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THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

JUDGMENT

Reportable

Case no: 937/18

In the matter between:

THE NATIONAL CREDIT REGULATOR
APPELLANT

and

LEWIS STORES (PTY) LTD

FIRST RESPONDENT
NATIONAL CONSUMER TRIBUNAL

SECOND RESPONDENT

Neutral citation:
The National Credit Regulator v Lewis Stores (Pty) Ltd (937/18)
[2019] ZASCA 190 (13 December 2019)

Coram
Wallis, Nicholls and Dlodlo JJA and Eksteen and Hughes AJJA

Heard:
11 November 2019

Delivered:
13 December 2019

Summary:
National Credit Act, 34 of 2005 (NCA) – interpretation – sections
100, 101(1)(a) and 102(1) – cost of credit – extended warranties in respect of goods
sold not void by virtue of incomplete or inaccurate testimonial of agreement – charging
subscriptions to Lewis Family Club not cost of credit – nature of proceedings before
National Consumer Tribunal – appeal to high court in terms of s 148(2)(b) of NCA –
high court sitting as court of first instance – leave to appeal to SCA in terms of
s 16(1)(a) of Superior Courts Act 10 of 2013.

___________________________________________________________________

ORDER
___________________________________________________________________

On appeal from: Gauteng Division of High Court, Pretoria (Janse van Nieuwenhuizen
J, Mokose AJ concurring, sitting on appeal from National Consumer Tribunal):

The appeal is dismissed with costs, including the costs of two counsel.
______________________________________________________________

JUDGMENT
______________________________________________________________

Eksteen AJA (Wallis, Nicholls and Dlodlo JJA and Hughes AJA concurring):

[1] The appellant (the regulator) applied to the second respondent (the tribunal),
pursuant to an investigation it had carried out, for a declarator that the first respondent,
a national retailer of furniture and electrical appliances (Lewis), had repeatedly
contravened ss 90, 91, 100, 101(1)(a) and 102(1) of the National Credit Act, 34 of
2005 (NCA) and for certain ancillary relief. The tribunal dismissed the application and
a subsequent appeal1 to the High Court, Gauteng, was unsuccessful. The current
appeal is with special leave of this court.2

The appeal
[2] In the appeal the regulator contended that:
(a) The charge levied by Lewis for certain ‘extended warranties’ in respect of goods
purchased from it constituted prohibited conduct as envisaged in ss 100, 101(1) and
102(1) of the NCA and that the extended warranties also contravened ss 90 and 91 of
the NCA; and

1 In terms of s 148(2)(b) of the NCA.
2 See the judgment by Wallis JA below in respect of the procedure for leave to appeal.

(b) The charging of subscriptions for membership of the Lewis Family Club (‘club fees’)
to customers who had entered into credit agreements with Lewis was prohibited
conduct as envisaged in ss 100, 101 and 102(1) of the NCA as these fees constituted
a prohibited ‘cost of credit’.
I will deal with each in turn, but before doing so need to deal with a cocnern regarding
the jurisdicion of the tribunal.

Jurisdiction of the tribunal
[3] In consequence of the findings of its investigation the regulator referred the
matter to the tribunal, ostensibly in terms of s 140(2)(b) of the NCA in which it sought,
inter alia, the following relief:
‘(a) A declaration that [Lewis] has repeatedly contravened s 90, 91, 100, 101(1)(a) and 102(1)
of the NCA;
(b) A declaration that [Lewis’s] repeated contravention of s 90, 91, 100,101(1)(a) and 102(1),
constitutes conduct prohibited by the NCA.
(c) An order directing [Lewis ] to refund all the customers who were, from 2007 to date,
unlawfully charged with costs and maintenance agreements by Lewis which ran concurrently
with the supplier/manufacturer warranty or had no term or period;
(d) An order directing [Lewis] to refund all the consumers who were, from 2007 to date,
unlawfully charged club and membership fees by Lewis.
(e) . . .
(f) An order declaring all the clauses or provisions relating to unlawful maintenance costs in
the maintenance agreements with [Lewis] referred to in the investigation report unlawful
provisions;
(g) An interdict restraining [Lewis] from, in future, charging consumers with unlawful
maintenance costs;
. . .’

