THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
Reportable
Case No 237/04
In the matter between:
CORDIANT TRADING CC

Appellant
and
DAIMLER CHRYSLER FINANCIAL
SERVICES (debis) (PTY) LTD

Respondent
Coram:
HOWIE P, ZULMAN, MTHIYANE, JAFTA AND

MLAMBO JJA
Heard:
9  MAY 2005
Delivered:
30 MAY 2005
Summary:
Jurisdiction – on causes – limited to causes arising within
the court’s area of jurisdiction. Declaration of rights –

when competent under s 19(1)(a)(iii) of Act 59 of 1959
J U D G M E N T
JAFTA JA/
JAFTA JA:
[1] Two issues were raised in this appeal: the first is whether the Durban

and Coast Local Division had jurisdiction to hear and determine an
application brought against a South African company based beyond its area
of jurisdiction; and the second is whether a seller of goods which were
resold to third parties in successive sales has locus standi to seek a
declarator against the original vendor who had sold them to the person from
whom the applicant had purchased the goods.
[2] In June 2000 the appellant brought an application in the court a quo
for an interdict restraining the respondent from vindicating certain motor
vehicles pending the finalisation of an action it intended to institute.  The
appellant indicated that it would seek an order declaring that the respondent
had no right to vindicate the vehicles in question.  By agreement between
the parties the application was referred for the hearing of oral evidence on
certain defined issues.  The parties further agreed that the appellant would
seek the declarator on the same papers instead of instituting a  new action.
Since the respondent had objected to both the jurisdiction of the court and
the appellant’s locus standi, the court  a quo (Nicholson J) was asked to
decide these issues separately from the merits of the matter.  The learned
Judge upheld both points and dismissed the application with costs. The
appellant now appeals against that order with leave of this Court.

[3] The appellant is a close corporation dealing in motor vehicles and
sells them mainly to other dealers.  It has its principal place of business in
Durban.  The respondent is a registered company with its principal place of
business at 123 Wierda Road, Centurion, Gauteng.  The respondent also is a
trader in certain brands of motor vehicles.  It purchases its stock from the
manufacturers and sells only to accredited dealers.
[4] During July 1997 the respondent and a company called Maxine Motor
Holdings (Pty) Limited trading as Fourways Motors (‘Fourways Motors’)
concluded a written sale agreement in terms of which the respondent sold
new vehicles to Fourways Motors.  It was a term of the agreement that
ownership of the sold vehicles would remain vested in the respondent until
the full purchase price had been paid.  The vehicles forming the subject
matter of the present proceedings were sold by the respondent to Fourways
Motors in terms of that agreement.  Sixteen of those vehicles were further
sold to the appellant by Fourways Motors.  The appellant resold them to
other dealers who, in turn, resold the vehicles to members of the public.
[5] In June 2000 the respondent issued a notice to the effect that
Fourways Motors had failed to pay for some of the vehicles and that

ownership thereof remained with it.  As a result the respondent demanded
payment for the vehicles or their return from persons in whose possession
they were at the time of the notice.  This prompted the appellant to launch
the current proceedings on the basis that it is likely to face claims from its
purchasers for repayment of the amounts paid to it for the vehicles.
Meanwhile Fourways Motors was placed under liquidation after its
managing director had died under mysterious circumstances. He had
represented Fourways Motors at the conclusion of the sales of the vehicles
to the appellant.
[6] Regarding the issue of jurisdiction, the court a quo ruled that it had
jurisdiction only in respect of two vehicles which were found to be in its
territorial area of jurisdiction at the time the proceedings were launched. In
this regard Nicholson J said:
‘I am therefore of the view that because it was common cause that the respondent did not
reside in this Court’s jurisdiction that all the requirements for an interdict, including a clear
right, apprehension of harm and no alternative remedy, arose outside the geographical area
of this Court, it consequently had no jurisdiction to deal with all the vehicles save vehicles
numbers 5 and 14 in this application. For this additional reason the application falls to be
dismissed with respect to all the other vehicles.’

