National Credit Regulator v First Group Investment Holdings (Pty) Ltd and Another

The National Credit Regulator (NCR) investigated First Group Investment Holdings (Pty) Ltd, a registered credit provider operating a holiday timeshare scheme, following a routine compliance monitoring exercise. The NCR formed the view that First Group had likely engaged in prohibited conduct under the National Credit Act 34 of 2005 (NCA), including reckless lending, levying costs of credit exceeding prescribed maxima, and charging unlawful fees. The NCR referred the matter to the National Consumer Tribunal (Tribunal) under s 140(1)(b) read with s 140(2)(b) of the NCA. First Group raised five preliminary defences (points in limine): (1) the NCR official who deposed to the founding affidavit (Ms Schwartz) lacked authorisation to refer the matter; (2) the investigator's report appended to the referral was inadmissible hearsay because the investigator had left the NCR and no confirmatory affidavit was provided; (3) the NCR lacked reasonable suspicion to initiate the investigation; (4) the investigator exceeded the scope of the authorised investigation; and (5) the investigator's report was materially incomplete. The NCR filed a replying affidavit late and sought condonation and a postponement; the Tribunal dismissed the postponement application, then dismissed all five preliminary points, and ordered that the main application proceed. First Group appealed the dismissal of its preliminary points to the Gauteng High Court, Pretoria, under s 148(2)(b) of the NCA. The High Court upheld First Group's appeal, finding that the referral was not properly authorised and that the investigation report was inadmissible hearsay; it set aside the Tribunal's order and dismissed the NCR's referral application with costs. The NCR successfully obtained leave to appeal to the Supreme Court of Appeal (SCA).

• Whether the Tribunal's order dismissing preliminary points in limine is a 'decision' susceptible to appeal under s 148(2)(b) of the NCA, or whether it is an interlocutory ruling that cannot be appealed until final determination of the merits.
• Whether the NCR's referral application to the Tribunal was duly authorised in terms of the Tribunal rules and the NCA.
• Whether the investigator's report constituted inadmissible hearsay evidence in the Tribunal proceedings.
• Whether the NCR possessed a reasonable suspicion that First Group had engaged in prohibited conduct to justify the investigation and referral.
• Whether the investigator exceeded the scope of the authorised investigation and whether the report was materially incomplete and defective.

The appeal is upheld with no order as to costs. The order of the High Court is set aside and replaced with the following: 'The appeal is struck from the roll.'

For the purposes of s 148(2)(b) of the National Credit Act 34 of 2005, the phrase 'the decision of the Tribunal in that matter' refers to the Tribunal's final substantive determination concluding the referral proceedings, and not to interlocutory rulings made in the course of those proceedings. An order dismissing preliminary points in limine in a referral under s 140 is interlocutory and not appealable under s 148(2)(b), even if the Tribunal becomes functus officio in respect of those specific objections. The fact that a preliminary ruling is dispositive of the objections raised does not convert it into a final decision where the merits of the underlying referral remain to be adjudicated. The textual reference to 'the' decision and the phrase 'in that matter' confine the right of appeal to the ultimate resolution of the matter. The objects of the NCA, particularly the provision for expeditious, informal and inquisitorial hearings in s 142(1), reinforce this construction by militating against fragmented appellate delay. Where an order is not appealable, the High Court lacks jurisdiction to entertain the appeal and must strike it from the roll. Jurisdiction is a matter of law and is not conferred by party concession or unchallenged assumptions in prior judgments.

Makgoka JA's minority views on the substantive preliminary defences constitute non-binding obiter. These include: (a) that proceedings before the Tribunal are inquisitorial and informal under ss 142(1) and 145 of the NCA, and should not be stifled by rigid motion-court rules or technical legalities such as the Plascon-Evans rule; (b) that failure to annex a board resolution proving authorisation is not automatically fatal to proceedings, and authorisation may be inferred from the probabilities where the litigation process is a natural consequence of an authorised investigation; (c) that the threshold for 'reasonable suspicion' to initiate an investigation under the NCA is relatively low in a regulatory environment; (d) that hearsay evidence in the form of an investigation report should not be dismissed in limine in Tribunal proceedings, but may be provisionally admitted under s 3(3) of the Law of Evidence Amendment Act pending oral evidence at the merits hearing; (e) that preliminary defences of a declinatory nature that would permanently terminate proceedings are appealable if they meet the Zweni test and the interests of justice so require; and (f) that organs of state exercising statutory public interest functions should not be mulcted in costs unless they acted unreasonably or partially. Matojane JA's observations that the authorisation and admissibility objections were at most dilatory because they could be cured at a later stage, and that the reasonable suspicion objection had already been answered in Dacqup, are also obiter as they were unnecessary to the majority's dispositive jurisdictional conclusion.

The case is significant in South African consumer and administrative law because it settles the availability of immediate appeals to the High Court against interlocutory rulings of the National Consumer Tribunal under s 148(2)(b) of the NCA. It establishes that only the Tribunal's final substantive determination of a referral is appealable, not preliminary rulings dismissing points in limine, thereby preventing enforcement proceedings from being arrested by technical, piecemeal appeals and upholding the statutory scheme of expeditious, informal and inquisitorial adjudication. The judgment also clarifies that jurisdictional questions are matters of law and cannot be created by party concession or unreasoned assumptions in earlier judgments. Although the minority's views on the merits did not form part of the order, they provide important guidance on the low threshold for reasonable suspicion in regulatory investigations, the proper treatment of hearsay evidence in Tribunal proceedings, the informal nature of Tribunal procedure, and the principle that organs of state pursuing legitimate public interest litigation should not ordinarily be ordered to pay costs.