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Why South Africa’s draft revised material transfer agreement is not fit for purpose

Forcing a square into a circle: why South Africa’s draft revised material transfer agreement is not fit for purpose

PAIA manual

View the PAIA manual HERE 20230626_PAIA_Manual_Esselaar Attorneys_PGE

Paul Esselaar

Paul Esselaar completed his BA, LLB at Rhodes University in Grahamstown in 1997. Thereafter he attended the School for Legal Practice at the University of Cape Town in 2000 and went on to complete his articles at Kessler De Jager Inc. During his articles he focussed...

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The Esselaar Attorneys Web Site is subject to copyright by Esselaar Attorneys or is licenced under copyright from third party owners. You may reproduce any web page - subject to the disclaimer below - for personal use only. Any comments and statements contained within...

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This message and any accompanying attachment(s) may contain confidential and copyrighted information. If you are not the addressee(s) indicated in this message or responsible for delivery of the message to the addressee(s), do not copy or deliver this message or the...

Financial Services Laws General Amendment Bill tabled in Parliament

According to the South African Government News Agency (SANews) the Financial Services Laws General Amendment Bill was tabled in Parliament last week. In short, 'the Bill, which was released for public comment in March, addresses urgent issues in eleven financial...

Is the Financial Services Industry pulling wool over consumers’ eyes?

The Financial Services industry is in a state of flux. The Financial Services Laws General Amendment Bill (FSLGAB) was tabled in parliament on 25 September 2012. The aim of the Bill is to ensure that ‘South Africa has a sounder and better regulated financial services...

Credit Law: Section 89(5)(c) of the NCA declared unconstitutional

In the May/June edition of CLR Paul Esselaar wrote about a decision by the Western Cape High Court in which s 89(5)(c) of the National Credit Act was declared unconstitutional for being inconsistent with the right to property in s 25(1). In other words it was found...

Draft NCA Regulations on Affordability Assessments published

The Department of Trade and Industry has published draft regulations on, "Affordability Assessment for the Amendment of Regulations for matters relating to the functions of the National Consumer Tribunal and Rules for the Conduct of matters before the National...

Drowning in Red Tape: The new threshold for registration as a credit provider

With all the pieces of legislation that are constantly being updated it is easy to miss changes to legislation that are really important – especially if that change comes in the form of a Regulation (something typically drafted by a ministry such as the Department of...

NEW

Why South Africa’s draft revised material transfer agreement is not fit for purpose

Forcing a square into a circle: why South Africa’s draft revised material transfer agreement is not fit for purpose

PAIA manual

View the PAIA manual HERE 20230626_PAIA_Manual_Esselaar Attorneys_PGE

Paul Esselaar

Paul Esselaar completed his BA, LLB at Rhodes University in Grahamstown in 1997. Thereafter he attended the School for Legal Practice at the University of Cape Town in 2000 and went on to complete his articles at Kessler De Jager Inc. During his articles he focussed...

Web Site Terms and Conditions

The Esselaar Attorneys Web Site is subject to copyright by Esselaar Attorneys or is licenced under copyright from third party owners. You may reproduce any web page - subject to the disclaimer below - for personal use only. Any comments and statements contained within...

Email Disclaimer

This message and any accompanying attachment(s) may contain confidential and copyrighted information. If you are not the addressee(s) indicated in this message or responsible for delivery of the message to the addressee(s), do not copy or deliver this message or the...

Financial Services Laws General Amendment Bill tabled in Parliament

According to the South African Government News Agency (SANews) the Financial Services Laws General Amendment Bill was tabled in Parliament last week. In short, 'the Bill, which was released for public comment in March, addresses urgent issues in eleven financial...

Is the Financial Services Industry pulling wool over consumers’ eyes?

The Financial Services industry is in a state of flux. The Financial Services Laws General Amendment Bill (FSLGAB) was tabled in parliament on 25 September 2012. The aim of the Bill is to ensure that ‘South Africa has a sounder and better regulated financial services...