[7] As to the issue of locus standi, the learned Judge followed, amongst
others, the decisions of this Court in Lammers & Lammers  v Giovannoni
1955 (3) SA 385 (A) and Louis Botha Motors v James & Slabbert Motors
(Pty) Ltd 1983 (3) SA 793 (A), in which it was held that a seller’s liability
to his purchaser depends upon proof of a breach of the warranty against
eviction and that this warranty binds a seller only to the purchaser to whom
he had sold.  On the basis of this principle, the learned Judge held that since
the threat of eviction was not directed at the appellant’s purchasers, it had
no locus standi to restrain the respondent from vindicating the vehicles.
[8] Before us, counsel for the appellant submitted that the court a quo
had jurisdiction because the cause arose within its area of jurisdiction. He
mentioned various factors which he contended establish jurisdiction.
Alternatively, he submitted that since the court a quo had found it had
jurisdiction in respect of two of the vehicles in question, considerations of
convenience and common sense warranted that it should have jurisdiction in
respect of all the vehicles.  This, he argued, would prevent the proliferation
of proceedings.  Reliance was placed on Estate Agents Board  v  Lek 1979
(3) SA 1048 (A) at 1067 where Trollip JA said:

‘Now I have already pointed out that the relief against such adverse effect of the Board’s
decision which respondent was entitled to and did seek by way of an appeal under the Act
was not mandatory but rather declaratory or empowering in respect of the Board.  Having
due regard to that fact I think that the Court a quo had jurisdiction to entertain his appeal
simply on the ground that he was resident within its area of jurisdiction.  After all, that was
the Court immediately at hand and easily accessible to him and to which he would naturally
turn for aid in seeking to have the diminution in his legal capacity or personality remedied.
In the present context of our unitary judicial system of having one Supreme Court with
different Divisions, as set out earlier in this judgment, convenience and common sense, are,
inter alia, valid considerations in determining whether a particular Division has jurisdiction
to hear and determine the particular cause.’
[9] Regarding the main argument, counsel for the respondent submitted
that the factors referred to by the appellant were insufficient to justify the
conclusion that the cause indeed arose within its area of jurisdiction.  As to
the alternative argument, he submitted that the present matter is
distinguishable from Lek where the appellant’s right to carry on business as
an estate agent was affected within the area of jurisdiction of the court of
first instance and that, he argued,  is not the position in the present case.

[10] The limitation as to the territorial area of each High Court is imposed
by s 19(1)(a) of the Supreme Court Act 59 of 1959 (‘the Act’).  The section
provides that such court shall have jurisdiction over persons residing in and
causes arising within its area of jurisdiction.  For present purposes the
jurisdiction of the court a quo must be determined with regard to the
requirement of ‘causes arising’.  In the past, these words were construed to
mean proceedings over which a High Court has jurisdiction under the
common law (Bisonboard Ltd  v  K Braun Woodworking Machinery (Pty)
Ltd 1991 (1) SA 482 (A) at 486 and Ewing McDonald & Co Ltd v M & M
Products Co 1991 (1) SA 252 (A)). In the latter case Nienaber AJA said at
257F-G:
‘The expression “causes arising” has been interpreted in the Bisonboard judgment supra at
p 11 of the typescript copy “… as signifying not “causes of action arising” but “legal
proceedings duly arising”, that is to say, proceedings in which the Court has jurisdiction
under common law”. Since a Court under the common law would have had jurisdiction
over persons domiciled within its area of jurisdiction (who would include, although not
confined to persons “residing or being in”), “persons residing or being in” and “causes
arising” are not antithetical concepts;  the former is merely an elaboration of the latter.’
[11] Plainly, what is meant in the above interpretation is that ‘causes

