JUDGMENT AND REASONS INTERLOCUTORY APPLICATION FOR STAY OF PROCEEDINGS / POSTPONEMENT

Transcription

1 IN THE NATIONAL CONSUMER TRIBUNAL HELD IN CENTURION CASE NO: In the matter between: MR PRICE GROUP LIMITED and NATIONAL CREDIT REGULA TOR APPLICANT RESPONDENT lnre: THE NATIONAL CREDIT REGULA TOR and MR PRICE GROUP LIMITED APPLICANT RESPONDENT Coram: Ms P Beck Adv J Simpson MrF Sibanda Presiding Member Member Member Date of Hearing: Date of Judgment: 15 May June 2018 JUDGMENT AND REASONS INTERLOCUTORY APPLICATION FOR STAY OF PROCEEDINGS / POSTPONEMENT PARTIES 1 The Applicant in this matter, who is the Respondent in the main matter, is Mr Price Group Limited, a credit provider registered with the National Credit Regulator (NCR), with registration number NCRCP46 ("the Respondent") and whose principal address is at 4th Floor, 380 West Street, Durban KwaZulu Natal.

2 2 The Respondent in this matter, who is the Applicant in the main matter, is the National Credit Regulator, a juristic person established in terms of Section 12 of the National Credit Act 34 of 2007 ("the Act") and situated at number 127, Fifteenth Road, Randjespark, Midrand. 3 For purposes of convenience and ease of reference the parties shall be cited as in the main matter. 4 At the hearing the Applicant was represented by Ms Anna Karien du Plooy, assisted by Ms Nthupang Magolego and Ms Kathrine Germishuys. 5 The Respondent was represented by Advocate Marilena Maddison, from the Cape Bar, instructed by Norton Rose Attorneys. APPLICATION TYPE 6 This application is brought in terms of Rule 4(2) of the Tribunal Rules1 which provides that- "/f an application relates to a matter contemplated in rule 3(2)(c) that is not specifically provided for in Table 2, the Applicant must- (a) apply by way of Notice of Motion in Form Tl.r4; (b) append a supporting affidavit setting out the facts on which the application is based; (c) serve the Notice and affidavit on the Respondent and other parties to the matter; and (d) file the application documents and proof of service with the Registrar." 7 In terms of Rule 3(2)(c) the Tribunal may consider applications related to an adjudication process with respect to, among other things, other procedural matters. 8 Thus, the Applicant in this case seeks an order from the Tribunal to - (1) stay the proceedings until after the matter which the Applicant brought against Edcon Holdings Limited under case number NCT /35378/2015/140( 1) (the Edcon matter) has been finally determined; 1Rules for the Conduct of Matters before the National Consumer Tribunal. General Notice 789 in Government Gazette No of 28 August 2007 Page 2 of 11

3 (2) in the alternative to (1) above, and in the event of the Tribunal determining that these proceedings should not be stayed (a) that the matter be set down on a date to be agreed to between the parties and the Tribunal, being not less than eight weeks after such agreement is reached, further alternatively, if the matter will not be set down on an agreed date, (b} that the matter be set down on not less than ten weeks' notice to the parties; and (3) direct the Applicant to pay the costs of this application in the event that it is opposed. 9 The Tribunal has jurisdiction to hear this matter. BACKGROUND 10 In the main matter; the Applicant initiated an investigation into the business affairs of the Respondent. This was following a reasonable suspicion created that the Respondent might be charging consumers a club fee on credit agreements in contravention of sections 100, 101 and 102 of the Act. 11 According to the Applicant, the basis of the investigation against the Respondent was a referral to this Tribunal by the Applicant, against Edcon Holdings Limited, a clothing retailer and registered credit provider alleged to have charged consumers a club fee in contravention of the Act. The Applicant had made other referrals to the Tribunal relating to the charging of club fees on credit agreements by furniture retailers Lewis Stores (Pty) Limited and JOG Trading (Pty) Limited, under case numbers NCT/41671/2016/140(1) and NCT/29052/2015/1340(1), respectively. 12 The Applicant further states that it perused the Respondent's annual report for the financial year ending March 2015 and discovered that the Respondent reported income generated from club fees. Page 3 of 11

