ABSA Bank Ltd v De Villiers and Another (146/09) [2009] ZASCA 140; [2010] 2 All SA 99 (SCA) (17 November 2009)

About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Supreme Court of Appeal
SAFLII
>>
Databases
>>
South Africa: Supreme Court of Appeal
>>
2009
>>
[2009] ZASCA 140
|

|

ABSA Bank Ltd v De Villiers and Another (146/09) [2009] ZASCA 140; [2010] 2 All SA 99 (SCA) (17 November 2009)

Links to summary

THE
SUPREME COURT OF APPEAL
REPUBLIC
OF SOUTH AFRICA
JUDGMENT
Case no: 146/09
ABSA
BANK LIMITED
Appellant
and
PIETER DE
VILLIERS
First Respondent
THE MAGISTRATE
FOR THE DISTRICT
Second Respondent
OF SIMON
’S
TOWN
________________________________________________________________
Neutral
citation:
Absa
v De Villiers
(146/09)
[2009] ZASCA 140
(17 November 2009)
CORAM:
Navsa,
Ponnan, Maya, Mhlantla JJA and Tshiqi AJA
HEARD:
5
November 2009
DELIVERED:
17
November
2009
CORRECTED:
SUMMARY: Review
of decision by Magistrate on the basis of gross irregularity in the
proceedings ─ contention that Magistrate’s
mistaken view of the
law constituted such irregularity ─ held that decision not
susceptible to review.
________________________________________________________________
______________________________________________________________
ORDER
______________________________________________________________
On appeal
from:
High
Court, Cape Town reviewing a decision of a Magistrate. (Full court).
The appeal is dismissed.
_____________________________________________________
___________
JUDGMENT
________________________________________________________________
NAVSA JA (PONNAN,
MAYA, MHLANTLA JJA and TSHIQI AJA concurring):
[1] During
September 2007, the appellant, Absa Bank Limited (Absa), a commercial
bank, applied
ex
parte
in the Magistrates’ Court for the district of Simon’s Town for an
order, the relevant parts of which are set out hereafter:
‘
A AN
interim interdict be authorized which would prohibit the respondent
to use the vehicle [mentioned below];
B THE Sheriff of this
Honourable Court be authorized to attach, remove and to hand over to
the applicant for safe-keeping, the following
goods, wherever it
might be found: -
VEHICLE MAKE: OPEL CORSA
LITE 140i
…
REGISTRATION
NUMBER: CY126181
C A
Rule Nisi be issued in terms whereof the Respondent be called upon to
provide reasons, if any, before this Honourable Court
on THURSDAY,
25
th
OCTOBER 2007 at 09h00: -
(a) Why the attachment
should not be made final;
(b) Why the costs of this
application shall not be paid as between attorney and client;
(c) Why
such alternative relief as may be just, not be granted.’
[
2] Absa
is the owner of the motor vehicle in question, which it had sold to
the first respondent, Mr Pieter de Villliers, in terms
of an
instalment sale agreement as defined in the National Credit Act 34 of
2000 (the NCA).
[3] The instalment
sale agreement had been concluded on 25 August 2006.
The mate
rial
terms of the agreement are:
‘
The
Purchaser will:
2.1
Keep the Goods in the Purchaser’s possession, maintain them in good
working condition at the Purchaser’s own cost, not
make the Goods
available for use by another person or body.
…
2.5 Allow the Seller or
the Seller’s agent reasonable opportunity to inspect the Goods.
…
4. Notwithstanding
delivery, ownership of the Goods shall not pass to the Purchaser
until all amounts owing under this agreement
have been paid in full.
…
BREACH
10.1 The Purchaser will
be in breach of this agreement if the Purchaser –
10.1.1 fails to make
payment in terms of this agreement.
10.1.2 fails to comply
with any other provision of this agreement.
…
10.3 In
the event of any breach of this agreement, including 10.1.1
... the Seller may, in addition to any other remedies that it may
have in terms of this agreement or at law:
10.3.1 terminate this
agreement and/or
10.3.2 claim, at the
Purchaser’s cost return and possession of the Goods, …
10.3.3 claim damages
(which may include immediate payment of all arrear payments plus
finance charges thereon).’
[
5] The
first respondent defaulted in paying instalments. The amount in
arrears was alleged to be R6 980.59 and the total outstanding
balance
was said to be R65 049.08.
[6] On 24 August
2007, Absa, purportedly acting in terms of s 129(1) (a) of the NCA,
gave written notice to Mr de Villiers
of his default and informed him
of the arrears and outstanding balance as set out in the preceding
paragraph. The material part
of the letter by Absa reads:
‘
We have been
instructed to demand from you, as we hereby do, payment of the
aforesaid amount within 10 days of delivery hereof.
Should you not be able to
pay the arrears, you are requested to return the item in question to
our clients, but you will remain
liable for the payment of all
amounts owed to our clients after realisation of the item.
Your
attention is further drawn to the provisions of
Section 129
of the
National Credit Act, 34 of 2005
, and this letter must be regarded as
a notice in terms of the said section. You may refer the credit
agreement to a debt counsellor,
alternative dispute resolution agent,
consumer court or ombud with jurisdiction, with the intent to resolve
any dispute under the
agreement or develop and agree on a plan to
bring the payments under the agreement, up to date.
We
suggest that you give this matter your urgent attention.’
[
7] The
first respondent did not respond to the notice.
[
8] In
its affidavit in support of the
ex
parte
application Absa stated that, Mr de Villiers had given a number of
undertakings to settle the arrears but failed to adhere to them