[4] I have a concern regarding the jurisdiction of the tribunal to deal with matters
arising under the provisions of ss 90 and 91 and accordingly with the power of the
tribunal to have entertained the application or to have made orders in the terms sought.
The concern arises from the provisions of the NCA, specifically ss 164(1) and 90(4).

[5] The tribunal is a statutory body established by s 26 of the NCA. Its powers are
defined by the NCA. The functions of the tribunal are set out in s 27 and include to:

‘(a) adjudicate in relation to any –
(i) application that may be made to it in terms of this Act, and make any order provided for in
this Act in respect of such an application; or
(ii) allegations of prohibited conduct by determining whether prohibited conduct has occurred
and, if so, by imposing a remedy provided for in this Act.’

[6]       Section 150 of the NCA empowers the tribunal to make orders:
‘(a) declaring conduct to be prohibited in terms of this act.
(b) interdicting any prohibited conduct;
(c) to (g) . . .
(h) requiring payment from the consumer of any excess amount charged, together with interest
at the rate set out in the agreement; or
(i) any other appropriate order required to give effect to a right as contemplated in this act or
the Consumer Protection Act, 2008.’
‘Prohibited conduct’ is defined in the NCA as ‘an act or omission in contravention of
the Act’.

[7] Sections 90 and 91 of the NCA, relied upon by the regulator and referred to in
the relief claimed from the tribunal, are contained in part A of chapter 5 of the NCA.
Part A of chapter 5 is concerned with ‘unlawful’ agreements and provisions. Section
90(2) lists a number of provisions which would be unlawful if they were contained in a
credit agreement and s 91 is directed at preventing a credit provider from
circumventing the provisions of s 90 by recording provisions which would be unlawful
if included in a credit agreement in a separate supplementary agreement or unilateral
document signed by the consumer. 3

[8] In s 90(3) the NCA declares a provision which is unlawful in terms of s 90(2)
void as from the date that the provision purports to take effect.4 Notwithstanding this
provision, however, s 164(1) of the NCA provides:

3 Section 91(2) provides: ‘A credit provider must not directly or indirectly require or induce a consumer
to enter into a supplementary agreement or sign any document, that contains a provision that would
be unlawful if it were included in a credit agreement’.
4 Section 90(3) provides that: ‘In any credit agreement, a provision that is unlawful in terms of this
section is void as from the date that the provision purported to take effect’.

‘Nothing in this Act renders void a credit agreement or a provision of a credit agreement that,
in terms of this Act, is prohibited or may be declared unlawful unless a court declares that
agreement or provision to be unlawful.’
This, it seems to me, refers back to the provisions of s 90(4), which stipulates:
‘In any matter before it respecting a credit agreement that contains a provision contemplated
in ss (2), the court must –
(a) sever that unlawful provision from the agreement, or alter it to the extent required to render
it lawful if it is reasonable to do so having regard to the agreement as whole; or
(b) declare the entire agreement unlawful as from the date that the agreement, or amended
agreement, took effect,
and make any further order that is just and reasonable in the circumstances to give effect to
the principles of s 89(5) with respect to that unlawful provision or entire agreement, as the
case may be.’

[9] These provisions of the NCA are not a model of clarity. However, prima facie,
it appears that no unlawful provision, as envisaged in s 90(2), contained in a credit
agreement would be void, as envisaged in s 90(3), unless and until a court had
declared it to be unlawful.5 If this is correct, the tribunal does not have the jurisdiction
to declare any such provision unlawful, because that jurisdiction appears to vest in a
court and the tribunal is not a court. Moreover voidness is not automatic because
s 90(4) requires a court to alter the offending provision so as to render it lawful if it is
just and reasonable to do so. In that event the provision ceases to be unlawful.

