THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case No: 755/2011
In the matter between:

CORPCLO 2290 CC t/a U-CARE

FIRST APPELLANT
CORPCLO 2297 (PTY) LIMITED t/a DMP
MARKETING

SECOND APPELLANT

And

THE REGISTRAR OF BANKS

RESPONDENT

Neutral citation:
Corpclo 2290 cc t/a U-Care v The Registrar of Banks
(755/11) [2012] ZASCA 156 (2 November 2012)

Coram:
MPATI P, LEWIS, MALAN, LEACH JJA and SOUTHWOOD AJA
Heard:
14 SEPTEMBER 2012
Delivered:
2 NOVEMBER 2012
Summary:
Banks Act 94 of 1990 – contravention of s 11 – appellants
conducting ‘the business of a bank’ as defined in notice issued in terms
of paragraph (e) of the definition of ‘the business of a bank’ in s 1 –
interdict granted against the appellants in terms of s 81 of the Act
prohibiting them from conducting their business in contravention of the
Act – appellants appeal against the order on the grounds that the
provisions of the Act and the notice itself not properly interpreted in the
light of the Constitution and the Act – such grounds not part of the
defence in the court a quo and raised for the first time in the appellants’
heads of argument – whether the court should consider the new
defences where they were not raised in the court a quo.

______________________________________________________________

ORDER
_____________________________________________________________

On appeal from:
KwaZulu-Natal High Court, Pietermaritzburg (Booyens
AJ, sitting as court of first instance)

The appeal is dismissed with costs, such costs to include the costs of two
counsel.
______________________________________________________________

JUDGMENT
______________________________________________________________

SOUTHWOOD AJA (MPATI P, LEWIS, MALAN and LEACH JJA
CONCURRING):

[1] The issue in this appeal is whether the KwaZulu-Natal High Court,
Pietermaritzburg (Booyens AJ) correctly granted an interdict in terms of s 81
of the Banks Act 94 of 1990 prohibiting the appellants (respondents in the
court a quo) from continuing a business practice in contravention of s 11(1) of
the Act. This appeal is with the leave of the court a quo.

[2] The Act, originally called the Deposit-taking Institutions Act, was
enacted to provide for the regulation and supervision of public companies
taking deposits from the public and matters connected therewith. It has been
extensively amended and now provides for the regulation and supervision of
public companies which intend to carry on „the business of a bank‟ which
means, primarily, the acceptance of deposits from the general public as a
regular feature of the business. Subject to s 18A (which is not presently
relevant), s 11(1) provides that no person shall conduct the business of a
bank unless such person is a public company and is registered as a bank in
terms of the Act.  A number of functions are assigned to the Registrar of

Banks by the Act. The Registrar is a South African Reserve Bank officer or
employee, designated by the Reserve Bank, to perform, under the control and
direction of the Reserve Bank, the functions assigned to the Registrar under
the Act (s 4). In order to perform his or her functions under the Act the
Registrar has all the powers and duties corresponding with those conferred or
imposed by the Inspection of Financial Institutions Act 80 of 1998 on a
registrar in terms of that Act (s 6). These include the power to appoint
inspectors who have extensive powers to investigate.

[3] In terms of s 81 of the Act, if the Registrar has reason to suspect that
any person who is not registered in terms of the Act as a bank –
(a)
is likely to conduct the business of a bank in contravention of the
provisions of section 11(1); or (b) has so contravened the provisions of
section 11(1) and/or that such contravention is likely to be continued or
repeated; the Registrar may apply to the relevant high court for an order
prohibiting the anticipated contravention referred to; in paragraph (a) and/or
prohibiting the continuation or repetition of a contravention referred to in
paragraph (b).
If it is proved to the satisfaction of the high court that there is a reasonable
likelihood of a contravention of s 11(1) taking place or that there is a
reasonable likelihood that a contravention will be continued or repeated, the
high court may make the relevant order applied for. It should be noted that s 9
of the Act provides for a review by a board of review of any decision taken by
the Registrar by any person aggrieved by the decision. Such a review is
confined to the question of whether or not the Registrar, in taking the decision,
exercised his or her discretion properly and in good faith. The board of review
may after the review confirm, vary or set aside the Registrar‟s decision.

