Selesho v Standard Bank of South Africa Limited and Others (NCT/49907/2016/149(1)NCA) [2017] ZANCT 47 (17 February 2017)

IN THE NATIONAL CONSUMER TRIBUNAL

HELD IN CENTURION

Case Number: NCT/49907/2016/149 (1) NCA

In the matter between:

JIMMY MMATHATE SELESHO

APPLICANT

and

THE STANDARD BANK OF SOUTH AFRICA LIMITED 1ST RESPONDENT

MOTOR FINANCE CORPORATION OF SOUTH AFRICA

2ND RESPONDENT

NISSAN FINANCE (A DIVISION OF WESBANK)

3RD RESPONDENT

Coram:

Prof Tanya Woker – Presiding member

Ms Laura Best

Mr Xolela May

Date of hearing: 17 February 2017

JUDGMENT

INTRODUCTION

1. The matter between Jimmy Mmathate Selesho (the Applicant) and Standard Bank of South Africa and two others (the Respondents) is an application for interim relief in terms of section 149 (1) of the National Credit Act, 2005 (the Act).

2. On 2 June 2016 the Applicant filed a complaint with the National Credit Regulator (NCR) in terms of section 136 (1) of the Act and on 6 June 2016, the Applicant filed an application for interim relief with the National Consumer Tribunal.

3. This judgment is based on the papers which were filed with the Tribunal as well as oral arguments which were presented by the parties at the hearing into the application for interim relief which was heard on 17 February 2016.

THE APPLICANT

4. The Applicant, Jimmy Mmathate Selesho, an adult male, was represented by Edward Mtlane, a consumer alternative dispute resolution officer with the Consumer Affairs Corporation (CAC).

THE RESPONDENTS

5. The 1st Respondent is Standard Bank of South Africa. For the sake of clarity, this Respondent will be referred to as Standard Bank. Standard Bank, was represented by Adv G Steyn instructed by Lowndes Dlamini Attorneys. .

6. The 3rd Respondent is Nissan Finance (A division of Wesbank). This Respondent will be referred to as Nissan. Nissan was represented by Adv G Botha instructed by Rossouws Lesie Inc.

7. The application against the 2nd Respondent has been withdrawn.

BACKGROUND

8. The Applicant purchased four motor vehicles in 2013 which were financed by credit providers including Standard Bank and Nissan.

9. It seems that there was a business arrangement between the Applicant and another person referred to as Gary Holmes (Holmes) in terms of which these vehicles were purchased for a business venture which was to be conducted between South Africa and Mozambique. The Applicant did not set out the details regarding this business arrangement in his papers but it seems that the Applicant never took possession of the vehicles or even had sight of them. The Applicant did however sign a delivery note in respect of the vehicle purchased in terms of the credit agreement entered into with Nissan.

10. A dispute subsequently arose between the Applicant and the various credit providers and there were allegations of fraudulent practices

on the part of Holmes, the details of which are rather sketchy.

11. The Applicant honoured his commitments under the credit agreements until he discovered that two of the vehicles had apparently been

transferred and registered on the e-NATIS system into the name of Holmes, in terms of a ‘sinister practice’ that the

Applicant did not consent to.

12. How or why Holmes had possession of these vehicles remains a bit of a mystery but it seems that this was in accordance with the business arrangement which was concluded between the Applicant and Holmes.

13. The result of this dispute was that the Applicant ceased paying his monthly instalments for the vehicles and his credit accounts fell into arrears.

14. Standard Bank and Nissan instituted legal action against the Applicant to recover the outstanding balances.

15. Standard Bank instituted an action out of the High Court, Gauteng Division, Pretoria under case number 20850/2015 on 20 March 2015 and the Applicant did not defend the action. As a result Standard Bank applied for and obtained a judgment against the Applicant on 14 October 2015.

16. Nissan issued summons against the Applicant on 23 May 2016.

17. On 2 June 2016, the Applicant initiated a complaint to the NCR in which he alleged that the ‘credit providers’ were contravening the spirit of the Act by attempting to enforce credit agreements under circumstances where the credit providers had allowed ownership in respect of the vehicles to be transferred to third parties.

18. In the complaint to the NCR the Applicant prayed for the following remedies:

(1) The credit agreements in question be rescinded; and

(2) All instalments paid under these credit agreements be repaid.

