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HELD IN CENTURION
Case number: NCT/110462/2018/141(1)(b)
In the matter between:
JOHN MCGINN APPLICANT
AND
MOTOR FINANCE CORPORATION, A DIVISION OF NEDBANK LTD RESPONDENT
Coram
Ms P A Beck - Presiding Member Ms H Devraj - Tribunal Member Ms N Maseti - Tribunal Member
Date of Hearing – 24 January 2019 Date of Judgment -21 February 2019
_________________________________________________________________________________________
JUDGMENT AND REASONS
_________________________________________________________________________________________
THE PARTIES
1. The Applicant in this matter is John McGinn, an adult male, residing at Sundowner, Johannesburg, (hereinafter referred to as the “Applicant”). The Applicant represented himself at the hearing.
2. The Respondent is the Motor Finance Corporation, a division of Nedbank Ltd, a registered credit provider (hereinafter referred to as the “Respondent” or “MFC”). The Respondent was represented at the hearing by an attorney, Mr WH Van Heerden, of the firm VHI Attorneys.
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THE HEARING
3. A hearing in this matter was held on 24 January 2019 in Centurion.
4. The Application for leave to refer proceeded on an opposed basis.
APPLICATION TYPE
5. This is an application in terms of Section 141(1)(b) of the National Credit Act 34 of 2005 (“the NCA or the Act”).
6. Section 141(1)(a) and (b) of the NCA states the following – Referral to Tribunal
(1) If the National Credit Regulator issues a notice of non-referral in response to a complaint other than a complaint concerning section 61 or an offence in terms of this Act, the complainant concerned may refer the matter directly to—
(a) the consumer court of the province within which the complainant resides, or in which the respondent has its principal place of business in the Republic, subject to the provincial legislation governing the operation of that consumer court; or
(b) the Tribunal, with the leave of the Tribunal.
7. In an application of this nature; the Tribunal must first consider whether it will grant the Applicant leave to refer the matter. If the leave is granted; then the Tribunal will consider the merits of the Application in a separate hearing. This hearing and judgment only concerns the application for leave. The merits of the Applicant’s application will therefore not be considered in detail, but only in relation to whether or not there is a reasonable prospect of the application succeeding.The judgment will only deal with the salient aspects that are most relevant to considering whether leave should be granted.
BACKGROUND
8. During February 2014 the Applicant entered into an agreement with the MFC to purchase a Ford Ranger 2.2, TDG motor vehicle. The loan application was approved by the MFC for a principle debt of R397 419,12. During 2015, the Applicant fell into arrears with the agreed monthly instalments on the loan. By December 2015, the arrears on the Applicant’s account was an amount of approximately R18 783,50.
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“Coetzee” to assist the Respondent with the collection of the arrears from the Applicant. Coetzee first visited the Applicant; at the Applicant’s place of residence on 13 January 2016. On this particular day, the vehicle was not at the Applicant’s place of residence and Coetzee told the Applicant he would pay the Applicant a visit on another day, when the vehicle was at the Applicant’s residence.
10. On 18 January 2016, Coetzee paid the Applicant a second visit at the Applicant’s place of residence. On this day, Coetzee handed the Applicant a document entitled “To whom it may concern’’ bearing the Applicant’s MFC account number, the vehicle description, the engine number and the name of Coetzee’s company. Below these particulars the following words appeared: “Please note that the following agent L Coetzee (name handwritten) Id […] is authorised to locate, inspect and recover the above-mentioned vehicle on behalf of MFC a division of Nedbank.” The date appearing in the top right hand corner of this document is in dispute, more particularly whether it was presented to the Applicant on 13 January 2016 or on 18 January 2016.
11. The Applicant submitted that he read the document referred to in 10 above; that he told Coetzee that the document presented to him, by Coetzee, was not a court order. The Applicant said that Coetzee confirmed that indeed the document presented to the Applicant was not a court order. The Applicant said that he asked Coetzee why the Respondent chose not to obtain a court order. In response to this question, the Applicant stated that Coetzee replied that it is better for the Applicant to receive this document, rather than for the Respondent to obtain a court order.
12. Coetzee went on to explain to the Applicant, that if the Applicant voluntarily surrendered the vehicle, the Applicant would have room to negotiate with the Respondent on the settlement of the arrears; such negotiation would not be possible if the Respondent obtained judgment against the Applicant and a court order to attach the vehicle. Coetzee then presented a second undated document to the Applicant entitled
“Surrender of goods by mutual agreement.”
13. The Applicant submitted that he was expecting a cash flow amount of R270 000,00. He therefore agreed,
“in good faith,’’ to surrender the vehicle to the Respondent. The Applicant signed the document entitled
“Surrender of goods by mutual agreement.”
14. On 22 February 2016, the Applicant offered to pay the Respondent an amount of R6 000,00, which amount exceeded the monthly instalment of R5 425,00 due on the vehicle, in part payment of the arrears.
At the same time, the Applicant requested an additional period of 30 days to raise the balance of the arrears. This offer was declined by the Respondent.
15. On 1 March 2016, the Applicant wrote to the Respondent demanding that the decision to decline the Applicant’s offer be reconsidered. The Respondent refused to reconsider its decision to decline the Applicant’s offer. The vehicle was sold at an auction on 3 March 2016.
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16. The Applicant feels that he was deliberately misled by the Respondent and or the Respondent’s agent, Coetzee, into voluntarily surrendering the vehicle; and that in doing so the Respondent contravened section 127 and 129 of the Act.
APPLICATION FOR LEAVE
17. In terms of section 141(1)(b) of the NCA, the Applicant may only refer the matter directly to the Tribunal with leave of the Tribunal.