4 13 On this basis the Applicant proceeded to initiate a complaint in its own name in terms of section 136(2) of the Act and carried out an investigation against the Respondent, after which it made a referral to the Tribunal in terms of section 140(1) of the Act. THE HEARING 14 This matter was initially set down to be heard on 19 February However, the Respondent applied for a postponement on the basis that - (1) the Respondent had not received a response to its correspondence to the Tribunal seeking a stay of proceedings pending the outcome of the High Court appeal in the Edcon Group Limited v NCR matter; and (2) both of the Respondent's counsel were not available to appear at the Tribunal on the date of the hearing. 15 The Applicant did not oppose the application for postponement. The matter was accordingly removed from the roll, to be set down at a later stage for a hearing on the merits unless an application in terms of Rule 4 of the Tribunal Rules is filed by the Respondent as directed by the Deputy Registrar of the Tribunal. 16 Accordingly, on 20 February 2018 the Respondent lodged an application in terms of Rule 4 of the Tribunal Rules for a stay of proceedings. ISSUES TO BE DECIDED 17 The Tribunal must decide whether: 17.1 it has powers to stay proceedings; and 17.2 it can grant the orders sought. Page 4 of 11

5 RESPONDENT'S SUBMISSIONS 18 The Respondent avers that the issues brought by the Applicant in the main matter against it are substantially similar to those which arise in the proceedings launched by the Applicant in the Edcon matter. 19 In the Edcon matter; the Applicant alleged that Edcon charged its customers club fees under credit agreements, in contravention of section 100, 101 and 102, read with section 90 of the Act. 20 On 24 April 2018 the Tribunal handed down its judgment in the Edcon matter. That judgment is now the subject of an appeal at the North Gauteng High Court. 21 According to the Respondent, it would be prudent to stay the main proceedings pending the outcome of the appeal, in order to avoid the incurrence of unnecessary costs and the wasting of the Tribunal's time and resources. 22 The Respondent further asks the Tribunal to, in the alternative; a stay proceedings, grant an order or issue directives that (a) the matter be set down on a date to be agreed between the parties and the Tribunal, being not less than eight weeks after such agreement, or alternatively if the matter will not be set down on agreed date (b) the matter be set down on not less than ten weeks' notice to the parties, to permit the Respondent to brief new counsel if necessary. APPLICANT'S SUBMISSIONS 23 The Applicant filed an answering affidavit opposing the Respondent's application for a stay of proceedings. The following are some of the arguments raised by the Applicant in its answer and elaborated in its heads of argument handed out at the beginning of the hearing. 24 The Applicant disputes that the Tribunal is competent to make an order to stay proceedings given that there is no provision in the Act, its Regulations or Tribunal Rules for such an order. Page 5 of 11

6 Moreover, the Tribunal is not a court with inherent jurisdiction to exercise discretion in the granting of such relief. 25 To underscore this position the Applicant refers to Rule 10 of the Tribunal Rules which provides that- "A person wishing to bring before the Tribunal a matter which is not listed in rule 3, or otherwise provided far in these rules, must first apply to the High Court for a declaratory order confirming the Tribunal's jurisdiction - (a) to deal with the matter; (b) to grant the order to be sought from the Tribunal. ff 26 In any event. the Applicant argues that the Respondent has failed to advance any reason on which the stay of proceedings can be granted and that convenience is not a requirement for such an application to succeed. 27 The Applicant submits that the application to stay proceedings is an attempt by the Respondent to delay finalisation of the main matter and in the end consumers will suffer serious injustice should the application be granted. 28 The Applicant further argues that a stay of proceedings is not a procedural matter; but a substantive one; that has the effect of suspending the adjudicative process; and cannot be taken based on speculation and hypothetical outcome of the court of appeal in the Edcon matter. ANALYSIS OF THE LAW AND THE FACTS 29 Rule 4(2) of the Tribunal Rules provides thatu/f an application relates to a matter contemplated in rule 3(2)(c) that is not specifically provided for in Table 2, the Applicant must - {a) apply by way of Notice of Motion in Form Tl.r4; (b) append a supporting affidavit setting out the facts on which the application is based; Page 6 of 11

