National Credit Regulator v Shoprite Investments Ltd (NCT/32946/2015/140(1)) [2017] ZANCT 98 (5 September 2017)

IN

THE NATIONAL CONSUMER TRIBUNAL

HELD

AT CENTURION

CASE NO: NCT/32946/2015/140(1)

In the matter between:

NATIONAL

CREDIT

REGULATOR

APPLICANT

and

SHOPRITE

INVESTMENTS LTD

RESPONDENT

Panel:

Adv J Simpson - Presiding member

Ms D Terblanche - Member

Ms P Beck – Member

JUDGMENT

AND REASONS

PARTIES

1. The Applicant is the NATIONAL CREDIT REGULATOR (hereinafter the “Applicant” or the “Regulator”), a juristic

person established by section 12 of the National Credit Act 34 of 2005 (the “Act’ or the “NCA”) as amended.

2. The Respondent is SHOPRITE INVESTMENTS LIMITED (hereinafter the “Respondent” or “Shoprite Investments”), a credit provider registered with the Applicant under registration number NCRCP6050.

PROCEDURAL

BACKGROUND

3. The Applicant initiated a complaint in terms of Section 136(2) of the NCA and an investigation against the Respondent and the then Second Respondent, Shoprite Insurance Company Limited (hereinafter “Shoprite Insurance”).

4. Following on the investigation, the Applicant filed a referral against both Shoprite Investments and Shoprite Insurance with the National Consumer Tribunal (hereinafter the “Tribunal”) on 12 October 2015.

5. The referral against the Respondents related to alleged contraventions of the Act by the Respondents entering into reckless credit agreements with, and the sale of retrenchment and occupational disability insurance to, consumers.

6. Various interlocutory matters have been brought before, considered and determined by the Tribunal during the proceedings leading up to the hearing. These are -

6.1. Application by the Respondents to the Tribunal for condonation of the late filing of their answering affidavits. The Tribunal granted the condonation application.

6.2. Application by the Applicant to the Tribunal for the amendment of its referral (founding) affidavit. The Tribunal granted the application for the amendment.

7. After the amendment was granted Respondent filed a further answering affidavit, supplementing its prior extensive answer to the

Applicant’s initial referral (founding) affidavit.

8. The Applicant withdrew its referral and prayers for relief against the Second Respondent on 28 February 2017.

9. At the hearing on 20 June 2017 only the referral and allegations relating to Shoprite Investments entering into reckless credit

agreements with consumers were proceeded with by the Regulator.

THE

DISPUTES BETWEEN THE PARTIES

10. The issues in dispute between the parties are -

10.1. A point in limine raised by the Respondent that the Applicant did not initiate a valid complaint against it in terms of section 136(2) of the NCA that could result in a valid investigation and referral to the Tribunal;

10.2. That the Respondent entered into reckless credit agreements with certain consumers when Respondent knew or should have known that it would make them over-indebted; and

10.3. The appropriateness of the nature and extent of the relief sought against the Respondent, including an order for an administrative fine to be imposed.

POINT IN LIMINE - RESPONDENT’S SUBMISSIONS

11. The Respondent made legal and factual submissions to the Tribunal in support of its case that the Regulator did not validly initiate a complaint against it for a valid initiation of an investigation and a subsequent valid referral to the Tribunal.

12. In a nutshell the legal submission are that -

12.1. Irrespective of whether a complaint is initiated by the Regulator in terms of section 136(2)[1] of the NCA, or it is lodged by a third party under section 136(1)[2], both the complaint and its initiation must be valid.

12.2. Only a valid complaint can lead to a valid investigation by an inspector in terms of section 139.

12.3. Only a valid complaint can ultimately lead to a valid referral by the Regulator to the Tribunal in terms of section 140(1)(b) and (2)(b).

12.4. A valid complaint must be –

12.4.1. Specific,[3] namely it must be a complaint concerning an alleged contravention of the Act or one concerning an allegation of reckless credit;[4]

12.4.2. Based on reasonable grounds, which the Regulator must provide when challenged to do so;[5]

12.4.3. The reasonable grounds must be based on objective facts and information the Regulator should be able to produce when required to do so.

13. The Respondent submitted that the Applicant has not shown that it had reasonable grounds based on objective information that gave rise to a reasonable suspicion that Respondent was contravening the NCA by granting credit recklessly.

14. The Respondent states that the facts put up by the Regulator in this regard, are confined to a single paragraph of the Regulator’s

founding papers comprising six sub-paragraphs. They are:

14.1. “As part of the research the Regulator did into the affordability calculations used by various credit providers, the Regulator’s

research and statistics department requested and received from the respondent, Excel spreadsheets of all credit agreements the

Respondent entered into in June 2013 and June 2014.”

14.2. “The respondent then provided the Regulator with affordability calculations of credit agreement samples identified by the Regulator

from the Excel spreadsheets.”

14.3. “From the information provided, it became apparent to the Regulator that the respondent was prima facie contravening the Act in relation to affordability assessments.”

14.4. “On the 6th of March 2015, based on the findings of the analyzed data, the Regulator’s Research and Statistics Department recommended

that, the respondent, amongst other mentioned entities, be subjected to further investigation. A copy of the memorandum is marked as Annexure JB-3 and attached hereto.”

15. According to the Respondent -

15.1. Nowhere in the above paragraph is there an allegation that the Regulator harboured a reasonable suspicion of a contravention of the Act or of reckless credit granting;

15.2. For the Tribunal to assess whether there is objective justification for an allegation that the Respondent was prima facie contravening the Act in relation to affordability assessments, the Tribunal must have regard to the relevant parts in the founding

affidavit and to the contents or part of any annexures to which specific reference is made therein;

15.3. The annexures referred to in the affidavit are the letter, the Excel spreadsheet of all credit agreements entered into by the Respondent

with consumers in June 2013 and June 2014, affordability calculations (not attached) of certain samples identified by the Regulator from those Excel spreadsheets provided, and a memorandum (dated 6 March 2015);

15.4. The only part of the memorandum on which the Regulator relies, is the fact that there was a recommendation based on the findings of the analyzed data, that the Respondent, amongst others, be subjected to further investigation;

15.5. The Tribunal and the Respondent are in the dark as to what the analyzed data showed, and more particularly, which provisions of the Act were contravened in what way, and with what result, and in respect of which consumers or customers; and

15.6. If the Regulator had wished to rely on any or all of the reasoning in the memorandum, it should have done so in paragraph 9.6 or in a further paragraph or paragraphs, sub-paragraphs in its founding affidavit.

