint, the complainant concerned may refer the matter directly to the Tribunal with the leave of the Tribunal. In terms of row number 32 of Table 2 of the rules[2], the complainant must file his or her application for leave to refer the complaint within 20 business days of the date of the notice of non- referral or within a longer time permitted by the Tribunal.

6. After the applicant referred his complaint to the NCR, the latter issued a notice of non-referral on 23 May 2024. Therefore, the applicant had 20 business days to refer his matter to the Tribunal by 21 June 2024. However, the applicant filed his application to the Tribunal on 21 June 2021 at 23:10, after the Tribunal's offices had closed. Therefore, his application is deemed to have been filed on the next business day, Monday, 24 June 2024. The filing, however, was

incomplete for various reasons, and after several filing attempts, the registry of the Tribunal issued a notice of complete filing on 22 August 2024.

BACKGROUND

7. In November 2019, the applicant purchased a used 2014 Volkswagen Polo Vivo (the vehicle) from Regal Motors Kathu (Pty) Ltd (Regal). The applicant applied to the respondent for vehicle finance to pay the purchase price. On 26 November 2019, he entered into a loan agreement with the respondent for R123 300 to purchase the vehicle.

The applicant’s contentions

8. According to the applicant, the agreement with the respondent was signed at a petrol station, and he was provided with a copy on 28 November 2019. He then noticed that the vehicle described in the agreement did not correspond with the one agreed upon with the respondent. When he raised this with a representative of the respondent, he was told that Regal did not have the model he requested. It was suggested that he take delivery of the one they had and trade it in after six months.

9. The applicant further states that he approached the respondent’s Mr. Oliphant within five days of signing the agreement and informed him of the above issue. Mr Oliphant advised him that he would contact Regal and provide the applicant with feedback. Mr Oliphant reverted on 19 December 2019, informing the applicant that Regal was unwilling

to cooperate and that he should send an email terminating the credit agreement, which he immediately did. However, the applicant states that he was told to pay a settlement amount if he wanted to terminate the agreement since the five-day termination period had elapsed as per the agreement.

10. The applicant objected to the above and blamed the respondent, who he says never informed him that the five-day period was not suspended whilst the respondent’s agent was engaging Regal.

The respondent’s contentions.

11. The respondent states that it entered into a credit agreement with the applicant. The agreement makes it clear that the respondent is neither the seller nor supplier of the vehicle, and the applicant guaranteed that he had no right or claim against the respondent if the vehicle had a defect or for any misrepresentations made to the applicant by Regal, or if the latter did not comply with any of its obligations.

12. The respondent further points out that the vehicle's description on the delivery authorisation in respect of the vehicle corresponded with the invoice issued by Regal, with a credit agreement between the applicant and the respondent, and with the applicant’s insurance confirmation letter.

13. According to the respondent, in the delivery authorisation document for the vehicle, the applicant as the buyer and Regal as the seller guaranteed that the vehicle was delivered to the applicant, that the applicant received it as described in the delivery authorisation, and that he received it in a satisfactory condition in accordance with his specifications.

14. The respondent argues that the applicant’s complaint is not against it but rather against Regal. Insofar as the applicant refers to his statutory right in section 121, it is clear that the applicant did not comply with the requirements in this regard, as no valid termination had been given within the requisite five-day period.

15. The respondent further states that Regal was willing to entertain the cancellation of the vehicle’s purchase provided that the applicant repaid R13 431.36, which Regal used to settle two outstanding accounts on behalf of the applicant. The respondent states that it was unaware that the applicant and Regal had arranged to factor this amount into the vehicle's purchase price.

RELEVANT LEGAL CONSIDERATIONS

16. Rule 34(1)(a) provides that a party may apply to the Tribunal for an order to condone the late filing of a document or application. In terms of rule 34(2), the Tribunal may grant the order on good cause shown.

17. According to Table 2 in the rules, an applicant must file its section 75(1)(b) application within 20 business days of the date of the NCC’s notice of non-referral or a longer period permitted by the Tribunal.

18. In determining whether good cause has been shown for the granting of condonation, our courts often refer to the paragraph enunciated by Holmes AJ in Melane v Santam Insurance Co. Ltd[3] (Melane), where it was stated:

“In deciding whether sufficient cause has been shown, the basic principle is that the court has a discretion to be exercised judicially upon a consideration of all the facts and, in essence, is a matter of fairness to both sides. Among the facts usually relevant are the degree of lateness, the explanation therefore, the prospects of success, and the importance of the case. Ordinarily, these facts are inter-related; they are not individually decisive, for that would be a piecemeal approach incompatible with a true discretion save, of course, that if there are no prospects of success, there would be no point in granting condonation...”

