THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Not Reportable
Case no: 1216/21

In the matter between:
MOSSELBAAI BOEREDIENSTE (PTY) LTD
t/a MOSSELBAAI TOYOTA

APPLICANT
and
OKB MOTORS CC
t/a BULTFONTEIN TOYOTA

RESPONDENT

Neutral citation: Mosselbaai Boeredienste (Pty) Ltd v OKB Motors CC
(Case no 1216/21) [2023] ZASCA 91 (09 June 2023)
Coram:
MOCUMIE, SCHIPPERS, CARELSE, MEYER and GOOSEN
JJA
Heard:
04 May 2023
Delivered: This judgment was handed down electronically by circulation to
the parties’ legal representatives by email, publication on the Supreme Court
of Appeal website and release to SAFLII. The date and time for hand-down is
deemed to be at 11h00 on 09June 2023.

Summary: Civil procedure – failure to comply with the rules of court – appeal
lapsing – application for condonation and reinstatement of appeal – factors to
be considered – strong prospects of success on appeal may trump
unsatisfactory explanation – special leave granted – matter referred to the full
court to determine the merits of the appeal.

_____________________________________________________________
ORDER
_____________________________________________________________

On appeal from: Free State Division of the High Court, Bloemfontein
(Naidoo J and De Kock AJ, sitting as a court of appeal):
Special leave to appeal is granted.
The appeal (in respect of the condonation application) is upheld, with
costs.
The order of the high court, dismissing the application for condonation
with costs, is set aside and replaced with the following order:
‘(a) Mosselbaai Boeredienste (Pty) Ltd is granted condonation for its failure
to comply with the provisions of uniform rules 50(4)(a), 50(7)(a) and 7(2).
(b) The appeal is reinstated.’
The matter is referred to the full court of the Free State Division of the
High Court, Bloemfontein to determine the merits of the appeal.

_____________________________________________________________
JUDGMENT
_____________________________________________________________
Carelse JA (Mocumie, Schippers, Meyer and Goosen JJA concurring)

[1] This is an application for special leave to appeal against the order of the
full bench of the Free State Division of the High Court, Bloemfontein
(Naidoo J and De Kock AJ), delivered on 18 November 2021 (the high court).
That court dismissed the application for condonation of the late prosecution
of the appeal. On further application to this Court for special leave to appeal,

the application was referred for oral hearing in terms of s 17(2)(d) of the
Superior Courts Act 10 of 2013. The parties were directed to be prepared, if
called upon to do so, to address this Court on the merits.

[2] The following facts are common cause. On 7 February 2018, the
applicant, Mosselbaai Boeredienste (Pty) Ltd t/a Mosselbaai Toyota (plaintiff)
and the respondent, OKB Motors CC t/a Bultfontein Toyota (defendant), both
motor dealers, concluded an interdealership agreement in terms of which the
respondent bought a Toyota Etios motor vehicle (the vehicle) from the
plaintiff for resale.

[3] On the same day, Mrs Steyn, an employee of the defendant, received
an invoice from Mr Maritz, the plaintiff’s sales manager’s email address,
namely sales2@mbtoyota.co.za. On 8 February 2018, the vehicle was
delivered to the defendant but the plaintiff did not receive payment of the
purchase price of R159 353.76. The defendant paid the purchase price into an
incorrect bank account because the invoice which was emailed to it was
intercepted by an unknown third party who fraudulently changed the
defendant’s bank details on the plaintiff’s invoice, and obtained receipt of the
money.

[4] On 8 February 2018, Mrs Steyn emailed proof of payment for the
vehicle which reflected the incorrect bank details, which was once again
intercepted by an unknown third party who changed the incorrect bank details
to the correct bank details that caused the plaintiff to believe that the defendant
had correctly made payment for the vehicle. It is not disputed that the standard

practice in the motor dealership industry is that a vehicle is only released upon
proof of payment.

[5] The plaintiff instituted an action in the magistrates’ court for payment
of the amount of R159 353.76, the purchase price of the vehicle. The
defendant raised a special plea of estoppel by representation. The court a quo
upheld the special plea and dismissed the plaintiff’s case. Dissatisfied with
the outcome, the plaintiff appealed to the high court. On 19 April 2021, the
plaintiff noted its appeal timeously in terms of rule 51(3) of the Magistrates’
Court’s Rules of Court.1

[6] A party who wishes to pursue an appeal to the high court must file a
notice contemplated in rule 50(4)(a)2 for the assignment of a date for the
hearing of the appeal, within 40 days of the noting of the appeal. It is common
cause that the plaintiff failed to do so. In the result, the appeal lapsed. The
plaintiff had to lodge with the registrar two copies of the record of appeal
timeously in terms of rule 50(7)(a).3 This was not done. The plaintiff also
sought condonation to file a power of attorney in terms of rule 7(2),4
authorising the plaintiff’s attorney to lodge an appeal.

