National Consumer Commission v Kasner (NCT/176450/2021/100(6)(a)) [2021] ZANCT 51 (5 December 2021)

SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

IN THE NATIONAL CONSUMER

TRIBUNAL

HELD ON-LINE via TEAMS

Case Number: NCT/176450/2021/100(6)(a)

In the matter between:

NATIONAL CONSUMER

COMMISSION

APPLICANT

AND

SELINA SANDRA

KASNER

RESPONDENT

Coram:

Dr L. Best: Presiding Tribunal member

Mr T. Bailey: Tribunal Member

Mr F. Sibanda: Tribunal Member

Date of hearing: 29 November 2021 via Teams electronic platform

JUDGMENT AND REASONS

APPLICANT

1. The Applicant is the National Consumer Commission (“the

Applicant” or “the NCC”) an organ of state established in terms of section 85(1) of the Consumer Protection Act

68 of 2008 (“the CPA") having its registered address at SABS Offices, 1 Dr Lategan Road, Groenkloof, Pretoria.

2. Mr Biyana, a Senior Legal Advisor in the employ of the NCC represented the Applicant at the hearing.

RESPONDENT

3. The Respondent is Selina Sandra Kasner (“the Respondent”),

a female who operates a small business, and is based in Joostenbergvlakte.

4. Mr Steyn, an attorney with the firm Steyn Coetzee, represented the Respondent at the hearing.

APPLICATION TYPE AND

JURISDICTION

5. This is an application to the National Consumer Tribunal (“the

Tribunal”) in terms of section 100(6)(a) of the CPA, for the imposition of a fine for failure to comply with a Compliance Notice issued in terms of section 100(1) by the Applicant on 11 August 2020.

Section 100(6)(a) states:

“If a person to whom a compliance notice has been issued fails to comply with the notice, the Commission may either –

(a) apply to the Tribunal for the imposition of an administrative fine; or …”

6. In terms of section 27(a)(i) of the National Credit Act 34 of 2005 (“the NCA”) the Tribunal has jurisdiction.

BACKGROUND

7. The Applicant issued a Compliance Notice because the Respondent had imported 157 pieces of clothing which did not comply with the CPA. Specifically:

7.1. the goods did not have a trade description stating clearly the country of origin, which is a contravention of section 24(5)(a) read with Regulation 6(1)(a)(i); and

7.2. the goods did not conform to the South African national standards for fibre content and care labelling in accordance with the provisions of Government Notice No.2410 of 2000, published in the Gazette of 30

June 2000. This is a contravention of section 24(5)(b) read with Regulation 6(1)(b).

8. The goods were held together with two other bales of clothing that the Respondent had imported, which were not the subject of the Compliance Notice as these were found to be compliant.

9. The Compliance Notice further detailed the steps the Respondent was required to take in order to satisfy the notice, namely to:

9.1. remove the goods to their country of origin or off the African continent within 15 business days of receipt of the Compliance Notice; alternatively;

9.2. destroy the goods locally at an accredited destruction at own cost within 15 business days of receipt of the Compliance Notice; and

9.3. refrain from importing goods, into the Republic of South Africa, in contravention of the following provisions of the CPA:

Section 24(5)(a) read with Regulation 6(1)(a)(i); and

Section 24(5)(b) read with Regulation 6(1)(b).

10. The Respondent made various attempts to remove the goods, all of which proved logistically impossible to implement or costs to do so were prohibitive.

11. The goods were subsequently released to the Respondent, who affixed labels to the items of clothing stating the country of origin. The Respondent believed that the goods were now compliant and proceeded to avail these for sale in the open market.

12. The Respondent was at no time aware that the disputed consignment of the 157 items of clothing had erroneously been released to her.

13. Believing that the Respondent’s actions were contrary to the stipulations of the Compliance Notice, the Applicant brought to application for failure to comply therewith, and the consequent imposition of an administrative fine.

THE HEARING

14. The Tribunal Registrar set the matter down for hearing on 29 November 2021.

15. The Respondent, by her own admission, acknowledged that she had contravened the provisions of the CPA as set out in the Compliance Notice, but had not done so intentionally or maliciously. Rather, the contravention arose from an oversight on the part of the seller of the goods, which the Respondent neglected to pick up on and act on to rectify pro-actively.

16. The Respondent requested to be pardoned for her oversights; her unintentional contravention of the CPA; and non-compliance with the Compliance Notice. She committed to not falling foul of the CPA in future.

17. The Applicant acknowledged that there would be no further point to pursue the Respondent’s compliance with the conditions set out in the Compliance Notice, given that the goods had been released from

detention – albeit erroneously but through no fault on the part of the Respondent - and were now already available for sale or may already have been sold in the marketplace.

18. The Applicant submitted that it was, however, pursuing the imposition of an administrative fine on the Respondent.

THE ADMINISTRATIVE FINE

19. The Tribunal proceeded to hear the parties respective arguments in relation to the imposition of an administrative fine.

