SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document
in compliance with the law and SAFLII Policy
THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not Reportable
Case no: 1216/21
In the matter between:
MOSSELBAAI BOEREDIENSTE (PTY) LTD
t/a MOSSELBAAI TOYOTA APPLICANT
and
OKB MOTORS CC
t/a BULTFONTEIN TOYOTA RESPONDENT
Neutral citation: Mosselbaai Boeredienste (Pty) Ltd v OKB Motors CC
(Case no 1216/21) [2023] ZASCA 91 (09 June 2023)
Coram: MOCUMIE, SCHIPPERS, CARELSE, MEYER and GOOSEN
JJA
Heard: 04 May 2023
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Delivered: This judgment was handed down electronically by circulation
to the parties’ legal representatives by email, publication on the Supreme
Court of Appeal website and release to SAFLII. The date and time for hand -
down is deemed to be at 11h00 on 09June 2023.
Summary: Civil procedure – failure to com ply with the rules of court –
appeal lapsing – application for condonation and reinstatement of appeal –
factors to be considered – strong prospects of success on appeal may trump
unsatisfactory explanation – special leave granted – matter referred to th e
full court to determine the merits of the appeal.
_____________________________________________________________
ORDER
_____________________________________________________________
On appeal from: Free State Division of the High Court, Bloemfontein
(Naidoo J and De Kock AJ, sitting as a court of appeal):
1 Special leave to appeal is granted.
2 The appeal (in respect of the condonation application) is upheld, with
costs.
3 The order of the high court, dismissing the applicati on for
condonation with costs, is set aside and replaced with the following order:
‘(a) Mosselbaai Boeredienste (Pty) Ltd is granted condonation for its
failure to comply with the provisions of uniform r ules 50(4)(a), 50(7)(a)
and 7(2).
(b) The appeal is reinstated.’
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4 The matter is referred to the full court of the Free State Division of the
High Court, Bloemfontein to determine the merits of the appeal.
_____________________________________________________________
JUDGMENT
_____________________________________________________________
Carelse JA (Mocumie, Schippers, Meyer and Goosen JJA concurring)
[1] This is an application for special leave to appeal aga inst the order of
the full bench of the Free State Division of the High Court, Bloemfontein
(Naidoo J and De Kock AJ), delivered on 18 November 2021 (the high
court). That court dismissed the application for condonation of the late
prosecution of the appeal. On further application to this Court for special
leave to appeal, the application was referred for o ral hearing in terms of s
17(2)(d) of the Superior Courts Act 10 of 2013 . The parties were directed to
be prepared, if called upon to do so, to address this Court on the merits.
[2] The fol lowing facts are common cause. On 7 February 2018, the
applicant, Mosselbaai Boeredienste (Pty) Ltd t/a Mosselbaai Toyota
(plaintiff) and the respondent, OKB Motors CC t/a Bultfontein Toyota
(defendant), both motor de alers, concluded an interdealership agreement in
terms of which the res pondent bought a Toyota Etios motor vehicle
(the vehicle) from the plaintiff for resale.
[3] On the same day, M rs Steyn, an employee of the defendant, received
an invoice from Mr Maritz, the plaintiff’s sales manager’s email ad dress,
namely sales2[…]. On 8 February 2018, the vehicle was delivered to the
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defendant but the plaintiff did not receive payment of the purchase price of
R159 353.76. The defendant paid the purchase price into an incorrect bank
account because the invoice which was emailed to it was intercepted by an
unknown third party who fraudulently changed the defendant’s bank details
on the plaintiff’s invoice, and obtained receipt of the money.
[4] On 8 February 2018, Mrs Steyn emailed proof of payment for the
vehicle which reflected the incorrect bank details , which was once again
intercepted by an unknown third party who changed the incorrect bank
details to the correct bank d etails that caused the plaintiff to believe that the
defendant had correctly made payment for the vehicle. It is not disputed that
the standard practice in the motor dealership industry is that a vehicle is only
released upon proof of payment.