‘while the [vehicle] is deteriorating and depreciating in value on
a daily basis as the respondent is using it and will continue
to do
so unless interdicted and restrained from doing so’. Absa did not
allege that the respondent was in fact abusing the motor
vehicle or
was failing to maintain it in working condition.
[9] In support of
the application Absa relied on the affidavit of a manager in its
motor vehicle and asset finance department, who
stated that during
his lengthy career he ‘frequently experienced’ that a purchaser
would damage and/or neglect goods intentionally
pending the hearing
of an application of which notice had been given or would conceal the
whereabouts of the vehicle.
[
10] Although
Absa alleged that the first respondent was in arrears and therefore
in breach of the instalment agreement, it did not
state that it had
cancelled the agreement. Absa submitted that it was entitled to be
placed in possession of the motor vehicle
in terms of the provisions
of the NCA.
[
11] The
matter was heard by the second respondent, the Magistrate for the
district of Simon’s Town. He considered the affidavit
on behalf of
Absa to contain only generalities but no pertinent factual
information in relation to harm caused or the potential
of harm being
caused to the vehicle. In the Magistrate’s view the provisions of
the NCA did not, in the circumstances of the
present case, assist
Absa as a credit provider to regain possession, absent a cancellation
of the instalment agreement. He consequently
dismissed the
application.
[12] Absa was
aggrieved. However, instead of appealing the decision as it was
entitled to, it chose, to apply to the Cape High Court
for an order
‘reviewing, setting aside and correcting [the Magistrate’s]
decision to dismiss the applicant’s application
for an interdict.’
[1
3] In
substantiation of its application Absa stated that the Magistrate’s
decision was reviewable on the grounds of a gross irregularity
in the
proceedings, and further, on the basis that he had rejected
admissible, competent and available evidence. The evidence aspect

does not appear to have been persisted with in argument before the
Cape High Court. Nor, rightly, was it persisted in before us.
[14] As correctly
observed by the
Magistrate and the court below the application was not for relief
pendente
lite
but,
was in fact, for a final order authorising the attachment of the
vehicle in question. Absa had not instituted an action for

