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2024
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[2024] ZAFSHC 336
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Bana v Georgiou (3759/2023) [2024] ZAFSHC 336 (21 October 2024)
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Reportable
/
Not
reportable
Case
number: 3759/2023
In
the matter between:
MAHOMED
FAROOK BANA
APPLICANT
And
MICHAEL
GEORGIOU
RESPONDENT
Coram:
Loubser J
Heard:
18
October 2024
Delivered:
21
October 2024
Summary:
A
pplication for leave to
appeal – novel issue of extensive scope raised in the
application
ORDER
1.
The
application
for leave to appeal is dismissed with costs, including the costs of
two counsel on scale C
JUDGMENT
LOUBSER
J
[1]
This is an application for leave to appeal
against the order of Buys, AJ dismissing the Applicant’s
application for the provisional
sequestration of the Respondent with
costs. Since the learned Acting Judge is no longer available to hear
the application for leave,
it came before this Court for
adjudication.
[2]
In
the Court
a
quo
,
the Applicant firstly relied on an Acknowledgement of Debt (“AOD”)
in terms of which the Respondent undertook to pay
the capital amount
of R41 500.00 to the Applicant. This was to show that he has a
liquidated claim against the Respondent
for not less that R100.00 in
terms of the requirements of Section 9(1) of the Insolvency Act.
[1]
The Applicant further relied on an oral agreement for this purpose,
in which agreement the Respondent allegedly undertook
to pay to the
Applicant a sum of R50 000.00 monthly until his indebtedness to
the Applicant arising from a certain transaction
has been paid in
full. The Respondent failed to make all the monthly payments in terms
of this agreement, it was alleged by the
Applicant.
[3]
In
its judgement, the Court
a
quo
found that the AOD constituted a regulated credit agreement under
Section 8(1)(b) and 8(1)(f) of the National Credit Act (“NCA”).
[2]
This was so, the Court found, because the AOD provided for the
deferred payment of the amount owed, and further provided
for the
payment of interest thereon. Since the Applicant was not a registered
credit provider, the AOD was unlawful and void in
terms of Section
40(4), 89(2)(d) and 89(5)(a) of the NCA, the Court found. As for the
indebtedness in terms of the oral agreement,
the Court found that the
defence raised by the Respondent was based on a dispute of fact on
bona
fide
and reasonable grounds. In the premises, the Applicant has failed to
satisfy the Court that he had a liquid claim against the Respondent,
the Court concluded. The application for provisional sequestration of
the Respondent was consequently dismissed with costs.
[4]
Before
this Court the Applicant mainly challenged the finding of the Court
a
quo
that the AOD constituted a regulated credit agreement in terms of the
NCA. In finding as such, the Court erred by adopting a literal
interpretation to Section 8 of the NCA, instead of employing a
purposive approach to the interpretation of the section, it was
contended. Counsel for the Applicant relied on the cases of Grainco
(Pty) Ltd v Broodryk 2011 N.O. and Others,
[3]
Hattingh v Hattingh
[4]
Ribeiro and Another v Slip Knot Investments 777 (Pty) Ltd
[5]
and
Ratlou
v Man Financial Services SA (Pty) Ltd[6] in this respect. In
these cases, so it was submitted, the purposive approach
was applied
to the effect that Acknowledgements of Debt and similar instruments
should not be construed as constituting credit
agreements for
purposes of Section 8 of the NCA, unless the underlying debt was a
money lending (or similar) transaction. In the
present case, the
underlying transaction giving rise to the AOD was a property
transaction where the monies had to be refunded.
It was not a money
lending or similar transaction, it was submitted for the Applicant.
[5]
The
underlying cause of the AOD in Grainco was a claim for damages, not
envisaged by the NCA. In Hattingh the underlying cause of
the written
agreement was to settle the end of a business relationship between
two brothers. In Ribeiro and Ratlou the underlying
cause were also
settlement agreements. In the present case, the Court
a
quo
relied
on the matter of Carter Trading (Pty) Ltd v Blignaut
[7]
where it was stated that the terms of the AOD in that case appeared
to be exactly what is envisaged in the NCA to be a credit agreement,
namely an agreement in terms of which payment is deferred and at
least a fee or charge is payable in respect of the AOD and interest
is payable in the event of a failure to pay. Here, the situation is
the same. The words of Section 8(4)(f) of the NCA leaves no
doubt
that all agreements where payment is deferred, and a charge or
interest is payable, constitute a credit agreement on terms
of the
Act.
[6]
As for the alleged oral agreement referred
to above, the Respondent denied that he concluded such an agreement
with the Applicant.
He explained on the basis of documentation that
the payments which were already made to the Applicant, were made by
third parties.
It follows that the most probable inference is that
the oral agreement was concluded between the Applicant and the said
third parties.
It is an accepted principle in our law that winding up
proceedings are not to be used to enforce payments of a debt that has
been
disputed on a
bona fide
and reasonable grounds. The finding of the Court
a
quo
on this score appears to have been
correctly made.
[7]
It needs mentioning that the application
for leave also lies against the decision of the Court
a
quo
to refuse condonation for the late
filing of the Applicant’s replying affidavit. This affidavit
was filed some fifty days
late. Again, there appears to be no basis
for an appeal court to interfere with the exercise of its true
dissection by the Court
a quo
in
this regard. In any event, it is difficult to envisage the effect of
the replying affidavit on the final outcome of the proceedings,
had
condonation in fact been granted.
[8]
This
leaves only the issue of the AOD and the argument for a purposive
interpretation versus a literal interpretation to be decided
for
purposes of leave to appeal. As we have seen, there appear to be
persuasive arguments on both sides of the spectrum. The problem
is
that this issue of a literal or a purposive approach is in the
present case a new matter raised in this Court for the first
time on
appeal. It did not form part of the case in the Court
a
quo
.
Generally speaking, a Court’s appellate jurisdiction exists not
to determine novel issues raised for the first time before
it.
[8]
It rather exits to intervene and correct determinations made by lower
Courts on cases as they were presented in the Court.
[9]
Should leave to appeal be granted in the
circumstances, the Court of Appeal will have to sit as a Court of
first instance on a novel
issue of extensive scope. I do not view
this as desirable.
[10]
In the premises, the
following
order is made:
1.
The application for leave to appeal is
dismissed with costs, including the costs of two counsel on scale C
P.J. LOUBSER, J
For
the Applicant:
Adv.
L. M. Spiller
Instructed
by:
Hajibey
Bhyat Mayet and Stein Inc, Johannesburg
c/o
Van der Merwe & Sorour, Bloemfontein
For
the First Respondent:
Adv.
S. Symon SC, with adv. D. Sive
Instructed
by:
Fluxmans
Attorneys, Johannesburg
c/o
EGCM Attorneys, Bloemfontein
[1]
Act
24 of 1936
[2]
Act
34 of 2005
[3]
JDR
0172 (FB)
[4]
2014(3)
SA 162 (FB)
[5]
2011(1)
SA 575 (SCA)
[6]
2019
(5) SA 117 (SCA)
[7]
2010(2)
SA 46 (ECP)
[8]
Tiekiedraai
Eiendomme
(Pty)
Ltd
v
Shell SA
Marketing
(Pty) Ltd
2019 (7) BCLR 850
(CC)