[10] By virtue of the conclusion to which I have come on the issues canvassed ina
rgument it is not necessary to resolve this issue. It was not raised in the papers and
we have not had the benefit of full argument in that regard. Accordingly I refrain from
making a conclusive finding in this regard.

The extended warranties
[11] The regulator’s investigation6 into the extended warranties, leading to its
complaint initiated in its own name in terms of s 136(2) of the NCA, arose in

5 Michelle Kelly-Louw Consumer Credit Regulation in South Africa at 205.
6 In terms of s 15(f) of the NCA.

consequence of an article published in the newspaper which asserted that Lewis might
be engaging in prohibited conduct relating to, amongst other things, extended
warranties. The article recorded that information was obtained by a ‘mystery shopper’
who went to a Lewis outlet to purchase a television set. It proceeded to explain that a
number of secret shopping expeditions that were recorded, were conducted at Lewis
outlets. The investigator accordingly engaged with Lewis in respect of its extended
warranties. One McLoughlin, an accountant in the employ of Lewis, explained that all
goods sold by Lewis have a 12 month supplier’s warranty which operates from the
date of purchase. An ‘extended warranty and maintenance contract’ (extended
warranty), which endures for two years after the expiry of the supplier’s warranty, was
offered to purchasers in respect of the goods sold. The terms and conditions of the
extended warranty were explained to consumers prior to the conclusion of the
agreement and it was entirely optional whether the consumer accepted the warranty.

[12] The explanation did not allay the concerns of the regulator. In the conduct of its
investigation the regulator inspected a sample consisting of 22 customer files from
Lewis’s records. It is not clear how many of the consumers were interviewed, but only
three affidavits were obtained. The affidavits which were taken are so brief as to be of
little assistance. The investigation found no evidence of the conduct alleged in the
news article. However, the investigator reported that in five instances consumers said
that the ‘extended warranty’ was not explained to them and had they understood they
would not have taken it. Only one affidavit was obtained in support of this allegation.
The deponent merely stated that the extended warranty was ‘not fully explained’. What
was in fact said and understood by the parties, in particular with reference to the period
of its operation, was not explored in the affidavit. No mystery shopper was sent to
determine first-hand how employees of Lewis conducted themselves and the
recordings of the secret shopping expeditions do not appear to have attracted the
interest of the regulator.

[13] Instead, the regulator called for copies of a number of credit agreements and
extended warranties which Lewis duly provided. The extended warranty was reflected
on a pro forma document which provided blank spaces for the insertion of the period
of the warranty and the commencement and completion dates thereof. In the sample
of documents provided the regulator identified a number of extended warranties where

the sales staff had either not completed the blank spaces or where incorrect dates had
been inserted reflecting the purchase date as the commencement date for the
extended warranty. In the latter cases, ex facie the document, the extended warranty
would run concurrently with the supplier’s warranty for the first 12 months. The
regulator concluded that as a result the incomplete documents were void, as the term
of the extended warranty had not been agreed. It said that it would accordingly
constitute a contravention of ss 100, 101(1)(a) and 102(1) of the NCA to require
payment by the consumers in respect of the extended warranties. In instances where
the period of the extended warranty reflected on the document coincided with the
period of the supplier’s warranty the regulator concluded that it constituted a
duplication of the supplier’s warranty which had no value. Its view was therefore that
it unlawfully increased the cost of credit and that the conclusion of the extended
warranty agreement in that form constituted a contravention of ss 90 and 91 of NCA.