1 Rule 51(3) of the Magistrates’ Court’s Rules provides that ‘[a]n appeal may be noted within 20 days after
the date of a judgment appealed against or within 20 days after the registrar or clerk of the court has supplied
a copy of the judgment in writing to the party applying therefor, which ever period shall be the longer.’
2 Rule 50(4)(a) of the Uniform Rules of Court provides that ‘[t]he appellant shall, within 40 days of noting
the appeal, apply to the registrar in writing and with notice to all other parties for the assignment of a date
for the hearing of the appeal and shall at the same time make available to the registrar in writing his full
residential and postal addresses and the address of his attorney if he is represented.’
3 Rule 50(7)(a) of the Uniform Rules of Court provides that ‘[t]he applicant shall simultaneously with the
lodging of the application for a date for the hearing of the appeal referred to in subrule (4) lodge with the
registrar two copies of the record: Provided that where such an appeal is to be heard by more than two judges,
the applicant shall, upon the request of the registrar, lodge a further copy of the record for each additional
judge.’
4 Rule 7(2) of the Uniform Rules of Court provides that ‘the registrar shall not set down any appeal at the
instance of an attorney unless such attorney has filed with the registrar a power of attorney authorising him
to appeal and such power of attorney shall be filed together with the application for a date of hearing.’

[7] It is not disputed that the plaintiff failed to prosecute its appeal within
60 days of the noting thereof. The appeal lapsed on 14 July 2021. The plaintiff
filed the record of appeal on 20 July 2021. A further complaint of the
defendant was that the plaintiff did not file a power of attorney. On 2 August
2021, the appeal was enrolled for hearing on 15 November 2021. On
17 August 2021, the plaintiff launched an application for condonation of its
non-compliance with the above-mentioned Rules of Court, and if successful,
the reinstatement of the appeal. The defendant opposed the application on the
basis of the tardiness of the plaintiff’s attorney and the lack of prospects of
success.

[8] The high court directed that the application for condonation be heard
first and the appeal itself at a later stage, depending on the outcome of the
condonation application. On 18 November 2021, the high court dismissed the
application for condonation with costs.

[9] The reasons for the delay and non-compliance with the rules have been
dealt with extensively in the judgment of the high court and need not be
repeated. It was not seriously contested that the delay in finalising the
preparation of the record should be laid at the door of the transcribers. The
record shows that there are two reasons why the high court refused the
application for condonation and reinstatement of the appeal. The first is that
there were no prospects of success on appeal; and the second, that the plaintiff
failed to file a power of attorney in terms of rule 7(2).

[10] As to the first reason, the high court indicated it would have granted the
application for condonation, but for the lack of prospects of success.

Regarding the second, it appears that a power of attorney is not required in
order to reinstate an appeal. Thus, the main issue for determination is whether
the plaintiff established reasonable prospects of success on appeal.

[11] Where special leave is sought, as in this case, the existence of
reasonable prospects of success is insufficient, ‘[s]omething more, by way of
special circumstances is needed’.5 The principles underlying an application
for condonation, in the context of a reinstatement of an appeal is that the court
has a discretion which must be exercised judicially. The Constitutional Court
has held that:
‘. . . the standard for considering an application for condonation is the interests of justice.
Whether it is in the interests of justice to grant condonation depends on the facts and
circumstances of each case. Factors that are relevant to this enquiry include but are not
limited to the nature of the relief sought, the extent and cause of the delay, the effect of the
delay on the administration of justice and other litigants, the reasonableness of the
explanation for the delay, the importance of the issue to be raised in the intended appeal
and the prospects of success.’6
It is trite that strong prospects of success can often overcome a poor
explanation for any delays. Differently stated, strong prospects of success may
trump an unsatisfactory explanation for the delay.7

5 Including: ‘. . . that the appeal raises a substantial point of law; or that the prospects of success are so strong
that a refusal of leave would result in a manifest denial of justice; or that the matter is of very great importance
to the parties or to the public.’ Cook v Morrison and Another [2019] ZASCA 8; [2019] 3 All SA 673; 2019
(5) SA 51 (SCA) para 8.
6 Van Wyk v Unitas Hospital and Another [2007] ZACC 24; 2008 (2) SA 472 (CC); 2008 (4) BCLR 442
(CC) para 20; Brummer v Gorfil Brothers Investments (Pty) Ltd and Others [2000] ZACC 3; 2000 (2) SA
837 (CC); 2000 (5) BCLR 465 (CC) para 3; PAF v SCF [2022] ZASCA 101 2022 (6) SA 162 (SCA).
7 Valor IT v Premier, North West Province and Others [2020] ZASCA 62; [2020] 3 All SA 397; 2021 (1)
SA 42 (SCA) 42 (SCA) para 38.