16. In the alternative the Respondent submitted that, if the Tribunal considers the memorandum, it does not establish a reasonable suspicion (basis) for the initiation of the complaint specifically in that -

16.1. It is not clear which of the conclusions apply to the Respondent , if at all, as it refers in generalized terms to “credit providers”;

16.2. The specifically identified transactions referred to in the memorandum were not attached to it;

16.3. The assumption regarding percentages of disposable income is not based on legally prescribed standards;

16.4. The use of credit bureau reports or not have not been viewed in in the context of an overall assessment; and

16.5. The author of the memorandum has not set out the data or the reasoning for prioritizing the Respondent to be investigated.

POINT IN LIMINE - APPLICANT’S

SUBMISSIONS

17. The Applicant referred the Tribunal to a spreadsheet created and submitted by the Respondent to the Applicant contained in pages 1077 to 1081 of the record to be read with the Memorandum referred to above recommending the initiation of an investigation of the Respondent to the Applicant.

18. The Applicant submitted that -

18.1. The data attached to the memorandum and in the papers before the Tribunal, clearly indicates, without any doubt, by just referring to a few consumers (included in the data submitted by the Respondent themselves to the Applicant), that the Respondent, reflected that they did not consider any information that came from credit bureaus;

18.2. By way of example the Applicant referenced certain consumers from the spreadsheet (provided by the Respondent) to illustrate that no information or data was contained from credit bureaus to indicate that indeed the Respondent took credit bureau information into consideration when assessing consumers for their ability;

18.3. The Applicant further submitted that when conducting affordability assessments, credit providers must consider debt repayment history of consumers in order to comply with the Act, and that repayment history of consumers is contained in credit bureau reports; and

18.4. For the above reasons it was sufficient and it was reasonable for the Applicant to initiate a complaint into the activities of the

Respondent.

POINT IN LIMINE -

DISCUSSION AND FINDINGS

19. The Tribunal noted the submissions made by the parties, specifically with regard to -

19.1. The exposition of the prevailing law in respect of the initiation of valid complaints ultimately leading to valid referrals to the

Tribunal; and

19.2. Whether the parties’ respective submissions with the alleged sets of facts support a valid complaint initiation, investigation and referral to the Tribunal.

20. Prevailing case law dictates that the Regulator must be in possession of information, which, objectively speaking, could give rise to a reasonable suspicion of a contravention of the Act for the granting of reckless credit.

21. In his affidavit, Respondent’s Van der Walt, sets out a detailed timeline on how this matter against the Respondent unfolded.

22. According to Van Der Walt -

22.1. The Regulator requested information on the credit agreements the Respondent entered into in June 2013 and June 2014 from the Respondent;

22.2. Respondent provided the information on 29 September 2014;

22.3. The Applicant then requested the Respondent to provide an analysis of the information submitted in the form of Excel spread sheets with specific data fields;

22.4. The Respondent provided the Information in the requested format on 12 December 2014;

22.5. The “ ... NCR made the selection of the customer accounts that appeared in the application” from this information submitted; and

22.6. The Regulator had information in its possession, in the form of spreadsheets provided by the Respondent, upon which it formed a

reasonable suspicion that Respondent might not be making use of credit bureau information in affordability assessments.

23. In spite of Respondent’s assertions that they were not provided with spreadsheets and could not determine what information is referred to, from the above; it is clear that the Respondent was aware that the spreadsheets referred to are those provided by the Respondent.

24. The Tribunal noted that the Respondent referred to evidence in its answering affidavit in answer to the referral that it uses credit

bureau information as part of its assessment mechanisms. Whether that is the case or not; the Regulator could not be expected to have gathered evidence at the point of initiation.

25. At the initiation stage the determination turns on whether the Regulator harboured a reasonable suspicion based on objective information, not evidence gathered that the Respondent is contravening the act or engages in reckless credit.

26. Instructive with what is meant with “suspicion” is Powell NO and Others v Van der Merwe NO and Others[6], where the Supreme Court of Appeal endorsed certain dicta of Lord Devlin in Shabaan Bin Hussein and Others v Chong Fook Kam and Another[7]. Paragraphs 36 of the judgment in Powell, to the extent relevant for present purposes, states that:

“36 This Court has endorsed and adopted Lord Devlin's formulation of the meaning of 'suspicion': 'Suspicion in its ordinary meaning is a state of conjecture or surmise where proof is lacking (emphasis added); "I suspect but I cannot prove". Suspicion arises at or near the starting point of an investigation of which the obtaining of prima facie proof is the end.’”

27. A suspicion is “reasonable” if stated as in the matter of Minister of Police v Dyssel[8] the Honourable Tuchten, J in paragraphs 18 and 19 thereof stated –

“Whether a reasonable suspicion existed must be considered objectively. Reasonable grounds of suspicion are those which would induce a reasonable person to have the suspicion.”[9]

28. In NCR vs Capitec Bank Limited and Another [10] the Honourable Justice stated that -

“It is clear from the provisions of section 136 of the NCA that a complaint must be initiated against (quote) ‘an alleged prohibited practice’ (unquote). The investigation by the NCR, following upon the initiation of a complaint, must be focused on the complaint in respect of which a reasonable suspicion is held, or relate to the information available to the NCR, in respect of which a reasonable suspicion exists (emphasis added). It is that complaint which will be referred to the Tribunal. As is the case with the Commission, the NCR’s far reaching powers may not be abused for purposes of a fishing expedition, without first having initiated a valid case, complaint

based on a reasonable suspicion.”

29. This matter and the facts are distinguishable from the Capitec Bank matter. In Capitec Bank, the basis for the initiation was said to be that “Concerns have been expressed relating to the provision of unsecured credit and short term loans by Capitec Bank” without any evidence to support it. In this matter; the Regulator based its suspicion on an excel spreadsheet (information) provided by the Applicant that Respondent did not consider any information that came from credit bureaus. The regulator then, had to investigate to find whether that is in fact so or not.

30. The Tribunal notes the submissions argued by the Respondent at the hearing that the paragraph quoted from the Applicant’s papers that “nowhere in this paragraph is there an allegation (our emphasis) that the Regulator harboured a reasonable suspicion of a contravention of the Act or of reckless credit granting.”

31. In the view of the Tribunal; the presence or absence of specific words or allegation “... harboured a reasonable suspicion of a contravention of the Act or of reckless credit granting” is not indicative of the presence or absence of a reasonable suspicion. Stated differently, a reasonable suspicion cannot be brought into existence merely through scripting or voicing the words, as the Respondent complained, "... does not appear in the paragraph referred to". The legal construct of reasonable suspicion should appear from the evidence put forward about whether it does or does not exist.

32. Given that the only context within which affordability assessments appear in the Act is in respect of reckless credit, it follows that it would amount to hair splitting and too formalistic an approach to require that the precise and specific words be scripted to sustain a finding that a reasonable suspicion existed.