[14] Lewis, on the other hand, said that this was mistaken on the facts as well as
the law. They explained that it was their policy that consumers were informed of the
existence of the 12 month supplier’s warranty at the time of purchase. They were
simultaneously advised of the optional extended warranty which would provide them
with an additional two years’ cover for repairs or replacement of defective
merchandise. The existence of this optional additional two year warranty was
advertised both on in-store advertising boards and other point of sale material and
Lewis’s marketing brochures. The extended warranty, Lewis contended, was
incorporated as an integral part of the computer data capturing process of all credit
agreements. The start and end dates of every extended warranty was captured on the
computer system by reference to the date of the conclusion of the credit transaction
and the date of the anniversary following such conclusion at which time the supplier’s
warranty expired. The commencement and completion dates of the extended
warranties were reflected on the consumer’s monthly statements and Lewis sent SMS
communications to all of its customers who concluded extended warranties advising
them of the commencement and end dates. All its customers who opted to take out an
extended warranty accordingly enjoyed the benefit of a warranty for a period of two
years after the expiry of the supplier’s warranty.

[15] Lewis contended further that there was no requirement in the NCA for an
extended warranty to be recorded in writing as a mandatory formality. The true
agreement between the parties, irrespective of the errors which may have occurred in
certain of the documents, was that every consumer who had elected to purchase an
extended warranty would receive the benefit of such warranty for the full two year
period. The regulator, in its investigation, did not locate any consumer who contended
that they had understood it differently or who complained that they did not receive the
benefits bargained for. The high water mark of the evidence which the regulator
presented was a single affidavit which said that the warranty was not ‘fully explained’.
The alleged shortcomings in the explanation were not identified. There was
accordingly no real dispute of fact in respect of these issues.

[16] I turn to the provisions of the NCA relied upon by the regulator. Sections 100,
101 and 102 are contained in part C of chapter 5 of the NCA. Part C thereof deals with
the ‘consumer’s liability, interest, charges and fees’. The material portion of section
100 provides:
‘Prohibited Charges
(1) A credit provider must not charge an amount to, or impose a mandatory liability on, the
consumer in respect of –
(a) A credit fee or charge prohibited by this Act;
(b) . . . ‘
Section 101 is directed at the ‘cost of credit’ and the material portion provides:
‘(1) A credit agreement must not require payment by the consumer of any money or other
consideration, except –
(a) The principal debt, being the amount deferred in terms of the agreement, plus the value of
any item contemplated in s 102;
(b) . . .’

[17] Section 102, in turn, prescribes the fees and charges which may be levied in
respect of a credit agreement. The material portion of s 102 provides:
‘Fees and charges
(1) If a credit agreement is an instalment agreement . . . . the credit provider may include in
the principal debt deferred under the agreement any of the following items to the extent that
they are applicable in respect of any goods that are the subject of the agreement—

(a) . . .
(b) the cost of an extended warranty agreement;
(c) . . .
(2) A credit provider must not—
(a) . . .
(b) . . .
(c) charge the consumer an amount under ss (1) in excess of—
(i) the actual amount payable by the credit provider for the service, as determined after
taking into account any discount or other rebate or other applicable allowance received
or receivable by the credit provider; or
(ii) the fair market value of a service contemplated in subsection (1), if the credit
provider delivers that service directly without paying a charge to a third party.
(iii) . . .’
Section 102(1) expressly authorises a credit provider to include in the deferred debt
the cost of an extended warranty agreement. There is therefore no dispute between
the parties in respect of the extended warranties which reflected the correct dates and
duration in accordance with Lewis’s policy. This raised the question whether the
shortcomings contained in the documents embodying the disputed extended
warranties, rendered the charges levied in respect thereof prohibited charges. Only in
that event would the credit agreements contain unlawful terms.

[18] On behalf of the regulator it was argued that in fact and in law the relationship
between the affected consumers and Lewis in respect of the extended warranties was
regulated solely by the written agreements, which could not be overridden by extrinsic
evidence such as the recordals in the computer system or records of Lewis or even
what actually transpired. Resort was had to the parol evidence rule to sustain the
argument.

