SUBMISSION BY MAGISTRATE F VON REICHE: PRETORIA MAGISTRATES COURT

27 July 2005

Dear Mr Chairman, Members of the Port Folio Committee, Ladies and Gentlemen


COMMENTS IN RESPECT OF THE NATIONAL CREDIT BILL

I regard it as a privilege to be able to address you today and make submissions to you on the subject matter of the National Credit Bill [hereinafter referred to as the Bill] which is of great importance to all of us.

My first contact with the Department of Trade and Industry’s [hereinafter referred to as the DTI] drive to initiate new legislation, was the publication of the Consumer Credit Bill, 2004 in Government Gazette No. 266678 of 17 August 2004 [hereinafter referred to as the first Bill].

After I studied the provisions of the first Bill, I wrote the Honourable Minister of Trade and Industry a letter dated 10 September 2004 in which I expressed serious concerns and reservations as to the contents of the first Bill. My letter of 10 September 2004 [hereinafter referred to as my letter] is appended hereto as annexure "A" and is to be regarded as an integral part of my submissions today.

Since the publication of the first Bill there have been many redrafts eventually culminating in the Bill.

For the purposes of my presentation it is not necessary to point out the differences between the two Bills. Suffice to say that the main body and salient features of the first Bill have been retained with a few minor changes being effected.

Accordingly the submissions made in my letter still hold true for the Bill.

Summarized my main criticism against the proposed new legislation generally and in particular the first Bill was threefold to wit:

1) The explanatory memorandum to the first Bill did not justify such a radical departure from the current legal position;

2) The National Credit Regulator, the Consumer Tribunal and other Institutions established offended against the Constitution and the general law; and

3) Assuming that the first Bill and its provisions did not offend against the Constitution and the general law (which was not conceded), its provisions negated the functioning of the public administration and the judiciary (both funded by tax payers’ money), removed consumer protection by decriminalizing legislative provisions, imported and redefined basic legal concepts, and discarded experience and legal certainty secured by legislation of long standing in particular the Usury Act, 1968 [Act no. 73 of 1968, hereinafter referred to as the Usury Act], and the Credit Agreements Act [Act no. 75 of 1980, hereinafter referred to as the Credit Agreements Act].

Allow me to elaborate on the principles addressed in my letter with specific reference also to the Bill.

My main concern is with the removal of consumer protection in the Bill [although in the media the public have been told that they will receive greater protection].

Refer articles published inter alia in the Pretoria News (Personal Finance Column) of 28 August 2004 and Die Beeld of 9 June 2005 consecutively appended hereto as annexures "B" and "C".

To substantiate my submission that consumer protection has been removed, I need to refer to the current legal position.

The following illustrative example is used. Mr A. Debtor borrows

R100 000-00 from ABC Bank the creditor. The term for repayment is 5 years and a variable rate is agreed upon as 21% per annum which constitutes the maximum interest rate allowed by the Usury Act when the contract which is in writing is concluded. During the term of the loan Mr A. Debtor learns that the maximum interest rate had been reduced to 15% per annum, but ABC Bank had not notified him of the change, had not adjusted his account to charge lesser rent and had also recovered costs which are not legally recoverable. Mr A. Debtor requests ABC Bank to rectify his account. ABC Bank refuses to do so.

Mr A. Debtor hands the matter to the National Inspectorate of the DTI and Mr P an inspector of the DTI and of the Usury Act is tasked to investigate the matter. Mr P investigates the matter, compiles a report and informs ABC Bank that there is prima facie evidence that the Bank has contravened the Usury Act. Mr P requires ABC Bank to rectify the matter within a stated time period failing which he will have to hand over the matter to the National Prosecuting Authority with a view to instituting a prosecution. ABC Bank promptly rectifies the matter and Mr A.Debtor has been vindicated without having to incur unnecessary costs and be possibly involved in protracted litigation.

In contrast with the current legal position where contraventions of the Usury Act and the Credit Agreements Act are made punishable offences, stand the provisions in clauses 156 and onward of the Bill.

Gleaning these provisions carefully it is clear that as far as a consumer such as Mr A. Debtor is concerned the criminal sanction he now has will be something of the past if the Bill becomes an Act of Parliament.

Under the proposed Bill Mr A. Debtor will have to file a complaint with the National Credit Regulator to be adjudged eventually by the Consumer Tribunal. The clause he will have to rely on is clause 136(1) of the Bill. There is clearly no criminal sanction in the Bill should ABC Bank fail to adhere to the provisions which relate to the maximum interest rates and/or other charges which may be imposed or levied.