[5] The plaintiff instituted an action in the magistrates’ court for payment
of the amount of R159 353.76, the purchase price of the vehicle . The
defendant raised a special plea of estoppel by representation. The court a
quo upheld the special plea and dismissed the plaintiff’s case. Dissatisfied
with the outcome, the plaintiff appealed to the high court. On 19 April 2021,
the plaintiff noted it s appeal timeously in terms of r ule 51(3) of the
Magistrates’ Court’s Rules of Court.1
1 Rule 51(3) of the Magistrates’ Court’s Rules provides that ‘[a]n appeal may be noted within 20 days after
the date of a judgment appealed against or within 20 days after the registrar or clerk of the court has
supplied a copy of the judgment in writing to the party applying therefor, which ever period shall be the
longer.’
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[6] A party who wishes to pursue an appeal to the high court must file a
notice contemplated in rule 50 (4)(a)2 for the assignment of a date for t he
hearing of the appeal , within 40 d ays of the noting of the appeal . It is
common cause that the plaintiff failed to do so . In the result , the appeal
lapsed. The plaintiff had to lodge with the r egistrar two copies of the record
of appeal timeously in terms of rule 50 (7)(a).3 This was not done. The
plaintiff also sought condonation to file a power of attorney in terms of rule
7(2),4 authorising the plaintiff’s attorney to lodge an appeal.
[7] It is not disputed that the plaintiff failed to prosecute its appeal within
60 days of the noting thereof. The appeal lapsed on 14 July 2021. The
plaintiff filed the record of appeal on 20 J uly 2021. A fur ther complaint of
the defendant was that the plaintiff did not file a power of attorney. On 2
August 2021, the appeal was enrolled for hearing on 15 November 2021. On
17 August 2021, t he plaintiff launched an application for condonation of its
non-compliance with the above-mentioned Rules of Court, and if successful,
the reinstatement of the appeal. The defendant opposed the application on
the basis of the tardiness of the plaintiff’s attorney and the lack of prospects
of success.
2 Rule 50(4)(a) of the Uniform Rules of Court provides that ‘[t]he appellant shall, within 40 days of noting
the appeal, apply to the registrar in writing and with notice to all other parties for the assignment of a date
for the hearing of the appeal and shall at the sam e time make available to the registrar in writing his full
residential and postal addresses and the address of his attorney if he is represented.’
3 Rule 50(7)(a) of the Uniform Rules of Court provides that ‘ [t]he applicant shall simultaneously with the
lodging of the application for a date for the hearing of the appeal referred to in subrule (4) lodge with the
registrar two copies of the record: Provided that where such an appeal is to be heard by more than two
judges, the applicant shall, upon the reques t of the registrar, lodge a further copy of the record for each
additional judge.’
4 Rule 7(2) of the U niform Rules of Court provides that ‘the registrar shall not set down any appeal at the
instance of an attorney unless such attorney has filed with the r egistrar a power of attorney authorising him
to appeal and such power of attorney shall be filed together with the application for a date of hearing.’
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[8] The high court directed that the application for condonation be heard
first and the appeal itself at a later stage , depending on the outcome of the
condonation application. On 18 November 2021, the high court dismissed
the application for condonation with costs.
[9] The reasons for the delay and non -compliance with the rules have
been dealt with extensively in the judgment of the high court and need not
be repeated . It was not seriously contested that the delay in finalising t he
preparation of the record should be laid at the door of the transcribers. The
record shows that there are two reasons why the high court refused the
application for condonation and reinstatement of the appeal. The first is that
there were no prospects of success on appeal; and the second, that the
plaintiff failed to file a power of attorney in terms of rule 7(2).
[10] As to the first reason, the high court indicated it would have granted
the application for condonation, but for the lack of prospects of success.
Regarding the second, it appears that a power of attorney is not required in
order to reinstate an appeal. Thu s, the main issue for determination is
whether the plaintiff established reasonable prospects of success on appeal.
