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IN THE NATIONAL CONSUMER TRIBUNAL
HELD AT CENTURION
Case No: NCT/5078/2012/60(3) & 101(1) (P)
In the matter between:
QUALITY VACATION CLUB . APPLICANT
THE NATIONAL CONSUMER COMMISSION . RESPONDENT
Prof T Woker - Presiding Member)
Ms D Terblanche - Member
Mr X May - Member
Hearing Date: 22 January 2014
JUDGMENT AND REASONS
1. The Applicant is the Quality Vacation Club Management Association (hereinafter referred to as “the Applicant”) a company duly registered in accordance with the laws of South Africa.
2. The Respondent is the National Consumer Commission (hereinafter referred to as “the Respondent”), an organ of state within the public administration established in terms of Section 85 of the Consumer Protection Act, Act 68 of 2008 (“CPA”).
3. At the hearing of this matter, the Applicant was represented by its Chairman, Mr John Meyer.
4. The Respondent did not file an answering affidavit and did not attend the hearing.
5. The Applicant brought an application to the National Consumer Tribunal (the “Tribunal”) to have a compliance notice issued against it by the Respondent, reviewed and cancelled in terms of section 101(1) of the CPA.
6. The Tribunal has jurisdiction to hear this matter in terms of section 101(1) of the CPA. This section provides that a person issued with a compliance notice in terms of section 100 may apply to the Tribunal in the prescribed manner and form for its review.
7. This judgment follows the hearing of this matter on 22 January 2014 at the offices of the Tribunal in Centurion.
8. The Applicant’s representative submitted oral arguments in support of the written application.
9. On the 5 th of August 2010 Quality Time Marketing (Pty) Ltd entered into a written agreement of sale with Mr. M A Luthuli and Mrs. N F Mbongwa (hereinafter the “Complainant”) , in terms of which they sold 30 Club Unit Rights to the complainant.
10. The purchase price was payable by way of 94 instalments of R559.16 each. Interest is payable at prime -0.5% on the outstanding purchase price.
11. A complaint was lodged by Mrs N Luthuli with the Respondent on the 11 th of May 2011 against the Applicant. 12. The complaint relates to the way in which the Applicant allegedly marketed the particular product. The complaint focuses on the allegation that the Complainant was misled by the marketing agent and as a result thereof was persuaded to attend the marketing of the product (allegedly the Complainant was offered a prize). The complaint is further directed at the allegations that certain ancillary charges reflected in the agreement were not discussed with Complainant and that the Applicant refused to cancel the agreement. The Complainant alleges further that the agreement was or later became unaffordable.
13. The Applicant applies in terms of section 101 of the CPA to review the finding of the Respondent on the basis that the Respondent erred on the grounds mentioned below:
13.1 The Respondent issued a compliance notice prior to the ruling of the conciliation process being communicated to the Applicant.
13.2 The Respondent failed to consider whether or not the agreement falls under the provisions of the Consumer Protection Act having regard to the fact that at the time the agreement was signed the CPA had not yet come into effect. The CPA came into effect on 31 March 2011 and the agreement against which the complaint was lodged was signed in August 2010. In particular the Respondent, according to Applicant, failed to consider whether or not any of the provisions of the CPA operates retrospectively.
13.3 The Respondent further failed to consider whether or not it is competent for it to make an award against the Applicant in circumstances where the Applicant is not a party to the agreement.
13.4 The Respondent had failed to consider whether or not the agreement is a credit agreement as contemplated in the National Credit Act, Act 34 of 2005, and having regard to section 5(2)(d) of the CPA failed to consider whether or not the Respondent may exercise jurisdiction in respect of the complaint.
13.5 The finding of the Respondent against the Applicant, to cancel the contract with the Complainant and refund them the amount paid after the 17 Club Units were used in 2011, is not competent. The Respondent did not consider what would happen to the goods purchased in these circumstances or the provision of section 14(3).
14. The Applicant submits that the CPA commenced on 31 March 2011 and that it does not have retrospective application, unless specifically provided for in Item 3(2) thereof. Item 3(2) specifically stipulates that Sections 53 to 58 of the CPA shall apply only with respect to any goods or services supplied to the consumer in terms of the agreement, on or after the general effective date.