[4] The primary definition of „the business of a bank‟ as defined in s 1, is:
„(a)
the acceptance of deposits from the general public (including persons in the
employ of the person so accepting deposits) as a regular feature of the business in
question,‟

But the definition is extended in paragraph (e) to include: „any other activity
which the Registrar has, after consultation with the Governor of the Reserve
Bank, by notice in the Gazette declared to be the business of a bank‟.

On 27 March 1997, the Registrar, by Notice 498 published in Government
Gazette 17895, declared the following „business practice‟ (defined to include
„any scheme, practice or method of trading, including any method of
marketing or distribution‟) to be „the business of a bank‟:
„2.
The acceptance or obtaining of money, directly or indirectly, from members of
the public, as a regular feature of a business practice, with the prospect of such
members (hereinafter referred to as the “participating members”) receiving payments
or other money-related benefits, directly or indirectly–

(a)
on or after the introduction of other members of the public to the business
practice (hereinafter referred to as the “new participating members”), from
which new participating members, in their turn, money is accepted or
obtained, directly or indirectly, as a regular feature of the business practice,
whether or not–

(i)
the introduction of the new participating members is limited to their
introduction by participating members or extends to the introduction of the
new participating members by other persons; or

(ii)
new participating members are required to acquire movable or  immovable
property, rights or services;

(b)
on or after the promotion, transfer or change of status of the  participating
members or new participating members within the business practices; or

(c)
from funds accepted or obtained from participating members or new
participating members in terms of the business practice.

3.
The soliciting of, or advertising for, directly or indirectly, money and/or
persons for introduction into or participation in a business practice as described in
paragraph 2 supra.‟

[5] During April 2009, acting on the instructions of the Governor of the
Reserve
Bank,
the
Registrar
appointed
three
employees
of
PriceWaterhouseCoopers
Forensic
Services
(Pty)
Ltd as
temporary
inspectors to investigate whether the appellants, their directors, members and
officers and related persons and entities were conducting the business of a
bank in contravention of s 11(1) of the Act. The inspectors ascertained that –
(a)
the business (known as U-Care) operated by the first appellant
operates as a multi-tiered structure (members are referred to as „independent
contractors‟) where members of the public are requested to make monthly
contributions to U-Care;
(b)
members make a minimum monthly contribution (initially R125, later
R165) which is deposited into an Absa account held in the name of the first
appellant;
(c)
this monthly contribution is utilized as follows:
(i)
60 % is paid back to members as commissions and/or bonuses;
(ii)
20 % is paid to the second appellant, the management company, for
„administrative expenses‟;
(iii)
20 % is donated to charity;
(d)
when joining, a member nominates a charity.  When 20 members have
nominated a charity it is selected to receive donations;
(e)
members are paid commissions as a reward for other members they
sign up, down to four levels in the tiered structure;
(f)
To qualify for commission a member must have three paying members
per level;
(g)
Commission is paid over four levels totalling R75 (later R125).  This is
60 % of the contribution;
(h)
The commission is calculated as follows:
(i)
first level – R10 commission per member signed up;
(ii)
second level – R20 commission per member signed up;
(iii)
third level – R30 commission per member signed up;
(iv)
fourth level – R15 commission per member signed up;
(i)
Commission is only paid down to four levels and there must be three
paying members per level.  If there are fewer than three paying members on a
level, commission is not paid;

(j)
Such unpaid commissions are used to pay bonuses;
(k)
„Clubs‟ are also paid bonuses/rewards on a monthly basis:
(i)
„Club 20‟ – R150 per month is paid to members with 20 people in their
structure of which four people are on the first level;
(ii)
„Club 60‟ – R500 per month is paid to members with 60 people in their
structure of which six people are on the first level;
(iii)
„Club 100‟ – R1 000 per month is paid to members with 100 members
in their structure of which ten people are on the first level;
(iv)
„Club 150‟ – R1 500 per month is paid to members with 150 people in
their structure of which 15 people are on the first level;
(v)
„Club 200‟ – R2 000 per month is paid to members with 200 members
in their structure of which 20 people are on the first level.

