Summary of Judgment

Introduction

This matter concerned an application for leave to appeal brought in the High Court of South Africa, Gauteng Division, Pretoria. The application sought leave to appeal against an earlier order of the same court directing that a motor vehicle described in the notice of motion be returned to Absa Bank Limited (or, failing that, that any person holding the vehicle through the opposing party deliver it to Absa, alternatively to the Sheriff).

The parties in the leave-to-appeal proceedings were Ike Thamisanqa Khumalo (as the applicant for leave to appeal) and Absa Bank Limited (as the respondent resisting leave). The judgment records that, in the underlying motion proceedings which gave rise to the order sought to be appealed, Absa had been the party seeking return of the vehicle, and Khumalo had been the opposing party.

Procedurally, the court emphasised that although the opposing party had filed a notice of intention to oppose in the underlying motion, no answering affidavit was filed. As a result, the founding evidence relied upon for the original order stood uncontested at the time the court granted relief. The leave-to-appeal application was then used by the applicant for leave to raise matters which, in the court’s view, should have been advanced (if at all) in an answering affidavit in the original application.

The broader dispute arose from an instalment sale agreement concluded through an online application in relation to a 2015 BMW (the vehicle), and the interlocutory return of that vehicle pending a main action in which issues such as cancellation and final entitlement to possession would be determined.

Material Facts

The court treated as material, and effectively undisputed for purposes of the original motion, that Absa’s case in the initial application stood on its founding affidavit, which was unanswered despite a notice of intention to oppose. The court therefore proceeded on the basis that the factual allegations advanced by Absa in the founding papers were not contradicted by admissible motion evidence from the opposing party.

It was also material that the instalment sale agreement in issue was concluded via an online application, with the consequence (as the court recorded) that there was no “original document” in the conventional sense relied upon in argument for the leave-to-appeal application. The court accepted Absa’s contention that this context affected the applicability of arguments premised on producing an “original” written agreement.

In addition, the court regarded it as significant that the opposing party had admitted the instalment sale agreement and its terms and conditions in paragraph 3 of his plea. On the court’s approach, this admission rendered the existence and terms of the agreement common cause, and meant that no further proof of the agreement was required for purposes of the relief sought.

The court further treated as material the nature of the order sought to be appealed: it was described as an interlocutory order, granted while the main action remained pending, and intended to operate without finally determining whether the agreement could ultimately be cancelled or whether Absa would be entitled to the vehicle “indefinitely”.

To the extent that there were disputes raised, the court treated as procedurally problematic the attempt by the applicant for leave to introduce new issues in the leave-to-appeal grounds which were not placed before the court in the original unopposed motion proceedings. The court described this as irregular because it involved attempting to create appeal prospects based on matters arising ex post facto, rather than from the record as it stood when the order was granted.

Legal Issues

The central questions addressed were whether the applicant for leave to appeal satisfied the statutory threshold for leave to appeal under section 17(1) of the Superior Courts Act 10 of 2013, and in particular whether the contemplated appeal would have reasonable prospects of success.

A further legal issue concerned appealability: whether an order characterised as interlocutory and having “no final effect” could competently be appealed at that stage, given that the main action was still pending and would finally determine cancellation and ultimate entitlement to the vehicle.

The court also had to deal with the nature of the objections advanced as potential grounds of appeal, namely contentions that only copies (and not “originals”) of the instalment sale agreement and proof of postage were attached, and that there was allegedly no evidence of compliance with what was described as the Electronic Communication Act 25 of 2002 (understood in the judgment to be a reference to the Electronic Communications and Transactions Act 25 of 2002). These issues involved the application of evidentiary and statutory rules to the factual context of an online agreement and to the procedural posture of uncontested motion proceedings coupled with admissions on the pleadings.

Overall, the dispute before the court on leave to appeal primarily concerned the application of legal standards to the procedural and factual posture of the case, rather than the resolution of contested facts on motion.

Court’s Reasoning

The court began by focusing on the procedural posture in which the original order had been granted. Because the respondent in the underlying application filed no answering affidavit, Absa’s founding evidence was uncontested. The court considered it improper for the applicant for leave to appeal to attempt to introduce, through the grounds of appeal, issues that ought to have been presented in answering papers in the motion court. On this approach, the court reasoned that prospects of success must be assessed with reference to the case as it stood when the matter was determined, and not by adding new factual or evidentiary disputes after the fact.

