---

IN THE NATIONAL CONSUMER TRIBUNAL

HELD AT CENTURION

Case number: NCT/63538/2016/141(1)

In the matter between:

ITUMELENG MOHIBIDU                                                                                                                  APPLICANT

and

AFRICAN BANK LIMITED                                                                                                           RESPONDENT

Coram:

Mr Trevor Bailey –   Presiding member

Dr Maria Peenze   –   Tribunal member

Ms Hazel Devraj   –   Tribunal member

 

Date of hearing     –    19 February 2018

JUDGEMENT AND REASONS

APPLICANT

1. The appellant is Itumeleng Mohibidu, an adult male consumer, who resides in Groblerspark, Roodepoort, Gauteng. The appellant appeared in person at the hearing of this application.

RESPONDENT

2. The respondent is African Bank Limited which is duly registered and incorporated in terms of the company laws of the Republic of South Africa.

3. The respondent was represented at the hearing of this application by Advocate J Botha, who was instructed by Oosthuizen Du Toit Berg and Boon Attorneys.

APPLICATION

4. This is an application in terms of section 141 of the National Credit Act, 2005 ("the NCA") in which the respondent alleges that the respondent extended credit to the applicant recklessly in contravention of section 81 of the NCA

BACKGROUND

5. Between the period 2007 and 2014 the appellant and the respondent concluded seven credit agreements. Three of the credit agreements are no longer in operation. The remaining credit agreements consisted of a credit card facility and three personal loans. They are jointly referred to as "the four credit agreements".

6. In September 2014 the applicant applied for debt review. On 25 March 2015 the Magistrate's Court for the District of Johannesburg West ("the magistrate's court") under case number 1874/2015 granted a debt re-arrangement order ("the debt re-arrangement order") that incorporated the four credit agreements.

7. On 4 November 2015 the applicant directed a complaint to the National Credit Regulator ("the NCR") to the effect that:

"Even when I'm still under debt review my arrears amount are just mounting." [sic]

and

"I'm currently over-indebted and I will like you assistance to verify that the process of granting this[sic] loans was correct".

8. The NCR interpreted the complaint as one of reckless credit, investigated the complaint and on 24 August 2016 issued a notice of non-referral in terms of section 139 (1) (a) of the NCA. That section provides that the NCR may issue a notice of non-referral if the complaint appears to be frivolous or vexatious, or does not allege any facts which, if true, would constitute grounds for a remedy under the NCA.

9. The applicant subsequently applied to the Tribunal in terms of section 141 (1) (b) of the NCA for an order granting him leave to refer this application directly to the Tribunal. On or about 3 December 2017 the Tribunal granted the applicant such leave. The merits of this application now fall to be decided by the Tribunal in terms of section 141 (4) of the NCA.

SUMMARY OF SUBMISSIONS

Respondent

10. At the outset of the hearing the respondent raised a number of points in limine. First, when the magistrate's court granted the debt re-arrangement order it had, or is taken to have, determined whether the four credit agreements were in fact reckless. The magistrate's court had therefore adjudicated on the applicant's complaint concerning reckless lending and the applicant is therefore estopped from raising his complaint before the Tribunal.

11. Second, the applicant's referral is defective because it fails to outline how the NCR misdirected itself when it issued the notice of non-referral and the applicant does not seek relief against the respondent.

12. Third, the four credit agreements were all concluded before the affordability assessment regulations ("the AAR")^[1] were introduced on 15 September 2015. The respondent's answering affidavit sets out in detail the assessment mechanism the respondent followed when concluding the four credit agreements with the applicant. The assessment shows that the respondent took the required reasonable steps to assess the relevant matters and did not therefore grant credit recklessly to the applicant.

13. Moreover, the applicant elected not to file a replying affidavit to the respondent's answering affidavit. The answering affidavit shows that the four credit agreements were restructured in accordance with the debt re-arrangement order and is therefore not disputed by the applicant.

Applicant

14. The applicant submitted that he was concerned as far back as September 2014 that the respondent had granted credit recklessly to him.

15. The applicant was not present when the magistrate's court made the debt re-arrangement order and does not know whether any of the respondents in the magistrate' s court matter opposed  the debt re-arrangement application. The applicant's debt counsellor told the applicant that he did not deal with reckless lending because he was not mandated to do so and the applicant should refer his reckless lending concerns to the Tribunal.

16. The applicant acknowledged that he should have been more specific in his complaint to the NCR by requesting the NCR to investigate a complaint of reckless lending.

17. The applicant clarified that he wanted the Tribunal to consider the process the NCR followed to draw its conclusion that led to the NCR issuing the notice of non-referral. The applicant also expected the Tribunal to consider the merits of his case against the Respondent. He did not file a replying affidavit because there was nothing new in the respondent's answering affidavit.

18. The applicant requires the Tribunal to make an order declaring that the respondent granted the four credit agreements to the applicant recklessly and that the loans are to be written off.

RELEVANT STATUTORY PROVISIONS AND ANALYSIS

Issue to be decided

19. The legal question that arises at the outset of this matter is whether the Tribunal may entertain the applicant's complaint that the respondent granted the four credit agreements to the applicant recklessly given that the four credit agreements were included in the applicant's application for debt review and the consequent debt re-arrangement order.

Relevant statutory provisions

20. Section 86 (1) of the NCA entitles a consumer to apply to a debt counsellor to have the consumer declared over- indebted. Section 86 (6) provides that a debt counsellor who has accepted such an application must determine whether the consumer appears to be over-indebted; and if the consumer seeks a declaration of reckless credit, whether any of the consumer's credit agreements appear to be reckless.

21. Section 86 (7) provides further that  if the debt counsellor reasonably concludes that the consumer is over-indebted, the debt counsellor may issue a proposal recommending that the magistrate's court declare one or more of the consumer's credit agreements to be reckless if the debt counsellor has concluded that those agreements appear to be reckless and/or that any one or more of the consumer's obligations be re-arranged by, amongst other things, extending the period of the agreement or restructuring the consumer's obligations.

Analysis

22. In the Tribunal's view, it is evident from the debt re-arrangement order that the applicant has either failed to seek a declaration of reckless credit when he had the opportunity to do so in terms of section 86 the NCA when he applied for debt review as far back as September 2014. Alternatively, that the debt counsellor had found that none of the four credit agreements were concluded recklessly. The magistrate's court made the debt re-arrangement order based on the debt counsellor's recommendation. The respondent was therefore correct to submit that the Tribunal cannot serve as a vehicle to reconsider the magistrates court's previous adjudication afresh whilst the debt re-arrangement order stands.

CONCLUSION

23. Consequently, the Tribunal lacks jurisdiction to adjudicate this application and the application falls to be dismissed on this ground alone. It follows that it is unnecessary to consider the other issues the applicant has raised in this application.

ORDER

24.         Accordingly:

24.1.            This application is dismissed; and

24.2.            There is no order as to costs.

DATED AT CENTURION ON THIS 29TH DAY OF MARCH 2018

 

_______________

TREVOR BAILEY

Tribunal member

With Dr M Peenze  and Ms H Devraj concurring.

Mohibidu.AfricanBank.63538.16.141(1)

---

---