[6] The appellants have also advertised their business and solicited
business by means of their website.

[7] On the strength of these facts the Registrar had reason to suspect that
the appellants were contravening, and would continue to contravene, s 11(1)
of the Act read with Notice 498, Consequently, the Registrar launched the
application in the court a quo for the relief set out in s 81 of the Act. The
appellants opposed the application and filed an answering affidavit.

[8] Despite the denial of certain allegations in their answering affidavit, the
appellants did not create any bona fide disputes of fact which would be an
obstacle to the grant of final relief.1 Their principal contention is that they
conduct a charity funding business which provides a service to both donors
(called „participants‟) and charities. They make donation by the participants
easier and less complicated and they distribute funds to charities on a regular
monthly basis. This facilitates the operation of the charities which are assured
of a regular monthly income. Without disputing the business practice

1 Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A) at 634E-
635C; Wightman t/a J W Construction v Headfour (Pty) Ltd & another 2008 (3) SA 371 (SCA)
paras 12-13; National Director of Public Prosecutions v Zuma 2009 (2) SA 277 (SCA) para
26.

described in the Registrar‟s founding affidavit, they contend that they do not
conduct the business of a bank.

[9] It also appears from the answering affidavit, that, in the first two years
of its existence, U-Care received total donations (or contributions) amounting
to almost R15 million, and in the next three and a half years, donations
amounting to more than R60 million. The appellants claim that U-Care is a
transparent fund-raising business which is inspired by altruistic motives but
they have not provided any facts to support these bald allegations or explain
the dramatic growth in income or turnover and they have not attached to their
answering affidavit any financial statements or other relevant documents.
They have provided no information about the donors, the amounts the donors
contribute, the charities that benefit from the business, the amounts
distributed to the charities and the commissions or bonuses paid to the
participants. They have also not stated what the second appellant‟s cost
structure is and what amounts have been paid to the second appellant for its
administrative expenses.

[10] It further appears from the affidavit that in 2007 the members or
directors of the appellants became concerned about whether their business
was lawful – they do not say when, but it was probably when they received a
letter from the Deputy Registrar seeking information about the business – and
they claim to have approached the Department of Trade and Industry for „the
necessary approvals to operate such business models so as to comply with
the relevant laws of the Republic of South Africa‟. Strangely, they do not state
what the outcome of such approach was and they do not attach to their
affidavit any approval given by the Department of Trade and Industry or any
correspondence between themselves and the Department. All that the court
was told by the appellants‟ counsel from the Bar was that the Department of
Trade and Industry did not grant approval. Although this evidence should
have been set out in the answering affidavit, it is entirely consistent with the
most plausible inference from the absence of such approval in the papers.

[11] The appellants‟ inaction after that is difficult to understand if they were
truly concerned about whether their business was legitimate. After they failed
to obtain the Department‟s approval, they should have sought legal advice to
ensure that they were not acting unlawfully. Yet they did nothing. Not even the
investigation carried out by the Registrar‟s inspectors in April 2009 could
prompt them into action. The appellants did not obtain legal advice until the
papers were served in August 2010. Apparently the only advice they received
was to simply deny that they were conducting „the business of a bank‟.