The court then addressed appealability. It characterised the original order as interlocutory, lacking final effect because the main action was still pending and would determine, in due course, whether the instalment sale agreement could be cancelled and whether Absa would be entitled to return of the vehicle on a final basis. From this, the court reasoned that there could be no appeal against an order that has no final effect in the circumstances described.

Turning to the specific grounds advanced for leave, the court considered the complaint that Absa attached only copies of the instalment sale agreement and proof of postage and provided no originals. The court accepted Absa’s explanation that the agreement was concluded through an online application, so that an “original” in the conventional sense did not exist. The court distinguished the authority relied upon by the applicant, namely Standard Merchant Bank vs. Rowe, on the basis that it concerned circumstances where a written document was relied upon and the best proof would be production of the document itself, whereas in the present matter a copy was produced and the agreement’s status was affected by both its electronic nature and admissions made on the pleadings.

In relation to the electronic-document objection, the court reasoned that Absa produced a copy of the document in terms of section 15(1) of the Electronic Communications and Transactions Act 25 of 2002, and referred to section 15(b) as supporting the proposition that the copy constituted the best evidence reasonably obtainable by the party adducing it. The court further considered that, given the admission in the plea, arguments premised on further compliance with the ECT Act were, in the court’s description, “nonsensical” in the circumstances.

The court also rejected the contention that Absa was required to file an affidavit addressing the electronic-document point, stating that such a requirement was not found in the ECT Act and that an adequate basis for the submission had not been laid.

Finally, the court recorded that for the relief originally granted, Absa was required only to establish a prima facie right, and it noted that ownership of the vehicle was not in question because the agreement provided that ownership remained with Absa until payments had been made in full. This fed into the court’s conclusion that the proposed appeal lacked reasonable prospects of success.

Applying section 17(1) of the Superior Courts Act 10 of 2013, the court held it was not persuaded that reasonable prospects existed on the grounds advanced.

Outcome and Relief

The application for leave to appeal was dismissed.

The court ordered that the dismissal be accompanied by costs on the attorney-and-client scale.

Cases Cited

Standard Merchant Bank vs. Rowe and Others 1982 (4) SA 671 (W).

Legislation Cited

Superior Courts Act 10 of 2013 (section 17(1)).

Electronic Communications and Transactions Act 25 of 2002 (section 15(1) and section 15(b), as referenced in the judgment).

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The court held that the applicant for leave to appeal failed to demonstrate reasonable prospects of success as required by section 17(1) of the Superior Courts Act 10 of 2013. The court further held that the earlier order was interlocutory and lacked final effect because the main action remained pending, and that the applicant’s attempt to introduce new matters through leave-to-appeal grounds (which were not raised in an answering affidavit in the underlying motion) was irregular in the circumstances. On the merits of the stated grounds, the court held that objections concerning production of “original” documents and alleged non-compliance with the ECT Act were unsustainable, particularly given the online nature of the agreement, Absa’s production of a copy in terms of the ECT Act, and the admission of the agreement in the pleadings.

LEGAL PRINCIPLES

The judgment applied the principle that leave to appeal may be granted only where the court is satisfied that the contemplated appeal would have reasonable prospects of success, as required by section 17(1) of the Superior Courts Act 10 of 2013.

It also applied the principle that an order characterised as interlocutory and having no final effect, especially where a pending main action will determine the parties’ final rights, is generally not susceptible to appeal in the manner contended for in the application.

In addition, the judgment applied the approach that where motion proceedings are unopposed on affidavit, the founding evidence stands uncontested, and a party should not attempt to introduce, at the leave-to-appeal stage, factual issues that ought properly to have been advanced by way of an answering affidavit in the original proceedings.

The judgment further applied the principle that where an agreement is admitted in pleadings, its existence and terms become common cause, with the result that additional proof of the agreement is not required for purposes of the relief dependent on that admission.

Finally, the judgment applied statutory principles relating to electronic records by accepting that a copy of an electronically concluded agreement may constitute the best evidence reasonably obtainable in terms of section 15 of the Electronic Communications and Transactions Act 25 of 2002, particularly in circumstances where the existence and terms of the agreement are admitted.