IN THE NATIONAL CONSUMER TRIBUNAL, 
HELD IN PRETORIA

CASE No: NCT7253/2009/138(1) (P)
DATE:21/04/2010

In the matter between
SINKI SUZAN LIPHOKO.................................................................Applicant/Consumer
(Represented by Martha Aletta Strydom a debt counsellor)

and

ABSA BANK	….............................................................1st Respondent/Credit Provider
AFRICAN BANK...........................................................2nd Respondent/Credit Provider
ELLERINE HOLDINGS LIMITED	…............................3rd Respondent/Credit Provider
EDCON (PTY) LTD (JET STORES)............................4th Respondent/ Credit Provider
ORANGE CASH LOANS.............................................5th Respondent / Credit Provider

JUDGMENT
1.      INTRODUCTION
1.1    The Applicant is a consumer who applied for debt review in terms of the  National Credit Act 34 of 2005 (the Act). The debt counsellor representing the debtor is
1.2 The debt counsellor found that the applicant was experiencing difficulty satisfying all obligations under her credit agreements in a timely manner.
1.3 The debt counsellor recommended a restructuring of the payment instalments to all credit providers, as per the agreement which is attached hereto marked "Annexure A".
1.4 All the respective credit providers (Respondents to this consent order) consented to this agreement.

2.      APPLICATION FOR CONSENT ORDER

2.1 The Applicant applied for a consent order on 9 December 2009. The Tribunal expressed concern regarding the credit which had been granted to the Applicant. The debt counsel informed the Tribunal that she had requested the contracts from the various credit providers in order to assess the credit which had been granted but that the credit providers had failed to supply her with these agreements. The matter was adjourned in order for the Tribunal to subpoena the contracts and/or to subpoena the Respondents in order to enable to Tribunal to properly assess the credit which had been granted to the Applicant. In particular the Tribunal was concerned to establish whether
1.	the Applicant was over-indebted and
2.	whether any of the respondents had granted credit to the Applicant recklessly.

2.2 The matter commenced again on 7 April 2010. The Tribunal had been provided with two contracts regarding credit which had been granted to the Applicant by African

2.3 The Representative from Orange Cash Loan (Orange) informed the Tribunal that he has been doing business since 2005. He had made a number of short term loans to the Applicant over the years which the Applicant had always been able to pay back. On each occasion he did an assessment of the Applicant's financial position and on each occasion he granted the Applicant a loan which never exceeded 60% of her disposable income taking into consideration her debts on the date on which the Applicant applied for the loan. He never gave the Applicant more than R1 200 as this was the maximum which in his opinion she would be able to repay. In most instances the loans were less than this. The last loan which he granted to the Applicant was on 5 June 2009. This loan was for R700. The Applicant was due to repay R833.55 on 26 June 2009. This amount included certain fees as well as interest at a rate of 5% per month (the acceptable interest rate for small loans. Small loans as per Regulation 39 read with Regulation 42 part C of the Act are loans that do not exceed R8 000 which are repayable within 6 months). This should have been paid via a debit order on the Applicant's bank account. The debit order was however returned due to insufficient funds. The Applicant did not inform the credit grantor that she had outstanding loans with African Bank. Orange informed the Tribunal that in his experience, consumers did not disclose the full extent of their loans and he took this into consideration when granting loans. This was the reason why he never granted a loan which exceeded 60% of a debtor's disposable income. It was also difficult to establish whether there were other loans from other credit providers as information is not always kept up to date or forthcoming. Orange stated that had he been aware of the loans from African Bank he would not have granted the Applicant a further loan.

3.      CONSIDERATION OF THE AFRICAN BANK CONTRACTS.
3.1 On 3 September 2007 African Bank gave the Applicant a loan of R11 500. The contract regarding this loan is attached and is marked "Annexure B". An Absa Bank statement from 1 June 2007 to 3 September 2007 which refers to the Applicant's bank account is attached to this contract. A consideration of this statement indicates that on numerous occasions the Applicant's debt orders were returned due to insufficient funds. See 28 June 2007, 29 June 2007, 26 July 2007, 31 August 2007. Also attached to the contract is a document headed "Income and Expense Declaration". The document establishes that at the time the Applicant earned a net salary of R2 196.29. This document establishes that the Applicant was asked numerous questions which were designed to establish her financial position. In answer to the question monthly expenses -clothing the Applicant simply states "buy with account". However, there is no indication of how many accounts and how much is owed. The Absa Bank employee who dealt with this loan was Poppy Ntshingila.