The present criminal sanction however can likewise come to the aid of debtors in civil matters. This can be illustrated by a civil matter which came before me in court 36 [the motion court] at the Pretoria Magistrate’s Court. And which can be reported as follows:

On 22 January 2004 I did the motion court. An application for summary judgement under case number 142915/2003 served before me. I noticed in one of the prayers that finance charges were claimed; at an annual rate of 50% per annum on the capital amount of R500 000,00. The aforementioned finance charge rate of 50% per annum was also embodied in a written agreement. I realized that the interest that was being charged was way above the statutory maximum interest rate of 19% per annum that would apply to the transaction. In this regard the Usury Act, 1968 (Act 73 of 1968) applies which provides in section 2(1)(a) as follows:

"No money lender shall in connection with any money lending transaction stipulate for, demand or receive finance charges at an annual finance charge rate greater than the percentage determined by the Registrar by notice in the Gazette in accordance with the directions of the Minister".

Section 17 of the aforesaid Act makes any contravention thereof punishable as a criminal offence.

I view of these considerations I enquired of the Plaintiff’s attorney on what basis could the court sanction a criminal offence. The plaintiff’s attorney asked for an amendment of the pleadings to allow only for a claim of 19% per annum. (Being the statutory maximum interest rate).

Judgement was accordingly handed down for payment of an amount of

R500 000,00 with interest thereon at the rate of 19% per annum ex 1 June 2003 till the date of payment, and costs to be taxed.

As a civil magistrate where requests for default judgements have been submitted to me, where the provisions of the Usury Act and the Credit Agreements Act have not been adhered to, I have often referred such matters back to the attorneys of the plaintiffs with queries which have many, times resulted in rectification or adjustments in amounts claimed to the benefit of defendants. Should the Bill be enacted such a course taken by a civil magistrate will not be possible anymore.

It is now necessary to quote from newspaper articles previously referred to. In the article in the Pretoria News (annexure B) under heading ‘complaints’ the following is said among other things:

"The bill provides for a consumer tribunal which will function as an informal court and adjudicate contraventions of the law".

And in Die Beeld Me A. Ludin of the DTI is quoted as having said that:

"Die idee is nie dat die krediettribunaal die rol van howe oorneem nie.

Laasgenoemde sal steeds ingespan word, maar die tribunaal is, nodig om kriminalisering van skuld te verminder en die wetgewing doeltreffend toe te pas".

Turning to the Bill it is respectfully submitted that the statement that "die idee is nie dat die krediettribunaal die rol van howe oorneem nie." (my underlining and emphasis) does definitely not accord with the clear wording of the Bill which I now turn to. Clause 164 is headed ‘Civil actions and jurisdiction’ Clause 164(2) provides as follows:

(2) If, in any action in a civil court, a party raises an issue concerning conduct that is required or prohibited in terms of this Act, that court must not consider that issue on its merits, and –

(a) if the issue raised is one in respect of which the Tribunal has made an order which has not been set aside by a court, the court must apply the determination of the Tribunal to the issue; or

(b) otherwise, the court must refer that issue to the Tribunal to be considered on its merits, if the court is satisfied that –

(i) the issue has not been raised in a frivolous or vexatious manner; and

(ii) the resolution of that issue is required to determine the final outcome of the action".

"Civil Court" is defined in clause 1 of the Bill as: "Means a court referred to in section 166(c), (d) or (e) of the Constitution.

In its turn section 166 of the Constitution of the Republic of South Africa, 1996 (Act 108 of 1996 – hereinafter referred to as the Constitution) provides as follows:

Judicial system

    1. The courts are –

(a) the Constitutional Court;

(b) the Supreme Court of Appeal;

(c) the High Courts, including any high court of appeal that may be established by an Act of Parliament to hear appeals from High Courts;

(d) the Magistrates’ Courts; and

(e) any other court established or recognised in terms of an Act of Parliament, including any court of a status similar to either the High Courts or the Magistrates’ Courts.

On a clear interpretation of the wording of clause 164(2) it is obvious that "Civil Courts" may not deal with "conduct that is required or prohibited in terms of this Act" (the Bill) on the merits but have to refer same to the Consumer Tribunal or accept an order that has not been set aside. This clause therefore removes the normal jurisdiction that civil courts have in all consumer matters falling under the Bill!

In my opinion this is outrageous to oust the jurisdiction of the "Civil Courts" who are the best suited and able to attend to these matters as well.