20. Section 112(3) of the CPA sets out the factors the Tribunal must consider when determining an appropriate fine. The Tribunal proceeds to consider each in turn, having consideration for the parties respective submissions.

The nature, duration, gravity, and extent of the contraventions

21. Whilst the Applicant submitted that the Respondent’s conduct disregards the purpose of the CPA, the absence of labels was only found on the 157 items of clothing, which comprised only one of the three bales that the Respondent imported. This lends credence to the Respondent’s submission that it was a genuine error on the part of the supplier and not a deliberate attempt to mislead South African consumers or intentionally deprive them of their right to information through product labelling. The possibility of exposing consumers to dermatitis and other forms of textile allergies is not borne out by any substance or fact. In addition, in all the years that the Respondent has imported clothing items for onward sale to consumers, no such incidence has been recorded.

Loss or damage suffered as a result of the contraventions

22. There is no evidence of any direct loss suffered by consumers in this matter. The expenses incurred by the Applicant in undertaking the investigation are within the legislative mandate of the Applicant, and the NCC receives funding from the public purse to fulfil these responsibilities.

The Respondent’s behaviour

23. The Respondent has shown contrition. Despite not complying with the conditions of the Compliance Notice, the Respondent made preliminary attempts to try to do so, but failed due to logistical and unaffordability to implement the corrective action as stipulated in the Compliance notice. There was no evidence that the Respondent intervened to secure the untimely release of the contested bale of clothing from where this was being detained at the customs facility. The Respondent took alternative steps to rectify the omission of labelling and attached labels herself to the goods before offering

these for sale to consumers. This does not excuse the initial lack of compliance with the CPA, but should at least place consumers in a position to have information at their disposal in order to exercise a choice whether or not to purchase an item of clothing offered for sale by the Respondent.

Market circumstances under which the contraventions occurred

24. The Respondent operates a small business to provide for her extended family who are dependent on her for their basic needs. The remedial action prescribed in the Compliance Notice was costly and unimplementable given the small size and limited scale of the Respondent’s business. This needs to serve as a reminder to other small business owners to ensure compliance with the CPA at all times of the supply chain. Failure to do so can have ruinous financial consequences for small businesses. It also impacts on consumer rights. A balance needs to be struck between creating an enabling and nurturing environment for small businesses, which are a cornerstone of the South African economy, and the rights of the consumers as inscribed in the CPA.

The level of profit derived from the contraventions

25. There is no evidence of any profit derived by the Respondent from the contravention. The Respondent’s total annual turn-over for the financial year ending February 2021 was R831 180.00.

The degree to which the Respondent co-operated with the Applicant

26. The Respondent went to considerable lengths to engage with the Applicant and to propose alternative remedies. However, none of these would have brought compliance with the CPA and hence the Applicant was unable to agree to these. The Respondent made initial efforts to comply with the remedies set out in the Compliance Notice but in the end did not do so.

The Respondent’s prior contraventions

27. The Tribunal considered that the Respondent has not previously been the subject of an investigation nor have findings been made against the Respondent.

CONCLUSION

28. The CPA was introduced into the South African legislative landscape to promote and secure consumer rights, and to create a framework for corrective, and if necessary punitive, measures where there is lack of compliance. The manner in which this is achieved needs to maintain a fine and at times delicate balance, that also allows small

businesses to continue to contribute to the national economy, which is particularly precarious following the ravages of the global Covid 19 pandemic. However, this cannot be done at the expense of consumers. The Tribunal has a duty to ensure that consumer rights are respected and enabled and will not tolerate any business, including small business operators, contravening the CPA. The Tribunal is satisfied that the nature of the Respondent’s contraventions justify the Tribunal imposing an administrative fine on the

Respondent.

29. The Respondent has admitted the contraventions of the CPA, and the Tribunal accepts that this was unintentionally so. The Respondent has given an undertaking under oath not to repeat this in future.

30. The disputed goods now contain labels stating the country of origin, albeit that this is not an allowable remedy in terms of the legislation. The goods are also already in the marketplace, some of which may have already been sold to consumers. Retrieving the goods does not seem practical or viable. There is thus impossibility of

performance of the Compliance Notice stipulations.

31. These considerations persuade the Tribunal that it is appropriate to impose an administrative fine of R10 000.00 (ten thousand Rand) on the Respondent.

ORDER

32. The Tribunal makes the following order:

32.1. The Respondent is ordered to pay the administrative fine of R10 000.00 (ten 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 National Revenue fund account details are as follows:

Bank:

Standard Bank of South Africa

Account name:

Department of Trade and Industry

Account number:

[....]

Account type:

Business current account

Branch code:

010645 (Sunnyside)

Branch code - electronic payments: 051001

Reference:

NCT-176450-2021-100(6)(a)

(Name of depositor.)

.

32.2. No order is made regarding costs.

DATED ON THIS 5th DAY OF DECEMBER 2021

DR L. BEST

PRESIDING MEMBER

Mr T. Bailey (Tribunal Member) and Mr F. Sibanda (Tribunal Member) concurring.