[12] In their answering affidavit the appellants raised only one defence:  that
the Registrar‟s founding affidavit did not disclose a cause of action because
the facts averred did not establish that the appellants were conducting „the
business of a bank‟. Neither of the appellants is a public company and they
did not dispute that they are not registered as a bank. Accordingly, the only
dispute was whether the appellants conduct „the business of a bank‟ as
described in the Notice. This required the application of the provisions of the
Notice to the business practice described earlier. The court a quo had no
doubt that the appellants were conducting the „business of a bank‟ and
pertinently recorded the appellants‟ counsel‟s concession that the appellants‟
business practice described above is tantamount to conducting the „business
of a bank‟. On the ordinary grammatical meaning of the words in the Notice,
that concession was clearly correct and so was the grant of the order against
the appellants. It was clear that unless interdicted the appellants would
continue with their business activities and persist in contravening s 11(1) of
the Act.

[13] On appeal, the appellants‟ counsel (who did not appear in the court a
quo) seek, in their heads of argument, to make out a completely new case on
behalf of the appellants. This has three parts. First, they contend that the
court a quo failed in its duty under ss 8 and 39 of the Constitution to interpret
the Act in a way that respects, promotes and fulfils the rights in the Bill of
Rights. It did this, according to the argument, because it failed to take account
of ss 1, 22, 25 and 33 of the Constitution. Second, they contend that even if
the court a quo‟s interpretation is correct, Notice 498 is unconstitutional

because it is ultra vires and overbroad and falls outside the scope of ss 1 and
11 of the Act. Third, they contend that s 1 of the Act gives „unlawfully wide‟
powers to the Registrar to determine the meaning of „the business of a bank‟.
Thus, the appellants raise three constitutional issues, the proper interpretation
of the Act, the constitutionality of the Notice and the constitutionality of the
power conferred on the Registrar to determine the meaning of „the business of
a bank‟.

[14] It is apparent from the judgment of the court a quo that no attempt was
made to interpret the Notice – obviously because the ordinary grammatical
meaning is clear and unambiguous and was not disputed – and that none of
the matters now sought to be raised was mentioned during the hearing.

[15] The Registrar‟s counsel contends that because these issues were not
canvassed in the appellants‟ answering affidavit the appellants are precluded
from advancing them on appeal.2 The Registrar‟s counsel points out that not
only was the Registrar not warned of the issues raised but the court is
deprived of the assistance of amici curiae such as the Reserve Bank, the
Minister of Finance and the Minister of Trade and Industry, all of whom would
have had an interest in the relief sought.3

[16] The appellants‟ approach ignores all the well-established rules of
practice governing motion proceedings and the raising of constitutional
issues. It is trite that in motion proceedings the affidavits comprise both the
pleadings and the evidence and that the parties‟ contentions should appear
clearly from the affidavits so that the opposing party can deal with them.4
Furthermore, Rule 16A of the Uniform rules emphasizes the necessity for

2 Philips & others v National Director of Public Prosecutions 2006 (1) SA 505 (CC) para 39;
Prince v President, Cape Law Society & others 2001 (2) SA 388 (CC) (2001 (2) BCLR 133)
para 22.
3 See eg Platinum Asset Management (Pty) Ltd v Financial Services Board & others:  Anglo
Rand Capital House (Pty) Ltd & others v Financial Services Board & others 2006 (4) SA 73
(W) and the unreported judgment of Hiemstra AJ in Claassen v Minister of Justice & others,
Case number 40405/08 (NGHC).
4 Radebe & others v Eastern Transvaal Development Board 1988 (2) SA 785 (A) at 793D-G;
Transnet Ltd v Rubenstein 2006 (1) SA 591 (SCA) paras 28-29; Minister of Land Affairs and
Agriculture & others v D & F Wevell Trust & others 2008 (2) SA 184 (SCA) para 43.