In the example quoted by me earlier Mr A. Debtor will have to resort to the National Credit Regulator and the Consumer Tribunal to have his case adjudged. The problem he may face is that he might be queuing with hundreds or maybe thousands of consumer to be heard by the Consumer Tribunal (which I will hereinafter point out is neither a civil nor a criminal court at all). This being so since the Consumer Tribunal (in terms of Clause 26(1)(a) of the Bill) has jurisdiction throughout the Republic.

However once he has managed to get before the Consumer Tribunal there is no guarantee that his matter will be adjudged satisfactorily the reason being that only one of the members of a panel of the Consumer Tribunal to which a matter is referred to by the Chairperson need have suitable legal qualifications and experience in terms of clause 31(2)(a) of the Bill. Should he be unsuccessful before the Consumer Tribunal he will have to weigh up the odds of appealing against the Tribunal’s order or take its decision on review in terms of clause 148 of the Bill. It might be risky and costly to do so, and he might decide not to do so. The end result could be that ABC Bank continue its illegal activities to the detriment of many customers and clients.

As regards so called hearings before the National Consumer Tribunal, clause 142(1) of the Bill provides as follows:

Hearings before Tribunal

142. (1) The Tribunal must conduct its hearings in public –

(a) in an inquisitorial manner;

(b) as expeditiously as possible;

(c) as informally as possible; and

(d) in accordance with the principles of natural justice.

In subclause (1)(a) reference is made to "in an inquisitorial manner" which is rather surprising and alarming since this system is in use on the Continent where judges take an active role in questioning accused persons in criminal matters as apposed to our adversial system in criminal matters where a public prosecutor or Director of Public Prosecution takes the lead in criminal actions against accused, and presents the evidence to court through mainly calling witnesses who give oral (or viva voce) evidence. Subclause (1)(c) refers to "as informally as possible" which is simply naïve and fallacious since some civil matters can be complex in nature and require the expertise of judicial officers, attorneys and advocates to deal with. Subclause (1)(d) refers to ‘in accordance with the principles of national justice" is too generalized and really belongs to the sphere of Administrative Law although the basic principle is embedded in the law of criminal and civil procedure which apply at present to the adjudication of consumer matters brought before the courts.

Generally speaking the courts of first instance established and recognized by section 166 of the Constitutions adjudicate in criminal and civil matters. In trial matters evidence is adduced by a prosecutor in the lower courts and a state advocate in the high courts on behalf of the State. In civil matters oral (or also referred to as viva voce evidence) evidence is adduced on behalf of plaintiffs and defendants, and in motion court matters evidence is presented to court mostly by written statements under oath and oral evidence is allowed in exceptional instances.

In my opinion there is simply no justification for an informal court such as the National Consumer Tribunal envisaged in the Bill.

A practising attorney, Mr V. van der Merwe, presented me with cogent arguments in respect of the proposed legislation. His comments are appended hereto as annexure "D" under the heading ‘Conclusion’ on pages 7 and 8 the attorney observed inter alia as follows:

"Author is therefore, with reference to the aforementioned, of the opinion, that the creation of new legislation with the object of protecting the rights of debtors against unlawful practices of creditors, is superfluous.

It is author’s further opinion that the material solution to solving the quandary concerned, being the protection of debtors against unlawful practices in debt collection and usurious interest charged by creditors, lies not in the creation of new legislation, but in the amendment of current legislation to that effect.

It is author’s final submission that the creation of new legislation and the establishment of new procedures, will only lead to legal uncertainty, as no case law will exist on such and the existing case law will be made redundant".

In stead of having one National Consumer Tribunal for the Republic with an impossible work load, the existing Magistrates’ Courts could be utilized in the handling of consumer matters, as in the past in the event that the scope and application of the existing law be extended. An example that comes to mind is the appointing of magistrates to act in Equality Courts as judicial officers.

Having had regard to all the provisions relating to the National Consumer Tribunal, it is my opinion that the Tribunal is neither a civil nor a criminal court but respectfully said to the draughtsman to be regarded as a kangaroo court which could be described as draconian.

A matter that is disturbing, is the fact that important matters to be prescribed by Regulations are not available for scrutiny. If would appear that the DTI requires a carte blanche from Parliament to approve the Bill without simultaneously presenting regulations which could be for reaching in its import.

Up to now my discussion related to general principles in the Bill and the creation of certain institutions e.g. the National Consumer Tribunal. The scope of my discussions do not allow me to dwell at any length on the myriad of terms and words used in the Bill. Therefore my comments on a specific clause of the Bill are not exhaustive and cursory in nature.

