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IN THE NATIONAL CONSUMER TRIBUNAL

HELD IN CENTURION

Case Number: NCT/7641/2013/165(1)(P)NCA

DATE:22/10/2013

In the matter between:

NEDBANK LIMITED …..................................................................................................................APPLICANT

and

SKHUMBUZO SAMUEL MARUMO.........................................................................................1^st RESPONDENT

SALAMINAH DIKONELO MARUMO.......................................................................................2^nd RESPONDENT

CAPITEC BANK LIMITED......................................................................................................3^rd RESPONDENT

JET STORES a division of EDCON (PTY) LTD.......................................................................4^th RESPONDENT

MERVYN JOEL SMITH ATTORNEYS......................................................................................5^th RESPONDENT

Coram:

Adv J Simpson – Presiding member

Ms D Terblanche – Member

Ms H Devraj – Member

Date of hearing – 27 September 2013

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JUDGEMENT

APPLICANT

1. The Applicant is Nedbank Limited, a limited liability company and commercial bank duly registered in terms of the laws of the Republic of South Africa, with registration number 1951/000009/06, and with principal place of business at Johannesburg, Gauteng (hereinafter referred to as the “Applicant”).

2. The Applicant is a registered credit provider in terms of the National Credit Act, 34 of 2005 (the “Act”).

3. At the hearing the Applicant was represented by an attorney, Ms Nadine Hills.

RESPONDENTS

4. The First Respondent is Skhumbuzo Samuel Marumo, a major male consumer residing in Vereeniging (hereinafter referred to as “the First Respondent”).

5. The Second Respondent is Salaminah Dikonelo Marumo, a major female consumer residing in Vereeniging (hereinafter referred to as “the Second Respondent”).

6. The Third Respondent is Capitec Bank Limited, a limited liability company and commercial bank duly registered in accordance with the company laws of the Republic of South Africa, with registration number 1980/003695/06, and with registered place of business in the Western Cape (hereinafter referred to as “the Third Respondent”).

7. The Fourth Respondent is Jet Stores, a division of Edcon (Pty) Ltd, a company duly registered in accordance with the company laws of the Republic of South Africa, with registered place of business in Johannesburg (hereinafter referred to as “the Fourth Respondent”).

8. The Fifth Respondent is Mervyn Joel Smith Attorneys, an Attorney Firm practising as such in Johannesburg (hereinafter referred to as “the Fifth Respondent”).

6. There was no appearance by any of the respondents or their representative/s at the hearing.

BACKGROUND

10. During April 2011, a debt counsellor by the name of Lorenco Lewis¹, applied for a debt re-arrangement agreement between the Applicant, first, second, third, fourth and fifth Respondents to be confirmed as an order of the Tribunal. Presiding member, Advocate HFN Sephoti, confirmed this debt re-arrangement as an order of the Tribunal on 18 July 2011.

11. The Applicant has now brought an application in terms of section 165(1) of the Act to the Tribunal, to rescind the order of the Tribunal dated 18 July 2011.

APPLICABLE SECTIONS OF THE ACT

12. The application is brought in terms of Section 165(1)(a) of the Act, which states the following:

“Variation of order

165. The Tribunal, acting of its own accord or on application by a person affected by a decision or order, may vary or rescind its decision or order-

(a) erroneously sought or granted in the absence of a party affected by it;

(b) in which there is ambiguity, or an obvious error or omission, but only to the extent of correcting that ambiguity, error or omission; or

(c) made or granted as a result of a mistake common to all the parties to the proceedings”.

13. The Application was initially filed as a consent order application in terms of section 138(1) of the Act², which provides that;

“Consent orders

138. (1) If a matter has been-

(a) resolved through the ombud with jurisdiction, consumer court or alternatively

(b) investigated by the National Credit Regulator, and the National Credit Regulator and the respondent agree to the proposed terms of an appropriate order, the Tribunal or a court, without hearing any evidence, may confirm that resolution or agreement as a consent order.”

THE HEARING

14. This matter was heard on 27 September 2013 in Centurion.

APPLICANT’S SUBMISSIONS

15. The basis of the Applicant’s application, as contained in the pleadings, can be summarised as follows:

15.1 The Applicant is of the view that that the instalments ordered by the Tribunal will not lead to the eventual satisfaction of the debt owing, within the period so ordered.

15.2 The Applicant further alleges that the debt counsellor³, who acted on behalf of the First and Second Respondents, mislead the Tribunal into believing that a declined proposal was indeed accepted by the Applicant.

15.3 The Applicant avers that the order was therefore granted erroneously and that the application by the debt counsellor did not comply with the provisions of section 138 of the Act.

