National Consumer Commission

1. National Consumer Commission 22 August 2012

2. Responses from NCC

3. Index Undated document Dated document: NCT to declare conduct prohibited NCT judgments do not give reasons, or guidance Insufficient funding to review NCT judgements NCT report to the dti City of Johannesburg v NCC MTN and Vodacom Section 69 and 71 General The impact on small businesses

4. Undated Document – 3 pages Paragraph 8 provides a cursory answer; Paragraphs 4 and 15 promise answers Save for the above, this document does not answer the questions posed by the Committee.

5. Dated document:

6. NCT to declare conduct prohibited ‘‘prohibited conduct’’ means an act or omission in contravention of the CPA Outcome of investigation 73. (1) After concluding an investigation into a complaint, the Commission may— (c) if the Commission believes that a person has engaged in prohibited conduct— (i) refer the matter to the equality court, as contemplated in section 10, if the complaint involves a matter in terms of Part A of Chapter 2; (ii) propose a draft consent order in terms of section 74; (iii) make a referral in accordance with subsection (2); or (iv) issue a compliance notice in terms of section 100.

7. NCT to declare conduct prohibited Nayyara Distribution Enterprise CC v Earlyworks 266 (Pty) Ltd t/a Gloria Jeans Coffees SA The NCT refers to section 73 “...if the Commission believes that a person has engaged in prohibited conduct...” The NCT criticised the decision of the Commission to issue a Compliance Notice (Par 32): "by failing to refer / non-refer the matter and opting for the compliance notice route, the NCC has effectively closed the Applicant off from accessing interim relief, a potential claim for damages and other remedies under the law."

8. NCT judgments do not give reasons, or guidance • Delayed reasons: a difficult legal question or bundles of evidence • Unreasonable delay: NCC could complain in writing to the NCT, and failing a response, to the Minister, Trade and Industry. • Guidance: The NCT is a statutory body created by section 27 of the National Credit Act, 2005 (Act No.34 of 2005) (“NCA”) and save for as provided in the NCA and the CPA has no authority to provide guidelines to the NCC on how to conduct its business. • The NCT is required to provide reasons for its judgements - reasons will deal with why relief is not granted, not what ideally should have happened.

9. Insufficient funding to review NCT judgements • NCC business plan and budget proposal should address this Other avenues: Section 96 CPA: “The Commission is responsible to increase knowledge of the nature and dynamics of the consumer market, and to promote public awareness of consumer protection matters, by— ... (b) providing guidance to the public by— ... (ii) applying to a court for a declaratory order on the interpretation or application of any provision of this Act; ...”

10. NCT report to the dti • NCC : • NCT acted unlawfully and ultra vires (no enabling legislation) • NCT: Department requested a summary of all NCC cases • No statutory authority required to address concerns about an institution to the authority to which it reports. • NCC : Set the report aside in terms of the Promotion of Administrative Justice Act, 2000 (Act No 3 of 2000) • Report is not a decision and thus PAJA is not applicable

11. City of Johannesburg v NCC • NCC: NCT does not indicate what is the correct process to investigate • NCT accepted the NCC’s Enforcement Guidelines as a standard against which to measure the NCC’s investigation in the current matter. • NCT also referred to PAJA principles • NCC: NCT applies a “superficial adherence to form.” • The NCT did not in its judgement criticise the form used by the NCC. • NCT stated that all Compliance Notices “follow the same format and contain the following:” setting out what it contains. • The CPA Regulations No R 293 of 1 April 2011, Annexure L : pro forma Compliance Notice.

12. MTN and Vodacom • NCC: NCT is inconsistent in its judgements • Difficult to ascertain facts to distinguish • Judgement appear to turn on whether the contract under investigation deals with licensing issues. • NCC: NCT did not indicate how the NCC is supposed to proceed • In both cases the NCT indicated why the consultations with ICASA were found to be insufficient. • Paragraphs 64 and 65 indicate a lack of appreciation for basic legal principles: • audialterempartem • compliance with procedural requirements

13. Section 69 and 71 • Par 79: NCC: sections 69 and 71 CPA • incorrect reference • incorrectly numbered. • Section 71 does incorrectly refer to subsections 69(1) and (2) which do not exist. • The impact this could have is that consumers may be prevented from referring a complaint to the NCC.

14. General:

15. The impact on small businesses • Nayyara Distribution Enterprise CC v Earlyworks 266 (Pty) Ltd t/a Gloria Jeans Coffees SA [2012] ZANCT 12 (3 July 2012): • NCC issued a compliance notice, rather than referring the matter to the NCT. • Hyginique Toilet Hire & Sales v Chauke and Another: • Condonation for late filing: The NCC's letterhead contained no physical or postal address; Hyginique told the NCC moved premises; Compliance notice indicated an objection form was attached, but it was not; Not assisted when contacted NCC; told they knew nothing about such a form; and then the objection forms are only issued to attorneys • Cancelled compliance notice: Procedural challenges (Hyginique did cooperate; NCC did not conduct an investigation; Compliance notice contained contradictions and was issued in terms of the wrong section in the CPA; Compliance notice could not be executed – received on last ady for complaince

16. Thank you