arising’ does not refer to causes of action but to all factors giving rise to
jurisdiction under the common law. Of course, such factors do not exclude
a cause of action. It is by now well-established that, in appropriate cases, a
court which has jurisdiction over the area within which a cause of action
arose is competent to decide a matter on that basis alone.
[12] Against this background I turn to the issue of whether the appellant
had adequately established that the court a quo had jurisdiction under the
common law.  The sales between the appellant and the immediate
purchasers were concluded in Durban.  The appellant’s obligation under the
warranty against eviction flows from these sales. Some of the evictions
against the possession of the vehicles in question occurred in Durban. In my
view, these facts show a sufficient connection to the court a quo’s area of
jurisdiction so as to justify its competence under the common law to decide
the case .
[13] In addition, some of the vehicles which formed the subject matter of
these proceedings were found within the court  a quo’s area of jurisdiction.
As a result it held that it had jurisdiction in respect thereof. In order to
avoid a proliferation of applications, it would have been convenient for the

court a quo to deal with all the vehicles involved instead of confining itself
to only those found within its area of jurisdiction. Indeed the balance of
convenience has been regarded as a consideration in determining whether or
not a court has jurisdiction.  In Sonia (Pty) Ltd v Wheeler 1958 (1) 555 (A)
Price AJA said at 562F-G:
‘It is argued that if the money claims stood alone and there were no claim for cancellation,
the Court would not have jurisdiction. Assuming this to be so, assuming that the Eastern
Districts Court could not entertain a claim for a refund of the purchase price if that claim
stood alone, it nevertheless seems to me that every consideration of convenience and
common sense indicates that where such a money claim is as closely associated with a
claim for cancellation of the contract, as in this case, and is a consequential claim, following
on the cancellation, the same Court which has jurisdiction to decree cancellation should
have jurisdiction to hear the money claim for a refund of the purchase price, and to order
costs.’
See also Roberts Construction Co Ltd v Willcox Bros (Pty) Ltd 1962 (4) SA
326 (A).
[14] The primary object of the above approach is to avoid an unnecessary
proliferation of proceedings and the possibility of conflicting decisions on
the same cause of action, between the same parties. In the present case the

issues before the court a quo involved the same parties. The underlying
basis for the appellant’s case was its obligation under the warranty against
eviction in respect of each vehicle. All vehicles were originally sold by the
respondent to Fourways Motors which, in turn, resold them to the appellant.
The respondent contended that ownership in respect of all the vehicles did
not pass to the appellant and its successors in title because of the reservation
of ownership clause in the agreement between it and Fourways Motors
which remained in force due to the latter’s failure to pay the purchase price.
The strong consideration of convenience in this case impels me to the
conclusion that the court a quo had jurisdiction to entertain the application
in respect of all the vehicles.
[15] The next question relates to the appellant’s locus standi to seek a
declarator. The answer thereto depends mainly on the interpretation of s
19(1)(a)(iii) of the Act. Subsection (1) insofar as is relevant provides:
‘(1)(a) A provincial or local division shall have jurisdiction over all persons residing or
being in and in relation to all causes arising and all offences triable within its area of
jurisdiction and all other matters of which it may according to law take cognizance, and
shall, subject to the provisions of subsection (2), in addition to any powers or jurisdiction
which may be vested in it by law, have power ─

(i)
…
(iii)
in its discretion, and at the instance of any interested person, to enquire into and
determine any existing, future or contingent right or obligation, notwithstanding that such
person cannot claim any relief consequential upon the determination.’
[16] Although the existence of a dispute between the parties is not a
prerequisite for the exercise of the power conferred upon the High Court by
the subsection, at least there must be interested parties on whom the
declaratory order would be binding. The applicant in a case such as the
present must satisfy the court that he/she is a person interested in an
‘existing, future or contingent right or obligation’ and nothing more is
required (Shoba v Officer Commanding, Temporary Police Camp,
Wagendrif Dam 1995 (4) SA 1 (A) at 14F). In Durban City Council v
Association of Building Societies 1942 AD 27 Watermeyer JA with
reference to a section worded in identical terms said at 32:
‘The question whether or not an order should be made under this section has to be
examined in two stages. First the Court must be satisfied that the applicant is a person
interested in an “existing, future or contingent right or obligation”, and then, if satisfied on
that point, the Court must decide whether the case is a proper one for the exercise of the
discretion conferred on it.’

