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2024
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[2024] ZAECQBHC 21
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Louw v Carter and Other (1890/2021) [2024] ZAECQBHC 21 (19 March 2024)
N
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE DIVISION, GQEBERHA)
CASE
NUMBER.: 1890/2021
In
the matter between:
PAUL
LOUIS
LOUW
Applicant
And
ALEXANDER
FREDERICK CARTER
First
Respondent
OMBUD
FOR FINANCIAL SERVICES PROVIDERS
Second
Respondent
JOHANNES
THEODORUS OTTO
Third
Respondent
DENTON
DEAN HENNING
Fourth
Respondent
PAUL
R JOHNSON
Fifth
Respondent
JUDGMENT
Beshe
J
[1]
This
is an application aimed at having second respondent’s
determination dated 7 September 2016 which was filed with the court
on 15 April 2019 reviewed and set aside. The determination was issued
following a complaint lodged by first respondent in this
matter as
well as others, against the applicant. Also sought by the applicant
are orders to the following effect:
That
applicant be exempted from exhausting further internal remedies.
Alternatively, postponing the matter sine die for applicant
to pursue
such internal remedies as may be necessary. Setting aside of the writ
that was issued out of this court on 4 March 2021.
Parties
[2]
The
determination and subsequent writ sought to be set aside were in
favour of the first respondent against the applicant. The second
respondent issued the determination, in their capacity as the Ombud
for Financial Services Providers. No relief is sought against
third
respondent, who is cited merely as an interested party against whom
the second respondent made a determination. He was the
third
respondent in the matter that served before the Ombud. Same applies
to fourth and fifth respondents. They were also fourth
and fifth
respondents in the matter before the Ombud.
Jurisdiction
[3]
Following
the determination by second respondent which was lodged with this
court, the writ of execution sought to be set aside
was issued by
this court.
Applicant’s
case
[4]
According
to the applicant, in March 2021 the Sheriff of Paarl attempted to
execute a writ at his home. He realised that the writ
was issued in
connection with a matter that was, as far as he is concerned still
pending before the second respondent. The matter
was pending in the
sense that he had appealed against the second respondent’s
decision. The latter had acknowledged receipt
of the appeal but never
reverted back to him. He got legal advice to take the second
respondent’s determination on review
as opposed to seeking a
rescission of the writ. It would also appear that before the writ was
issued, applicant and third respondent
had made some payments towards
the reduction of the amount the second respondent determined they
owed the first respondent.
[5]
The
dispute before the Ombud concerned funds that were invested through
Capital Builder Investment (CBI) by the first respondent
in 2009. CBI
is a Close Corporation in which applicant held a 50%-member interest
with third respondent. They were later joined
by the fourth
respondent with fifth respondent being the office manager, amongst
his other responsibilities. The money invested
was then transferred
to first respondent’s account at ODL Securities, London. The
investment involved Forex trading. An amount
of R800 000.00 was
invested by the first respondent. It appears to be common cause that
irregular trading was conducted, and
that clients’ mandates
were exceeded by CBI officials. First respondent lodged a complaint
with the second respondent (the
Ombud). Briefly, complaining that he
invested R800 000.00 with CBI, hoping for a good return as per
their advertisement that
promised a 30% return. There was an
agreement that he will be paid 1000 USD per month. That he has signed
a redemption form to
get the full return of his investment because
since March 2011 the good return did not materialize. He later could
not get hold
of CBI. This is despite the fact that first respondent
was advised to make direct contact with the London based company to
redeem
his investment. First respondent lodged the complaint with the
second respondent in October 2011.
[6]
Having
considered the complaint, second respondent made the following
determination:
‘
(a)
An Ombud must reduce a determination to writing, including the
reasons therefore, sign the determination, and send copies thereof
to
the registrar and all parties concerned with the complaint and, if no
notice of appeal to the board of appeal has been lodged
within the
period required thereafter, to the clerk or registrar of court which
would have jurisdiction in the matter, had it been
heard by a court.
