IN THE NATIONAL CONSUMER TRIBUNAL
HELD AT CENTURION

Case number: NCT/15542/2014/148(1)
In the matter between:

HANS REINHARD PETTENBURGER-PERWALD		APPELLANT  
OBO 
GIOVANNI DANIEL CLOETE
LORETTA CLOETE				

and

ABSA BANK LIMITED						FIRST RESPONDENT
RCS CARDS 	(PTY) LIMITED					SECOND RESPONDENT
DIRECT AXIS (SA) (PTY) LIMITED				THIRD RESPONDENT
EDCON (PTY) LIMITED 					FOURTH RESPONDENT
FOSCHINI RETAIL GROUP (PTY) LIMITED			FIFTH RESPONDENT

Coram:
Adv F Manamela 	– 	Presiding member
Prof Bonke Dumisa 	– 	Member
Mr F Sibanda 		– 	Member 

Date of Hearing 		– 	23 September 2014 

JUDGMENT AND REASONS

THE PARTIES

1.	The Appellant is Mr Hans Reinhard Pettenburger-Perwald a debt counsellor registered in terms of the National Credit Act, No 34 of 2005 (“the NCA”) with registration number NRDC49 (hereinafter referred to as “the Appellant”). The Appellant is acting on behalf of Mr Giovanni Daniel Cloete and Ms Loretta Cloete, consumers who jointly applied for the restructuring of their debt in terms of the NCA.

2.	The first to fifth Respondents are credit providers registered in terms of the NCA. 

JURISDICTION

3.	The Appellant lodged an appeal against the decision of a single member of the Tribunal in terms of section 148(1) of the NCA, which states that –

“(1) A participant in a hearing before a single member of the Tribunal may appeal a decision by that member to a full panel of the Tribunal”

4.	Therefore the Tribunal has jurisdiction to hear this matter. 

ISSUES TO BE DECIDED

5.	The Tribunal must determine whether the single member erred in refusing to make a debt-rearrangement agreement an order of the Tribunal. 

BACKGROUND

6.	The Appellant lodged an application to the Tribunal in terms of section 86(8) of the NCA, on behalf of Mr Giovanni Daniel Cloete and Mrs Loretta Cloete to have a debt re-arrangement agreement made an order of the Tribunal in accordance with section 138(1) of the NCA. 

7.	The application was considered by a single member, Ms P. Beck, who refused to grant the application on 17 June 2014 stating that – 

“The Applicant’s net disposable income is the sum of R3 749.07.
The re-arranged instalment is the sum of R4 164.97.
The Applicant is financially unable to meet the agreed instalments to the debt re-arrangement.
The Applicant therefore does not have the disposable income to comply with the consent order.” 

8.	On 20 June 2014 the Appellant lodged an appeal against the decision of the single member, stating that – 

“The Tribunal Member responsible for the ruling interpreted the budget incorrectly. The consumer has sufficient funds for the monthly repayment.”

9.	A Notice of Complete Filing was sent to the parties on 27 June 2014. The matter was set down for hearing on 23 September 2014.

THE HEARING

10.	At the hearing the Appellant was represented by Mr Rynhardt De Lange (hereinafter referred to as “Mr De Lange”) who appeared via Skype video and audio transmission. There was no appearance by any of the Respondents or their representatives at the hearing.

11.	Mr De Lange explained to the Tribunal how the income and expenditure statement was compiled and that according to him the consumer has sufficient funds to meet the monthly restructured instalment. 

12.	Mr De Lange referred the Tribunal to page 19 of the paginated bundle, containing a summarised version of the income and expenditure statement of the consumer as submitted with the original application. According to Mr De Lange, the amount of R4 700 in the line item “Gross Collectable” is what is at the consumer’s disposal for repaying the creditors. He then referred the Tribunal to page 21 containing a document entitled “Consumer Budget”. The Consumer Budget clearly delineates the income and expenses of the consumer and has a line item entitled “Amount Available to be distributed amongst Creditors”, showing an amount of R4 700.00. This is the amount that the consumer has for debt repayment and is clearly higher than the monthly instalment of R4 164.97, as reflected in the draft debt re-arrangement application.   