16. At the hearing the Applicant’s representative made further oral submissions to the Tribunal. Her submissions were essentially a restatement of the submissions made in the application pleadings. She further added that the Applicant had in fact sent, what can be deemed as a counter-proposal, to the debt counsellor on 12 May 2011. A copy of the letter was handed up to the Tribunal at the hearing and entered into the record marked as ‘Annexure A”. The letter essentially confirms that the Applicant accepted the debt re-arrangement proposed by the debt counsellor but on specific payment terms and interest rates as set out in the letter. The payment terms set out in the letter do not match the payment terms submitted by the debt counsellor in the original application for the debt re-arrangement to be made an order of the Tribunal or the eventual order that was made by the Tribunal. She submitted that the counter proposal letter was merely for information purposes and to substantiate its submission that the letter which the debt counsellor attached to the original application was not in fact an acceptance of the proposal made. The letter now handed to the Tribunal could however not be used or regarded as a current acceptance of the debt re-arrangement proposal made by the debt counsellor in 2011.

CONSIDERATION OF THE EVIDENCE ON A DEFAULT BASIS

17. During January 2013 the Applicant filed the application with the Tribunal. Subsequently a Notice of Complete Filing was issued by the Registrar to the Applicant and all the Respondents on 31 January 2013.

18. In terms of Rule 13 of the Rules of the Tribunal, the Respondents had to respond within 15 days by serving an answering affidavit on the Applicant. The Respondents however failed to do so.

19. The Applicant did not file an application for a default order in terms of Rule 25(2).

20. The allegations made in the founding papers in this application therefore, as at the date of the hearing of the matter by the Tribunal, remain unanswered by the Respondents.

21. Rule 13(5) provides as follows:

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

22. Therefore, in the absence of any answering affidavit filed by the Respondents, the Applicant’s application and all of the allegations contained therein are deemed to be admitted.

23. The Tribunal therefore accepts the following evidence as having been admitted and accordingly proven on a balance of probabilities:

23.1 The Tribunal examined the “acceptance letter from Nedbank which the debt counsellor submitted on the original application for the debt re-arrangement to be made an order of the Tribunal. The letter is marked as page 7 on the original file. The “letter” is not in the format of a normal letter and is not signed. It rather appears to be a system generated information sheet intended to convey information regarding the account. The “letter” in any event clearly states that the proposal is not accepted and that the information in the proposal documents is insufficient to make a proper assessment. It can therefore not be relied on to indicate an acceptance by the Applicant to the debt re-arrangement proposal made by the debt counsellor.

23.2 The Panel accepts that the Applicant did not accept the debt-rearrangement proposal made by the debt counsellor at the time.

CONSIDERATION OF THE LAW APPLICABLE

Section 165 of the Act

24. Section 165 of the Act provides for a rescission or variation of an order granted by the Tribunal under the following circumstances:

24.1 When the order of the Tribunal had been erroneously sought or granted in the absence of a party affected by it;

24.2 There is ambiguity, or an obvious error or omission, but only to the extent of correcting that ambiguity, error or omission; or

24.3 Made or granted as a result of a mistake common to all the parties to the proceedings.

Erroneously sought or granted

25. In the absence of any previous decisions by the Tribunal which could serve as guidance in this matter, the decisions and Rules of the High court were consulted.

26. Rule 42(1)(a) of the High Court provides that:

“(1) The court may, in addition to any powers it may have, mero motu or upon the application of any party affected, rescind or vary: an order or judgment erroneously sought or erroneously granted in the absence of any party affected thereby…”

27. In the matter of Lodhi 2 Properties Investments CC and Another v Bondev Developments (Pty) Ltd⁴ the court dealt with two principles applicable to rule 42(1)(a):

1. A judgment to which a party is procedurally entitled cannot be considered to have been granted erroneously by reason of facts of which the judge who granted the judgment, as he was entitled to do, was unaware; and

2. Similarly, a judgment to which a plaintiff is procedurally entitled in the absence of the defendant cannot be said to have been ‘granted erroneously’ in light of a subsequent disclosed defence⁵.

28. This rule was described, in the matter of Promeria Drukkers & Uitgewers (Edms) Bpk⁶ as

“a procedural step designed to correct expeditiously an obviously wrong judgment or order.”⁷

The court went on to say that:

“Relief will be granted under this Rule if there was an irregularity in the proceedings; if the court lacked legal competence to have made the order; and if the Court, at the time that the order was made, was unaware of facts which, if known to it, would have precluded the granting of the order (see Nyingwa v Moolman)⁸.”

29. There is very little guidance to be found in case law regarding the term “erroneously sought”. The term “erroneously sought” is also not defined in the Legal Dictionary of Words and Phrases. It would appear that the term “erroneously granted” is generally considered and applied when assessing applications of this nature.