cancellation of the agreement, nor was it alleged that it intended
instituting an action of any kind in relation to the vehicle.
[1
5] Properly
analysed, Absa’s contention that proceedings in the Magistrates’
Court were reviewable on the grounds of a gross
irregularity is based
on the view the Magistrate took of the provisions of the NCA in
relation to its claim to be placed in possession
of the motor
vehicle. The following two paragraphs of the affidavit in support of
Absa’s application demonstrate this:
‘
20. The
procedure introduced by the
National Credit Act is
vastly different.
Section 127(2)
to
Section 127(9)
which deal with the voluntary
surrender of goods by a consumer is in terms of Section 130(1) of the
Act applicable to the procedure
that applies subsequent to an
attachment order being made by a Court. As is evident from Section
127 as a whole and in particular
the provisions of Section 127(6)(b)
and Section 127(8)(b) an instalment agreement is now terminated in
accordance with the provisions
of the Act and the return of the asset
is no longer dependant on a prior cancellation of the instalment
agreement.
…
22. I
therefore submit that the Second Respondent’s dismissal of the
application on the aforesaid basis constituted a gross irregularity

that can be reviewed by this Honourable Court.’
[1
6] After
making the unambiguous claim that the Magistrate’s decision to
dismiss its application was reviewable on the basis of
a gross
irregularity, thereby bringing its review application squarely within
the ambit of s 24(1)(c) of the Supreme Court Act,
Absa set out what
it considered to be the Magistrate’s most important reason for
dismissing the application, thereby suggesting
that it was the most
compelling basis for a review:
‘
[18] The most
important reason being that the Applicant has failed to substantiate
the bringing of the application for the return
of the vehicle whilst
the application lacked an averment that the agreement was cancelled
and furthermore that the application
was not accompanied by a
simultaneously issued summons in which a claim was made for the
cancellation of the agreement, the return
of the motor vehicle and
damages to be determined subsequent to the attachment of the
vehicle.’
[1
7] Probably
because Absa considered the review application as a test case for
credit providers, a full court was constituted to
hear the matter.
The Cape High Court (Fourie, Saldanha JJ and Madima AJ concurring)
recorded in the first line of the judgment
that it was considering a
‘review application’. In the second sentence of the judgment the
following is stated:
‘
In
particular, it involves
the interpretation of certain provisions of the NCA dealing with the
repossession of property that is the subject of an instalment

agreement.’
[1
8] The
court below did not pause to consider whether there was a proper
basis for review. Put differently, it did not consider whether
the
Magistrate’s decision was indeed susceptible to review. The full
court immediately went on to consider the provisions of
the NCA and
the merits of Absa’s contentions in relation thereto. The court
below said the following in the penultimate paragraph
of its
judgment:
‘
[43] I
accordingly agree with the finding of second respondent that, absent
a claim for the cancellation of the instalment agreement,
applicant
was not entitled to a final order for the at
tachment
of the vehicle in terms of section 131 of the NCA. It accordingly
follows that the application for review cannot succeed.
In view of my
conclusion, it is not necessary to deal with second respondent’s
finding that the allegations in applicant’s
founding affidavit fell
short of what is required for the granting of applications of this
nature.’
[1
9] Because
Absa proceeded by way of an
ex
parte
application, the first respondent was not party to the proceedings in
the Magistrates’ Court and despite having the review application