[17] It seems to me that once the applicant has satisfied the court that he/
she is interested in an ‘existing, future or contingent right or obligation’,
the court is obliged by the subsection to exercise its discretion. This does
not, however, mean that the court is bound to grant a declarator but that it
must consider and decide whether it should refuse or grant the order,
following an examination of all relevant factors. In my view, the statement
in the above dictum, to the effect that once satisfied that the applicant is an
interested person, ‘the Court must decide whether the case is a proper one
for the exercise of the discretion’ should be read in its proper context.
Watermeyer JA could not have meant that in spite of the applicant
establishing, to the satisfaction of the court, the prerequisite factors for the
exercise of the discretion the court could still be required to determine
whether it was competent to exercise it. What the learned Judge meant is
further clarified by the opening words in the dictum which indicate clearly
that the enquiry was directed at determining whether to grant a declaratory
order or not, something which would constitute the exercise of a discretion
as envisaged in the subsection (cf Reinecke v Incorporated General
Insurances Ltd 1974 (2) SA 84 (A) at 93A-E).

[18] Put differently, the two-stage approach under the subsection consists
of the following. During the first leg of the enquiry the court must be
satisfied that the applicant has an interest in an ‘existing, future or
contingent right or obligation’. At this stage the focus is only upon
establishing that the necessary conditions precedent for the exercise of the
court’s discretion exist. If the court is satisfied that the existence of such
conditions has been proved, it has to exercise the discretion by deciding
either to refuse or grant the order sought. The consideration of whether or
not to grant the order constitutes the second leg of the enquiry.
[19] The appellant, in the present case, was clearly interested in the
determination of the respondent’s alleged right of ownership on the vehicles
in question because its right to seek compensation and liability under the
warranty against eviction depended on the respondent’s right of ownership
being unassailable. Consistently with this position, the issues which the
appellant wanted to raise were: (a) that the respondent was not the owner of
the vehicles in question and that Fourways Motors was;  (b) that the
respondent was in any event estopped from denying Fourways Motors’
ownership. The appellant could obviously raise those issues in any of the
proceedings instituted by the respondent. Indeed the respondent’s counsel

conceded that the appellant could intervene in any of such proceedings.
However, counsel argued that instead of launching the present proceedings,
the appellant should have waited for its buyers first to institute proceedings
against it. I do not agree. It is clear from what is said above including the
concession by the respondent’s counsel that the appellant had interest in the
current proceedings. I can conceive of no basis on which such interest could
be suspended until the appellant’s buyers institute proceedings against it.
Section 19(1)(a)(iii) certainly does not require that as a preliminary step. It
follows that the court a quo erred in holding that the appellant had no locus
standi.
[20] In the view I take of the matter, it is not necessary to determine
whether the common law principle, confining claims for compensation
arising from the warranty against eviction to immediate sellers and
purchasers, is applicable to the present case. Suffice to say that its
application would not, in my view, affect the interest of the appellant in
these proceedings. If it applies, it would only mean that the appellant’s
liability is confined to its immediate purchasers.
[21] In the circumstances the court a quo should have dismissed the points

raised by the respondent and proceeded to a consideration of the merits,
thereby exercising its discretion as contemplated in s 19(1)(a)(iii).
[22] The following order is made:
1.
The appeal is upheld with costs including costs occasioned by the
employment of two counsel.
2.
The order of the court a quo is set aside and replaced with the
following order:
‘The points raised by the respondent in respect of jurisdiction and locus
standi are hereby dismissed with costs including costs of two counsel.’
___________________
C N JAFTA
JUDGE OF APPEAL

Concur:
HOWIE P
ZULMAN JA
MTHIYANE JA
MLAMBO JA