18. In determining whether the Applicant should be granted leave to refer the matter directly to the Tribunal, the Tribunal must consider the requirements for the granting of “leave”.
19. In Westinghouse Brake and Equipment (Pty) Ltd v Bilger Engineering (Pty) Ltd1 it was held that-
“In applications for leave to appeal properly brought before the appropriate court in terms of the old sec 20, read with sec 21 as it then was, the only relevant criteria were whether the applicant had reasonable prospects of success on appeal and whether or not the case was of substantial importance to the applicant or to both him and the respondent.”
20. The Tribunal will therefore, when considering whether to grant the Applicant leave to refer the matter or not, use the same test as applied in the High Court for applications for “leave” and will consider:
i. the Applicant’s reasonable prospects of success with the referral; and
ii. whether the matter is of substantial importance to the Applicant, the Respondent or both.
Prospects of Success
21. From the outset it must be noted that the complaint of the Applicant stems firstly, from the process followed by the Respondent when the Respondent appointed the Respondent’s agent, Coetzee, to recover the vehicle from the Applicant; Secondly, the complaint stems from the document referred to in 10 above entitled “To whom it may concern” which stated “Please note that the following agent …….is authorised to locate, inspect and recover the above-mentioned vehicle on behalf of MFC…” and the document referred to in 12 above, entitled “Surrender of goods by mutual agreement.”
22. In considering the prospects of success, the Tribunal weighed the evidence before it and considered whether indeed the Respondent complied with Section 127 and Section 129 of the Act. Section 127 of
1 1986 (2) SA 555 (A). Also see Coertze and Burger v Young NCT/7142/2012/75(1)(b)&(2)
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procedure a credit provider must follow before enforcing a debt.
23. The Respondent submitted that the Section 127 process was meticulously followed. The Tribunal posed questions to the Respondent pertaining to section 127 of the Act and how it links with the requirements of section 129 of the Act.
24. Section129 (1) provides that inter alia: “If the consumer is in default under a credit agreement, the credit provider –
(a) may draw the default to the notice of the consumer in writing and propose that the consumer refer the credit agreement to a debt counsellor, alternative dispute resolution agent, consumer court or ombud with jurisdiction, with the intent that the parties resolve any dispute under the agreement or develop and agree on a plan to bring the payments under the agreement up to date.”
25. It is the evidence of the Applicant, that the Applicant put forward a plan, as contemplated in Section 129 (1)(a) of the Act; the plan was the offer of R6 000,00 to cover the monthly instalment and in part payment of the arrears. The Applicant requested a further period of 30 days to bring the arrears up to date. It is the Applicant’s evidence that the Respondent declined the plan proposed by the Applicant.
26. In response to questions from the panel, the Respondent confirmed that a plan was not developed with the Applicant, by the Respondent, to bring the arrears up to date; that the Respondent expected the Applicant to pay the full monthly instalment and the arrears; and that the Respondent rejected the offer of R6000,00 even though it exceeded the monthly instalment of R5 425,00 due by the Applicant.
27. It is the submission of the Applicant that the Respondent did not consider the requirements of Section 127 and Section 129 of the Act; that the Respondent made no attempt to “develop and agree on a plan” with the Applicant to bring the arears up to date; and that the Respondent made no attempt to resolve the dispute once the Respondent had possession of the vehicle.
28. Instead, the Respondent simply rejected the plan proposed by the Applicant; proceeded to sell the vehicle without complying with the requirements of Section 127 and 129 of the NCA; and misled the Applicant, through Coetzee, into signing the form to voluntarily surrender the vehicle. Hence, it is the submission of the Applicant that the Respondent contravened Section 127 and 129 of the Act.
29. The Respondent stated that where a consumer falls into arrears with the consumer’s vehicle re-payments, the Respondent engages the services of an expert debt collector, in this instance, Coetzee; the actions of such expert debt collectors, like Coetzee, are monitored and screened by the Respondent.
30. The mandate of Coetzee was to locate the consumer; discuss the arrears on the account with the consumer; and recover the arrears on the account from the consumer. The Respondent however did not
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fully explain the conduct of the Respondent in so far as it relates to compliance with Section 127 and Section 129(1)(a) of the Act; and did not fully explain, to the satisfaction of the Tribunal, the intention of the Respondent in using Coetzee to “locate, inspect and recover” the vehicle.
SUBSTANTIAL IMPORTANCE
31. It is clear that the matter is of substantial importance to the Applicant. There is no doubt that the Applicant is aggrieved by the actions of the Respondent. The importance of the matter to the Applicant is clear from the steps taken by the Applicant over the past two years to obtain relief. This matter is also of importance to the Respondent who has defended the matter. Any adverse finding of a contravention of the Act would also negatively impact the Respondent as a credit Provider.
CONCLUSION
32. The decision on whether to grant leave to the Applicant must be taken in a balanced way. In the circumstances the Tribunal finds that it would be in the interests of justice to hear the merits of the matter.
33. The Tribunal finds further that the Applicant does enjoy reasonable prospects of success in the main application, based on the following:
(i) The Applicant’s claim falls within the jurisdiction of the NCA and the Tribunal; and (ii) The relief sought is relief that the Tribunal is empowered to order.
ORDER
34. Accordingly, the Tribunal makes the following order –
34.1 The Applicant’s application for leave to refer the matter directly to the Tribunal is granted; and 34.2 There is no order as to costs.
SIGNED AND DATED ON THIS 21st DAY OF FEBRUARY 2019 {Signed}
P A BECK
PRESIDING MEMBER
Ms H Devraj and Ms N Maseti concurring