constitutional issues to be clearly raised. In Shaik v Minister of Justice and
Constitutional Development & others5 the Constitutional Court said:
„The minds of litigants (and in particular practitioners) in the High Courts are focused
on the need for specificity by the provisions of Uniform Rule 16A(1). The purpose of
the Rule is to bring to the attention of persons (who may be affected by or have a
legitimate interest in the case) the particularity of the constitutional challenge, in order
that they may take steps to protect their interests. This is especially important in
those cases where a party may wish to justify a limitation of a chap 2 right and
adduce evidence in support thereof.  It constitutes sound discipline in constitutional
litigation to require accuracy in the identification of statutory provisions that are
attacked on the ground of their constitutional invalidity. This is not an inflexible
approach. The circumstances of a particular case might dictate otherwise. It is,
however, an Important consideration in deciding where the interests of justice lie.‟
And it has been held that it is impermissible to rely on a constitutional
complaint that was not pleaded.6

[17] The issue was comprehensively dealt with by the Constitutional Court
in Prince v President, Cape Law Society & others7 where Ngcobo J said:
„Parties who challenge the constitutionality of a provision in a statute must raise the
constitutionality of the provisions sought to be challenged at the time they institute
legal proceedings. In addition, a party must place before the Court information
relevant to the determination of the constitutionality of the impugned provisions.
Similarly, a party seeking to justify a limitation of a constitutional right must place
before the Court information relevant to the issue of justification. I would emphasise
that all this information must be placed before the court of first instance. The placing
of the relevant information is necessary to warn the other party of the case it will have
to meet, so as to allow it the opportunity to present factual material and legal
argument to meet that case. It is not sufficient for a party to raise the constitutionality
of a statute only in the heads of argument, without laying a proper foundation for
such a challenge in the papers or the pleadings. The other party must be left in no
doubt as to the nature of the case it has to meet and the relief that is sought. Nor can
parties hope to supplement and make their case on appeal.‟

5 Shaik v Minister of Justice and Constitutional Development & others 2004 (3) SA 599 (CC)
(2004 (1) SACR 105) paras 24-25; Phillips & Others v National Director of Public
Prosecutions 2006 (1) SA 505 (CC) para 40.
6 Phillips & others v National Director of Public Prosecutions, supra, para 39.
7 Prince v President, Cape Law Society & others 2001 (2) SA 388 (CC) para 22.

[18] The constitutional attack on the Notice and the power of the Registrar
clearly affects other parties who should have been given notice of such attack
so that they could intervene and present evidence and argument in support of
the constitutionality of the Notice and the Registrar‟s power in paragraph (e) of
the definition of „the business of a bank‟ This part of the appellants‟ argument
therefore cannot be considered. In so far as this court might have been
inclined to consider the interpretation issue raised in the appellants‟ heads of
argument, it does not assist the appellants that the argument in the heads of
argument is incoherent and unintelligible; it did not become more coherent
and intelligible during oral argument. At one stage the appellants‟ counsel
clearly conveyed to the court that he was abandoning all arguments except
that based on the Notice being ultra vires, only to return to the other
arguments during reply.

[19] The only sections relevant to the Registrar‟s cause of action against
the appellants are s 11 (read with the definition of „the business of a bank‟ in
the Notice) and s 81. No sections in the South African Reserve Bank Act 90 of
1989 or any other Act have to be considered or interpreted. Both ss 11 and 81
and the Notice are clear and unambiguous. Section 11 clearly prohibits any
person, other than a public company which is registered as a bank in terms of
the Act, from conducting the business of a bank – which includes the
„business practice‟ described in the Notice. Section 81 provides what action
the Registrar can take if he or she has reason to suspect that any person,
who is not registered as a bank in terms of the Act, is likely to conduct the
„business of a bank‟ in contravention of the provisions of section 11(1) or that
such a contravention is likely to be continued or repeated. This is therefore a
case of a clear, straightforward prohibition of defined conduct and clear and
straightforward provisions authorising the Registrar‟s action.