[19] Section 93 of the NCA requires a credit provider to deliver to a consumer a copy
of the document that records their credit agreement and it prescribes the form in which
various categories of credit agreements are to be concluded. The written document,
however, constitutes evidence of the agreement concluded and is not a constitutive
requirement for the validity of the contract.7 Like any other agreement, were a dispute

7 Compare s 164(1) of the NCA which provides:

to arise inter partes relating to the terms of the written document, either party would
be entitled to raise rectification of the document. Rectification corrects the document,
not the juristic act expressed by the document, and it does not amount to a variation
of the contract.8 The document purporting to reflect the contract must be rectified
before the question of compliance with formal requirements can be considered.9

[20] By parity of reasoning, where there is no dispute as to the content of the
extended warranty agreement (the legal act) in fact concluded between Lewis and the
consumers (as opposed to the document evidencing the agreement), logic dictates
that regard must be had to the extrinsic evidence in order to determine whether a
contravention of the NCA has occurred. In fact, on the papers, there is no evidence of
any consumer who was not advised at the time of making the election to purchase an
extended warranty that they would enjoy protection in terms of the warranty for two
years after the lapse of the supplier’s warranty. Lewis has consistently honoured the
extended warranty accordingly. In the circumstances I consider that the court a quo
correctly concluded that the evidence presented on behalf of Lewis established, that
notwithstanding the incorrect dates in some of the extended warranty agreements, the
terms of the actual agreements were honoured. Every consumer that entered into a
two year extended warranty agreement, received the additional two years upon the
expiry of the initial one year manufacturer’s warranty.

[21] The disputed documents, notwithstanding the errors, are indeed warranties as
envisaged in s 102(1)(b). The warranties have consistently been honoured for a period
of two years after the lapse of the supplier’s warranties and there is no evidence that
the amount charged in respect thereof exceeded their fair market value. Had a dispute
arisne between a customer and Lewis both parties would have been entitled to claim
rectification of the extended warranty document.  Even if that were not the case,
section 90(4) of the NCA, which is set out earlier, provides for a court considering an

‘Civil actions and jurisdiction
(1) Nothing in this Act renders void a credit agreement . . . that, in terms of this Act, is prohibited or
may be declared unlawful unless the court declares the agreement . . . to be unlawful’.
8 See Spiller v Lawrence 1976 (1) SA 307 (N) at 310 in respect of the need to distinguish between
‘contract’ in the sense of a contractual document and ‘the contract’ in the sense of the agreement
constituting the legal act.
9 See Van der Merwe, Van Huysteen, Reinecke, Lubbe Contract: General Principles 4ed (2011) at
157.

agreement which is alleged to contain a clause which is unlawful in terms of s 90(2),
to alter the offending provision so as to render it lawful, provided it is reasonable to do
so. In order to do so the court would be obliged to consider the interaction between
the parties when concluding the agreement. All the evidence which would be
admissible in a claim for rectification and any prejudice which any party may suffer if
the order is granted would have to be considered. I can conceive of no circumstances
in which it would not be more appropriate to alter the term in regard to the duration of
the extended warranty than those which prevail in this case. The parol evidence rule
cannot apply.

[22]       The reliance placed by the regulator on the provisions of ss 90 and 91 flowed
from its contentions in respect of ss 100, 101 and 102. Once it is accepted, as I have
found, that the errors in completing the document were resolved by the evidence of
the actual warranty agreements concluded, the regulator’s objections fall away.

Club fees
[23] The investigation embarked upon by the regulator revealed the existence of the
‘Lewis Family Club’ (the club) and that certain consumers were charged ‘club fees’ as
reflected on their monthly statements. It accordingly initiated a further complaint and
extended the mandate of the investigation of extended warranties to include the
question of club fees as it postulated that they increased the cost of credit.

[24] In scrutinising the sample of customer files obtained from Lewis the regulator
identified positive evidence of two consumers who were being charged club fees
reflecting on their monthly statements, but not on the copies of the consumer credit
agreements. The investigation by the regulator revealed nothing more. The regulator
contended that charging a club fee was part of the cost of credit as the fees were
included in the statements of account. It therefore asserted that the mere charging of
a club fee to consumers was not permitted by ss 100, 101 and 102(1) of the NCA,
whether or not membership of the club was optional.