33. The Respondent’s statement that “There’s a difference, I submit, between a reasonable suspicion and a prima facie appearance, which is what is relied on here” led to consideration of the differences between reasonable suspicion and a prima facie appearance. It also leads to the consideration of whether it aids the Tribunal in coming to a decision on the point in limine.

34. In this regard in Powell NO and Others v Van der Merwe NO and Others[11], the Supreme Court of Appeal endorsed certain dicta of Lord Devlin in Shabaan Bin Hussein and Others v Chong Fook Kam and Another[12]. Paragraphs 36 and 37 of the judgment in Powell, to the extent relevant for present purposes, read as follows:

“37 Lord Devlin went on to point out 'another distinction between reasonable suspicion and prima facie proof. Prima facie proof consists of admissible evidence. Suspicion can take into account matters that could not be put in evidence at all. ... Suspicion can take into account also matters which, although admissible, could not form part of a prima facie case.”

35. The Tribunal agrees with the Respondent that the newspaper articles and articles dealing with international practices referred to by the Applicant do not support a reasonable suspicion on the part of the Applicant in respect of the Respondent.

36. Respondent submitted with regard to the specificity required for a complaint and the initiation of an investigation to be valid that –

“...it has to be focused on a complaint in respect of an alleged prohibited practice, in this case the alleged contravention for a specific allegation of reckless credit granting.”

37. This approach negates the distinctive and progressive stages of a complaint from initiating or receipt of complaints to investigating

and finally to referral to the Tribunal or a Court.

38. It goes much further than what is envisaged by the courts and would in fact require an investigation to be able to provide the level of particularity the Respondent seems to suggest is required for a valid complaint initiation.

39. That approach would have exactly the effect of what Brandt, J in Yara cautioned against (see section emphasized) below-

“In Yara, Brand JA, writing for the court, with reference to Woodlands, confirmed that there can be no investigation in terms of the Competition Act without a complaint submitted by a complainant or

initiated by the commission against an alleged prohibited practice, and that a complaint can only be initiated by the commission on the basis of a reasonable suspicion. The learned judge of Appeal referred to ‘loose statements’ in Woodlands which he cautioned ought not be subjected to the formal process of interpretation and continued.

On the other hand, the judgment should not be understood to authorize a formal investigation without a complaint initiation (emphasis added), nor the initiation of a complaint without reasonable grounds, nor to absolve the commission of its obligation to provide those grounds when challenged to do so.”

40. The problem with this approach is that it conflates the initiation and the investigation stages of a matter as the types of outcomes

mentioned can only be achieved through an investigation. Stated differently you cannot expect to find information from a complaint

initiation akin to the level and detail of what can be expected from an investigation report as that the initiation is a step that

precedes an investigation. This is borne out by the Respondent submissions requiring information at initiation stage that can only

obtain after an investigation through its words “ ... what would be sufficient is what is stated in the investigation report ... So you must say that, as was done in the investigation report...”.

41. The Tribunal cannot agree with the Respondent’s submission, on inquiry from the Tribunal that the level of specificity required

should be “...an identified transaction or transactions are in contravention of the Act, or amounted to the granting of reckless credit...”as that surely will require an investigation and evidence.

42. Based on the above the point in limine is dismissed.

MERITS

THE APPLICANT’S CASE

43. The crux of the Applicant’s case is that the Respondent entered into reckless credit agreements with consumers that made them

over-indebted. This was as a result specifically of the Respondent not taking reasonable steps to assess the consumers’ debt

repayment history (as a consumer under credit agreements) and their existing financial means, prospects and obligations.

44. The Applicant has put forward details and information about a number of consumers it alleged the Respondent entered into reckless credit agreements with.

45. The Applicant’s main contention is that these consumers all had negative disposable income and the Respondent’s conduct in entering into credit agreements with them was reckless.

46. The Applicant submitted that the Tribunal should consider the cumulative provisions of sections 80, 81 and 82 of the Act, summarized by the Applicant as follows:

“Reckless lending, which is a prohibited conduct, is committed by a credit provider if affordability assessment principles prescribed under section 81 are not followed, or if the principles under section 81 are followed and the outcome of the assessment indicates that a consumer is over-indebted, and in spite of this indication the credit provider proceeds to conclude the proposed credit agreement with a consumer.

An over-indebted consumer is a consumer whose information at the time of the assessment, indicates that the particular consumer is or will be unable to satisfy in a timely manner all the obligations under all the credit agreements to which the consumer is a party, having regard to that consumer’s:

· financial means, prospects and obligations; and

· probable propensity to satisfy in a timely manner all the obligations under all the credit agreements to which the consumer is a party, as indicated by the consumer’s history of debt repayment.”

47. From the above, according to the Applicant, it follows that the Respondent has repeatedly contravened section 81(3), read with section

80(1)(b)(ii) and 81(2)(a)(ii) and (iii) of the Act.

48. credit agreement. It provides that –

“... A credit provider must not enter into a reckless credit agreement with a prospective consumer”.

49. Section 80(1) of the Act, envisages two types of reckless credit agreements namely where a credit provider -

49.1 Failed to conduct the assessment[13] as required by section 81 (2), irrespective of what the outcome of such an assessment might have concluded at the time; and

49.2 Having conducted an assessment[14] as required by section 81 (2), entered into the credit agreement with the consumer despite the fact that the preponderance of information

available to the credit provider indicated that “(i)... ; Or (ii) entering into that credit agreement would make the consumer over-indebted.”[15]

49.3 Thirdly, the Applicant relies on section 81(2)(a)(ii) and (iii) which provide that –

“(2) A credit provider must not enter into a credit agreement without first taking reasonable steps to assess—

(a) the proposed consumer’s—

(i) ... ;

(ii) debt repayment history as a consumer under credit agreements;

(iii) existing financial means, prospects and obligations; and ...” (Emphasis added).

50. The Applicant submitted that the Respondent granted credit recklessly to consumers –

50.1. Who were over-indebted before the Respondent granted them credit in that they had insufficient income to meet their monthly expenses, debt obligations and installments to the Respondent;

50.2. Who had adverse credit listings against their credit bureau records i.e. facts pertaining to their debt re-payment history, including -

50.2.1. First, an emoluments attachment order reflected on the salary advice;

50.2.2. Arrears on a Foschini account; and

50.2.3. Legal action been threatened by a credit provider.

51. The Applicant’s evidence showed that a number of consumers the Respondent entered into credit agreements with, had negative

disposable income where their expenditure exceeded their income at the date of entering into the agreements.

RESPONDENT’S

CASE

52. The Respondent, though agreeing with the Applicant that the listed consumers had negative disposable incomes, takes issue with the

Applicant’s view that a negative disposable income means that the consumer was or was about to become over-indebted, and that by extension granting credit to those consumers would make them (more) over-indebted and Respondent entering into the credit agreement with them reckless.