[12] There are four issues to consider in the present matter in determining
whether there are prospects of success in the appeal. At the outset, it must be
emphasised that this Court is not making any findings on these issues: it is
only necessary to determine whether they demonstrate reasonable prospects
of success. First, the defendant raised the defence of estoppel which was
upheld by the court a quo. The defendant’s case is that the plaintiff had
negligently misrepresented to the defendant that the banking details on its
invoice were the correct banking details. It is common cause between the IT
experts that the interception was on the side of the plaintiff, in other words,
the plaintiff’s email system was ‘spoofed’.8 The plaintiff was aware of
cybercrime in the motor industry, and failed to take measures to guard against
this. As a result, the court a quo held that the plaintiff was estopped from
denying that the altered bank details were not those of the plaintiff. Mr Oliver
(for the defendant) testified that before he had authorised the electronic
transfer of funds to the plaintiff, he had specifically asked Mrs Steyn, the sales
assistant (for the defendant) whether she had verified the correctness of the
plaintiff’s bank details, which she confirmed. However, when she testified,
she denied this. This material contradiction was not considered by the court a
quo.

[13] Second, the court a quo failed to consider whether the alleged
negligence was the proximate cause of the payment having been electronically
transferred by the defendant into the incorrect banking account. Third, the

8 In the Oxford Learners Dictionary, ‘spoofed’ is defined as the practice of sending emails that appear to
come from somebody’s email address. https://www.oxfordlearnersdictionaries.com/definition/english/spoof
2?q=spoofed. Accessed on 30 May 2023.

court a quo failed to consider whether the damage or loss that was caused by
the third party (the interceptor), was foreseeable.

[14] Fourth, the facts in this case may be akin to the interception of cheques.
It is well known that banking systems are targeted by criminals. Cheques,
which were once the preferred method of payment, have become obsolete. In
Eriksen Motors (Welkom) Ltd v Protea Motors, Warrenton and Another,9 the
principles to be applied in cases where cheques have been intercepted in the
post and misappropriated by a thief have been reaffirmed thus: when a debtor
tenders payment by cheque, and the creditor accepts it, the payment remains
conditional and is only finalised once the cheque is honoured. Any risk of
fraudulent misappropriation should be borne by the debtor since it is the
debtor’s duty to seek out its creditor. But where the creditor stipulates the
mode of payment and the debtor complies with it, any inherent risk in the
stipulated method is for the creditor’s account.

[15] In Galactic Auto Pty Ltd v Andre Venter,10 the creditor sent the debtor
an invoice via email and thereafter sent the debtor its bank details.
Unfortunately, the email was intercepted and the debtor received the email
with incorrect banking details into which it made an electronic transfer of the
amount as per the invoice. The court relied on the decision of Mannesmann
Demag (Pty) Ltd v Romatex Ltd and Another,11 and found in favour of the
creditor.

9 Eriksen Motors (Welkom) Ltd v Protea Motors, Warrenton and another [1973] 4 ALL SA 116 (A). See a
more recent judgment, Stabilpave (Pty) Ltd v South African Revenue Services [2013] ZASCA 128; 2014 (1)
SA 350 (SCA) para 9.
10 Galactic Auto v Pty Ltd v Andre Venter [2019] ZALMPPHC 27.
11 Mannesmann Demag (Pty) Ltd v Romatex Ltd and Another [1988] 2 ALL SA 353 (D).

[16] The question that arises in this case is whether the same legal principles
should find application, namely where the debtor remains liable until payment
has been credited to the creditor’s bank account. The question concerning the
interception of a creditor’s banking details sent by electronic means has yet
not been decided by this Court.

[17] A further reason for granting special leave to appeal, is that there are
conflicting high court judgments on the question as to who should bear the
loss where a payment is electronically made to a creditor, which is
fraudulently intercepted by a third party. This Court was referred to some of
those conflicting judgments. In Andre Kock en Seun Vrystaat (Pty) Ltd v
Snyman N.O,12 the high court held that the debtor is responsible for verifying
the creditor’s banking details. In Hawarden v Edward Nathan Sonnenbergs
Inc ,13 the high court held that the defendant had a general duty of care to the
plaintiff, the purchaser of immovable property, and concluded that the
purchaser could not be held liable for the electronic transfer of funds into a
banking account where the bank details had been fraudulently changed. In
Gerber v PSG Wealth Financial Planning (Pty) Ltd,14 the high court held that
‘[t]he proximate cause of the loss was not the hacking, it was the failure to
employ the necessary and contractually prescribed vigilance when monies
held in trust were paid into a different account’.15 In Hartog v Daly,16 the high
court held that the electronic transfer of funds into the incorrect account did
not absolve the debtor from payment.