(b)
Where a notice of appeal has been lodged, the Ombud must send a copy
of the final decision of the board of appeal to any such
clerk or
registrar.
The
above Honourable Court has jurisdiction by virtue of the fact that
the Respondents’ known address is within the jurisdiction
of
the above Honourable Court.
THE
ORDER
Particulars
of the determination as appears from paragraph 37 thereof are as
follows:
[37]
In
the premises I make the following order:
1.
The complaint is upheld;
2.
Respondents are ordered to pay to complainant, jointly and severally,
the sum of R800 000;
Interest
on this amount at the rate of 10,25% from August 2011 to date of
payment.’
[7]
The
determination was made in September 2016. In October 2016 applicant
addressed an email to the office of the second respondent
wherein he
complained that their decision was not fair. He stated reasons why he
believed the decision was unfair. He then ended
the communication by
stating:
‘
I
am currently under debt review and have no funds for legal costs
whatsoever. If I had resources available, I would definitely
apply
for leave to appeal in order for justice to prevail.’
The
office of the second respondent in the next hour responded as
follows:
‘
Dear
Mr Louw,
Thank
you for your email received on even date,
You
may apply for leave to appeal by sending me an email wherein you
point out what your concerns are (more or less like you did
here
below),
You
can explain to us what you do not agree with in the determination and
draw attention to certain facts,
There
is no standard format and no costs applicable to an application for
leave to appeal. You just need to send it by no later
than next week
Friday.
Please
let me know if this is unclear so that I can assist you with the
process.
Kind
Regards’
[8]
Applicant
also attached annexure PL31 entitled Memorandum to Ombud October
2016; Leave to appeal and provides case ref, which he
states was
acknowledged by second respondent but nothing further was heard from
second respondent. I could not find any such acknowledgement
though
albeit that applicant indicated it was attached. Applicant says he
did not think that not hearing from second respondent
was odd because
second respondent’s processes drag out, as it took five years
for second respondent to take its first decision
(the determination).
He goes on to state that because the matter was before the criminal
court, he thought the second respondent
no longer retained
jurisdiction over the matter. He acknowledges however, that in the
absence of an adjudication of his appeal
he could not take the second
respondent’s decision on review. Subsequent to receiving the
Rule 53 record, the notice of motion
was amended by the insertion of
prayer 1bis the last part of which reads thus: “
alternatively,
in the event that the court finds that the applicant has not
exhausted his internal remedies, and refusing exemption
as
contemplated in Section 7 (2) (c) of Promotion of Administrative
Justice Act (PAJA), that the matter be postponed sine die in
order
for the applicant to pursue such internal remedies as the court may
find necessary”.
[9]
It
appears to be common cause that both applicant and third respondent
were convicted at the conclusion of the criminal trial and
ordered to
refund or compensate first respondent.
[10]
From
what I can gather from applicant’s conclusion in his founding
affidavit, the following are his grounds for the review
of second
respondent’s determination:
The
Ombud came to the wrong conclusion factually and legally. He was not
the cause of any loss to first respondent. His funds were
lost
through the trading of third respondent. First respondent’s
claim against him was not quantified properly. The Ombud
has failed
to make a finding on his appeal. By filing the determination three
years after it was made and without reference to
his appeal
constitutes an abuse of the court process. As far as the writ of
execution is concerned, that it must be set aside because
it was
issued five years after second respondent’s determination and
without informing the Registrar that part payment has
taken place,
thereby committing fraud on a stale judgment.
[11]
It
is common cause that applicant and third respondent were convicted of
a criminal offence in respect of the matter. However, the
writ of
execution was issued based on the second respondent’s
determination that was filed in the Gqeberha High Court.
[12]
It
seems to be common cause that the review is sought in terms of the
PAJA
[1]
.
[13]
In
that respect, applicant is seeking condonation of the late filing of
the review application as well as an exemption from exhausting
further or other internal remedies.