[20] It is a primary rule of statutory construction that words in a statute must
be given their ordinary grammatical meaning in the light of their context,
where „context‟ includes the language of the rest of the statute, the matter of
the statute, its apparent scope and purpose, and, within limits, its background.
When interpreting the words in as statute, the court must, from the outset,

consider the language and the context together.8 This must be done even
when the words to be interpreted are clear and unambiguous.9 In addition, s
39(2) of the Constitution requires that every piece of legislation must be
construed in a manner that promotes the „spirit, purport and objects of the Bill
of Rights,‟ ie „(a)ll statutes must be interpreted through the prism of the Bill or
Rights‟.10 This must be done whatever the nature of the legislation.11 But
looking through the prism of the Constitution does not open the door to
changing the clear meaning of the statute. If the clear meaning conflicts with
the Bill of Rights, the remedy is to strike it down.12 And it must always be
borne in mind that s 39(2) postulates that the interpretation which is proposed
is one which would demonstrably promote an identifiable value enshrined in
the Bill of Rights and also one of which the legislation is reasonably capable.13
In seeking to give meaning to the words of a statute the court will also give
effect to the object or purpose of the legislation14 but this cannot change the
meaning of words which are only capable of one meaning.15 I now turn to
consider what I regard as the main shortcomings in the appellants‟ new case.

[21] The heads of argument do not consistently identify the relevant section
or sections in the Act which, it is contended, have not been properly
interpreted and then in relation to each such section explain how, by the
application of the rules of interpretation, the relevant provisions would acquire

8 Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs & others 2004 (4) SA 490
(CC) para 89; Jaga v Dὂ nges NO & another; Bhana v Dὂ nges NO & another 1950 (4) SA
653 (A) at 662G-663A.
9 Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs supra paragraph 90;
Thoroughbred Breeders’ Association v Price Waterhouse 2001 (4) SA 551 (SCA) st 600E-H.
10 Investigating Directorate: Serious Economic Offences & others v Hyundai Motor
Distributors (Pty) Ltd & others: In re Hyundai Motor Distributors (Pty) Ltd & others v Smit NO
& others 2001 (1) SA 545 (CC) para 21.
11 First National Bank of SA Ltd t/a Wesbank v Commissioner, South African Revenue
Service & another; First National Bank of SA Ltd t/a Wesbank v Minister of Finance 2002 (4)
SA 768 (CC) para 31 („…even fiscal statutory provisions, no matter how indispensable they
may be for the economic well-being of the country – a legitimate governmental objective of
undisputed high priority – are not immune to the discipline of  the Constitution…‟)
12 Cipla Medpro (Pty) Ltd v Aventis Pharma SA, Aventis Pharma SA  & others v Cipla Life
Services (Pty) Ltd & others [2012] ZASCA 108 paras 44-45.
13 Thoroughbred Breeders Association v Price Waterhouse 2001 (4) SA 551 (SCA) at 597H-I
and 604F-G; Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs, supra, para 72.
14 Standard Bank Investment Corporation Ltd v Competition Commission and others; Liberty
Life Association of Africa and others v Competition Commission & others 2000 (2) SA 797
(SCA) paras 16-22.
15 Standard Bank Investment Corporation Ltd ,supra, paras 19-22.

a different meaning not in conflict with the relevant rights in the Bill of Rights.
The argument in connection with the appellants‟ right to just administrative
action in terms of section 33 of the Constitution  is formulated as if this case is
a review in terms of the Promotion of Administrative Justice Act 3 of 2000
(PAJA) – which it clearly is not. After referring to ss 22, 25 and 33, and what
they mean, the argument concludes that the court a quo failed to interpret the
Reserve Bank Act (which is neither relevant nor the subject of attack), the Act
and Notice 498 in a manner that took account of the constitutional rights of the
first appellant, its members and beneficiaries, and that the correct
interpretation required an interpretational „reading down‟. This is then stated in
extremely vague and general terms:
„a.  The Registrar should not have been entitled to investigate and arrive at adverse
decisions impacting on the rights of Corpclo without showing due respect for
Corpclo‟s administrative rights to procedural fairness; b.  The Registrar should not
have been entitled to take a decision that seriously impacts upon the rights of
Corpclo and its directors and members to property and freedom of trade without
sufficient reason and with respect for procedural fairness; c.  The Banks Act and
Government Notice 498 should be interpreted to exclude Corpclo and like
organisations, which is clearly not operating “the business of a bank” as envisaged
by the Banks Act; d.  The power of the Registrar to declare activities to be “the
business of the bank” in terms of section 1 of the Banks Act should be constitutionally
limited.‟