53. The Respondent provided the Tribunal with a detailed explanation of its affordability assessment mechanisms and procedures, as allowed in terms of section 82(1) of the NCA.

54. The Respondent illustrated on its papers and in argument how it applied it to the factual scenarios of each of the consumers in question, asserting that it resulted in fair and objective assessments.

55. The main tenets of the Respondent’s credit granting system (affordability assessment mechanisms and procedures) are -

55.1. The first round of information gathering;

55.2. Credit Bureau (ITC) check through a computerized link;

55.3. A second round of information gathering including verification of pay, identity number, etcetera;

55.4. Consideration of the credit application by Respondent’s credit granting department;

55.5. Assessing the consumers’ credit worthiness and credit record; and

55.6. Conducting a Pro Forma Affordability Assessment utilizing a Customized Computerized Credit Granting System (UCS) taking into account the consumer’s income (as apparent from his or her pay slips and / or bank statements) or other sources of income resulting in a pro forma calculation.

56. According to the Respondent’s process a negative pro forma calculation result (same as a negative disposable income figure) from the customized computerized credit granting system does not mean the end of the road for the consumer and a refusal of the credit application.

57. The Respondent set out three reasons it applies in justifying its departure from what the pro forma affordability calculation in the system may indicate in order to grant credit to consumers notwithstanding their poor affordability figures. They are –

57.1. It may be appropriate to “adjust” certain expenses from the ITC system namely –

57.1.1. Payments for short-term commitments such as insurance, pay TV, cellular telephone, etc;

57.1.2. Installments for credit agreements i.e. where there are up to four (4) installments remaining;

57.1.3. Installments where it appears that the credit bureau records are not up to date;

57.2. Where the consumer has a good payment history and is up to date or not materially in default (three months or more in arrears);

57.3. Where a consumer’s “financial means” and “prospects might be influenced for the better due to the fact that the consumer is married or in some form of partnership.

58. The Respondent submitted that it followed the above process for the consumers in question, and –

58.1. Added back installments due and payable to certain credit provider’s (most notably Hyperama, Checkers and OK Furniture) where only a few installments were left thus reducing the consumers’ expenses as reflected on the Credit Bureau;

58.2. Disregarded installments where it formed a view that the ITC system was not updated or that the information might be incorrect thus reducing the consumers’ expenses as reflected on the Credit Bureau;

58.3. Took into account credit available to a consumer e.g. an amount available in a home loan and thus increasing the consumers’ income and improve their affordability;

58.4. Disregarded month-to-month insurances and what it viewed as discretionary expenses thus reducing the consumers expenses as reflected on the Credit Bureau;

58.5. Where it formed a view that the consumers have a good repayment history albeit disregarding threats of legal action against a consumer and an emoluments orders on his salary slip; and

58.6. Taking into account marriage, spouse or life partner’s income and disability grant (improved means).

59. Respondent submitted that the above resulted in fair and objective assessments of these consumers’ affordability of the credit they applied for.

60. Respondent denied that it entered into reckless credit agreements with the consumers as alleged by the Applicant or caused them to become over-indebted as a result of extending credit to them.

61. It appears that the Respondent’s arguments are premised mainly on “whether the consumer is unable to satisfy in a timely manner all the obligations under the credit agreements to which the consumer is a party, or will be unable to do so if the proposed new credit is granted” and postulates this consideration as the “ultimate question” to evaluate consumers’ over-indebtedness and subjugate other considerations to this “ultimate” one.

CONSIDERATION

OF THE LEGAL SUBMISSIONS AND THE EVIDENCE

62. The NCA, under section 82[16], allows a credit provider to determine its own evaluative mechanisms when conducting affordability assessments under section 81, provided the evaluative mechanisms results in a fair and objective assessment.

63. As the Respondent determined its own evaluative mechanisms the Tribunal is left with determining whether the Respondent’s evaluative mechanisms resulted in fair and objective assessments.

64. Before getting into whether the Respondent’s evaluative mechanisms resulted in fair and objective assessments, the Tribunal will first consider whether the Respondent entered into reckless credit agreements with consumers.

65. Section 80(1)(b)(ii) provides that -

“A credit agreement is reckless if, at the time that the agreement was entered into (emphasis added)... that credit agreement would make the consumer over-indebted.”

66. Section 79(1) provides that –

“A consumer is over-indebted if the preponderance of available information at the time a determination is made indicates that the

particular consumer is or will be unable to satisfy in a timely manner all the obligations under all the credit agreements to which

the consumer is a party, having regard to that consumer’s—(a) financial means, prospects and obligations; and (b) probable propensity to satisfy in a timely manner all the obligations under all the credit agreements to which the consumer is a party, as indicated by the consumer’s history of debt repayment.”

67. The above provision is quite complex in that it has -

67.1. A timing component - the point at which the consumer gets assessed namely the time when the determination is made.

67.2. An evaluation or assessment component - whether the consumer is or will be unlikely to meet his or her obligations under all his or her credit agreements taking into account -

...”financial means, prospects and obligations...” and

... “probable propensity to satisfy in a timely manner all the obligations under all the credit agreements”

68. The Respondent focuses on what it postulates as the “ultimate question” of over-indebtedness namely “whether the consumer is unable to satisfy in a timely manner all the obligations under the credit agreements to which the consumer is a party, or will be unable to do so if the proposed new credit is granted.” Through this the Respondent de-emphasises the components pertaining to the timing of the assessment and to quite a large extent also the aspect of “...financial means, prospects and obligations...” This results in the Respondent -

68.1. Shifting the point at which the assessment has to be made to a point in the future when the consumer would have (presumably) paid off the installments still due on other credit agreements, accessed funds from other credit lines, cancelled short-term commitments, etc.; and

68.2. Constructing “ financial means, prospects and obligations” without a reasonable and objective basis - as it is not certain that the above can actually be brought about for the consumer to pay for the new credit.

69. Section 81(2) provides that -

“A credit provider must not enter into a credit agreement (emphasis added) without first taking reasonable steps to assess— (iii) existing (emphasis added) financial means, prospects and obligations”.

70. Reading the plain text of this provision the word “existing” qualifies “financial means”, “prospects” and “obligations”.

71. It follows that the “existing”, is as at the time of entering into the credit agreement has to be taken into account and not “future” “financial means”, “prospects” and “obligations” i.e. as at the time by when the consumer might have paid up his or her furniture accounts, unilaterally defaulted on their insurance and other month-to-month commitments, or taking into account unverified income without taking into account possible concomitant expenses against such income and taking into account income from another source of credit that might very well increase the consumer’s debt obligations.