served on him he did not take part in the review proceedings nor was
he represented before us.
Conclusions
[
20] As
far back as 1903 Innes CJ spelt out, with customary clarity, the
distinction between the review of proceedings of inferior
courts,
both civil and criminal, and a review of the decisions of public
bodies acting in furtherance of statutory duties imposed
on them.
1
[21] At that time
the grounds for the review of inferior courts were set out in the
Administration of Justice Proclamation. The
mechanism to be employed
in such a review was indicated by the prevailing Rules of Court. The
proceedings of an inferior court
could be reviewed on the basis of
‘grave irregularities or illegalities’ occurring during such
proceedings.
[22] Insofar as the
second species of review was concerned, a public body which
disregarded provisions of a statute or was guilty
of gross
irregularity or clear illegality in the performance of its duty was
liable to have its decision reviewed and set aside
or corrected. A
review of this kind was different from a review of the decisions of
inferior courts. The body being reviewed was
not a judicial one and
the grounds upon which a review might be claimed were ‘somewhat
wider than those which alone would justify
a review of judicial
proceedings’.
2
[23] Although a
high court has overriding jurisdiction to prevent abuse of process,
it has inherent power to make orders furthering
the administration of
justice only when a statute or rule of court is silent.
3
[
24] The
constitutionalisation of administrative law has fundamentally altered
the basis of judicial review of administrative action.
The enactment
of the Promotion of Administrative Justice Act 3 of 2000 (PAJA) had
the effect of adding new kinds of administrative-law
review to those
available in the past. The common-law grounds have become subsumed
under the Constitution.
4
[25] Importantly,
PAJA which gives effect to administrative action that is lawful,
reasonable and procedurally fair as contemplated
in the Constitution
provides bases on which ‘administrative action’ can be reviewed.
Administrative action
does
not
include the judicial functions of a judicial officer of a court
referred to in s 166 of the Constitution, which includes the
Magistrates’
Courts.
5
[
26] Presently,
the review of proceedings of inferior courts is provided for by s 24
of the Supreme Court Act 59 of 1959, which
sets out the grounds on
which it could be brought. Section 24(1)(c) lists ‘gross
irregularity in the proceedings’ as one such
ground. A gross
irregularity in civil proceedings in an inferior court means an
irregular act or omission by the presiding judicial
officer in
respect of the proceedings, of so gross a nature that it was
calculated to prejudice the aggrieved litigant, on proof
of which the
court would set aside such proceedings, unless it was satisfied that
the litigant had in fact not suffered any prejudice.
6
An example of conduct justifying a review based on a gross
irregularity in the proceedings is where a judicial officer acts in
a
high-handed manner and prevents a party from having its case heard.
7
[27] As a rule,
where the complaint is against the result of proceedings rather than
the method, the proper remedy is by way of
appeal rather than review.
Put differently, if the motivation for having a judgment of an
inferior court set aside is that it
came to the wrong conclusion on
the facts or the law, the appropriate procedure is by way of appeal.
8
[2
8] Generally
speaking, a bona fide mistake of law is not a ground for review.
9
Sometimes, a mistake of law might qualify as a gross irregularity. In
Goldfields
Investment Ltd and another v City Council of Johannesburg and another
1938
TPD 551
Schreiner J said the following (at 560-561):
‘
The
law
,
as stated in
Ellis
v Morgan
(supra) has been accepted in subsequent cases, and the passage which
has been quoted from that case shows that it is not merely

high-handed or arbitrary conduct which is described as a gross
irregularity; behaviour which is perfectly well-intentioned and
bona
fide
,
though mistaken, may come under that description. The crucial
question is whether it prevented a fair trial of the issues. If
it
did prevent a fair trial of the issues then it will amount to a gross
irregularity. Many patent irregularities have this effect.
And if
from the magistrate’s reasons it appears that his mind was not in a
state to enable him to try the case fairly this will
amount to a
latent gross irregularity. If, on the other hand, he merely comes to
a wrong decision owing to his having made a mistake
on a point of law
in relation to the merits, this does not amount to gross
irregularity. In matters relating to the merits the
magistrate may
err by taking a wrong one of several possible views, or he may err by
mistaking or misunderstanding the point in
issue. In the latter case
it may be said that he is in a sense failing to address his mind to
the true point to be decided and
therefore failing to afford the
parties a fair trial. But that is not necessarily the case. Where the
point relates only to the
merits of the case, it would be straining
the language to describe it as a gross irregularity or a denial of a
fair trial. One
would say that the magistrate has decided the case
fairly but has gone wrong on the law. But if the mistake leads to the
Court’s
not merely missing or misunderstanding a point of law on
the merits, but to its misconceiving the whole nature of the inquiry,
or of its duties in connection therewith, then it is in accordance
with the ordinary use of language to say that the losing party
has
not had a fair trial.’
[
29] Counsel
for Absa attempted to persuade us that the present case fell within
the latter class of case referred to at the end
of the dictum set out
in the preceding paragraph. Before us counsel for Absa rightly
conceded that the conclusion reached by the
Magistrate was tenable,
but submitted that Absa’s view was preferable and more compelling.
For present purposes I discount confirmation
by the court below of
the merits of the conclusion reached by the magistrate. The court
below was faced with a basis of review
which it ought to have
scrutinised at the outset. It ought to have considered not just
whether Absa had provided a sustainable
basis for review but also
whether review was indeed the appropriate remedy.
[
30] That
the Magistrate was correct in his view of the relevant provisions of
the NCA is, at the very least, arguable. For completeness,
I record
that both the Magistrate and the court below considered the NCA not
to be a model of elegance and clarity ─ a view that
appears at face
value to be justifiable. The Magistrate was concerned that Absa’s
submissions in relation to the provisions of
the NCA militated
against fundamental contractual principles.
10
He considered the relevant provisions of the NCA closely and came to
the conclusion, that in the circumstances referred to above,
it did
not provide a basis for Absa to reclaim possession. Even if one were
to assume, in Absa’s favour, that the Magistrate’s
view of the
law is incorrect, this is certainly not a case where a judicial
officer’s view of the law is such as to amount to
a gross
irregularity.
[
31] Perhaps
even more fundamentally, the Magistrate was entitled to refuse to
entertain the application on the basis that, in effect,
final relief
was being sought without the knowledge of the respondent, who was
excluded on the flimsiest basis. He was being denied
an opportunity
of presenting his case in relation to the interpretation contended
for by Absa. In
Jordan
and Another v Penmill Investments CC and Another
1991
(2) SA 430
(E) the high court set aside a decision of a magistrate on
the basis of a gross irregularity which consisted of a magistrate
deciding
to eject an occupant of a flat on application by the owner,
pending finalisation of the main action in which the legality of the