[22] The following comments on these conclusions are apposite:
Conclusion „a‟ does not relate to the interpretation of any relevant section. It
seems to relate to a constitutional attack on the provisions of s 6 of the Act
(which is not relevant) in terms of which the Registrar is empowered to
appoint inspectors, and an attack on the Registrar‟s decision in terms of s 81
to launch the application in the court a quo. The second attack should clearly
have been made in a review in terms of s 9 of the Act in terms of PAJA.
Conclusion „b‟ also does not relate to the interpretation of an identified
section. It seems to relate to a constitutional attack on s 81 which allegedly
conflicts with the appellants‟ rights in terms of ss 22, 25 and 33 of the
Constitution or an attack on the Registrar‟s decision to launch the application
in the court a quo, which should have been made in a review under s 9 of the

Act or in terms of PAJA. Conclusion „c‟ relates to interpretation but does not
identify any provisions of the Act which should be interpreted as alleged and it
is therefore not possible to establish which provisions should be read down.
Similarly the words in the Notice which must be read down are not identified.
Conclusion „d‟ is also not an interpretational but a constitutional issue. Here
the appellants have conflated the two issues. It is striking that the appellants
have not addressed the clear meaning of ss 11 and 81 and the Notice.

[23] The Act is a law of general application which was enacted to regulate
and supervise the business of public companies taking deposits from the
public. However, it is clear from the provisions of s 11 that no one may
engage in these activities unless such person is a public company and is
registered as a bank in terms of the Act. It is also clear from the definition of
„the business of a bank‟ (para (e)) that the Registrar has, after consultation
with the Governor of the Reserve Bank, the power to declare any other
„business practice‟ to be „the business of a bank‟. Finally it is clear that the
court may issue an interdict which has the effect that the offender may not
conduct the contentious „business practice‟. For present purposes it will be
accepted that such an interdict interferes with the appellants‟ right to choose
their trade or occupation (s 22 of the Constitution) and will constitute a
deprivation of property (s 25 of the Constitution).

[24] In their heads of argument the appellants have not dealt with the
limitation of rights allowed by s 36 of the Constitution or the internal limitations
of the rights in s 22 („the practice of a trade, occupation or profession may be
regulated by law‟) and s 25 (a person may be deprived of property in terms of
a law of general application). In their argument before this court the
appellants‟ counsel made no submissions in respect of these matters.

[25] Regarding the appellants‟ right to just administrative action in terms ofs
33 of the Constitution, the appellants‟ heads of argument attack the
Registrar‟s decision (in terms of unidentified provisions of the Reserve Bank
Act 90 of 1989 – which is not relevant – and the Act) to appoint inspectors to
investigate the appellants and to institute proceedings against them on the

grounds that these were administrative decisions taken by an organ of State
in the course of implementing legislation and that the Registrar failed to act in
a manner that was lawful, reasonable and procedurally fair. This would
require, so it is contended, that the appellants be given adequate notice of the
nature and purpose of the administrative action, a reasonable opportunity to
make representations, a clear statement of the administrative action and
adequate notice of the right to request reasons and of any right of review. It is
also contended that administrative action must not be taken arbitrarily,
capriciously, in bad faith or for an ulterior purpose. In support of these
contentions the appellants refer to ss 1, 3 and 6 of PAJA. These are clearly
not matters of interpretation but matters for review in terms of PAJA.