7 (c) serve the Notice and affidavit on the Respondent and other parties to the matter; and (d) file the application documents and proof of service with the Registrar. n 30 It is common cause that a stay of proceedings is not provided for in Table 2 of the Tribunal Rules, hence the Respondent applied by way of Notice of Motion using Form Tl.r4. Rule 3(2)(c)(vii) further provides that - "The Tribunal may- (c) consider applications related to an adjudication process - (vii) relating to other procedural matters." 31 Whilst the Applicant disputes that an application for a stay of proceedings is a procedural matter, according to the Respondent the question of when the main proceedings should be heard is a matter of procedure, which the Tribunal is authorised by the Act and its Rules to determine. 32 In Minister of Public Works v MXN Development Construction CC2, when considering an application for a stay of proceedings the court stated that - "It is trite that superior courts in this country possess inherent jurisdiction to prevent the abuse of their process' by staying proceedings in certain circumstances... n 33 Similarly, in Ntswaki Joyce Mokona v Tassos Properties CC and another4, when dealing with the question of the stay of proceedings, it was pointed out that the Constitutional Court, the Supreme Court of Appeal and the High Court of South Africa each has the inherent power to protect and regulate their own process and to develop the common law, taking into account the interests of justices. According to the judge - 2 Minister of Public Works v MXN Development Construction. High Court of South Africa. CC Case no: 7015/2006 J Own emphasis 4 Ntswaki Joyce Mokone v Tassos Properties CC and another. Constitutional Court of South Africa. Case No. CCT 113/16 and 291/16 s Section 173 of the Constitution of the Republic of South Africa Page 7 of 11

8 NCR v Mr Price Group limited NCT/81672/2017 /140( 1) "Put simply, this says the mentioned Courts may regulate their own process6, taking into account the interests of justice." 34 From the above, and without necessarily pronouncing on the issue, it can be argued that the issue is a procedural one and the Tribunal can grant such an order if the circumstances justify it. 35 However, the main question that this Tribunal perhaps has to grapple with is whether there is any reasonable basis for granting such an order under the circumstances described. 36 In New Reclamation Group (Pty) Ltd v Chicks Scrap Metal (Pty) Ltd et ap the legal requirements for adjudicaling a stay of proceedings were summarized as follows: (a) Whether the respondents have succeeded in showing that they have a basis in law for the Court's discretion to stay the proceedings; (b) If so, whether the court should exercise its discretion in favour of the respondents to grant a stay of proceedings; and (c) Whether the respondents are bona fide in seeking a stay of the proceedings. 37 Thus the onus is on the Respondent to show good cause and b~sis in law for its application to stay the proceedings. In George Talbot Spencer and others v Xolisa Kennedy Memani and anothet6 the court held that- "For a defence of /is alibi pendens to succeed, more is required than a mere overlapping of some of the issues in two or more cases." 38 However, when asked whether there is any precedent or case law to support the arguments on whether the Tribunal has powers to grant a stay of proceedings on the same basis on which the Respondent is arguing, Ms Maddison stated that - s Own emphasis r 2602/11 Kwazulu-Natal High Court, Durban Republic of South Africa, 2011 a {675/12) [2013} ZASCA146 (1 October 2013) Page 8 of 11