[11] Where special leave is sought , as in this case, the existence of
reasonable prospects of success is insufficient, ‘[s]omething more, by way of
special circumstances is needed ’.5 The principles underlying an application
for condonation, in the context of a reinstatement of an appeal is that the
5 Including: ‘. . . that the appeal r aises a substantial point of law; or that the prospects of success are so
strong that a refusal of leave would result in a manifest denial of justice; or that the matter is of very great
importance to the parties or to the public.’ Cook v Morrison and Another [2019] ZASCA 8; [2019] 3 All
SA 673; 2019 (5) SA 51 (SCA) para 8.
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court has a discretion which must be exercised judi cially. The Constitutional
Court has held that:
‘. . . the standard for considering an application for condonation is the interests of justice .
Whether it is in the interests of justice to grant condonation depends on the facts and
circumstances of each case. Fac tors that are relevant to this enquiry include but are not
limited to the nature of the relief sought, the extent and cause of the delay, the effect of
the delay on the administration of justice and other litigants, the reasonableness of the
explanation for the delay, the importance of the issue to be raised in the intended appeal
and the prospects of success.’6
It is trite that strong prospects of success can often overcome a p oor
explanation for any delays. Differently stated, strong prospects of success
may trump an unsatisfactory explanation for the delay.7
[12] There are four issues to consider in the present matter in determining
whether there are prospects of success in the appeal. At the outset, it must be
emphasised that this Court is not making any findings on these issues: it is
only necessary to determine whether they demonstrate reasonable prospects
of success. First, t he defendant raised the defence of estoppel which was
upheld by the court a quo. The defendant’s case is that the plaintiff had
negligently misrepresented to the defendant that the banking details on its
invoice were the correct banking details. It is common cause between the IT
experts that the interception was on the side of the plaintiff, in other words,
6 Van Wyk v Unitas Hospital and Another [2007] ZACC 24; 2008 (2) SA 4 72 (CC); 2008 (4) BCLR 442
(CC) para 20; Brummer v Gorfil Brothers Investments (Pty) Ltd and Others [2000] ZACC 3; 2000 (2) SA
837 (CC); 2000 (5) BCLR 465 (CC) para 3; PAF v SCF [2022] ZASCA 101 2022 (6) SA 162 (SCA).
7 Valor IT v Premier, North West Province and Others [2020] ZASCA 62; [2020] 3 All SA 397; 2021 (1)
SA 42 (SCA) 42 (SCA) para 38.
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the plaintiff’s email system was ‘spoofed’ .8 The plaintiff was aware of
cybercrime in the motor industry , and failed to take measures to guard
against this. As a result, the court a quo held that the plaintiff was estopped
from denying that the altered bank details were not those of the plaintiff.
Mr Oliver (for the defendant ) testified that before he had authorised the
electronic tr ansfer of funds to the plaintiff , he had specifically asked
Mrs Steyn, the sale s assistant (for the defendant) whether she had verified
the correctness of the plaintiff’s bank details , which she confirmed .
However, when she testified , she denied this. This material contradiction
was not considered by the court a quo.
[13] Second, the cour t a quo failed to consider whether the alleged
negligence was the proximate cause of the payment having been
electronically transferred by the defendant into the incorrect banking
account. Third, the court a quo failed to consider whether the damage or loss
that was caused by the third party (the interceptor), was foreseeable.
[14] Fourth, the facts in this ca se may be akin to the interception of
cheques. It is well known that banking systems are targeted by criminals.
Cheques, which were once the preferred method of pa yment, have become
obsolete. In Eriksen Motors (Welkom) Ltd v Protea Motors, Warrenton and
Another,9 the principl es to be applied in cases where cheques have been
intercepted in the post and misappropriated by a thief have been re affirmed
8 In the Oxford Learners Dictionary, ‘spoofed’ is defined as the practice of sending emails that appear to
come from somebody’s email address. https://www.oxfordlearnersdictionaries.com/definition/english/spoof
2?q=spoofed. Accessed on 30 May 2023.
9 Eriksen Motors (Welkom) Ltd v Protea Motors, Warrenton and another [1973] 4 ALL SA 116 (A). Se e a
more recent judgment, Stabilpave (Pty) Ltd v South African Revenue Services [2013] ZASCA 128; 2014 (1)
SA 350 (SCA) para 9.