[26] Even if the argument could be found to relate in some way to the
interpretation of the sections, the appellants‟ reasoning is seriously flawed.
First, it will be remembered that the Registrar‟s cause of action in the court a
quo was simply the contravention of s 11 of the Act read with the Notice and s
81 of the Act. The Registrar‟s decision to investigate the appellants‟ business
was of no relevance whatsoever. Secondly, the Registrar‟s decisions to
investigate the appellants‟ business and institute proceedings against the
appellants for an interdict in terms of s 81 of the Act were not administrative
actions for the purposes of PAJA as they did not (as required by the definition
of „administrative action‟ in s 1 of PAJA) adversely affect the rights of the
appellants or have a direct, external legal effect or have that capacity.16
Whether or not administrative action, which would make PAJA applicable, has
been taken, cannot be determined in the abstract. Regard must always be
had to the facts of the case.17 A decision to investigate and the process of
investigation, which exclude a determination of culpability, could not adversely
affect the rights of the appellants in a manner that has a direct and external

16 Viking Pony Africa Pumps (Pty) Ltd t/a Tricom Africa v Hidro-Tech Systems (Pty) Ltd &
another 2011 (1) SA 327 (CC) para 37; Joseph & another v City of Johannesburg & others
2010 (4) SA 55 (CC) para 27; Grey’s Marine Hout Bay (Pty) Ltd & others v Minister of Public
Works & others 2005 (6) SA 313 (SCA) par 23; City of Cape Town v Hendricks & another
[2012] ZASCA 90; J R de Ville Judicial Review of Administrative Action in South Africa, (2003)
para 2 1 6; Cora Hoexter Administrative Law in South Africa 2 ed (2012) at 220-227.
17 Viking Pony Africa Pumps (Pty) Ltd t/a Tricom Africa v Hidro-Tech Systems (Pty) Ltd &
Another 2011 (1) SA 327 (CC) para 37.

legal effect.18 So too a decision to institute proceedings in the high court for an
interdict does not affect the rights of the appellants or have that capacity.19 It
is the high court which decides that the Act is being contravened and decides
to grant the interdict.

[27] Since this is not a review, none of the additional cases referred to by
the appellants‟ counsel during argument20 in support of the proposition that
before the Registrar took the decisions, the appellants should have been
given an opportunity to adduce material „which would deter the decision-
maker from making that decision‟, are of any relevance.

[28] The object or purpose of the Act is clearly to regulate the registration
and operation of persons conducting the „business of a bank‟. Section 11(1)
prohibits all persons who are not public companies and who are not
registered in terms of the Act from conducting the „business of the bank‟.
This is not affected by any right in the Bill of Rights.

[29] There is, therefore, no merit in the appeal and it must be dismissed.

The following order is made:

The appeal is dismissed with costs, such costs to include the costs of two
counsel.

______________________
B R SOUTHWOOD
ACTING JUDGE OF APPEAL

18 Viking Pony Africa Pumps (Pty) Ltd t/a Tricom Africa v Hidro-Tech Systems (Pty) Ltd &
another, supra, para 37.
19 Competition Commission of SA v Telkom SA Ltd & another [2010] 2 All SA 433 (SCA) para
11.
20 Mahon v Air New Zealand Ltd & others [1984] 3 All ER 201 (PC) at 210b-e; General
Council of Medical Education and Registration of the United Kingdom v Spackman [1943] 2
All ER 337 (HL) at 342F-346A and Whine v Dranklisensieraad vir Gebied 34 1967 (2) SA 316
(O) at 321C-G.

APPEARANCES

For Appellants:                 A J Dickson (SC) (with him M du Plessis)
Instructed by:
M C Wilkinson & Co, Hilton
McIntyre & Van der Post, Bloemfontein

For Respondent:
E L Theron (with him T Manchu)

Instructed by:

Hahn & Hahn Inc, Pretoria

Symington & de Kok, Bloemfontein