72. There is no doubt and the Tribunal accepts, as Respondent stated, that a consumer’s “financial means” and “prospects” might “be influenced for the better” because of being married or in a life partnership and the ability to draw on their joint resources or that of a household member.

73. However the mere fact of a marriage or the existence of a life partnership and potential income from those other sources is not sufficient on its own to influence a consumer’s financial means for the better. To rely on this factor without requiring concrete and specific proof of income of the spouse or life partner and their expenses is not justifiable in the view of the Tribunal.

74. The correct application of section 81(2)(iii) is for a credit provider to verify and not to merely assume the additional income of the spouse, life partner or household member and to also determine what obligations that individual has to meet from the verified income. The Respondent did not do this.

75. The Respondent does not deny that for these consumers, the assessment through its customized computerized credit granting system resulted in a negative pro forma calculation. The Respondent rather opted to explain to the Tribunal how it “addressed” the negative pro forma calculations and “influenced them for the better”. In some instances this process even resulted in changing an initial negative pro forma calculation to a positive pro forma calculation

that then allowed the Respondent to enter into the credit agreement with the consumer.

76. According to the Respondent it applies the “fair and objective assessment” to depart from a negative pro forma affordability calculation through making three types of downward adjustments as listed by the

Respondent may be added back e.g. Short term commitments e.g. pay television subscriptions and short term insurance premiums; Credit

transactions where only a few installments are left and will fall away in the near future; and where it is clear that the ITC system

has not been updated and the information in question is out of date.

77. This approach by the Respondent, erroneous in the view of the Tribunal, led the Respondent to conclude that “... a consumer whose expenses exceeds his or her income might still be able to maintain a good repayment record”. For these consumers though the ability to meet obligations under the credit agreement and to maintain a good repayment record is premised on and subject to the consumer cutting back on items of expenditure, unilaterally re-schedule debts, and / or rely on family members for support (see above).

78. This in effect means that on the “... preponderance of available information at the time a determination...” the consumer at the time of entering into the agreement actually does NOT have the financial means and prospects and the extension of credit to the consumer is reckless.

79. Furthermore it causes the consumers to be worse off in respect of existing financial obligations which by following Respondent’s system of disregarding short-term and other commitments to be in a position to pay Respondent the installments due under the new credit agreements.

80. Considering the apparent position the consumers now may have found themselves in after the assessment, and without going into extensive detail on this aspect, the Respondent’s evaluation mechanisms, or models and procedures do not bring about “fair and objective result” to all parties concerned -

80.1. Consumers pre-existing commitments and future commitments are being sacrificed in favour of the consumer entering into a new credit agreement with the Respondent;

80.2. Pre-existing credit obligations are disregarded contrary to the provisions of the Act;

80.3. That credit bureau information is adjusted by the Respondent to enable it to grant credit where the information points to the contrary;

81. What it does is enabling the Respondent’s credit granting department to grant credit and not to evaluate the consumer’s ability to afford the credit applied for at the time it is applied for as required in the scheme of the NCA.

82. A fair and objective assessment result is, in the view of the Tribunal, not a result that necessarily favours the Respondent entering into credit agreements with consumers. A fair and objective assessment result is when the consumer who had been granted credit has the financial means and prospects on the “... preponderance of available information at the time a determination...” without the Respondent having to “influence” the consumers’ financial means and prospects “... for the better” and disregarding consumers’ obligations, short-term or otherwise.

83. What is even more troubling to the Tribunal is noting from Koekemoer’s affidavit, that even after the Respondent had “addressed” the negative pro forma calculations and “influenced them for the better;” the majority of these consumers still had negative affordability figures namely consumers E from -R 3 542,37 to -R 3 086,37; F from -R 493,25 to -R 157,20; G from -R 435,00 to R 71,25; H -R 9 888,29; J from -R 810 to R 4 698,92; K from -R 2 136,46 to R 293,00; L from -R 2 674,01 to -R 2 770,01; M from -R 5 273,32 to -R 2 205,32; and N -R 462,61.

84. Having regard to the foregoing the Tribunal finds that the Respondent repeatedly contravened section 81(3), read with section 80(1)(b)(ii)

and 81(2)(a)(ii) and (iii) of the NCA through entering into credit agreements with consumers E, F, G, H, J, K, L, M and N.

85. The Tribunal furthermore finds that the Respondent’s evaluation mechanisms or models and procedures used in meeting its assessment

obligations under section 81, does not result in a fair and objective assessments as through the machinations it described to enter into credit agreements with consumers meant them having to sacrifice meeting their obligations under existing credit agreement and other short-term financial obligations.

86. There is one further matter we should mention. This relates to the issue of sample consumer files and whether they constitute sufficient evidence for the Applicant’s case and the relief Applicant seeks.

87. The Applicant has put sample consumer files before the Tribunal for its consideration and determination of prohibited conduct. This requires of the Tribunal to consider the implications of using sample files in the determination of the “... extent of the contravention” in terms of section 151 of the NCA and arriving at an appropriate administrative fine.

88. The sample put before the Tribunal by the Applicant was prepared by the Respondent on request by the Applicant drawn from the excel

spreadsheet provided by Respondent of the agreements it entered into with consumers. Even though samples only; the Respondent indicated it faced challenges in preparing the sample requested from it by the Applicant due to its voluminous nature. It would therefore be in the view of the Tribunal reasonable to draw sample files to put before the Tribunal for a determination of whether there are contraventions of the NCA. Thereafter, if it is found that there were contraventions, then a process of determining the extent of contravention can be embarked on in order to make the appropriate orders for relief.

89. In this regard the Tribunal in NCR vs Season Star Trading 333 t/a De Noon’s Cash Loans [17] set out that -

“26 This issue of the Regulator putting a case forward on the basis of sample files, is not a new issue before the Tribunal. It was raised and dealt with by the Tribunal in previous matters namely, amongst others, NCR v Van Dyk[18] and Matjokana v National Credit Regulator[19] where the Tribunal found that it cannot be expected of the Regulator to investigate each and every consumer file of a credit provider or debt counsellor and to show contraventions in respect of each and every one or even a majority of the files. It is sufficient for the Regulator to prove contravention of the NCA through putting forward evidence drawn from “sample” files...”

RELIEF

SOUGHT

90. The Applicant seeks the following orders from the Tribunal -

90.1. Declaration that the Respondent has repeatedly contravened section 81(3) of the Act, read with sections 80(1)(b)(ii) and 81(2)(a)(ii) and (iii).

90.2. Declaration that the Respondent’s repeated contravention of section 81(3) of the Act, read with sections 80(1)(b)(ii) and 81(2)(a)(ii) and (iii) constitutes conduct prohibited by the NCA.

