Phaladi v Lamara

• Jurisdiction: South Africa
• Citation: 2018 (3) SA 265 (WCC)

Phaladi v Lamara
2018 (3) SA 265 (WCC)

2018 (3) SA p265

Citation	2018 (3) SA 265 (WCC)
Case No	20480/2017 and 20481/2017
Court	Western Cape Division, Cape Town
Judge	Binns-Ward J
Heard	January 12, 2018
Judgment	January 12, 2018
Counsel	S Bruinders for the applicant (in case No 20480/2017); M Alexander for the applicant (in case No 20481/2017).

Flynote : Sleutelwoorde

Credit agreement — Consumer credit agreement — Consumer credit records — B Removal of record of debt rearrangement by credit bureau or national credit register — Not judicial process — May only be effected through prescribed administrative process — National Credit Act 34 of 2005, s 71.

Headnote : Kopnota

Consumers who have fulfilled all their obligations under credit agreements that C are subject to debt rearrangement, are entitled to obtain a clearance certificate in terms of s 71 [*] of the National Credit Act 34 of 2005 (the NCA). The record of the debt rearrangement of consumers who succeed in obtaining such a clearance certificate will be expunged from credit bureau records; if they encounter problems their remedy lies in an approach to the D National Consumer Tribunal (the Tribunal). The process is administrative, not judicial. It is only the Tribunal that is empowered to assist them at first instance. The NCA does not afford the High Court jurisdiction to deal at first instance with matters falling within the province of the Tribunal. The role of the High Court in the legislative scheme was limited to dealing with judicial reviews of, or appeals from, the decisions of the Tribunal. (Paragraph [17], E paraphrased.)

Cases cited

Du Toit v Benay Sager t/a Debt Busters and Others [2017] ZAWCHC 141: approved

Ex parte Concato and Similar Cases 2016 (3) SA 549 (WCC): referred to F

Ex parte Ford and Two Similar Cases 2009 (3) SA 376 (WCC): referred to

Geuking v President of the Republic of South Africa and Others 2003 (3) SA 34 (CC) (2003 (1) SACR 404; 2004 (9) BCLR 895; [2002] ZACC 29): referred to

Magadze v ADCAP; Ndlovu v Koekemoer [2016] ZAGPPHC 1115: criticised G

Manamela v Du Plessis t/a Debt Safe and Others [2017] ZAGPPHC 289: criticised

Mokubung v Mamela Consulting and Others [2017] ZAGPPHC 462: criticised

Rennie NO v Gordon and Another NNO 1988 (1) SA 1 (A): referred to

Rougier v Nedbank Ltd [2013] ZAGPJHC 119: referred to H

2018 (3) SA p266

Universal A City Studios Inc v Network Video (Pty) Ltd 1986 (2) SA 734 (A) ([1986] 2 All SA 192; [1986] ZASCA 3): dictum at 754G applied.

Legislation cited

Statutes

The National Credit Act 34 of 2005, s 71: see Juta's Statutes of South Africa 2016/17 vol 2 at 1-529.

Case Information

S B Bruinders for the applicant (in case No 20480/2017).

M Alexander for the applicant (in case No 20481/2017).

Two applications heard together, for declaratory relief and orders directing the removal of consumers' records of debt rearrangement. C The order (dismissing the applications) is at [30].

Judgment

Binns-Ward J:

[1] Application was made in two matters [1] enlisted on Tuesday's unopposed motion roll for orders:

(a)

D Declaring that the applicant is no longer overindebted and that the records be expunged; and

(b)

directing that the debt counsellor (the first respondent) update the status of the applicant with its creditors, the credit bureaux and the National Credit Regulator within one month hereof by forwarding E the relevant Form 17W. [2]

[2] The factual bases of both applications were essentially identical. In each case the applicant had applied to the debt counsellor in terms of s 86 of the National Credit Act 34 of 2005 (the NCA) to be declared to be overindebted. Having assessed their applications, and given notice to the applicants' creditors and all the registered credit bureaux as required in F terms of s 86(4), the debt counsellor accepted their applications. An application to the magistrates' court for a debt rearrangement order did not follow, however. This was because in each case a voluntary rearrangement was agreed with the creditors pursuant to a recommendation by the debt counsellor in terms of s 86(7)(b). These arrangements G were apparently satisfactorily adhered to under the auspices of the debt counsellor. Matters have reportedly proceeded so satisfactorily in fact that the applicants claim that they are now 'financially sound', and in a position to demonstrate that they are able to punctiliously fulfil their outstanding obligations. They contend that it would be reasonable in the H circumstances for their records at the credit bureaux to be expunged so that they would be enabled to responsibly incur additional obligations by entering into fresh credit agreements in the ordinary course. In one of the matters it is alleged, without any substantiating particularity, that the I applicant's 'negative credit rating' also 'potentially affect[s] [her] job

2018 (3) SA p267

Binns-Ward J

applications to further [her] career'. They submit that the only manner A in which their objects can be achieved is with the aid of a court order.