19. It is trite that the interest of justice is critical in determining whether condonation should be granted. In Van Wyk v Unitas Hospital and Another[4], the Constitutional Court stated:

“This Court has held that the standard for considering an application for condonation is the interests of justice. Whether it is in the interests of justice to grant condonation depends on the facts and circumstances of each case. Factors that are relevant to this enquiry include but are not limited to the nature of the relief sought, the extent and cause of the delay, the effect of the delay on the administration of justice and other litigants, the reasonableness of the explanation for the delay, the importance of the issue to be raised . . . and the prospects of success.”

20. The applicant’s case is based on the right of a consumer to rescind a credit agreement under section 121. The relevant part of this section reads as follows:

(1) This section applies only in respect of a lease or an instalment agreement entered into at any location other than the registered business premises of the credit provider.

(2) A consumer may terminate a credit agreement within five business days after the date on which the agreement was signed by the consumer, by—

(a) delivering a notice in the prescribed manner to the credit provider; and

(b) tendering the return of any money or goods, or paying in full for any services, received by the consumer in respect of the agreement.

(3) When a credit agreement is terminated in terms of this section, the credit provider—

(a) must refund any money the consumer has paid under the agreement within seven business days after the delivery of the notice to terminate; and

(b) may require payment from the consumer for—

(i) the reasonable cost of having any goods returned to the credit provider and restored to saleable condition; and

(ii) a reasonable rent for the use of those goods for the time that the goods were in the consumer’s possession, unless those goods are in their original packaging and it is apparent that they have remained unused.

21. In his complaint to the NCR, the applicant indicated that the respondent did not conduct an affordability assessment when he applied for credit in that his income, expenses, or other debt obligations were not considered. To the extent that the applicant may rely on this, it is noted that in terms of section 80, a credit agreement is reckless if, at the time that the agreement was made, 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. The provisions of section 81, read with regulation 23A, set out the criteria for conducting an affordability assessment, which is not necessary to repeat for present purposes.

22. Lastly, it is necessary to mention that section 166 deals with the limitation of bringing an action in terms of the NCA. Section 166(1) provides that a complaint in terms of the NCA may not be referred to the Tribunal or a consumer court more than three years after the act or omission that is the cause of the complaint or in the case of a course of conduct or continuous practice, the date that the conduct or practice ceased.

ANALYSIS

23. The filing of the applicant’s application for leave to refer was not inordinately late. If this were the only consideration for condoning the late filing, it would probably warrant granting this application. However, in this matter, the Tribunal finds that considering the merits in the main application is instructive.

24. First, insofar as the applicant may rely on section 121, this section applies only in respect of a lease or an instalment agreement. The credit agreement between the applicant and the respondent is neither of these. In any event, if section 121 was applicable, the applicant did not deliver a notice in the prescribed manner to the respondent within five business days after the date on which the agreement was signed, as required by the section. Therefore, the applicant’s reliance on a consumer’s right to rescind a credit agreement in terms of section 121 has no merit.

25. Second, to the extent that the applicant may claim that no affordability assessment was conducted, the Tribunal is of the view that section 166 becomes relevant. The act or omission that is the cause of the complaint in this instance is the respondent’s failure to conduct an affordability assessment when the credit agreement was under consideration. More than three years have elapsed since then, and the matter is therefore precluded from being referred to the Tribunal in terms of section 166(1)(a).

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26. As a result of the poor merits of the applicant’s claim, he has no prospects of success, and no purpose will be served in granting this condonation application. The granting of condonation would not be in the interest of justice in the circumstances.

THE ORDER

27. In the result of the above, the following order is made:

27.1. The application for the condonation of the late filing of the application for leave to refer is dismissed.

27.2. There is no order as to costs.

S Hockey (Presiding Tribunal member)

[1] A reference to a section in this ruling shall refer to a section of the NCA unless otherwise indicated in the context.

[2] GN 789 of 28 August 2007: Regulations for matters relating to the functions of the Tribunal and Rules for the conduct of matters

before the National Consumer Tribunal, 2007 (Government Gazette No. 30225).

[3] 1962 (4) SA 531 (A) at 532 C – F.

[4] [2007] ZACC 24; 2008 (2) SA 472 (CC) at para 20.