[25] The club is an association which affords certain benefits to its members
including the opportunity to participate in regular draws to win attractive prizes. There

may be some scepticism about the real benefits of belonging to the club, however,
that is not an issue in the present matter.

[26] The evidence on behalf of Lewis relating to the nature of the club membership
and the charging of fees was uncontradicted. Club membership is open to any person,
whether or not they be a credit customer of Lewis. Whilst membership of the club is
offered to consumers seeking credit, in the same manner as it is to any other
customers, the consumer has the exclusive entitlement to determine whether or not
they wish to take up the offer. When a person elects to join the club a completely
separate contract is concluded between the parties. Membership is not in any way
dependent upon the conclusion of a credit agreement and is open to members of the
public, whether or not they are customers of Lewis. The duration of the club
membership has no bearing on the duration of any credit agreement concluded and
any member is entitled to terminate their membership on 30 days’ notice. A
subscription fee (club fee), payable in advance, is levied in the amount of R25 per
month to all members of the club. Where a member of the club defaults on the payment
of the monthly club fees, no interest is charged on arrears and, if they fall into arrears
in respect of three months’ club fees, their membership is automatically terminated. In
such instances the unpaid club fees are written off and are not recovered from the
former member.

[27] The monthly statements of account sent to credit consumers reflect the club fee
payable separately from the outstanding amounts on any credit agreements and
reveal that no interest is levied on arrear club fees. It is accordingly not included in the
deferred amount as envisaged in s 101(1).

[28] On behalf of the regulator it was argued that the agreement between
consumers and Lewis in respect of club fees was a prohibited supplementary
agreement, as envisaged in s 91(2) of the NCA. This was so, so the argument went,
as one of the terms contained in the small credit agreement which Lewis concluded
with consumers provided consumers with the option to agree to join the club and to
pay the club fee.

[29] There are a number of difficulties with this argument. Firstly, in its founding
papers the regulator placed no reliance on the provisions of ss 90 or 91 in respect of
club fees. Lewis has accordingly not addressed the issue in its answering papers. In
Swissborough Diamond Mines (Pty) Ltd and others v Government of the RSA 1999
(2) SA 279 (T) Joffe J correctly summarised the requirements for founding papers thus:
‘It is trite law that in motion proceedings the affidavits serve not only to place evidence before
the Court but also to define the issue between the parties. In so doing the issues between the
parties are identified. This is not only for the benefit of the Court but also, and primarily, for the
parties. The parties must know the case that must be met and in respect of which they must
adduce evidence in the affidavits. In Hart v Pinetown Drive-Inn Cinema (Pty) Ltd 1972 (1) SA
464 (D) it was stated at 469C-E that
“where proceedings are brought by way of application, the petition is not the equivalent of the
declaration in proceedings by way of action. What might be sufficient in a declaration to foil an
exception, would not necessarily in a petition, be sufficient to resist an objection that a case
has not been adequately made out. The petition takes the place not only of the declaration but
also of the essential evidence which would be led at a trial and if there are absent from the
petition such facts as would be necessary for determination of the issue in the petitioner’s
favour, an objection that it does not support the relief claimed is sound.”
An applicant must accordingly raise the issue upon which it would seek to rely in the founding
affidavit. It must do so by defining the relevant issues and by setting out the evidence upon
which it relies to discharge the onus of proof resting on it in respect thereof.’10
The unlawfulness in terms of ss 90 and 91 accordingly did not arise.