90.3. Declaration that the Respondent’s credit agreements with consumers (e), (f), (g), (h), (j), (k), (l), (m) and (n) are reckless.

90.4. Directing the Respondent to write off all outstanding balances owed under those agreements.

90.5. Directing the Respondent to remove, at its own expense, all the adverse credit bureau listings recorded by the Respondent on the credit bureau records of the consumers granted credit recklessly by the Respondent.

90.6. Rescinding all judgments taken against consumers granted credit by the Respondent.

90.7. Alternatively to the rescission order above, if the Tribunal considers that the consumers are over-indebted at the time of these proceedings -

90.7.1. Orders suspending the force and effect of the credit agreements for a period determined by the Tribunal; and

90.7.2. Restructuring the consumers’ obligation under the credit agreements in the manner determined to be appropriate by the Tribunal.

90.8. Restraining the Respondent from, in future, granting credit recklessly to consumers.

90.9. Restraining the Respondent from, in future, granting credit to those who are in arrears on other accounts, and/or have adverse credit bureau listings or judgments.

90.10. Imposing an administrative fine of 10% of the Respondent’s turnover for the previous financial year or R1 million whichever is the greatest.

91. The overall empowering provision for the imposition of orders by the Tribunal is set out in section 150 of the NCA. It provides that “In addition to its other powers in terms of this Act, the Tribunal may make an appropriate order in relation to prohibited conduct or required conduct in terms of this Act, or the Consumer Protection Act, 2008.”

92. Section 83 of the NCA allows the Tribunal to impose specific relief where it found that the Respondent engaged in prohibited conduct and engaged in reckless credit.

93. The Tribunal found above that the Respondent has repeatedly contravened section 81(3) of the Act, read with sections 80(1)(b)(ii) and 81(2)(a)(ii) and (iii) for the reasons foregoing.

94. With regard to the Applicant seeking an order that the Respondent’s conduct be declared prohibited conduct the following:

94.1 Prohibited conduct is defined in section 1 of the NCA as “... an act or omission in contravention of this Act;...” The Tribunal’s power to declare conduct prohibited is provided for in section 150(a) of the NCA. Following on the Tribunal’s

finding that the Respondent has repeatedly contravened section 81(3) read with sections 80(1)(b)(ii) and 81(2)(a)(ii) and (iii) of the Act, the Tribunal declares the Respondent’s conduct as prohibited conduct.

95. Under section 83(1) the Tribunal is empowered to make the order sough by the Applicant declaring the credit agreements the Respondent entered into with consumers (E), (F), (G), (H), (J), (K), (L), (M) AND (N) reckless. This section provides that - “... Despite any provision of law or agreement to the contrary, in any court or Tribunal proceedings in which a credit agreement is being considered, the court or Tribunal, as the case may be, may declare that the credit agreement is reckless, as determined in accordance with this Part.”

96. Following on the finding the Tribunal made foregoing that the Respondent has repeatedly contravened section 81(3), the Tribunal declares the agreements the Respondent entered into with the consumers concerned reckless credit agreements.

97. Regarding the order sought by the Applicant from the Tribunal directing the Respondent to write off all outstanding balances owed under those agreements; this Tribunal may impose this relief in the event of a contravention of section 80(1)(a) and 80(1)(b)(i). The case before the Tribunal is a however not that but about conduct in contravention of section 81(3) read with sections 80(1)(b)(ii) and 81(2)(a)(ii) and (iii) of NCA. The relief can accordingly not be granted.

98. With regard to the order sought directing the Respondent to remove, at its own expense, all the in credit bureau listings recorded by the Respondent on the credit bureau records of the consumers granted credit recklessly by the Respondent:

98.1 This relief might be possible under section 150(i) of the NCA which provides that “(i) any other appropriate order required to give effect to a right, as contemplated in this Act or the Consumer Protection Act, 2008.”

98.2 With regard to this relief sought, there is no evidence before the Tribunal regarding the credit bureau listings recorded by the

Respondent against the consumers granted credit recklessly by the Tribunal. The order sought may falter on the basis of it being

unenforceable due to not, as per Molahlehi, AJ in Lujabe v Maruatona[20] “... present(ing) a readily executable or enforceable order.”

98.3 The question is whether it is possible for the Tribunal to grant the order sought and that it will be enforceable, without the Applicant

having put forward evidence of the credit bureau listings to be expunged and in respect of which consumers.

98.4 This question is considered against the backdrop that orders of the Tribunal have the same force and effect as High Court Orders[21] and that a Respondent, who does not comply with a Tribunal order may be convicted on contempt of a court.

98.5 In the circumstances it is not possible for the Tribunal to grant this order sought.

99. With regard to the order sought directing the Respondent to rescind all judgments taken against consumers by the Respondent to whom the Respondent granted credit:

99.1 This relief might be possible under section 150(i) of the NCA which provides that “(i) any other appropriate order required to give effect to a right, as contemplated in this Act or the Consumer Protection Act, 2008.”

99.2 Similarly as above the Applicant has not put forward evidence of judgments taken by the Respondent and against which consumers. The same thinking and rationale as in paragraph 97 above applies.

99.3 In the circumstances it is not possible for the Tribunal to grant the order sought.

100. Alternatively to the rescission order the Applicant requested ”... if the Tribunal considers that the consumers are over-indebted at the time of these proceedings, orders suspending the force and effect of the credit agreements for a period determined by the Tribunal, and restructuring the consumers’ obligation under the credit agreement in the manner determined to be appropriate by the Tribunal.”

101. Where the Tribunal found that the credit agreements were reckless, as it did, the section imposes an obligation on the Tribunal to make an assessment of whether the consumers are “... over-indebted at the time of those proceedings.” It is only if and once the Tribunal “... concludes that the consumer is over-indebted, the said court or Tribunal may make an order—(i) suspending the force and effect of that credit agreement until a date determined by the Court when making the order of suspension; and (ii) restructuring the consumer’s obligations under any other credit agreements, in accordance with section 87.”

200%">102. Quite correctly, as submitted by the Respondent, the condition precedent to suspend or restructuring the consumers’ obligations is a finding by the Tribunal that at the time of the proceedings, the consumers are over-indebted.

103. According to the Respondent, as the Applicant had not made allegations or put up any evidence as to the consumers’ levels of indebtedness at the time of the proceedings, it follows that an order in terms of section 83(3)(b) (i) and (ii) cannot be made.

104. The Tribunal considered the above submissions and the provisions of the NCA to assess whether the Tribunal has to consider, at the

proceedings whether, these consumers are over-indebted. If the answer to this question is in the affirmative, it would have required

evidence by the Applicant for the Tribunal to make that determination. If not, then the question is when and through what process the obligatory assessment in terms of section 83(3)(a) “the court or Tribunal... (a) must (emphasis added) further consider whether the consumer is over-indebted at the date of the proceedings ...”

