National Credit Regulator v Banton (NCT/169271/2020/55(6)) [2021] ZANCT 14 (11 June 2021)

IN

THE NATIONAL CONSUMER TRIBUNAL

HELD

IN CENTURION

Case Number: NCT/169271/2020/55(6)

In the matter between:

NATIONAL

CREDIT REGULATOR

APPLICANT

and

ZOLA

JAMES BANTON

RESPONDENT

Coram:

Mr A Potwana - Presiding Tribunal member

Dr M Peenze - Tribunal member

Ms D Terblanche - Tribunal member

Date of hearing: 8 June 2021

JUDGEMENT

AND REASONS

APPLICANT

1. The Applicant is the National Credit Regulator (“NCR”), a juristic person established in terms of section 12 of the National Credit Act 34 of 2005 (“NCA”) and with offices situated at 127, 15th Road, Randjespark, Midrand, Gauteng (“Applicant”).

2. At the hearing, the Applicant was represented by Ms B Kolweni, a legal advisor employed by the Applicant (“Ms Kolweni”).

RESPONDENT

3. The Respondent is Zola James Banton (“Mr Banton” or “the Respondent”), an adult male who is registered as a debt counsellor with the Applicant under the registration number: NCRDC2472. The Respondent’s last known address is 174 Place De Tetre, Zefania Road, Honeydew Drive, 2140.

4. The Respondent did not appear at the hearing or any legal representative on his behalf. On the morning of the hearing, the Tribunal panel was advised by officials from the Tribunal’s Registrar (“Registrar”) that Mr Banton sent an email advising that he would not be able to attend the hearing as someone in his family was ill.

TYPE

OF APPLICATION AND JURISDICTION

5. This is an application in terms of section 55(6)(b) of the NCA.

6. In terms of Section 27(a)(i) of the NCA, the National Consumer Tribunal (“Tribunal”) has jurisdiction.[1]

7. Due to the coronavirus pandemic and the resultant physical distancing protocols, all the parties appeared via the Teams audio and video technology link.

INTRODUCTION

8. On 29 September 2020, the Applicant filed an application in terms of section 55(6)(b) of the NCA to enforce a compliance notice issued in terms of section 55(1)(b) of the NCA with the Registrar using Form TI.r30A, the filing notice. The application is contained the prescribed Form TI.55(6). The application documents were served by registered mail to the Respondent’s last known address.

HEARING

OF THE MATTER ON A DEFAULT BASIS

9. Notwithstanding service of the application documents on the Respondent as contemplated under rule 30 of the Tribunal Rules,[2] the Respondent did not file any answering affidavit as provided for under rule 13(1) and (2) of the Tribunal Rules. On the day of the hearing, the Tribunal panel was satisfied that the application documents and the Notice of Set Down were adequately served on the Respondent.

10. Since the Respondent did not file an answering affidavit and did not formally apply for a postponement, the hearing of the application proceeded on a default basis as envisaged in rule 25(3) of the Tribunal Rules.

FACTS

11. In “Part C: Alleged non-compliance” of Form TI.55(6), the Applicant alleged that the Respondent failed to comply with the terms of the compliance notice issued by the Applicant in all respects. In the compliance notice, the Respondent was required to do the following:

11.1. Confirm, in writing to the Applicant that he had taken the following measures:

11.1.1. referred consumers’ debt restructuring applications to the Magistrates’ Courts within 60 business days;

11.1.2. assist consumers in accordance with the provisions of section 86(11), where consumers had notified him that credit providers served summons following his failure to file debt restructuring applications at the Magistrates’ Courts;

11.1.3. refund legal fees to consumers in respect of which accounts were terminated due to his failure to file debt restructuring applications at the Magistrates’ Courts;

11.1.4. refund debt restructuring fees to consumers in respect of which accounts were terminated due to his failure to file debt restructuring applications at the Magistrates’ Courts;

11.2. Within 40 (forty) business days from receipt of the compliance notice, submit an external audit report to the Applicant indicating:

11.2.1. The number of consumers registered under debt review with him together with names, contact details and identity numbers of the concerned consumers;

11.2.2. A list of consumers who had paid restructuring fees and legal fees together with the total amount paid; however, no debt restructuring applications were filed at the Magistrates’ Courts, and credit providers had not terminated debt review proceedings;

11.2.3. A list of consumers whose credit agreements had been terminated from debt review proceedings as a result of the Applicant’s failure to refer debt restructuring applications to the Magistrates’ Courts;

11.2.4. The number together with names, contact details and identity numbers of consumers in respect of which summons were issued due to his failure to refer debt restructuring applications to the Magistrates’ Courts;

11.2.5. Verification that the required section 86(11) applications had been instituted where summons were issued due to his failure to file debt restructuring applications at the Magistrates’ Courts; and

11.2.6. Confirmation accompanied by supporting documentation that all the amounts mentioned in paragraph C(1) of the notice had been refunded to the concerned consumer.

12. In “Part D: Order sought from the Tribunal”, the Applicant stated that it seeks the following orders from the Tribunal:

12.1. Declaring that the Respondent contravened the following provisions of the NCA:

12.1.1. section 86(7) read with section 86(10) of the NCA; and

12.1.2. section 52(5)(c) read with the Respondent’s conditions of registration and debt counselling fee guidelines of 2011.

12.2. Alternatively, in relation to the consumer: Nasima Aron, declaring that the Respondent contravened the following sections of the NCA:

12.2.1. section 86(7), section 86(7)(c) read with section 86(10) of the NCA; or

12.2.2. section 52(5)(c) read with the Respondent’s conditions of registration and debt counselling fee guidelines of 2011.

