Residual Debt Services Limited (Previously Registered as African Bank Limited and The African Bank Limited) v Company Unique Finance (Pty) Ltd and Others (Leave to Appeal) (33442/21) [2024] ZAGPPHC 53 (26 January 2024)

Key Facts

Issues

• CUF contends that it should not be required to bear the costs associated with the transfer of the ring-fenced business from RDS to itself under section 54(3) of the Banks Act. RDS argues that the transfer was by operation of law and ownership had already vested in CUF.
• CUF challenges the Court a quo's interpretation of section 54(3) regarding the transfer of rights and obligations. RDS supports the original judgment, emphasizing the statutory authority for the transfer.
• CUF claims the application constitutes an attempt to avoid res judicata principles, while RDS asserts the Court a quo correctly determined ownership had already vested in CUF by operation of law.
• CUF argues against the obligation to register the second list of properties that were acquired but not formally registered. RDS maintains that legal registration is required to regularize the factual situation established by the transfer.
• CUF raises the issue of prescription, suggesting that the time period for enforcing the transfer may have expired. RDS counters that the transfer was authorized by the Minister in terms of the Banks Act, which precludes prescription concerns.

Holdings

• The costs of this application will be costs in the appeal. The court directed that the costs incurred during the leave to appeal application be absorbed into the appeal costs.
• The First Respondent is granted leave to appeal to the Full Court of the Gauteng Division, against the judgment of 20 January 2023. The court concluded there is a reasonable prospect that another court would come to a different conclusion regarding the transfer of properties and mortgage bonds under the Banks Act.

Remedies

• The costs of this application will be costs in the appeal.
• The First Respondent is granted leave to appeal to the Full Court of the Gauteng Division, against the judgment of 20 January 2023.

Legal Principles

Precedent Name

• Chithi and Others; in re: Luhlwini Mchunu Community v Hancock and Others
• Van Heerden v Cromwright and Others
• Commissioner of Inland Revenue v Tuck
• Fairtrade Tobacco Association v President of the Republic of South Africa
• Fusion Properties 233 CC v Stellenbosch Municipality
• Mont Chevaux Trust v Goosen and Eighteen Others
• S v Smith
• MEC for Health, Eastern Cape v Ongezwa Mkhitha & The Road Accident Fund

Cited Statute

• Banks Act 94 of 1990
• Superior Courts Act 10 of 2013
• Deeds Registry's Act 47 of 1937

Judge Name

Passage Text

• [33] The circumstances of this matter are unique. This Court is therefore faced with pondering whether the application by CUF is an attempt to have a second bite of the cherry, or satisfying justice in the light of the complexity of the circumstances. Further, looking at the whole matter, one can inter alia state that there is novelty in the issues and also a lack of any precedents to follow. CUF in their Heads of Argument claim that: "There is no judicial authority"13.
• [34] The test applied by the Supreme Court of Appeal in S v Smith14 neatly sums up the position in which this Court has found itself with respect to the application by CUF. The question based on S v Smith is whether there is, "a sound rational basis for the conclusion that there are prospects of success on appeal."
• [35] Having heard both counsels and having carefully read the papers, I come to the conclusion that there is a reasonable prospect that another Court would come to a different conclusion.