105. Section 85 deals with, amongst others, declaring a consumer over-indebted. In the relevant part section 85(a) provides that –

“...Despite any provision of law or agreement to the contrary, in any court proceedings in which a credit agreement is being considered, if it is alleged that the consumer under a credit agreement is over indebted, the court may –

(a) refer the matter directly to a debt counsellor with a request that the debt counsellor evaluate the consumer’s circumstances and make a recommendation to the court in terms of section 86 (7); or

(b) declare that the consumer is over indebted, as determined in accordance with this Part, and make any order contemplated in section 87 to relieve the consumer’s overindebtedness.”

106. From this section it clearly appears that debt counsellors make the determinations of over-indebtedness in terms of section 86(7) and the Tribunal then takes that forward in terms of section 83(3) to make the final order i.e. whether to suspend the force and effect of the agreements and whether to restructure the consumers’

obligations under the credit agreement under section 87.

200%">107. The assessment of over-indebtedness thus falls outside the scope of these proceedings and an appropriate order for the Tribunal would be to refer the consumers to a debt counselor to make the required assessments and report back to the Tribunal.

108. It must however be noted that the consumers who have been found to have been granted credit recklessly by the Respondent may not even be aware of this matter. They have not been cited in any way as parties and were not involved in the proceedings in any way. The possible consequences of having their financial situation assessed and found to be over indebted may have serious implications for the consumers concerned. These consumers may not want their financial situation assessed in any way. It must therefore be clearly noted that these consumers must voluntarily agree to the process of having their financial situation assessed by a debt counsellor. Should any of them refuse or not wish to cooperate in any way then they cannot be forced to do so and the matter ends there for that particular consumer. Although Section 83(3)(a) of the Act requires the Tribunal to consider whether the consumer is over indebted it could never have been the intention of the legislature that they could be forced to have their financial affairs assessed. They must further be informed by the debt counsellor exactly what the implications may be if they are found to be over indebted and of the possible suspension order the Tribunal may make.

109. The Tribunal further notes that the NCR did not request any order that all the loans granted by the Respondent be audited and assessed. The Tribunal is therefore limited to considering the specific loans submitted by the NCR in the matter.

110. The Applicant is further seeking an interdict restraining the Respondent from in future, granting credit recklessly to consumers generally, to those who are in arrears on other accounts and/or those who have adverse credit bureau listings or judgments.

111. The Respondent objects to the imposition of an interdict on the bases that firstly, there is no allegation or evidence that it has granted credit to anyone with adverse judgments listed on a credit bureau and secondly, that granting the interdict sought would override the more nuanced assessments which are required by section 79(1) of the NCA.

112. The Tribunal agrees that the order sought amounts to unduly fettering the provisions of section 79(1), which do not prohibit the extension of credit to consumers in arrears on other accounts, and/or those who have adverse credit bureau listings or judgments against them.

113. The Tribunal is empowered to impose interdicts in terms of section 150(b) of the NCA. Making an order interdicting the Respondent from entering into reckless credit agreements is a different question and the Tribunal is of the view that it can issue such an order.

114. Lastly, the Applicant is seeking the imposition of an administrative fine in terms of section 151, of 10% of the Respondent’s annual turnover during the preceding financial year. At the hearing the Applicant submitted that the fine to be imposed, whether R1 million or whether it’s the 10% annual turnover, should be for each and every prohibited conduct.

115. The imposition of administrative fines is provided for in section 150(c) read with section 151 is as follows -

“151. Administrative fines.—

(1) The Tribunal may impose an administrative fine in respect of prohibited or required conduct in terms of this Act, or the Consumer Protection Act, 2008.

(2) An administrative fine imposed in terms of this Act, or the Consumer Protection Act, 2008, may not exceed the greater of—

(a) 10 per cent of the respondent’s annual turnover during the preceding financial year; or

(b) R1 000 000.

(3) When determining an appropriate fine, the Tribunal must (emphasis added) consider the following factors:

(a) The nature, duration, gravity and extent of the contravention;

(b) any loss or damage suffered as a result of the contravention;

(c) the behaviour of the respondent;

(d) the market circumstances in which the contravention took place;

(e) the level of profit derived from the contravention;

(f) the degree to which the respondent has cooperated with the National Credit Regulator, or the National Consumer Commission, in the case of a matter arising in terms of the Consumer Protection Act, 2008, and the Tribunal; and

(g) whether the respondent has previously been found in contravention of this Act, or the Consumer Protection Act, 2008, as the case may be.”

Section 151(4) deals with what is meant by “turnover” -

“(4) For the purpose of this section, the annual turnover of—

(a) a credit provider at the time an administrative fine is assessed, is the total income of that credit

during the immediately preceding year under all credit agreements to which this Act applies, less the amount of that income that

represents the repayment of principal debt under those credit agreements; or

(b) any other person, is the amount determined in the prescribed manner.”

116. The Respondent objects to the imposition of an administrative fine for a number of reasons. First that it did not commit any contravention of the NCA. Second that the Applicant has not put forward the bases justifying the fine it is seeking. Third that the annual turnover the Applicant relies on as a basis for the determination of the fine put forward in its papers is not the correct basis for the Tribunal to consider in the determination of the amount of the fine to be imposed.

117. The Tribunal has considered the submissions by the parties in respect of the administrative fine.

117.1 The starting point for the Tribunal in determining the amount of an administrative fine is the Respondent’s annual turnover as defined. As the Applicant is seeking the imposition of an administrative fine it is incumbent on the Applicant to put the turnover amount forward to the Tribunal. The Tribunal has noted that the Regulator did not quantify the Respondent’s annual turnover

as defined.

117.2 Does this mean that the Tribunal cannot impose an administrative fine on the Respondent as contended by the Respondent? In National Credit Regulator v Werlan Cash Loans [22] ad paragraph 32 The Tribunal stated that “Section 151(2)(b), establishes an alternative to an administrative penalty of 10% of annual turnover namely R1m. Accordingly, where no evidence regarding annual turnover is available, the Tribunal still has the option to award a penalty not exceeding R 1 000 000.00.

117.3 The above approach is aligned to the purpose of the NCA and is set out in section 3 of the NCA. In summary, the purposes of the Act are to promote and advance the social and economic welfare of South Africans, promote a fair, transparent, competitive, sustainable,

responsible, efficient, effective and accessible credit market and industry and to protect consumers “... by ... (c)...(ii) discouraging reckless credit granting by credit providers and contractual default by consumers”

117.4 The Tribunal is of the view that the nature of the offense, namely entering into reckless credit agreements with the consumers to the level and extent of negative affordability and placing consumers in a position where they have to consider defaulting on pre-exiting

contracts to pay for new credit with the Respondent as is evident in this matter, justifies the imposition of an administrative fine.