13.	The Consumer Budget document was submitted by the Appellant for purposes of assisting the Tribunal in interpreting the income and expenditure statement but was not part of the original application.

CONSIDERATION OF THE EVIDENCE 

14.	The original income and expenditure statement has a line item entitled ‘Gross Income’, reflecting an amount of R10 460.13. This is followed by statutory and employer deductions leaving a ‘Net Income’ of R9 198.65. Then after subtracting ‘Other Income’ of R0.00, the consumer is left with a ‘Total Disposable Income’ of R9 198.65. From the ‘Total Disposable Income’ various expenses are deducted leaving an amount of R4 700.00 shown on the statement as ‘Available Amount’. Thereafter there is a contingency amount of R0.00 leaving a ‘Gross Collectable’ amount of R4 700.00 This is the amount that the Appellant contends the Tribunal Member should have interpreted as the amount available for debt repayment. 

15.	However, the income and expenditure statement shows further deductions from the ‘Gross Collectable’ amount. DC Aftercare costs and PDA fees are deducted from the ‘Gross Collectable’ amount leaving a ‘Gross Debt Affordability’ amount of R4 271.36 Thereafter an amount of R522.29 representing credit agreement linked insurance, is deducted leaving a final line item entitled ‘Net debt affordability for distribution to settle Debts’ reflecting an amount of R3 749.07 This is the amount that the Tribunal Member interpreted as being at the consumer’s disposal to settle the monthly instalment of R4 164.97 and is clearly insufficient. 

16.	Anyone reading the income and expenditure statement as submitted by the Appellant in the original application will be left in no doubt that the line item ‘Net debt affordability for distribution to settle Debts’ represents the amount available to settle the outstanding debt, after adjusting for all expenses and deductions.

17.	It is not clear on what basis the Appellant interprets the term ‘gross’ as used in the line item ‘Gross Collectable’ to mean this is the amount to be used to settle debts. What is more, after ‘Gross Collectable’ there is still another item called ‘Gross Debt Affordability’ which is still not the correct item containing what the consumer can use for debt repayment. 

18.	The Collins English Dictionary defines gross as – 

“to earn as total revenue, before deductions for expenses..”

19.	The Black’s Law Dictionary defines gross as – 

“..whole, entire, total…opposed to net…not adjusted or reduced by deductions or subtractions.”

20.	From the above definitions a gross amount is what is earned before deductions. As reflected in the income and expenditure statement, correctly so, various deductions are made after the ‘Gross Collectable’ amount to arrive at a net amount, the purpose of which is clearly shown as ‘for distribution to settle debts’.  The Tribunal Member could not have erred in her interpretation of the income and expenditure statement.   

21.	It must be understood that the Tribunal Member makes a decision based on the information submitted in the application and cannot be expected to conjure up any explanation or make different inferences regarding the consumer’s ability to repay the debt, other than what is presented.  

22.	The Tribunal is aware that an assessment of a consumer’s income and expenditure position is not a requirement of the NCA when considering a debt re-arrangement application. However, the Tribunal has the discretion, in the interest of the consumer, to consider whether the consumer can afford the agreed repayments. 

CONCLUSION

23.	The information submitted indicates that the amount at the consumer’s disposal is less than the total monthly instalment. Therefore the Tribunal does not find any basis for setting aside the refusal of the application.

24.	The Appellant is free to submit a new application for the debt re-arrangement, using a format such as the one on page 21 of the bundle of documents, clearly showing the consumer’s ability to repay the debt, if the consumer’s financial position has not changed. 

ORDER

25.	Under the circumstances and for the reasons stated above, the Tribunal orders as follows: 

a.	The appeal against the refusal to grant a debt re-arrangement order by Ms Beck fails;
b.	The Appellant is at liberty to lodge a new application; and
c.	There is no order as to costs.   

DATED THIS 18th DAY OF NOVEMBER 2014

[signed]
___________________________
FK Sibanda 
Member

Adv F Manamela (Presiding Member) and Prof B Dumisa (Member) concurring.