Credit Law: Section 89(5)(c) of the NCA declared unconstitutional

In the May/June edition of CLR Paul Esselaar wrote about a decision by the Western Cape High Court in which s 89(5)(c) of the National Credit Act was declared unconstitutional for being inconsistent with the right to property in s 25(1). In other words it was found...

Draft NCA Regulations on Affordability Assessments published

The Department of Trade and Industry has published draft regulations on, "Affordability Assessment for the Amendment of Regulations for matters relating to the functions of the National Consumer Tribunal and Rules for the Conduct of matters before the National...

Drowning in Red Tape: The new threshold for registration as a credit provider

With all the pieces of legislation that are constantly being updated it is easy to miss changes to legislation that are really important – especially if that change comes in the form of a Regulation (something typically drafted by a ministry such as the Department of...

For many years consumer lawyers have been puzzling over section 69 of the Consumer Protection Act 68 of 2008 and whether it creates a mandatory route that a dissatisfied consumer needs to follow. While the section sets out several forums that a consumer may approach, the problematic part reads: 

‘…approaching a court with jurisdiction over the matter, if all other remedies available to that person in terms of the national legislation have been exhausted.’

 In essence, this created the concern that consumers were forced to exhaust the other remedies (such as going to the Motor Vehicle Industry Ombud of South Africa (MIOSA) or the Consumer Goods and Services Ombud (CGSO)) before they would be able to approach a court. Ironically (and the irony is significant) this meant that consumers had effectively less rights than in other contractual situations. Several commentators had mentioned that – if this were true – then this section may be able to be challenged in terms of s34 of the Constitution of South Africa (1996) which states: 

“Everyone has the right to have any dispute that can be resolved by the application of law decided in a fair public hearing before a court or, where appropriate, another independent and impartial tribunal or forum.” 

Unfortunately, this section of the constitution still leaves the door wide open to the possibility that a consumer must exhaust consumer bodies like the CGSO before it is able to approach a court. Indeed that is precisely what was held in Joroy 4440 CC v Potgieter and Another NNO 2016 (3) SA 465 (FB) where it was held that the failure to first exhaust other remedies prevented the court from hearing the matter at all. Even worse, Nzwana v Dukes Motors t/a Dampier Nissan (1170/2018) [2019] ZAECGHC 81 (3 September 2019) then confirmed this approach. 

Enter Motus Corporation (Pty) Ltd and Another v Wentzel (Case no 1272/2019) [2021] ZASCA 40 (13 April 2021) which is notably a Supreme Court of Appeal case (as opposed to Joroy (Free State High Court) and Nzwana (Eastern Cape High Court). In this matter the appellants also raised the defence of the consumer (Applicant) failing to exhaust other forms before approaching the High Court. Tragically this point was abandoned by the appellant during the course of the case which meant that any comments on this issue became obiter  – obiter remarks are not essential to a decision and do not create binding precedent. Despite it being obiter, Zondi JA then went on to provide as clear an indication as possible that the decisions by Joroy and Nzwana were incorrect: 

“Section 69(d) should not lightly be read as excluding the right of consumers to approach the court in order to obtain redress.”    

and 

“The section is couched in permissive language consistent with the consumer having a right to choose which remedy to pursue.”

and

“Given the purpose of the Act to protect the interests of the consumer, who will always be the person seeking redress under it, there is no apparent reason why they should be precluded from pursuing immediately what may be their most effective remedy.”

This is the clearest indication yet that a consumer would be entitled to approach a court directly and not be forced to exhaust other forums first. This is particularly important as forcing a consumer to approach other forums before approaching the courts inevitably delays the matter considerably – often to the considerable detriment of the consumer. Even worse the decisions of consumer ombuds such as the GGSO and MIOSA are not binding on the supplier! In our view Zondi’s obiter judgment sets out the correct consumer-centric approach which section 2(10) of the CPA enjoins us to consider when it states: 

“No provision of this Act must be interpreted so as to preclude a consumer from exercising any rights afforded in terms of the common law.”