[3] The question that arises is whether it is at all within the power of the court to grant them the relief they seek.

[4] A similar application was recently refused in this division by B Thulare AJ in Du Toit v Benay Sager t/a Debt Busters and Others [2017] ZAWCHC 141 (17 November 2017). The essence of the reasoning of the court in Du Toit was that the relief sought was inconsistent with the scheme of the NCA. It was held in particular that it had been inappropriate for the applicant to have brought the application to the High Court. C

[5] In the Gauteng Division, however, there have been at least three judgments handed down in which relief of the nature sought in the current application has been granted. In Magadze v ADCAP; Ndlovu v Koekemoer [2016] ZAGPPHC 1115 (2 November 2016) Neukircher AJ D granted the applicants precisely the same relief as that sought by the applicants in the matters before me; and Mbongwe AJ followed suit in Mokubung v Mamela Consulting and Others [2017] ZAGPPHC 462 (14 June 2017); and Manamela v Du Plessis t/a Debt Safe and Others [2017] ZAGPPHC 289 (21 June 2017).

[6] Neukircher AJ noted that debt counsellors enjoyed no power under E the NCA to release a debtor from debt review proceedings [3] and, correctly, with respect, held that s 71 of the NCA did not afford an adequate remedy in the circumstances to expunge the record that the applicants were in debt review. She considered that the High Court nevertheless enjoyed 'wide powers' to grant the relief sought by the applicants. The learned F acting judge expressed the opinion that it would be 'untenable' were s 71 of the Act to 'carry more weight than an order issued out by the High Court'. [4] The judgment does not identify the source of the wide powers that were purportedly invoked to grant the orders that were made, effectively overriding the statutory provision. G

[7] In the other two judgments, Mbongwe AJ, citing Universal City Studios Inc v Network Video (Pty) Ltd 1986 (2) SA 734 (A) ([1986] 2 All SA 192; [1986] ZASCA 3) at 754, explained that the orders made were granted 'using [the court's] inherent reservoir of power to regulate procedures in the interest of the proper administration of justice'. H

[8] The High Court does indeed have an inherent jurisdiction, and in appropriate circumstances even a duty, to develop the common law taking into account the interests of justice. [5] It also has an inherent jurisdiction to regulate its own procedures and processes — it was only of I

2018 (3) SA p268

Binns-Ward J

that A aspect of its powers that Corbett JA was speaking in Universal City Studios supra loc cit. [6] In the area of law regulated or determined by statute, it is under a duty to interpret and apply legislative enactments in a manner that promotes the spirit, purport and objects of the Bill of Rights, [7] but in striving to do so it cannot by Procrustean construction do B violence to the language used by the legislature. Its powers do not extend to improving legislation by providing measures or remedies that the statutory enactments do not afford, merely because the court considers it would be just or equitable that they should be afforded. To purport to do so would be in effect to assume a legislative function and thereby trench impermissibly on the domain of the legislative branch of government. C The powers exercisable in terms of s 172 of the Constitution to read down or read in provisions to render legislation constitutionally compatible, or to provide just and equitable interim relief following on a declaration of constitutional incompatibility, are quite distinguishable; as is the approach of the courts to strictly or narrowly interpret legislation D that limits or curbs common-law rights. Any contemplation of the width of the superior courts' powers that fails to acknowledge and respect these limitations of their bounds is likely to lead to a fundamentally misconceived conception of their actual extent, and, if by judges, can result in their being exceeded.

[9] E The concepts of 'over-indebtedness' (including that of financial difficulty falling short of 'over-indebtedness' contemplated by s 86(7)(b)) and the attendant remedy of 'debt review' within the meaning of the NCA, have no foundation in the common law. They are statutory creations. How they work is governed entirely by the NCA and, in the absence of a challenge to their constitutionality, the courts' powers F in respect of them are delineated by the provisions of the enactment.

[10] It is plain, if regard is had to the Act, that the debt review process under the NCA is provided as a remedy whereby the overindebted can obtain an opportunity to settle their credit agreement related debt in a...