[2]
[14]
In
paragraph 95 of the founding affidavit,
[3]
applicant states that in so far as the application is brought outside
the 180 days’ period allowed by PAJA, he only became
aware of
second respondent’s decision on 5 July 2021. I note that this
application was launched in July 2021. I am not certain
what decision
the applicant is referring to because as far as the second
respondent’s determination is concerned, as far
back as October
2016 he signalled his intention to seek leave to appeal the
determination. Subsequent to receiving the Rule 53
record, applicant
deposed to a supplementary affidavit as provided for in Rule 53 (4).
The purpose of the affidavit is, by and
large to explain why he is
not able to provide the acknowledgment of his application for leave
to appeal the second respondent’s
determination. Explaining
that his computer crashed with the result that he could not retrieve
some of his documents on outlook.
He also endeavoured to retrace his
steps in so far as the leave to appeal is concerned and stated that
he is able to indicate that
the last time he worked on the document
was on the 16 October 2016 after which he must have despatched it to
the second respondent
soon thereafter.
First
respondent’s opposition
[15]
First
respondent raises two points in limine:
Failure
to exhaust internal remedies; and
Failure
to seek a review without unreasonable delay.
Implicit
in applicant’s notice of motion is that he appreciates the
existence of these two requirements or the need to satisfy
them.
[16]
First
respondent draws the court’s attention to Section 7 (2) (a),
(b) and (c) of PAJA. As well as to Section 28 (4) of the
Financial
Advisory and Intermediary Services Act
[4]
(FAIS) which provides for an appeal to the board of appeal. In this
regard it is contended that this appeal procedure constitutes
an
internal remedy as contemplated in Section 7 (2) of PAJA. First
respondent pours cold water to applicant’s assertion that
he
submitted an application for leave to appeal, as evidenced by the
absence of the acknowledgement thereof by second respondent’s
office. Pointed also to what has unfolded regarding applicant’s
initial allegation that he received one and it is attached.
Further
points out that in any event if he last worked on the document on 16
October 2016, he was already out of time for the submission
of the
leave to appeal. Furthermore, that applicant has not applied for an
exemption and put up any facts establishing exceptional
circumstances. The option to pursue the internal remedy is no longer
open to the applicant because his right to appeal lapsed upon
him
failing to apply for leave to appeal within the requisite time. First
respondent contends that this application falls to be
dismissed on
this ground alone.
[17]
As
far as the requirement to seek a review without unreasonable delay,
it is pointed out that the requirement is that this should
not be
later than 180 days after the proceedings sought to be reviewed were
concluded. In applicant’s case, a review has
only been sought
four years after the proceedings in question were concluded. Further
that he has not placed any facts before court
that establish that it
will be in the interest of justice to grant him an extension in this
regard.
Second
respondent’s opposition
[18]
As
part of its opposition to the relief sought, the two points raised by
first respondent are also raised by the second respondent.
The
following contentions are made by the second respondent:
Their
determination was issued on 7 September 2016. At the time the
applicant had at his disposal the right to apply for leave to
appeal
the decision. The court’s attention is drawn to the applicable
provisions of the relevant Act and the applicable Rule
of the FAIS
Act. Upon being unsuccessful in seeking leave to appeal from the
Ombud, applicant had recourse to apply to the Board
of Appeal for
leave to appeal against the determination. The latter Board has since
been replaced by the Financial Services Tribunal.
Second
respondent denies receiving an application for leave to appeal from
applicant. It is averred that the second respondent only
got to know
about the alleged application for leave to appeal upon receipt of
this application. And to further demonstrate that
no such application
was submitted, applicant, even though he claims that he had received
an acknowledgement of his application
from second respondent,
conveniently did not annex the email in question. He has also not
suggested he made any follow-up with
the second respondent on the
progress of his application for leave to appeal. The deponent to the
second respondent’s answering
affidavit also asserts that had
an application for leave to appeal been received from the applicant,
it would have been considered
like those of the other respondents
were considered. This, so it was contended, is a further indication
that no such application
was received from the applicant and that
therefore he has failed to exhaust internal remedies prior to
instituting these proceedings.