[30] Secondly, the argument was factually incorrect. The small credit agreement
provided that the terms and conditions that applied in respect of the credit agreement
were contained in the contract folder, which terms and conditions had to be read as
forming part of the agreement. The contract folder consisted of: The terms and
conditions – small credit agreement, customer protection insurance terms, the
certificate of insurance, the notice of disclosure to short term policyholders and the
maintenance agreement, if selected. It proceeded to record that:
‘The terms and conditions relating to the amount of the principal debt, the number and
frequency of instalment payments, the date of the first and last payments and all such other
additional charges that the seller may charge to the purchaser are contained in the pre-

10 Swissborough at 323G–324A.

agreement statement and quotation attached thereto, which terms and conditions must be
read as forming part of this credit agreement’.
There is no reference to the club fees in the pre-agreement statement and quotation,
nor in any of the documents that form part of the agreement. During the credit
application procedure, however, a manager’s interview sheet is utilised as a checklist
to obtain information from the consumer. In the course thereof, as reflected on the
sheet, a credit consumer is afforded the option to join the club and, in the event of
them electing to do so they are required to confirm that they can afford the monthly
fee of R25. This form, reflecting the information obtained from customers, is signed by
both the manager and the consumer. It is not, however, the membership contract with
the club and no obligation arises from the completion of the document.

[31] Thirdly, a ‘supplementary agreement’ is not defined in the NCA. The ordinary
principles applicable to the interpretation of legislation find application in respect of the
NCA.11 Moreover s 2 of the NCA enjoins a court in interpreting the provisions of the
Act to do so in a manner that gives effect to the purposes of the Act set out in s 3
thereof. The overriding purpose of the Act set out in s 3 is ‘to promote and advance
the social and economic welfare of South Africans, promote a fair, transparent,
competitive, sustainable, responsible, efficient, effective and accessible credit market
and industry and to protect consumers’.

[32] The starting point in interpreting the legislation, of necessity, is to give
consideration to ‘the language used in the light of the ordinary rules of grammar and
syntax; the context in which the provision appears, the apparent purpose to which it is
directed and the material known to those responsible for its production.’12 The Shorter
Oxford English Dictionary13 defines ‘supplementary’ as ‘of the nature of, forming, or
serving as, a supplement’. ‘Supplement’, in turn, is defined as ‘something added to
supply a deficiency; an auxiliary means, an aid;’ or ‘a part added to complete a literary
work or any written account or document.’ Giving the term its ordinary English meaning
in the context of chapter 5 of the NCA, an agreement can only, in my view, be

11 The principles are summarised in Natal Joint Municipal Pention Fund v Endomeni Municipality
[2012] ZASCA 13; 2012 (4) SA 593 (SCA) para 18 and Bothma-Batho Transport (Edms) Bpk v S
Bothma en Seun Transport (Edms) Bpk [2013] ZASCA 176, 2014 (2) SA 494 (SCA) para 10.
12 Natal Joint Municipal Pension Fund 603 – 604 at para 18.
13 Shorter Oxford English Dictionary 3rd ed, reprinted with revised etymologies and addenda, A73;

‘supplementary’ if it deals with the same subject matter as the main agreement, ie the
regulation of the credit and repayment thereof. Examples of supplementary
agreements that spring to mind would be documents acknowledging that no
representations had been made to the consumer, a waiver of statutory rights or an
acknowledgment of receipt of goods in good order and condition.

[33] I have referred earlier to the provisions of ss 89, 90 and 91 of the NCA. Section
91(2) provides that the credit provider must not directly or indirectly require or induce
a consumer to enter into a supplementary agreement or sign any document that
contains a provision that will be unlawful if it were included in the credit agreement.

[34] Counsel for the regulator was constrained to acknowledge that the signing of
the manager’s interview sheet (or the club membership agreement) did not constitute
a supplementary agreement. He contended nevertheless that Lewis, directly or
indirectly, induced consumers to sign the document which contained the election to
join the club, which he contended would be unlawful if it were included in the credit
agreement. The document envisaged in s 91(2) is, however, in the context of NCA,
prohibited if it includes a term which is declared unlawful by the provisions of s 90(2).
Section 91 is found in part A of chapter 5 of the NCA to ss 89 and 90. It seeks to
prevent the circumvention of the provisions of ss 89 and 90 by means of the expedient
of separating certain undertakings from the agreement itself. It must nevertheless
relate to the same subject matter, being the terms of the credit. The election to join the
club is not in any manner related to the terms of the credit facility granted. In these
circumstances the argument cannot succeed.