12 Andre Kock en Seun Vrystaat (Pty) Ltd v Willem Stephanus Snyman N.O and Another [2022] ZAFSHC
161 para 9.
13 Hawarden v Edward Nathan Sonnenbergs Inc [2023] ZAGPJHC 14; [2023] 1 All SA 675 (GJ) para 122.
14 Gerber v PSG Wealth Financial Planning (Pty) Ltd [2023] ZAGPJHC 270.
15 Ibid para 90.
16 Hartog v Daly [2023] ZAGPJHC 40; [2023] 2 All SA 156 (GJ).

[18] The applicant thus established reasonable prospects of success on
appeal. It is appropriate that the matter be referred to a full court of the Free
State Division of the High Court, Bloemfontein to determine the merits of the
appeal.

[19] In the result, the following order is made:
Special leave to appeal is granted.
The appeal (in respect of the condonation application) is upheld, with
costs.
The order of the high court, dismissing the application for condonation
with costs, is set aside and replaced with the following order:
‘(a) Mosselbaai Boeredienste (Pty) Ltd is granted condonation for its failure
to comply with the provisions of uniform rules 50(4)(a), 50(7)(a) and 7(2).
(b) The appeal is reinstated.’
The matter is referred to the full court of the Free State Division of the
High Court, Bloemfontein to determine the merits of the appeal.

________________________
Z CARELSE JA
JUDGE OF APPEAL

Appearances

For appellant:
C D Pienaar
Instructed by: Oosthuizen Marais & Pretorius Inc, Mosselbaai
Phatshoane Henney, Bloemfontein

For respondent:
A P Berry
Pieter Badenhorst Attorneys, Bloemfontein.

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL
From:
The Registrar, Supreme Court of Appeal
Date:

9 June 2023
Status:
Immediate
The following summary is for the benefit of the media in the reporting of this case and does not
form part of the judgments of the Supreme Court of Appeal
Mosselbaai Boeredienste (Pty) Ltd v OKB Motors CC (Case no 1216/21) [2023] ZASCA 91 (09 June
2023)
Today, the Supreme Court of Appeal (SCA) upheld an appeal from the Free State Division of the High
Court, Bloemfontein (high court). The order of the high court was replaced with one granting
condonation for failure to comply with the provisions of the Uniform Rules of Court (rules) and reinstated
the appeal. The matter was referred back to the high court for determination of the merits.

The appeal revolved around an interdealership agreement between the applicant and respondent
(plaintiff and defendant in the court a quo) for the purchase of a motor vehicle. The motor vehicle was
purchased and delivered, and the purchase price transferred. However, the purchase price was never
received as the provided invoice was intercepted and altered by a third party who ultimately obtained
receipt of the money. The proof of payment sent by the defendant was again intercepted by the same
third party who altered the fraudulent payment details to the correct details, causing the defendant to
believe that the payment was correctly made.

Proceedings commenced in the magistrates’ court (court a quo), which dismissed the matter. It
proceeded upon appeal to the high court. However, a party who wished to pursue an appeal to the high
court should have, inter alia, complied with the rules regulating appeal proceedings. Having considered
the matter, the high court dismissed the application for condonation and reinstatement of the appeal on
the grounds that there were no reasonable prospects of success.

The plaintiff proceeded to apply for special leave to appeal to the SCA. Principally, the SCA maintained
that where special leave is sought, the existence of reasonable prospects of success is insufficient –
something more, by way of special circumstances was required. The principles underlying an
application for condonation, in the context of a reinstatement of an appeal, has always been that the
court had a discretion which should have been exercised judicially. As such, the appeal hinged on four
considerations. The first was that the respondent, in the court a quo, raised the defence of estoppel
with regards to the negligent misrepresentation of the banking details. A material contradiction relevant
to this consideration was not considered by the court a quo. Second, the court a quo failed to consider
whether the alleged negligence was the proximate cause of the payment having been electronically
transferred by the defendant into the incorrect banking account. Third, the court a quo failed to consider

whether the damage or loss that was caused by the third party was reasonably foreseeable and fourth,
it was unclear whether the debtor ought to have remained liable for payment until such payment had
been credited to the creditors account.

After examining authority on the considerations at hand, the SCA determined that the plaintiff
established reasonable prospects of success on appeal and that the matter should be heard by a full
court on appeal. In the result, the order of the high court was replaced with one granting condonation
for failure to comply with the provisions of the rules and reinstated the appeal.

~~~~ends~~~~