Pointing out that the review
application was prompted by the attempted execution based on the
determination. Further that having
succeeded in staying the execution
of the writ, nothing stopped the applicant from pursuing the appeal
he alleges he lodged.
[19]
As
far as the merits are concerned, second respondent contends that
there are no valid reasons/grounds to set the second respondent’s
determination aside.
Applicant’s
reply
[20]
In
his reply applicant insists that an application for leave to appeal
was lodged to the second respondent. Alternatively, that
he should be
exempted from exhausting the internal remedies. It is not altogether
clear what exceptional circumstances justify
the exemption sought.
Regarding the merits of the application, I do not understand
applicant’s case to be that the second
respondent’s
determination was arrived at in a manner that was procedurally
unfair.
Parties’
submissions
[21]
Applicant
maintains that he submitted an application for leave to appeal and
suggesting that the second respondent’s record
is incomplete
and his application for leave to appeal may have been mislaid by the
second respondent’s office. He then analyses
the evidence that
was presented before second respondent and assails its cogency. It is
only in his argument that applicant suggests
that the second
respondent was biased (against him) and cites several other reasons
why the second respondent’s determination
falls to be set
aside.
[22]
First
respondent submits that the applicant has not succeeded in showing
that he exhausted the internal remedies available to him.
In the
event that the court finds that he did lodge an application for leave
to appeal, the appropriate decision or administrative
action to take
on review is second respondent for failure to take a decision on his
appeal. Further that there has been an unreasonable
delay in
submitting this review application (four years).
[23]
It
appears to be common cause that after the filing of all requisite
affidavits, second respondent filed a notice to abide the court’s
decision in this matter. Second respondent’s argument, as I
understand, is aimed at urging the court not to make a costs
order
against second respondent. The following submissions are put forward
in this regard:
The
merits of the application for review are not conceded. The second
respondent “successfully” raised two points in
limine as
a result of which the applicant sought an amendment of its papers.
The amendment in the manner sought initially was also
objected to by
the second respondent as a result of the objection, a proper
application on motion supported by an affidavit was
delivered. Second
respondent argues that by opposing the application and raising the
two points, it did not act recklessly or mala
fide and would have
succeeded in opposing the application solely on this basis. The
court’s attention is drawn to the need
and advantages of
exhausting internal remedies before a court is approached for a
review. The second respondent submits that this
is an appropriate
case for the court to order each party to pay its own costs in so far
as the applicant and second respondent
are concerned.
PAJA
[24]
Section
3 (1) of the Act provides that:
Administrative action which
materially and adversely affects the rights or legitimate
expectations of any person must be procedurally
fair.
Even though
applicant does not state that he relies on the grounds for judicial
review mentioned in Section 6 of PAJA, judging
from the relief he
seeks based on his prayers, he is seeking judicial review of second
respondent’s decision in terms of
PAJA.
[25]
I
take note of Section 3 (2) (a) of the Act which provides that:
‘
(2)
(a) A fair administrative procedure depends on the circumstances of
each case.’
[26]
Section 7 of the Act lays down the procedure to be
followed when instituting a judicial review. Section
7 (1) provides
that:
‘
7.
Procedure for judicial review
(1)
Any proceedings for judicial review in terms of section 6(1) must be
instituted without unreasonable delay and not later than
180 days
after the date‒
(a)
subject to
subsection (2)(c), on which any proceedings instituted in terms of
internal remedies as contemplated in subsection (2)(a)
have been
concluded; or
(b)
where no such
remedies exist, on which the person concerned was informed of the
administrative action, became aware of the action
and the reasons for
it or might reasonably have been expected to have become aware of the
action and the reasons.