Clause 89 of the Bill determines in what cases credit agreements are unlawful.

Clause 89(2)(a) renders a credit agreement unlawful which was entered into by "an unemancipated minor".

The question arises why it was necessary for the draughtsman to deal with legal capacity tot contract in the Bill. Legal capacity is part of the general law and need not be specifically dealt with unless there are specific reasons to do so.

Apart from express emancipation in terms of an order of court in terms of sections 3 read with 7 of the Age of Majority Act, 1972 (Act 57 of 1972) there is also the possibility that there can be tacit emancipation by the parents of a minor in respect of his or her entering into a consumer contract.

In my opinion the wording is unfortunate and does not allow for the possibility that a consumer contract can be entered into by a minor which can be ratified by himself on attaining majority, be ratified before majority by his guardians or the High court which is the upper guardian of all minors.

The general principles of law in general and those that relate to minors in particular should not be codified as it were regarding credit agreements.

Clause 89(5) obliges a court to order that an unlawful agreement be void as from the date it was entered into.

In the case of a minor this would rule out the possibility of ratification afterwards as I have mentioned before.

Clause 89(2)(d) makes provision that a credit agreement is unlawful if a credit provider was unregistered and the Act (Bill) required him to be registered. If this is a case in a specific matter the court must order that the agreement is void as from the date on which it was entered into.

This is a very drastic measure, no norm is involved and can be regarded as statutory blackmail to enjoin the registration, where required, of credit providers.

In conclusion I wish to say that with reference to the Bill and the explanatory memorandum accompanying it, that I am not convinced by its contents that a case has been made out to justify such a radical departure from the current legal position. The Bill in its present form will, in so far as consumer protection is concerned, in all probability plunge the consumer industry into an abyss.

Amendments to existing legislation should in my opinion be made only after there has been thorough research and wide consultations with all concerned with Consumer law.

 

 

______________________

MR F.V.A. VON REICHE

ADDITIONAL MAGISTRATE, CIVIL SECTION, PRETORIA

 

ANNEXTURE A

10 September 2004

Dear Minister Mpahlwa

RE: PUBLICATION OF THE CONSUMER CREDIT BILL, 2004 IN GOVERNMENT GAZETTE NO. 26678 OF 17TH AUGUST 2004 [HEREAFTER REFERRED TO AS "THE BILL"]

 

Allow me first to congratulate you on your appointment as Minister of Trade and Industry.

Towards the end of August 2004 I was presented with a copy of the Bill and I am busy studying the contents thereof.

The subject matter of the Bill is of obvious importance to consumers in general, the public and also the judiciary which is called to interpret statutes of Parliament.

During the month June of the year 2002 I was appointed as an investigating officer by the Director of Human Resources Management of the Department of Trade and Industry.

The appointment related to an investigation into grievances of an Assistant Director, Mr Christo Pretorius, against Miss Lana van Zyl, the then Director of the National Inspectorate and also the Registrar of the Usury Act. The aforesaid grievances were mainly that requests for inspections of alleged contraventions of the Usury Act, 1968 [Act 73 of 1968 hereafter referred to as "The Usury Act"] were unreasonably refused and that the said Mr Pretorius complained that he was being victimized when performing his statutory assigned duties.

After I had investigated the said grievances, I compiled a comprehensive report dealing in main with the Usury Act and related matters in terms of other legislation. My report was completed on 31st October 2002 and was handed to the Director-General of the said department.

 

Mr C. Pretorius resorted to the High Court (Transvaal Provincial Division) in a motion court application, since the Director-General, Dr A. Ruiters, did not to Mr Pretorius’s satisfaction deal fully with all the recommendations in my report. The motion court hearing took place on 6th and 7th April 2004. Judgement was reserved and at the time of writing of this has not been handed down yet.

My investigations required me to make an in-depth study of the Usury Act and other legislation including the Constitution of the Republic of South Africa, 1996 (Act 108 of 1996, hereafter referred to as "The Constitution").

Having had regard to the Bill and its provisions, I am of the conviction that in principle it offends against the provisions of the Constitution and also makes inroads in the existing law. At present I am working on comments to be submitted before the closing date of 28th September 2004.

Since I do not want to burden you with technical detail regarding legal matters, I have decided to name but a few matters to illustrate what I mean that the Bill offends against the Constitution and the general law.

