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IN THE HIGH COURT OF SOUTH AFRICA
WESTERN CAPE DIVISION, CAPE TOWN
CASE NO:2026-045648
In the matter between:
SAM DALE TRADING (PTY) LTD Applicant
t/a CONSUMER FRIEND
and
MBD LEGAL COLLECTIONS (PTY) LTD First Respondent
RCS CARDS (PTY) LTD Second Respondent
Delivered this 3rd day of September 2026
_________________________________________________________
JUDGMENT
_________________________________________________________
NDITA, J
[1] This is an application for leave to appeal against the whole
judgment and order I issued on 28 July 2026, in terms of which I issued,
inter alia, a declaratory order to the effect that the Respondent is a legal
successor or assignee of the Second Respondent and was as such
bound by the terms of the agreement between the Applicant and the
Second Respondent. More specially, the order that I issued is couched
in the following terms:
The Applicant’s failure to abide by the rules pertaining to time periods, filing
service and compliance with the rules of this Court is condoned and this
application is dealt with as one of urgency in accordance with Uniform Rule 6 (12).
1. It is declared that, in relation to the portfolio acquired by the first respondent
from the second respondent (‘the portfolio’), the first respondent is bound by
the service agreement concluded between the applicant and the second
respondent on 26 October 2022 (effective from 1 October 2020) (‘the
Consumer Friend Agreement’) as the second respondent’s “permitted assign”
and/or “other legal successor”) for purposes of clause 1.4 thereof.
2. The first respondent is directed to comply with the Consumer Friend
agreement in relation to the portfolio, including (without limitation) clause 13.1
thereof, by recognising and giving effect to the applicant’s entitlement to retain
and administer Paying Matters (as defined therein) until they are paid in full.
3. Directing the first respondent, within 24 hours of service of this order, to take
all steps within its power (including issuing written instructions to all relevant
payment distribution agents (‘PDA’s) and any third party administrators and/or
service providers utilised by the first respondent in relation to the portfolio) to
ensure that payments in respect of the portfolio (and, in particular, Paying
Matters) are routed for onward transmission to the applicant in accordance
with existing administration and payment -flow arrangements contemplated by
the Consumer Friend agreement within 24 hours of service of this order.
4. The first respondent is interdicted and restrained, pending full compliance with
paragraphs 3 and 4 above, from:
4.1 instructing any PDA, debtor, debt counsellor, or third party administrator or
service provider to route payments away from the applicant in respect of
the portfolio;
service provider to route payments away from the applicant in respect of
the portfolio;
4.2 receiving, retaining applying appropriate or dealing with payments in respect
of the portfolio otherwise than as contemplated by the Consumer Friend
agreement; and
4.3 interfering. directly or indirectly, with the applicant’s administration of the
portfolio.
5. The first respondent is further directed, within 5 court days of service of this
order, to furnish the applicant with a schedule certified by a duly authorised
representative of the first respondent reflecting, in respect of the portfolio:
5.1 the account identifiers;
5.2 the relevant PDAs and/or payment channels; and
5.3 All receipts collected from 1 February 2026 to date.
6. The first respondent is ordered to pay costs of two counsel on scale C.
The Parties
[2] The Applicant, Consumer Friend (PTY) Ltd (“Consumer Friend”) a
private company duly incorporated in accordance with the laws of the
Republic of South Africa with its registered address at […], The C […]
E[…], Westway Office Park, Westville, KwaZulu -Natal. It conducts its
business as a “credit agent” performing outsourced debt review
administration services on behalf of various credit providers.
[3] The First Respondent, MBD Legal Collections (Pty) Ltd (“MBD”) is
a private company duly incorporated with the Laws of the Republic of
South Africa with its registered address at 1 […] W[…] Street, Sandown,
Sandton, Gauteng.
[4] The Third Respondent RCS CARDS (PTY) Ltd (“RCS”) is also a
private company duly incorporated in accordance with the laws of the
Republic of South Africa with its registered address at M […] Park, J[…]
S[…] Drive, Pinelands, Western Cape.
[5] The parties are referred to in the same way as in the main
judgment notwithstanding the fact that the First Respondent is the
Applicant in the present application.
Factual background
[6] On 26 October 2022, Consumer Friend and RCS concluded a
written service agreement for debt collection services. During 2024, RCS
conducted a procurement process a Request for Information) (“ RFI”)
followed by a request for proposals (‘RFP’) relating to the sale of certain
debt review portfolios, including the portfolio which is the subject matter
of this application (‘the portfolio’). The RFI and RFP documentation
recorded that the acquisition of the portfolio would “come with Consumer
Friend as the managing agent” and that Consumer Friend would retain
the right to collect on debt review “Paying matters”.
[7] It is undisputed that MBD participated in the RFI/RFP process and
thereafter, with the full knowledge of the Consumer Friend agreement,
acquired the portfolio from RCS in terms of a “ Sale of Book Debts
Agreement” dated 25 September 2025. According to the Applicant by
acquiring the portfolio (and the associated administration or payment -
flow arrangements) MBD stepped into RCS’s position in relation to the
portfolio as RCS’s “permitted assign” and/or other “legal successor”.
[8] In terms of the Consumer Friend Agreement, RCS had appointed
Consumer Friend to administer its debt review portfolio “on its behalf”
with commission of 13% payable by RCS. The Applicant’s version was
that Mr the Consumer Friend agreement is binding to on an enforceable
against by the trustees, permitted assigns, liquidators or other legal
successors of the parties as fully and effectually as if they had signed
the agreement. It is common cause that on 12 February 2026,
Consumer Friend became aware of an RCS notice dated 10 February
2026 distributed by MBD to the effect that the relevant debt review
accounts would be “administered by MBD”, provided Capital data
contact details for future correspondence and directed that “all future
payments” be made into a nominated Capital Data bank account, with
queries directed to Capital Data. The notice obviously ousted Consume
Friend as the administrator of the concerned debt review accounts. RCS
then issued a rectifying notice stating that Consumer Friend would
continue administering the relevant debt review accounts. The parties
were unable to resolve the impasse, hence the Applicant brought the
application in respect of which judgment was granted in its favour.