(2)
(a) Subject to paragraph (c), no court or tribunal shall review an
administrative action
in
terms of this Act unless any internal remedy provided for in any
other law has first been exhausted.
(b)
Subject to paragraph (c), a court or tribunal must, if it is not
satisfied that any internal remedy referred
to in
paragraph (a) has been exhausted, direct that the person concerned
must first exhaust such remedy before instituting proceedings
in a
court or tribunal for judicial review in terms of this Act.
A
court or tribunal may, in exceptional circumstances and on
application by the person concerned, exempt such person from the
obligation to exhaust any internal remedy if the court or tribunal
deems it in the interest of justice.
’
These
are the provisions that are directly implicated in these proceedings.
In the sense that they are the basis of the points in
limine raised
by first and second respondents.
[27]
It
is common cause that the review proceedings were instituted some four
years after the applicant became aware of the determination,
well
beyond 180 days. It appears to be common cause also that he became
aware of the decision during October 2016 when he made
his intention
to seek leave to appeal the determination known. Applicant suggests
that in a bid to exhaust the internal remedies
available to him, he
applied for leave to appeal and has been waiting for the second
respondent’s decision in this regard.
Second respondent on the
other hand states that no such application was received. In my view,
applicant’s defences to the
points in limine are inextricably
intertwined.
[28]
The
defences raised by the applicant in this regard and second
respondent’s allegations give rise to a factual dispute. It
is
trite that where in motion proceedings disputes of fact have arisen
on affidavits, a final order whether it be an interdict
or some other
form of relief, may be granted if the facts stated by the applicant
which have been admitted by respondent, together
with those alleged
by the respondent justify such an order.
[5]
In Buffalo Freight Systems v Crestleigh Trading
[6]
it was stated that the court should be prepared to undertake an
objective analysis of dispute when required to do so. Furthermore,
that a court must be cautious about deciding probabilities in the
face of conflicts of fact on affidavits. That judgment on the
credibility of the deponent, absent direct and obvious contradictions
should be left open.
[29]
I
will endeavour to undertake an objective analysis of the dispute of
fact as it emerges from the affidavits filed.
[30]
Applicant’s
failure to institute this review timeously is, as I understand his
case, due to the fact that he was still awaiting
second respondent’s
decision on his application for leave to appeal. He waited for
approximately four years.
[31]
The
applicant was seemingly spurred into action by the Sheriff’s
attempt to execute the writ in question.
[32]
In
the four years he did not make any enquiries about the progress or
fate of his application for leave to appeal. Instead proceeded
to
make payments to reduce his “debt” to the first
respondent. Whereas he stated that he received an acknowledgement
of
receipt of his application for leave to appeal from the second
respondent, no such acknowledgement was attached as indicated.
Later
he stated that he could not locate the said acknowledgement due to
his computer having crashed. Even though applicant asserts
that he
applied for leave to appeal the second respondent’s decision
within the time allowed for such, the respondent has
shown that it
could have been within stipulated time, judging from the date
applicant alleges he last worked on his application
for leave to
appeal. It is common cause that the second respondent considered
applications for leave to appeal from two other respondents
against
whom the determination in question was issued. As I indicated
earlier in this judgment, at paragraph 95 of his founding
affidavit
applicant states that in so far as this application is brought
outside the 180-day period allowed in PAJA, he became
aware of the
Ombud’s decision until 5 July 2021 and that decision was in any
event not in respect of his appeal. In reply
and as evidenced by the
email exchange between applicant and second respondent already, in
October of 2016 signalled his intention
to apply for leave to appeal
second respondent’s determination. So, it cannot be accurate
that he only became aware of the
decision in July 2021. In my view,
his explanation for the delay in instituting this application
timeously sounds improbable if
one has regard to the factors stated
earlier. In my considered view, the dispute whether applicant applied
for leave to appeal
should be decided on second respondent’s
version. The applicant has therefore not exhausted the internal
remedies at his
disposal before lodging this application.