9 Judgment and Reasons "No, I do not have any, but can I respond by saying that perhaps the use of the phrase stay was too technical. That is why I have tried to emphasise that what we are really asking for here, and I hope that that will have come through in the papers filed in support of the application, is that the matter simply not be set down until the EDCON appeal has been heard. Whether that is technically a stay or whether or not that is simply a deferment of the set down, that is all we ask for is that procedurally the matter not be set down until EDCON has been determined. The conventional stay situations arising in court are, as our friends have mentioned, where the case is vexatious or where security for costs are sought. That is not the scenario we are dealing with here. We are dealing with an unusual scenario where what we say is that it is not the same parties litigating elsewhere so it is not /is pendens or anything like that, but what it is a similar matter, a substantially similar matter, the outcome of which may at the very least be persuasive to this tribunal and that in those circumstances it makes sense to defer the set down.~ 39 According to the Respondent, it is not raising a defence of tis pendens or anything similar. Rather, the Respondent's case seems to be premised on its assertion that this and the Edcon matters are substantially similar, hence it will be a waste of both the parties' and the Tribunal's resources to continue with a hearing that may ultimately prove to be unnecessary. 40 When followed through, this assertion bears the hallmarks of a highly optimistic pre-emption of the outcome of both the merits of the main matter and the Edcon matter. 41 It would be dereliction of its duty for the Tribunal to stay or postpone the main matter on the basis of proceedings in another forum where the Respondent is not a party and the outcome of which is indeterminate. Moreover, by its own admission, the Respondent has raised a number of additional arguments in the main proceedings that were not previously considered by the Tribunal when it determined the Edcon matter, despite there being substantial similarity in the issues in the main proceedings and the issues in the Edcon matter It is worth repeating what the Tribunal stated in Leen 'n Rand and the National Credit Regulatortt thatuour Courts have held that a court or a Tribunal should not easily divest itself of jurisdiction. Courts do not act on abstract ideas of justice and equity but s Page 29 of hearings transcript 10 Para 10. Respondents' Heads of Argument 11 Leen 'n Rand and the National Credit Regulator, NCT/78950/2017/57/(1) Page 9 of 11

10 must act on principle. n This principle is, in the case of the Tribunal, that the final judgement in the main matter is not a foregone conclusion. The Tribunal, after hearing the evidence, may reach a verdict in favour of the Respondent or the Applicant. If it went against a Respondent, that Respondent still has the right to approach a higher court. n 43 Whilst the Tribunal has powers to postpone matters, such discretion has to be exercised judiciously, taking into account various factors including whether justice will be served by such a postponement. We have not found precedent to support the Respondent's application and hence, we are not persuaded that it will be in the interest of justice to grant this application. CONCLUSION 44 The Respondent has not shown good cause nor has it advanced legal precedent upon which the Tribunal can rely in granting the application to stay, postpone or hold in abeyance the main matter, pending the outcome of the Edcon matter. 45 By necessity however, the matter will be set down for hearing and the date for the hearing will need to accommodate the legal counsel for the parties involved. This then provides for the alternative application by the Respondent. ORDER 46 Accordingly, the Tribunal makes the following order: The Respondent's application for the stay of proceedings, postponement or holding in abeyance of the main matter pending the outcome of the Edcon matter is dismissed; 46.2 The Registrar will set the matter down for hearing after due consultation with the parties for a suitable date when their legal counsel is available; and 46.3 There is no order as to costs. 12 See Williamson v Schoon SA 1053 {T) Page 10 of 11

11 DATED IN CENTURION ON THIS DAY OF JUNE 2018 [signed] Mr FK Sibanda (Member} Ms P Beck (Presiding Member) and Adv J Simpson (Member) concurring. Authorised for Issue by National C onsumer Tribunal Case Numt:t r. NCT,l<KU, I z../'lo 7 r I t '±t>_(1) Date:JS: J-, "'<. 1..o,c( Hatlon.:il Consumer Tribunal. I( Ground Floor, Building 8 ~ Ybficld Office Park 272 West Avenue c., entunon 0167 \iyinw.thenct.ca.t;a i n~ onllj cr,n5 utt10:r tr,t,..u., J I =-4-.. Page 11 of 11