ejectment was to be considered. The magistrate had not provided
reasons for doing so. There was no averment by the owner that
continued occupancy of the flat would have caused damage to it or
would in any way have frustrated his claim. The high court observed

that the very object of an interlocutory order is to freeze the
position until the court decides where the right in issue lies,

whereas the order under review had the effect not of preserving the
position at the time of the initiation of the action, but of
changing
the
status
quo
in favour of the owner without there being any justification for it.
The Magistrate in the present case was being asked to do exactly
what
the court in that case considered objectionable.
[32] To sum up: No
sustainable basis was provided for a review on the basis of a gross
irregularity in the proceedings. The court
below rightly refused the
application for review, but for the wrong reasons. The more
appropriate order in the court below should
have been to strike the
matter off the roll. However, there is in effect, no difference. It
is therefore not necessary to have
the order of the court below
substituted. Considering that the matter was not opposed there is no
necessity for a costs order.
[3
3] The
following order is made:
The appeal is dismissed.
_________________
M S NAVSA
JUDGE OF APPEAL
APPEARANCES:
For
Appellant: P Coetsee SC
Instructed
by
Sandenbergh
Nel Haggard Bellville
Schoeman
Maree Inc Bloemfontein
For
Respondent: No opposition
1
Johannesburg Consolidated
Investment Co v Johannesburg Town Council
1903 TS 111.
2
Johannesburg Consolidated
Investment Co op cit
at pp
115-116.
3
Op cit
at 116 and
Western Bank
Limited v Packery
1977 (3)
SA 137
(T) at 142C-E;
Sabena Belgian World Airlines v Ver Elst and Another
1980 (2) SA 238
(W) at 242E-G and see A C Cilliers, C
Loots, HC Nel SC
Herbstein
& Van Winsen The Civil Practice of the High Courts and the
Supreme Court of Appeal of South Africa
5
ed (2009) Vol 2 at p1270.
4
Cora Hoexter
Administrative
Law in South Africa
(2007);
Cilliers
et al op cit
1302;
Telcordia
Technologies Inc v Telkom SA Ltd
[2006] ZASCA 112
;
2007 (3) SA 266
(SCA) 266 at para 60.
5
See
definition of administrative action in s 1 of PAJA.
6
D E van Loggerenberg, P B J Farlam
Erasmus
Superior Court Practice
(2009) A1-71.
7
For further examples see Cilliers
et
al op cit
1270 and Van
Loggerenberg
et al op cit
A1-72.
8
Van Loggerenberg
et al op
cit
A1-70A.
9
Loots
et al
at 1273 and the authorities there cited.
10
See in this regard
Mulder v
Combined Motor Finance (Pty) Ltd
1981 (1) SA 428
(W).