3.2 The Applicant again applied for a loan from Absa Bank on 5 June 2008. On this occasion the Applicant was granted a loan of R6 750. 00. The contract is attached marked "Annexure C". The Absa Bank employee who dealt with this loan was again Poppy Ntshingila. The Applicant was again asked a series of questions regarding her financial position but in this contract the answers are different to those given when she was granted a loan in 2007. In addition, there is no reference in this document to the 2007 loan. Again an Absa Bank statement is attached (from 30 May 2008 to 5 June 2008) and this again indicates that debit orders were returned due to insufficient funds. The Applicant is asked about her clothing payments and she replies "buy on account". There is no indication of how many accounts and how much the Applicant owes on these accounts.
4       CONSIDERATION
4.1 An application for a consent order regarding a plan of repayment between a debtor and her creditors is granted by the Tribunal when the debtor is not over-indebted but is nevertheless experiencing difficulty repaying her debts in a timely manner (see s86 (7) (b) read with s86 (8) (a)). If a debtor is over indebted the matter must be referred to the magistrate's court for consideration. In National Credit Regulator v Nedbank Ltd 2009 (6) SA 295 (GNP) the court held cases of over indebtedness must be referred to the magistrates' court so as to ensure judicial oversight of the entire process (at 304-305). The magistrates' court is granted certain powers in terms of the Act to relieve the debtor's over indebtedness which are not granted to the Tribunal. In addition, the magistrates' court can consider whether or not credit has been granted recklessly and if it has, it has certain powers to deal with this. In particular, in terms of section 83 the court may set aside some or all of the debtor's obligations or it may suspend the force and effect of the credit agreement. The Tribunal does not have these powers.

4.2 In order to decide whether or not a debtor is over indebted, regard must be had to section 79. A consumer is regarded as being 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 consumers 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.
The Applicant has a disposable income each month, after all her necessary expenses have been paid of R 1 033.68. She owes R36 017.67 to her creditors. Her history of debt repayment indicates that she will have extreme difficulty repaying this amount in a timely fashion. The consumer is clearly over indebted In addition, there is evidence which suggests that credit was granted recklessly. The matter must therefore be dealt with by the magistrates' court.

5.      CONCLUSION

5.1    The application for a consent order is refused and the Tribunal makes the following order:

The matter is referred to the National Credit Regulator in order to investigate whether there was prohibited conduct on the part of any of the Respondents. The Regulator is requested to report back to the Tribunal within a period of one month from the date of this judgment regarding its findings.

Handed down on this ..21. day of April 2010

PROFESSOR T WOKER

Presiding Member

IN THE-NATIONAL CONSUMER TRIBUNAL  
HELD AT CENTURION	'	

CASE NO.	
In the matter between:
Sinki Suzan Liphoko........................................................................Applicant/Consumer
Identity number: -----------

'and.

Absa Bank Limited	…....................................................1st Respondent/Credit Provider
African Bank Limited......................................................2nd Respondent/Credit Provider
Ellerine Limited …........................................................3rd Respondent  /Credit Provider
(Furn City)
Edcon (Pty) Ltd …...........................................................4th Respondent/Credit Provider
(Jet Store Account 
Orange Cash Loan	…....................................................5th Respondent/Credit Provider

DRAFT CONSENT ORDER IN TERMS OF SECTION 86(8) READ TOGETHER
WITH SECTION 138 OF THE NATIONAL CREDIT ACT 34 OF 2005

WHEREAS:

a.	The consumer applied for debt review in terms of the National Credit Act 34 of 2005;

b.	The debt counsellor found that the consumer is experiencing difficulty satisfying all
obligations under the credit agreements in a timely manner;

c.	The debt counsellor recommended a restructuring of the payment installments to all the
|            credit providers, as per the agreement which is attached hereto marked: "Annexure B";
d.	All the respective credit providers and the consumer/applicant consented to this agreement,
which consents are hereto attached marked "Annexure C"

NOW THEREFORE:

The Tribunal, being satisfied that the Applicant and Respondent are parties to a debt rearrangement facilitated by a debt counsellor under section 86(7) of the National Credit Act, hereby orders, by consent of the parties:

1. That the payment structures of the agreement between the Applicant and the respondents as set out in Annexure "B", be made an order of the National Consumer Tribunal;
2. Which agreement restructures the payment installment by extending the payment period as indicated in Annexure "B"

Creditor	Reference	Annual Interest	New Monthly Installment	Balance	Estimated Period in Months	
Absa Bank Ltd	5544351116968016	16.00%	R52.00	R1 718.07	46 months	
African Bank Ltd	5629283002 5629283003	15.50% 15.50%	R280.00 R180.00	R10 484.69 R6 428.47	47 months 46 months	
Ellerine Holdings Limited	952-8301-8
*	21.00%	R270:00	R14 275.02	58 months	
Edcon (Pty) Ltd	let Store
7006600100066858 434	23.70%	R100.00	R2 287:86	34 months	
Orange Cash Loan	6408180301086	15.00%.   .......	R100.00	R823,56 		,13 months	

 DATED at Centurion this the	day of       	2009

REGISTRAR OF THE NATIONAL CONSUMER TRIBUNAL Applicant/Consumer
Debt Counsellor on behalf of the Consumer
.Dated at Sasolburg	 on this 15 day of	October        2009.	

Applicant/Consumer
 TO:
THE REGISTRAR OF THE TRIBUNAL CENTURION

1. African Bank Limited	
59 16th 
Midrand
1685

2. Absa Bank Limited
3The Crescent, Westway Office Park,
Westville	
4000

3.  Edcon Cash loan
Edgardale Press Avenue
Crown Mines
2025

4.Ellirine  Holdings Limited
38 Elston Street
Benoni
1500

5. Orange Cash Loan
2G Wandellaan
Sasolburg
1947