12.3. Declaring the Respondents conduct to be prohibited conduct;

12.4. Ordering the Respondent to submit an audit report and to refund the consumers identified therein; and

12.5. In terms of section 150(i) of the NCA, making any other appropriate order required to give effect to consumers’ rights in terms of the NCA.

13. The compliance notice was issued on 19 March 2019. A copy thereof is annexed to Form TI.55(6) and marked “A”.

ISSUE TO BE

DECIDED

14. The Tribunal is required to determine whether it can grant the order sought by the Applicant.

THE

LAW

15. Section 52(5)(c) of the NCA states that “A registrant must comply with its conditions of registration and the provisions of this Act.”

16. Section 55(1) of the NCA states –

“Subject to subsection (2), the National Credit Regulator may issue a compliance notice in the prescribed form to-

(a) a person or association of persons whom the National Credit Regulator on reasonable grounds believes-

(i) has failed to comply with a provision of this Act; or

(ii) is engaging in an activity in a manner that is inconsistent with this Act; or

(b) a registrant whom the National Credit Regulator believes has failed to comply with a condition of its registration.”

17. Section 55(6) of the NCA states –

“If a person fails to comply with a compliance notice as contemplated in this 45 section without raising an objection in terms of section 56, the National Credit Regulator may refer the matter-

(a) to the National Prosecuting Authority, if the failure to comply constitutes an offence in terms of this Act; or

(b) otherwise, to the Tribunal for an appropriate order.”

18. Section 86(7) of the NCA states –

“If, as a result of an assessment conducted in terms of subsection (6), a debt counsellor reasonably concludes that –

(a) the consumer is not over-indebted, the debt counsellor must reject the application, even if the debt counsellor has concluded that a particular credit agreement was reckless at the time it was entered into;

(b) the consumer is not over-indebted, but is nevertheless experiencing, or likely 25 to experience, difficulty satisfying all the consumer’s obligations under credit agreements in a timely manner, the debt counsellor may recommend that the consumer and the respective credit providers voluntarily consider and agree on a plan of debt re-arrangement; or

(c) the consumer is over-indebted, the debt counsellor may issue a proposal 30 recommending that the Magistrate’s Court make either or both of the following orders-

(i) that one or more of the consumer’s credit agreements be declared to be reckless credit, if the debt counsellor has concluded that those agreements appear to be reckless; and

(ii) that one or more of the consumer’s obligations be re-arranged by-

(aa) extending the period of the agreement and reducing the amount of each payment due accordingly;

(bb) postponing during a specified period the dates on which payments are due under the agreement;

(cc) extending the period of the agreement and postponing during a specified period the dates on which payments are due under the agreement; or

(dd) recalculating the consumer’s obligations because of contraventions of Part A or B of Chapter 5, or Part A of Chapter 6.”

19. Section 86(10)(a) of the NCA states-

“If a consumer is in default under a credit agreement that is being reviewed in terms of this section, the credit provider in respect of that credit agreement may give notice to terminate the review in the prescribed manner to-

(i) the consumer;

(ii) the debt counsellor; and

(iii) the National Credit Regulator

at any time at least 60 business days after the date on which the consumer applied for the debt review.”

20. Rules 13(1) and (2) of the Tribunal Rules state –

“(1) Any person required by these Rules to be notified of an application or referral to the Tribunal may oppose the application or referral by serving an answering affidavit on:

(a) the Applicant; and

(b) every other person on whom the application was served.”

21. Rule 13(5) of the Tribunal Rules states -

“Any fact or allegation in the application or referral not specifically denied or admitted in an answering affidavit will be deemed to have been admitted.”

22. Rule 25(3) of the Tribunal Rules states-

“The Tribunal may make a default order—

(a) after it has considered or heard any necessary evidence; and

(b) if it is satisfied that the application documents were adequately served.”

23. Rule 30(1)(b) of the Rules of the Tribunal states-

“A document may be served on a party by sending it by registered mail to the party’s last known address.”

ANALYSIS

OF THE EVIDENCE AND REASONS FOR JUDGEMENT

24. There is insufficient evidence or evidence on oath before the Tribunal that the Respondent contravened sections 86(7) read with section 86(10) and section 52(5)(c) of the NCA. In response to questions posed by the Tribunal, Ms Kolweni conceded that the Tribunal could not grant the order sought by the Applicant as, among other things, the Respondent has not been afforded an opportunity to answer allegations that he contravened sections 86(7) read with section 86(10) and section 52(5)(c) of the NCA.

25. The Applicant cannot utilise the compliance notice provisions of the NCA to circumvent the provisions of 136, 139 and 140 of the NCA and seek declarations of prohibited conduct. Furthermore, the referral of a complaint to the Tribunal as envisaged under section 140 of the NCA allows both the Applicant and respondents to present evidence on oath upon which the Tribunal can make findings regarding allegations of prohibited conduct. The Applicant is well aware of these provisions and has alluded to them under paragraph D of the compliance notice.

CONCLUSION

26. In the absence of evidence on oath, the Tribunal cannot declare that the Respondent contravened sections 86(7) read with section 86(10) and section 52(5)(c) of the NCA as prayed for by the Applicant.

ORDER

27. The Tribunal makes the following order:

27.1. The application is refused; and

27.2. There is no order made as to costs.

Thus, done and signed on 11 June 2021.

Mr Andisa Potwana

Presiding Tribunal Member

Dr Peenze (Tribunal member) and Ms Terblanche (Tribunal member) concur.

[1] Section 27(a)(i) of the NCA provides that “The Tribunal or a member of the Tribunal acting alone in accordance with this Act or the Consumer Protection Act, 2008 may adjudicate in relation to any application that may be made to it in terms of this Act in respect of such an application.”

[2] Regulations for Matters Relating to the Functions of the Tribunal and Rules for the Conduct of Matters before the National Consumer Tribunal, 2007 (as amended).