Findings
[9] In my judgment I found that even though MBD was not a party to
the Consumer Friend agreement with RCS, it was bound to the
aforesaid agreement by virtue of being an assignee or legal successor
pursuant to its agreement with RCS notwithstanding that there was no
such formal agreement. In my judgment, the assignment or transfer
obligations in the present matter have been established by the facts. I
held that it was clear from the RFP preceding the conclusion of the
contract that Consumer Friend was to remain the managing agent as
envisaged in clause 1.4 of the Consumer Friend Agreement. This is also
based on MBD’s post-acquisition conduct in permitting Consumer Friend
to continue providing the services and MBD in tu rn continued with
paying the commission.
[10] I also found that the Consumer Friend agreement is binding and
enforceable on MBD as a “permitted assign” or “ legal successor ”.
Furthermore, RCS’s disposal of the portfolio to MBD, coupled with
MBD’s insistence on a unilateral switch -over and rerouting, constitutes,
in substance a withdrawal of the relevant debts or portfolio for purposes
of clauses 3.4 or 3.5, which triggers clause 13.1. Clause 13.1, according
to the Applicant, affords protection to Paying Matters which cannot be
defeated by a change in ownership and the conduct of MBD erodes that
very protection.
[11] Additionally, I held that the MBD agreement is irrelevant in
considering whether the MBD was a permitted assign or legal successor,
as a result of which in reaching the conclusion that MBD was a n
assignee, I drew an inference from the common cause facts and the
conduct of the parties.
Grounds of appeal
[12] In the grounds of appeal, the Respondent raises several points on
the basis of which it alleges that I erred and/or misdirected myself in
concluding that MBD as a permitted assign was bound by the Consumer
Friend Agreement. In a nutshell, the Respondent state that:
12.1 The MBD sale agreement which the court ought to have had
recourse to precludes the assignment or legal succession which
gave rise to the declaratory relief;
12.2 There is no evidence of an agreement between Consumer
Friend and RCS in respect of the defined portfolio and that
Consumer Friend failed to establish such an agreement.
12.3 The court should have found that the express terms of the
MBD Sale Agreement precluded the assignment or legal
succession which gave rise to the declaratory relief in paragraph 2
of the order;
12.4 subsequent to such finding, the court should have found that
there is no basis for relief sought in prayers 3 to 7 of the Notice of
Motion granted in those terms.
12.5 The court should have found that the Applicant had failed to
establish any of the requirements for the interdictory relief in
paragraphs 3 to 6 of the order.
Analysis
[13] In terms of 17 (1) of the Superior Courts Act 10 of 2013:
Leave to appeal may only be given where the judge or judges concerned
are of the opinion that:
(a) (i) the appeal would have reasonable prospects of success: or
(ii) there is some compelling reason why the appeal should be
heard, including conflicting judgments on the matter under
consideration.
[14] In Mont Chevaux Trust v Tina Goosen & 18 Others 2014 JDR 2325
(LCC) at para [6] Bertelsmann J held as follows:
“It is clear that the threshold for granting leave to appeal against a judgment of a High
Court has been raised in the new Act. The former test whether leave to appeal
should be granted was a reasonable prospect that another court might come to a
different conclusion, see Van Heerden v Cronwright & Others 1985 (2) SA (T) at 345
H. The use of the word “would” in the new statute indicates a measure of certainty
that another court will differ the court whose judgment is sought to be appealed
against.
The test on an application such as the present is whether there is a reasonable
prospect of success on appeal. Stated differently, the question is whether there is a
reasonable prospect that another court might come to a different conclusion. (See
Van Heerden v Cronwright and Others 1985 (2) SA 342 (T) and S v Sikosana 1980
(4) SA 559 (A).”
[15] In Ramakatsa v African National Congress and Another [2021]
ZASCA 31, Dlodlo JA, explained the application of section 17 (a)(i) thus:
“I am mindful of the decisions at high court level debating whether the use of the
word ‘would’ as opposed to could possibly means that the threshold for granting the
appeal has been raised. If a reasonable prospect of success is established, leave to
appeal should be granted. . .. The test of reasonable prospects of success postulates
a dispassionate decision based on the facts and the law that a court of appeal would
reasonably arrive at a conclusion different to that of the trial court. In other words, the
appellants in this matter need to convince this Court on proper grounds that they
have prospects of success on appeal. Those prospects of success must not be
remote, but there must exist a reasonable chance of succeeding. A sound rational
basis for the conclusion that there are prospects of success must be shown to exist.”
[16] It is trite that in considering whether another court would reach a
different conclusion, I must do so dispassionately.
[17] In the matter at hand, I am of the view that some of the grounds of
appeal raised by the Applicant lack merit as it is implicit in the judgment
that the Applicant established a clear right to the relief sought and that
an inference that MBD was a legal successor or permitted assign of
RCS’s obligations to Consumer Friend is justified. However, I am of the
view that another court might would come to a different conclusion when
regard is had to the terms of MBD Agreement notwithstanding the fact
that the Applicant’s application was premised on the Consumer Friend
Agreement. I am therefore inclined to grant leave to appeal to the full
court of this division.
[18] In the result, the following order is issued:
18.1 Leave to appeal is granted to the Full Court of this division.
18.1 The costs of the application for Leave to Appeal are costs in
the appeal.
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NDITA; J