19. On 6 June 2016, the Applicant applied for an interim order which would provide relief in the following terms:

Credit providers cease collections on the accounts in terms of section 129 and 130 of the NCA pending the finalisation of the complaint with the regulator.

APPLICABLE SECTIONS OF THE ACT AND CASE LAW

20. Section 149 (1) provides as follows:

At any time, whether or not a hearing has commenced into a complaint, a complainant may apply to the Tribunal for an interim order in respect of that complaint, and the Tribunal may grant such an order if –

(a) There is evidence that the allegation may be true; and

(b) An interim order is necessary to –

(i) Prevent serious irreparable damage to that person;

(ii) Prevent the purposes of the Act from being frustrated;

(c) The respondent has been given a reasonable opportunity to be heard, having regards to the urgency of the proceedings; and

(d) The balance of convenience favours the granting of the order.

POINTS IN LIMINE

21. Standard Bank pointed out that it had obtained a judgment against the Applicant in 2015. Therefore there is already a judgment between it and the Applicant on the issues which are pertinent to this application for interim relief. Standard Bank argued that the application is purely academic, because that which the Applicant seeks to prevent, occurred in 2015 and that on this point alone the matter against Standard Bank could be disposed of.

22. At the hearing the Applicant accepted that Standard Bank had obtained a judgment against the Applicant and that the Tribunal did not have the power to set aside a judgment of the High Court. The Applicant informed the Tribunal that when it had bought the application for interim relief he did not know about the judgment. He is now in the process of bringing an application for rescission of judgment. The Applicant accepted that no relief could be granted by this Tribunal against Standard Bank.

23. Nissan argued that the Tribunal lacks jurisdiction to hear the matter because there is no evidence that the NCR hasreferred the complaint to the Tribunal, nor has the NCR issued a notice of non-referral in response to the Applicant’s complaint.

24. Following discussion on this point at the hearing, Nissan accepted that the Applicant had laid a complaint with the NCR and that its arguments on this issue would focus on the merits of the complaint and whether this disclosed prohibited conduct on the part of Nissan. Nissan therefore accepted that the Tribunal had jurisdiction to consider the merits of the matter.

25. This issue was further compounded by the fact that, at the hearing, it was confirmed that on 26 August 2016 the NCR informed the Applicant, by letter, that it was closing its file on the matter because the matter had been referred by the Applicant to the Tribunal. This raises the point whether there is still a complaint before the NCR in terms of which interim relief could be granted. The Tribunal decided to consider all the issues in this judgment because the Applicant could request a notice of non-referral from the NCR and could then refer the matter to the Tribunal himself in terms of section 141 (b). The Tribunal deemed it to be in the interests of all parties that a judgment on the merits be issued.

APPLICANT’S ARGUMENTS

26. The Applicant accepted that it could not take the matter any further as far Standard Bank is concerned and indicated that he would be applying for rescission of judgment.

27. As far as Nissan is concerned the Applicant argued that Nissan has contravened section 3 (c), (d) and (e) of the Act which deal with the purposes of the Act and section 163 which deals with agents.

28. The relevant parts of section 3 read as follows:

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) promoting responsibility in the credit market by –

(i) encouraging responsible borrowing, avoidance of over-indebtedness and fulfilment of financial obligations by consumers and by

(ii) discouraging reckless credit granting by credit providers and contractual default by consumers;

(d) Promoting equity in the credit market by balancing the respective rights and responsibilities of credit providers and consumers;

(e) Addressing and correcting imbalances in negotiating power between consumers and credit providers by …….

(iii) providing consumers with protection from deception and from unfair or fraudulent conduct by credit providers and credit bureaux.

29. Section 163 deals with agents and outlines the responsibilities that credit providers, debt counsellors and payment distribution agents have when employing agents to carry out their duties under the Act.

30. The Applicant argued that an eNatis motor vehicle ownership query confirmed that the vehicle which he had purchased from Nissan has been placed under administration. This he alleges proves that the title to the vehicle is not in his name.

31. The Applicant is of the view that the culprit to this scheme, Holmes, was Nissan’s agent and that Nissan had a responsibility to protect him from Holmes’ fraudulent schemes.