Consequently, the applicant did not bring the review application
within a reasonable
period as provided for in Section 7 (1) of PAJA.
The applicant has also not made out a case for exemption from
exhausting internal
remedies as provided for in Section 7 (2) (c) of
the Act. The exceptional circumstances that in his submission exist
to justify
the exemption are that the internal remedies that existed
at the time of the issuing of the determination are no longer in
existence.
[33]
According
to the second respondent however, the only change is that the Board
of Appeal has since been replaced by the Financial
Services Tribunal
and that the applicant has a right to approach the Tribunal for the
reconsideration of the determination. As
to the question whether the
applicant is still within time to approach the Tribunal in this
regard, I would rather not venture
into that. In Koyabe and Others v
Minister for Home Affairs and Others
[7]
it was stated that:
‘
[47]
Although the duty to exhaust defers access to courts, it must be
emphasised that the mere lapsing of the time period for exercising
an
internal remedy on its own would not satisfy the duty to exhaust, nor
would it constitute exceptional circumstances. Someone
seeking to
avoid administrative redress would, if it were otherwise, simply wait
out the specified time-period and proceed to initiate
judicial
review. That interpretation would undermine the rationale and purpose
of the duty. Thus, an aggrieved party must take
reasonable steps to
exhaust available internal remedies with a view to obtaining
administrative redress.’
The
writ of execution
[34]
I
have already alluded to the grounds cited by the applicant for the
setting aside of the writ. Namely that the writ was issued
on a stale
judgment. As indicated earlier in this judgment, the determination
was filed with the Gqeberha High Court in March 2019.
The writ of
execution was issued by the High Court in March 2021. It could not
have been issued before the filing of the determination
with the High
Court. In this regard as well, I am not satisfied that the applicant
has made out a case for the setting aside of
the writ of execution.
[35]
In
the result, it is my finding that the applicant did not bring the
review application in terms of Section 7 (1 (a) of the Act.
He has
not made out a case for condonation or extension of the period
referred to in Section 7 (1) of the Act. And has not made
out a case
for exemption.
[36]
It
therefore follows that the review application cannot be considered.
Costs
[37]
I
am not persuaded that there is any reason why I should not exercise
my decision in favour of issuing an order that costs should
follow
the result despite second respondent’s election to abide the
decision of this court for the reasons stated by second
respondent.
Order
[38]
The
application is dismissed with costs.
N
G BESHE
JUDGE
OF THE HIGH COURT
APPEARANCES
For
the Applicant :
Adv: E. Crouse SC
Instructed
by
: HOWARD
COLLEN INC.
11A
Shirley Street
Newton
Park
GQEBERHA
Ref: (H Collen)
Tel.: 041 – 365
3700
For
the 1
st
Respondent: Adv: L.
Gagiano
Instructed
by
:
RUSHMERE
NOACH INC.
5
Ascot Office Park
Conyngham
Road
Greenacres
GQEBERHA
Ref:
Mrs S L Lubbe-Roberts/LH/MAT39113
Tel.:
041
– 399
6735
For
the 2
nd
Respondent: Adv: X. Hilita
Instructed
by
: MAMATELA
ATTORNEYS
INC.
C/o
VAN HEERDEN ATTORNEYS INC
147
Cape Road
Glendinningvale
GQEBERHA
Ref:
LVH/wb/M158
Tel.:
041 – 007 0923
Date
Heard: 15 February 2024
Date
Reserved: 15 February 2024
Date
Delivered: 19 March 2024
[1]
Act
3 of 2000.
[2]
As
provided for in Section 7 (2) (c) of PAJA.
[3]
Page
36 of the papers.
[4]
Act
37 of 2002.
[5]
Plascon-Evans
v Van Riebeeck Paints
[1984] ZASCA 51
;
1984 (3) SA 623
AD at 634.
[6]
2011
(1) SA 8
SCA at 14 C-E.
[7]
2010
(4) SA 327
CC at 345 [47].