The National Credit Regulator is established in terms of section 12(1) of the Bill and is to be a juristic person in terms of subsection (1)(b). When one has regard to the Constitution and in particular to chapter 5 thereof it is clear that the administration of statutes fall under the President as Head of State and that in turn he designates to members of the cabinet to be Ministers of the various State Departments. A cabinet member (being a Minister) may assign any power or function that is to be exercised or performed in terms of an Act of Parliament to a member of a Provincial Executive Council or to a Municipal Council [refer sections 83 and 99 of the Constitution]. One of the conditions of such an assignment is that it only takes effect upon proclamation by the President [refer section 99(c) of the Constitution]. Section 12(1) attempts the impossible since it prescribes that a juristic person outside the National Executive is to be vested with powers and functions which are the province of the President, the State Ministers and others to whom powers have been delegated in terms of section 238 of the Constitution. Clearly it would be impossible to divest the National Executive of its powers without radically amending the Constitution and abrogating the principle of the separation of powers imbedded in the Constitution.

Section 12(2) of the Bill provides:

"Each organ of state must assist (sic) the National Credit Regulator to maintain its independence and impartiality and to effectively carry out its powers and duties".

This subsection needs to be considered carefully. Respectfully I fail to see how an organ of State (e.g. the National or Provincial Executives) can "assist" an institution that falls outside the National Executive in the first place. Independence and impartiality of the National Executive is in any event assured and required by the Constitution [refer section 195 of the Constitution].

A matter of grave concern is therefore to my mind a misleading article titled "Greater protection for borrowers" published in the Personal Finance column of the Pretoria News of 28th August 2004 [thus after the publication of the Bill].

Under a subheading "Complaints" the following remarks are made:

"The bill proposes the establishment of the National Credit Regulator, which will fall under the DTI" (my emphasis).

This is clearly wrong since the National Credit Regulator described as a juristic person clearly does not fall under the National Department of Trade and Industry. [Refer section 12(2) of the Bill].

The Consumer Tribunal is established in terms of section 20(1) of the Bill. In terms of subsection (1)(b) it is to be a juristic person. This runs counter to the Constitution which makes it clear that not a juristic person but judicial officers appointed as such perform duties in the hierarchy of courts established in terms of section 166 of the Constitution.

In terms of section 20(1)(a) the Consumer Tribunal is to have jurisdiction throughout the Republic. This simply does not make sense since the courts of first instance referred to in the Constitution (section 166 thereof) have territorial jurisdiction. For example the High Courts have jurisdiction each over one of the nine provinces of the Republic. My submission is that the Consumer Tribunal as described in the Bill is unconstitutional in its very nature and also offends against National legislation concerning the establishing and functioning of the courts referred to in section 166 of the Constitution.

In order not to burden you with too much detail, I wish to give a few examples of what I mean. Firstly I have already before referred to the territorial jurisdiction of courts and the fact that a court of law can not be a juristic person.

It was with a sense of unbelief that I saw what powers are accorded to the Consumer Tribunal in the Bill. For example, section 134(1) provides as follows:

"The Consumer Tribunal may impose an administrative penalty only – (a) in the circumstances expressly provided for in this Act; or,

(b) for a failure by a credit provider to comply with a requirement of this Act".

As regards subsection (1)(a), I cannot find in the definitions in section 1, section 133 (referred to in section 134) and section 134 what is meant by "administrative fines". In terms of the other provision of subsection (1)(b) of section 134 presumably an "administrative fine" can be imposed when a person fails to comply with a requirement of the Bill. This however violates the Criminal Law and the principle of nullum crimen sine lege which means that there is no crime unless it has been recognized by the Common Law or has been enacted as such by the legislatures of the three levels of Government. Courts do not have the powers to create crimes [refer RvM 1915 CPD 334, 340]. Gleaning the Bill it is clear that the offences created are confined to sections 139 up to and including 143. Nowhere in the Bill is conduct made punishable which could warrant the imposition of an "administrative fine" in terms of sections 133 and 134 of the Bill. The principle of nullum crimen sine lege is embodied in section 35(3)(l) which provides:

 

"Every accused person has a right to a fair trial, which includes the right –

(l) not be convicted for an act or omission that was not an offence under either national or international law at the time if was committed or omitted".

In any event the Bill contradicts itself since section 150 provides that in proceedings before the Tribunal the standard of proof is on a balance of probabilities, which is the well known civil standard of proof, and not the criminal standard of proof which requires proof beyond reasonable doubt. How can the Consumer Tribunal thus impose a fine where no crime exists and the court is not sitting and composed as a criminal court of law?! Clearly an absurdity.