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thus: when a debtor tenders payment by cheque, and the creditor accepts it,
the payment remains conditional and is only finalised once the cheque is
honoured. Any risk of fraudulent misappropriation should be borne by the
debtor since it is the debtor’s duty to seek out its creditor. But where the
creditor stipulates the mode of payment and the debtor complies with it, any
inherent risk in the stipulated method is for the creditor’s account.
[15] In Galactic Auto Pty Ltd v Andre Venter,10 the creditor sent the debtor
an invoice via email and thereafter s ent the debtor its bank details .
Unfortunately, the email was intercepted and the debtor received the email
with incorrect banking details into which it made an electronic transfer of
the amount as per the invoice . The court relied on the decision of
Mannesmann Demag (Pty) Ltd v Romatex Ltd and Another,11 and found in
favour of the creditor.
[16] The question that arises in this case is whether the same legal
principles should find application , namely where the debtor remains liable
until payment has been credited to the creditor’s bank account . The question
concerning the interception of a creditor’s banking details sent by electronic
means has yet not been decided by this Court.
[17] A further reason for granting special leave to appeal, is that t here are
conflicting high court judgments on the question as to who should bear the
loss where a payment is electronically made to a creditor, which is
fraudulently intercepted by a third party . This Court was referred to some of
10 Galactic Auto v Pty Ltd v Andre Venter [2019] ZALMPPHC 27.
11 Mannesmann Demag (Pty) Ltd v Romatex Ltd and Another [1988] 2 ALL SA 353 (D).
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those conflicting judgments. In Andre Kock en Seun Vrystaat (Pty) Ltd v
Snyman N.O,12 the high court held that the debtor is responsible for verifying
the creditor’s banking details . In Hawarden v Edward Nathan Sonnenberg s
Inc ,13 the high court held that the defendant had a general duty of care to the
plaintiff, the purchaser of imm ovable property, and concluded that the
purchaser could not be held liable for the electronic transfer of funds into a
banking account where the bank details had been fraudulently changed . In
Gerber v PSG Wealth Financial Planning (Pty) Ltd ,14 the high court held
that ‘[t]he proximate cause of the loss was not the hacking , it was the failure
to employ the necessary and contractually prescribed vigilance when monies
held in trust were paid into a different account ’.15 In Hartog v Dal y,16 the
high court held that the electronic transfer of funds into the incorrect account
did not absolve the debtor from payment.
[18] The applicant thus established reasonable prospects of success on
appeal. It is appropriate that the matter be referred to a full court of the Free
State Division of the High C ourt, Bloemfontein to determine the merits of
the appeal.
[19] In the result, the following order is made:
1 Special leave to appeal is granted.
2 The appeal (in respect of the condonation application) is upheld, with
costs.
12 Andre Kock en S eun Vrystaat (Pty) Ltd v Willem Stephanus Snyman N.O and Another [2022] ZAFSHC
161 para 9.
13 Hawarden v Edward Nathan Sonnenbergs Inc [2023] ZAGPJHC 14; [2023] 1 All SA 675 (GJ) para 122.
14 Gerber v PSG Wealth Financial Planning (Pty) Ltd [2023] ZAGPJHC 270.
15 Ibid para 90.
16 Hartog v Daly [2023] ZAGPJHC 40; [2023] 2 All SA 156 (GJ).
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3 The order of the high court, dismissing the application for
condonation with costs, is set aside and replaced with the following order:
‘(a) Mosselbaai Boeredienste (Pty) Ltd is granted condonation for its
failure to comply with the provisions of uniform rules 50(4) (a), 50(7)(a)
and 7(2).
(b) The appeal is reinstated.’
4 The matter is referred to the full court of the Free State Division of the
High Court, Bloemfontein to determine the merits of the appeal.
________________________
Z CARELSE JA
JUDGE OF APPEAL
Appearances
For appellant: C D Pienaar
Instructed by: Oosthuizen Marais & Pretorius Inc, Mosselbaai
Phatshoane Henney, Bloemfontein
For respondent: A P Berry
Pieter Badenhorst Attorneys, Bloemfontein.