30. In the matter of First National Bank of South Africa Ltd v Jurgens and Others⁹ which had been confirmed on appeal¹⁰ the court held that a judgment that was not mistakenly or incorrectly sought where the relief granted to the plaintiff was precisely the relief that its counsel had requested. The court held as follows:

“The ordinary meaning of ‘erroneous’ is ‘mistaken’ or ‘incorrectly sought’. The relief accorded to the plaintiff was precisely the relief that its counsel requested. The complaint now is that there is an omission of an accessory feature from the judgment. I am unable to perceive how an omission can be categorised as something erroneously sought or erroneously granted.

I consider that the Rule only has operation where the applicant has sought an order different from that to which it was entitled under its cause of action as pleaded. Failure to mention a form of relief which would otherwise be included in the relief granted is not in my opinion such an error.”

31. In the matter of Nyingwa v Moolman N.O.¹¹ the court held as follows:

“It therefore seems that a judgement has been erroneously granted if there existed at the time of its issue, a fact of which the Judge was unaware, which would have precluded the granting of the judgment and which would have induced the Judge, if he had been aware of it, not to grant the judgment.”

32. A similar decision was made in the matter of Naidoo and Another v Matlala N.O. and Others¹² in which the court referred to aforesaid matter (Nyingwa) and held that:

“In general terms a judgment is erroneously granted if there existed at the time of its issue a fact of which the judge was unaware, which would have precluded the granting of the judgment and which would have induced the judge, if aware of it, not to grant the judgment”

33. The court in the Naidoo-matter further held that:

“it follows that if material facts are not disclosed in an ex parte application – see Schlesinger v Schlesinger 1979 (4) SA 342 (W) …the order will be erroneously granted.”

34. It was said in the matter of Bakoven Limited v JG Howse¹³ that:

“Once it is held that the judgment in question was erroneously granted, it is not necessary for an Applicant (in the position of the present Defendant) to show “good cause” in the context of an explanation for the default and a bona fide defence.”

35. The courts have held that in an application for variation or rescission of an order, the Applicant bears the onus of establishing that the order was erroneously granted.¹⁴ The court considered the meaning of the words "erroneously granted". This is dealt with in the Bakoven-case¹⁵ where it was stated:

"An order or judgment is 'erroneously granted' when the Court commits an 'error' in the sense of 'a mistake in a matter of law appearing on the proceedings of a Court of record' (The Shorter Oxford Dictionary). It follows that a Court in deciding whether a judgment was 'erroneously granted' is, like a Court of Appeal, confined to the record of proceedings. In contradistinction to relief in terms of Rule 31(2)(b) or under the common law, the applicant need not show 'good cause' in the sense of an explanation for his default and a bona fide defence (Hardroad (Pty) Ltd v Oribi Motors (Pty) Ltd (supra) at 578F-G; De Wet (2) at 777F-G; Tshabalala and Another v Pierre  1979 (4) SA 27 (T) at 30C-D). Once the applicant can point to an error in the proceedings, he is without further ado entitled to rescission."

APPLYING THE LAW TO THE EVIDENCE

36. Section 138 of the Act, read with section 86(8)(a)¹⁶, provides that if a debt counsellor makes a recommendation in terms of section 86(7)(b), and the consumer and each credit provider referred to in the proposal, accepts that proposal, the debt counsellor must record the proposal in the form of an order, and if it is consented to by the consumer and each credit provider concerned, file it as a consent order in terms of section 138 of the Act. On this basis, the Tribunal then confirms such a debt rearrangement as an Order of the Tribunal.

37. It is evident from the above that the Applicant did not, at any stage, accept the proposal by the debt counsellor, and neither did the Applicant consent to the filing thereof as a consent order in terms of section 138 of the Act. The only document relating to the Applicant, contained in the section 138 case file, is an indication by the Applicant that they were not provided with sufficient documentation to make a proper assessment. The Respondents were therefore not entitled to apply for the debt re-arrangement to be made an order of the Tribunal.

38. All the credit providers concerned were required to agree to the debt re-arrangement before it could be confirmed as an order of the Tribunal.

39. The order was thus granted erroneously under the mistaken belief that all the credit providers referred to in the debt re-arrangement proposal had agreed to the proposal.

40. Under these types of circumstances the order made cannot simply be varied by removing the Applicant from the order and leaving the other debt re-arrangements with the remaining credit providers in place. The fact that one of the credit providers referred to in the debt review proposal did not agree to the debt re-arrangement ensures that the debt counsellor did not comply with the requirements of the Act in the first place and the order could not be granted by the Tribunal. The order must therefore be rescinded.

ORDER

41. Accordingly, the Tribunal makes the following order:

29.1 The order granted on 18 July 2011, as per case number NCT/2076/2011/138(1), confirming the debt re-arrangement agreement as an order of the Tribunal, is hereby rescinded.

29.2 No order as to costs

DATED ON THIS 22^th DAY OF OCTOBER 2013

[signed]

Adv J Simpson

Presiding Member

Ms D Terblanche and Ms H Devraj concurring

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