Gleaning the provisions of section 133 of the Bill under the title "Orders of Consumer Tribunal", I am of the opinion that powers are granted to the Tribunal to interfere with the established principles of freedom of contract and ordinary commercial practices which are not only draconian but simply unheard of.

In the case of Wells v South African Alumenite Company 1927 AD 69 the court quoted with approval the following dicta from an English case:

"If there is one thing which more than another public policy requires it is that men of full age and competent understanding shall have the utmost liberty of contracting and that their contracts when entered into freely and voluntarily shall be held sacred, and shall be enforced by courts of justice [per Jessel MR in Printing and Numerical Registering Company v Sampson (1875) LR (19 Eq 462 at 465) …"

The above quotation represents the very important principle of the freedom of contract which is part and parcel of our law. It stands to reason that in certain instances the legislature can make provision for provisions in an agreement where there is or have been abusive practices and/or exploitation of consumers. But this certainly represents exceptions to the rule of freedom of contract and does not entitle the legislator to abrogate an established legal principle.

Sections 136, 137 and 138 of the Bill under the headings authority to enter and search under warrant, powers to enter and search and conduct of entry and search, empower a High Court Judge, a Regional Magistrate or a Magistrate to issue warrants for certain purposes and subject to certain conditions. Section 14 of the Constitution provides that everyone has the right to privacy which includes the right not to have –

  1. their person or home searched
  2. their property searched
  3. their possessions seized or
  4. the privacy of their communications infringed.

Section 36 of the Constitution makes provision that the rights in the Bill of Rights (including the rights under section 14) may be limited under certain conditions. Currently such rights are limited in terms of National legislation (the Criminal Law and Criminal Procedure) when a person is suspected of having committed or involved in committing a criminal offence(s). The abovementioned sections of the Bill probably violate the Constitution and the Criminal Law and Criminal Procedure.

 

My reasons for this submission are that section 136 enjoins the issuing of a warrant if "prohibited conduct" has taken place. As I have previously pointed out that generally speaking mere contraventions of the majority of the provisions of the Bill do not at the same time constitute criminal offences. [Refer to the definition in section 1 of "prohibited conduct"]. The result is whereas in Criminal Procedural Law information under oath of the commission of an offence to presumed as a prerequisite for a warrant here no such prerequisite is required. Clearly untenable! [Refer sections 19 up to and including 36 of the Criminal Procedure Act 1977 (Act no. 51 of 1977)].

Assuming that the National Credit Regulator, the Consumer Tribunal and other institutions, established by the Bill and the other provisions of the Bill, generally do not violate the Constitution and the law [which is not conceded], I submit with my 25 years experience at law in administering, applying and interpreting statutes of Parliament that the Bill fails for the following reasons:

  1. It provides for elaborate procedures and institutions which could easily stall commercial transactions.
  2. It seems to be onerous to the credit providers to which it applies.
  3. It will probably place a heavy financial burden on credit providers to fund the administration of the Bill.
  4. It negates the functioning of the public administration and the judiciary which is in place and supported by public funds, (tax payers’ money),
  5. The registration system is obviously in place to provide funding of the Bill but also a mechanism to enjoin compliance with the provisions of the Bill.
  6. Apart from a few provisions which make certain conduct to constitute criminal offences, the impression created is that the Bill regulates civil matters which do not afford real protection to consumers.
  7. Experience and legal certainty secured by legislation of long standing in particular the Usury Act, 1968 (Act no. 73 of 1968) and the Credit Agreements Act, 1980 (Act No. 75 of 1980) will be discarded.
  8. Basic legal concepts are redefined in the Bill which could easily create confusion and lead to legal uncertainty.

Since my report is part of the documentation in the aforementioned motion proceedings and the matter being sub judice, I am unfortunately not allowed to disclose to you my findings and recommendations. What I can say is that I did definitely not recommend new legislation to address problems encountered in Consumer Law.

In conclusion with reference to the explanatory memorandum, I am not convinced by its contents that a case has been made out to justify a radical departure from the current legal position. Amendments to existing legislation should in my opinion be made only after there has been thorough research and wide consultations with all concerned with Consumer Law. A copy will be forwarded to Ms Lynn Layman.

Trusting that my comments can assist you in your very responsible task.

Yours faithfully

 

 

 

 

 

(SIGNED) F.V.A. VON REICHE

ADDITIONAL MAGISTRATE: CIVIL SECTION

MAGISTRATE: PRETORIA