The National Consumer Commission v Univision Services Association NPC

The National Consumer Commission received hundreds of complaints from consumers relating to the First to Eleventh Respondents' (collectively "Univision") advertising, marketing and sale of "points" in the timeshare industry and collection of levies. In November 2014, the Commission referred the complaints to the National Consumer Tribunal under s 73(2)(b) of the Consumer Protection Act 68 of 2008. The referral was supported by voluminous papers totaling almost 900 pages. A pre-hearing was held on 1 October 2015 where the Tribunal raised various issues to be addressed. On the morning of the hearing scheduled for 9 November 2015, the Commission served a notice of withdrawal without consenting to pay costs. Univision applied to the Tribunal for a punitive costs order against the Commission, alleging the referral was frivolous and vexatious. The Tribunal refused to award costs, holding that s 147 of the National Credit Act 34 of 2005 precluded a costs award where the matter was referred by the Commission under s 73(2)(b) rather than by a complainant under s 75(1)(b) of the CPA. Univision applied to the High Court for review of this decision, which was upheld. The Commission appealed to the Supreme Court of Appeal.

• Whether the National Consumer Tribunal had the power to make a costs order against the National Consumer Commission when it withdrew a referral made under s 73(2)(b) of the Consumer Protection Act 68 of 2008
• Whether regulations promulgated under s 171 of the National Credit Act 34 of 2005 (particularly regs 19(2), 25(4) and 25(7)) could extend the Tribunal's power to award costs beyond the scope of s 147 of the National Credit Act
• Whether s 147 of the National Credit Act distinguished between referrals made by the Commission under s 73(2)(b) and those made by complainants under s 75(1)(b) of the CPA for purposes of costs awards

1. The appeal succeeded, with costs. 2. The order of the High Court was set aside and substituted with: "The application to review and set aside the order of the Tribunal of 16 November 2015 is dismissed, with costs."

Section 147 of the National Credit Act 34 of 2005 precludes the National Consumer Tribunal from granting a costs order against the National Consumer Commission when it withdraws a referral made under s 73(2)(b) of the Consumer Protection Act 68 of 2008. The Tribunal's power to award costs under s 147(2) of the NCA is limited to cases where a complaint was referred by a complainant under s 75(1)(b) of the CPA, not where the referral was made by the Commission under s 73(2)(b). Regulations promulgated under an enabling statute are strictly ancillary to that statute and cannot be used to interpret the statute or extend the scope of powers granted by the statute beyond what is expressly provided. Regulations 19(2), 25(4) and 25(7) of the regulations for matters before the Tribunal are ancillary to s 147(2) and only apply where the statute authorizes a costs award - they do not independently create a power to award costs beyond the scope of s 147.

The Court observed that there is good policy reason for the legislature to have limited the Tribunal's power to award costs as it did in s 147, given the distinct nature of the Commission as an organ of state acting in the public interest to enforce consumer rights and protect the economic welfare of consumers, rather than as an ordinary civil litigant seeking redress for personal infringement of civil rights. The Court noted that when the Commission refers matters to the Tribunal under s 73(2), it acts in pursuance of its statutory obligation to enforce consumer rights on behalf of complainants and the public at large. The Court rejected a tentative submission that s 147 only applied to costs incurred after a hearing commenced, stating it would be absurd to interpret the section as denying costs orders from the hearing stage onwards but not before, and that the section clearly applies to all costs associated with a matter once a referral is made to the Tribunal. The Court also noted with some surprise that neither the Tribunal nor the High Court nor the Supreme Court of Appeal had been referred to the decisive Constitutional Court judgment in Competition Commission of South Africa v Pioneer Hi-Bred International Inc 2014 (2) SA 480 (CC), which addressed identical issues under similar provisions in the Competition Act.

This case establishes important principles regarding the relationship between enabling statutes and subordinate regulations in South African administrative law. It affirms that regulations cannot extend beyond their ancillary function or broaden the powers granted by the enabling statute. The judgment clarifies the costs regime applicable to proceedings before the National Consumer Tribunal, distinguishing between referrals made by the National Consumer Commission in the public interest under s 73(2)(b) of the Consumer Protection Act (where the general rule that each party bears its own costs applies under s 147(1) of the National Credit Act), and referrals made by individual complainants under s 75(1)(b) (where the Tribunal has discretion to award costs under s 147(2)). The case recognizes the special status of the Commission as an organ of state acting to protect consumer rights in the public interest, rather than as an ordinary civil litigant. This has significant implications for consumer protection enforcement in South Africa and protects regulatory bodies from costs orders when acting in the public interest within their statutory mandate.