NISSAN’S RESPONSE

32. Nissan argued that the Applicant has not established a right to interim relief because

32.1 There is no evidence that Nissan participated in the ‘sinister practice’ complained of or that Nissan participated in the transfer of ownership in respect of the vehicles financed by it whilst the credit agreement between Nissan and the Applicant was still in force, or after the cancellation thereof.

32.2 Nissan was not a party to any alleged fraud and produced the certificate of registration for the vehicle which indicated that it is the registered title holder of the vehicle with registration having been effected on 7 February 2013.[1]

32.3 The Applicant’s allegations that Holmes acted as Nissan’s agent are unsubstantiated and Nissan denies that they are correct. In fact the Applicant was a willing participant in the scheme as he was involved in a business relationship with Holmes. For the first eighteen months of the credit agreement he abided by his obligations.

32.4 After this period the Applicant failed to comply with his obligations in terms of the credit agreement with Nissan and there is an outstanding amount of R490 345,20 owing to Nissan which remains due and payable.

32.5 The fact that the Applicant may have been the victim of a fraudulent scheme does not prohibit Nissan from enforcing its contractual rights in terms of the agreement which it concluded with the Applicant.

32.6 The Applicant is contractually bound to pay Nissan the outstanding balance on the credit agreement and having to pay this does not

amount to irreparable damage.

32.7 Nissan’s enforcement of its contractual rights in terms of the agreement with the Applicant cannot be said to frustrate the purposes of the Act.

32.8 The Applicant has approached the Tribunal as a strategy to frustrate Nissan in the legal action instituted against the Applicant which amounts to an abuse of process.

CONSIDERATION

33. As has been stated in previous decisions by the Tribunal the Applicant in an application for interim relief must have laid a complaint with the NCR.[2] In this particular matter there is a question mark regarding the complaint because the NCR has indicated that it has closed its file and does not intend to take the matter any further. This does not however prohibit the Applicant from proceeding to bring the matter directly to the Tribunal should he receive a notice of non-referral from the NCR in terms of section 141 (1) (b).

34. Hence the Tribunal deems it in the interests of the parties to deal with the issue of what constitutes a complaint and whether this matter falls within the ambit of the Tribunal’s jurisdiction to hear the matter or grant the relief sought by the Applicant.

35. The Tribunal has been established to adjudicate on issues relating to prohibited conduct and its powers are set out in section 150 of the Act.

36. The Tribunal is a statutory body which does not have inherent powers and so must ensure that it acts within the ambit of its founding

legislation.

37. Therefore before the Tribunal can grant interim relief it must be established that there is a clear allegation of prohibited conduct on the part of the Applicant.

38. In addition, as correctly conceded by the Applicant, the Tribunal does not have the power to set aside a high court order and therefore

cannot assist the Applicant in its complaint against Standard Bank.

39. There is no evidence before the Tribunal that Nissan engaged in prohibited conduct. Whilst it seems that the Applicant may have been the victim of certain fraudulent practices, there is no evidence that Nissan knew or participated in these fraudulent practices when it granted the loan to the Applicant for the purchase of the motor vehicle.

40. The Tribunal is of the view that the correct forum for these issues to be ventilated is the civil courts. Nissan has issued summons against the Applicant and the Applicant has indicated that he intends to defend the matter.

41. Even if the Tribunal could grant the interim relief which the Applicant is requesting, such interim relief would serve no purpose other than to delay the matter for six months which would further prejudice the Applicant as interest may continue to accrue on his outstanding debt.

42. It seems that ultimately what the Applicant is hoping for is that the credit agreements which he has concluded with both Standard Bank and Nissan be set aside and that he be refunded the money which he has already paid for the vehicles. These issues can only be adjudicated upon by the civil courts and not by the Tribunal.

ORDER

43. The application for interim relief is dismissed

44. There is no order as to costs

T Woker

……………..

Presiding Member

Ms Laura Best and Mr Xolela May concurring

[1] At the hearing Nissan indicated that it had abandoned all hopes of getting the vehicle back because experience had demonstrated that in such circumstances it would be very difficult if not impossible to trace the vehicle.

[2] See Ingregyn 40 CC t/a Reconstratev ABSA Bank Ltd NCT 16162/2014/149(1).