117.5 For this reason we are of the view that the Tribunal may impose an administrative penalty without reference to annual turnover.

Accordingly, where no evidence regarding annual turnover is available, the Tribunal still has the option to award a penalty not

exceeding R 1 000 000.00.

118. With regard to the section 151(3)(a) to (g) factors, these have been dealt with in a number of Tribunal judgments including in City Finance[23] referred to by the Respondent. Without evidence the Tribunal is not placed in a position to consider them to apply the aggravating and mitigating considerations.

118.1 With regard to the gravity, nature and extent of the prohibited conduct, in the absence of evidence from the Applicant, in these proceedings the number of instances of prohibited conduct in this matter counts nine (9). There is no evidence before the Tribunal of what proportion of the Respondent’s lending these contracts represent.

118.2 Though the NCA provides for the Tribunal to “... impose an administrative fine in respect of prohibited or required conduct in terms of this Act, or the Consumer Protection Act, 2008.”

118.3 The Tribunal agrees with the Applicant’s analogy of punishment for criminal acts to the extent that for each differed crime the person may get charged and penalized. However in this case the contravention relates to one specific type of contravention (crime) and the number of consumers involved would impact on the extent of the fine not the number of fines to be imposed.

118.4 A factor the Tribunal takes into account, as an aggravating factor in the determination of the amount of the administrative penalty in terms of section 151(3) vis-a-vis the“... (c) the behaviour of the respondent;” is that even after the Respondent had “addressed” the negative pro forma calculations and “influenced them for the better” and the majority of the consumers still had negative affordability figures, it still continued and entered into credit agreements with them.

118.5 Based on these factors, the maximum penalty of R1 000 000.00 at the Tribunal may impose in this matter is therefore justified and appropriate.

119. Wherefore the Tribunal:

119.1 Declares that the Respondent has repeatedly contravened section 81(3) of the Act, read with sections 80(1)(b)(ii) and 81(2)(a)(ii) and (iii);

119.2 Declares that the Respondent’s repeated contravention of section 81(3) of the Act, read with sections 80(1)(b)(ii) and 81(2)(a)(ii) and (iii) constitutes conduct prohibited under the NCA;

119.3 Declares that the Respondent’s credit agreements with consumers (e), (f), (g), (h), (j), (k), (l), (m) and (n) are reckless in terms of section 83(1);

119.4 Interdicts and restrains the Respondent from, in future, granting credit recklessly to consumers.

119.5 Orders the Respondent at its costs to appoint a debt counsellor to conduct assessments on whether consumers (E), (F), (G), (H), (J), (K), (L), (M) AND (N) are over-indebted as at the date of these proceedings and provide his or her assessment to the Tribunal within 60 days of the date of this order for the Tribunal to consider whether to impose the remedies as provided for in section 83(3). The consumers must specifically be informed of all the implications of this debt review process by the debt counsellor and must specifically consent and agree to this process before it is undertaken;

119.6 Imposes an administrative fine on the Respondent in the amount of R 1 000 000.00 to be paid with 30 days of date of this order; and

119.7 Makes no order as to costs.

Thus done and signed on this 5th day of September 2017.

{signed}

_________

D Terblanche

Tribunal member

Adv. Simpson (Presiding member) and Ms. Beck (member) concurring.

[1] Section 136(2) provides that the National Credit Regulator may initiate a complaint in its own name.

[2] Section 136(1) provides that any person may submit a complaint concerning an alleged contravention of this Act or a complaint concerning an allegation of reckless credit to the National Credit Regulator in the prescribed manner and form.

[3] Woodlands Dairy (Pty) Ltd and Another v Competition Commission 2010(6) SA 108 (SCA) at paragraphs 35

[4] Section 136(1) of the NCA

[5] Competition Commission vs Yara (SA) (Pty) Ltd and Others 2013(6) SA404 (SCA) at paragraph 26

[6] 2005 (5) SA 62 SCA at paragraphs 36 and 37

[7] [1970] AC 942 (PC) [1969] 3 All ER 1627

[8] (A763/2014) [2016] ZAGPPHC 229 (7 April 2016)

[9] R v Van Heerden 1958 3 SA 150 T 152E, referred to with approval in Duncan, supra, 814E

[10] (A440/2014[2016] ZAGPPHC 125

[11] 2005 (5) SA 62 SCA paras 36 and 37

[12] [1970] AC 942 (PC) [1969] 3 All ER 1627

[13] Section 80(1)(a)

[14] Section 80(1)(b)

[15] Section 80(1)(b)(ii) provides that - “(1) A credit agreement is reckless if, at the time that the agreement was made, or at the time when the amount approved in terms of the agreement is increased, other than an increase in terms of section 119 (4)— (a) ... ; or (b) the credit provider, having conducted an assessment as required by section 81 (2), entered into the credit agreement with the consumer despite the fact that the preponderance of information available to the credit provider indicated that— (i)

... ; or (ii) entering into that credit agreement would make the consumer

over-indebted.”

[15] Section 80(1)(b)(ii) provides that -

“(1) A credit agreement is reckless if, at the time that the agreement was made, or at the time when the amount approved in terms of the agreement is increased, other than an increase in terms of section 119 (4)—

(a) ... ; or

(b) the credit provider, having conducted an assessment as required by section 81 (2), entered into the credit agreement with the consumer despite the fact that the preponderance of information available to the credit provider indicated that—

(i)

... ; or

(ii) entering into that credit agreement would make the consumer

over-indebted.”

[16] Section 82(1) A credit provider may determine for itself the evaluative mechanisms or models and procedures to be used in meeting its assessment obligations under section 81, provided that any such mechanism, model or procedure results in a fair and objective

assessment and must not be inconsistent with the affordability assessment regulations made by the Minister.

[17] National Credit Regulator v Season Star Trading 333 CC t/a De Noon's Cash Loans (NCT/6977/2012/57(1)(P) NCA) [2013] ZANCT 41 (21 November 2013)

[18] NCT/2017/2011/57(1)

[19] NCT/2636/2011/56(1).

[20] (35730/2012) [2013] ZAGPJHC 66 (15 April 2013)

[21] Section 152(1) “.—(1) Any decision, judgment or order of the Tribunal may be served, executed and enforced as if it were an order of the High Court, and is binding on”...

[22] (NCT/3867/2012/57(1)) [2013] ZANCT 5 (13 February 2013)

[23] National Credit Regulator v City Finance (NCT/22130/2015/55(6) NCA) [2015] ZANCT 14 (2 July 2015)