15. The Applicant submits that the conduct that forms the subject matter of the compliance notice took place prior to the commencement of the CPA and therefore falls outside of the Respondent’s jurisdiction.
16. The CPA does not apply as –
16.1 The contract was concluded on 5 August 2010 before the general effective date of 31 March 2011.
16.2 The agreement entered into to purchase points was a credit agreement governed by the NCA, not a transaction governed by the CPA.
16.3 Section 14 did not apply to the agreement as the Property Timesharing Control Act 75 of 1983 governed the agreement.
17. The compliance notice was served on the incorrect party as it was served on the Applicant whereas it should have been served on Quality Time Marketing (Pty) Ltd.
18. The Applicant submits that the Respondent did not conclude an investigation in respect of the complaint, as is mandatory by virtue of the provisions of section 72 of the CPA, and could therefore not have issued the compliance notice in terms of Section 100 prior to the conducting of such investigation. The Applicant submits that, since the Respondent did not conduct and complete an investigation as required in terms of section 72 of the CPA, the Respondent could not have issued a compliance notice, as the completion of the investigation is a jurisdictional prerequisite for the issuance of a compliance notice.
19. The Applicant submits that the compliance notice itself was defective, as it did not contain details of the contraventions alleged.
20. The compliance notice was not served on the applicant correctly – the notice was served via electronic mail and not as per the requirements of section 118 of the CPA, read with section 100 and Rule 6 of the Rules of the Tribunal[1].
The entity to which the notice was issued
21. The Applicant submits that it is an independent legal entity named Quality Vacation Club and not a party to the relevant purchase agreement.
22. The Respondent did not file an answering affidavit and was not present at the hearing.
APPLICABILITY OF THE CPA TO THIS MATTER
23. The general effective date on which the CPA came into effect is 31 March 2011.
24. Complainant concluded a contract on 05 August 2010 with Quality Time Marketing (Pty) Ltd.
25. The issues raised by the Applicant in this matter relate to circumstances surrounding the conclusion of the contract. The contract was concluded on 5 August 2010, this was before the general effective date of the CPA.
26. Item 3 of Schedule 2 of the CPA determines the extent to which the CPA applies to “ pre-existing transactions and agreements” and the CPA does not apply to any transaction concluded, or agreement entered into, before the general effective date; or any goods supplied or services provided to a consumer before the general effective date, being 31 March 2011. Sections 53 to 58 of the CPA apply to pre-existing transactions: “ Only with respect to any goods or services supplied to the consumer in terms of the agreement, on or after the general effective date”.
27. The issuing of the compliance notice relating to this transaction therefore results in a retrospective application of the CPA. The Tribunal has handed down a number of judgments [2] addressing the aspect of the retrospective application of the CPA and setting aside these compliance notices on a default basis. There is no empowering provision in the CPA vesting the Respondent with authority to issue compliance notices retrospectively in this respect.
28. The compliance notice issued by the Respondent relates directly to the cancellation of the contract between the Complainant and Quality Time Marketing (Pty) Ltd..
29. The Tribunal finds that the CPA is not applicable to this matter, as the agreement was entered into prior to the general effective date of the CPA. Considering that the compliance notice therefore fails to clear this first hurdle relating to its lawfulness it is not necessary to evaluate any further aspects relating to the Applicant’s submissions.
30. For the reasons set out above the Tribunal concludes that the compliance notice issued by the Respondent was not issued in accordance with the provisions of the CPA.
Accordingly, the Tribunal makes the following order:
31. The Compliance notice issued by the Respondent is hereby cancelled; and
32. No order is made as to costs.
DATED ON THIS 22 nd DAY OF JANUARY 2014
Prof T Woker (Presiding member) and Ms D Terblanche (Member) concurring.
[1] For the Conduct of Matters before the National Consumer Tribunal published under GN789 in GG30225 of 28 August 2007 as amended by GenN428 in GG34405 OF 29 June 2011 (hereinafter “the Rules of the Tribunal”).
[2] Peugeot Citroen South Africa (PTY) LTD t/a Citroen South Africa vs. NCC NCT/4062/2012/101 (1) (P); Kia Motors South Africa (PTY) LTD t/a Kia Motors The Glen vs. NCC NCT/3914/2012/101(1)P and City of Johannesburg v NCC NCT/2667/2011/101(1) (P) & NCT/2081/2011/101(1) (P)