[35] Reverting to the material provisions of ss 100, 101 and 102(1), set out earlier,
these provisions are contained in part C of chapter 5 and are concerned with the
consumer’s liability, interest, charges and fees in respect of the credit facility. These
sections relate to payments and charges made in respect of the credit facility. Section
101 places a limitation on what may be contained in the credit agreement. It does not
purport to prohibit a credit provider from engaging in other business, unrelated to the
credit facility, with a consumer.

[36] The prohibited charge (envisaged in s 100(1)(a)) contended for by the regulator
is a charge made in conflict with s 101(1). The material portion of s 101(1) prohibits a
credit provider from ‘requiring payment’ by a consumer under a credit agreement of
any money or other consideration except the principal debt, being the amount deferred
in terms of the agreement, plus the value of any item contemplated in s 102. It is
common cause that club fees are not an item contemplated in s 102. On the
undisputed facts set out on behalf of Lewis, however, the membership agreement
between consumers and the club is an agreement unrelated to the credit facility. It
deals with a different subject matter. The club fees are payable in advance and do not
constitute credit. No interest is raised on the arrears and in the event of them not being
paid they are not recovered. In these circumstances it cannot be said that a consumer
is ‘required’ to pay the club fee; nor that it increases the cost of credit; nor can it be
said that the club fee, if it is paid, is paid under the credit agreement. The mere fact
that some consumers are introduced to the notion of club membership during the credit
application process can have no bearing on the interpretation of the provisions of the
NCA.

[37] In the result the appeal is dismissed with costs, including the costs of two
counsel.

________________________
J Eksteen
Acting Judge of Appeal

Wallis JA (Nicholls and Dlodlo JJA and Eksteen and Hughes AJJA concurring):

[38] I have read the judgment prepared by my colleague Eksteen AJA on the merits
of this appeal and concur in the judgment and the outcome. This judgment deals with
the question whether the procedure followed to bring this case before this court was
correct. It came before us by way of special leave to appeal granted by this court in
terms of s 16(1)(b) of the Superior Courts Act 10 of 2013 (the SC Act). In the course

of preparation for the appeal it transpired that in previous cases involving appeals to
this court against decisions of the high court under s 148(2)(b) of the NCA
inconsistent approaches to obtaining leave to appeal had been followed. In Barko14
the appeal was brought on the basis of leave granted by the high court under
s 16(1)(a) of the SC Act, but in NCR v SAFPS15 special leave to appeal under
s 16(1)(b) of the SC Act was sought and granted. It is desirable to resolve this issue
and determine whether it affects the appeal.

[39] Section 16(1) of the SC Act reads as follows:
‘(1)  Subject to section 15 (1), the Constitution and any other law—
(a)
an appeal against any decision of a Division as a court of first instance lies, upon leave
having been granted—
(i)
if the court consisted of a single judge, either to the Supreme Court of Appeal or to a
full court of that Division, depending on the direction issued in terms of section 17 (6); or
(ii)
if the court consisted of more than one judge, to the Supreme Court of Appeal;
(b)
an appeal against any decision of a Division on appeal to it, lies to the Supreme Court
of Appeal upon special leave having been granted by the Supreme Court of Appeal’.

[40] Under ss 17(1) and (2) of the SC Act, the judge or judges who heard the case
at first instance may grant leave to appeal, if they are of the opinion that the appeal
would have reasonable prospects of success, or that there is some other compelling
reason why the appeal should be heard. If the first instance court refuses leave to
appeal it may be sought from the SCA, where two judges appointed by the President
of the SCA consider the application. If special leave is required in terms of s 16(1)(b),
an application must be made to the SCA in terms of s 17(3) of the SC Act for the grant
of such leave. Special leave imposes a more stringent test for the grant of leave to

14 Barko Financial Services (Pty) Ltd v National Credit Regulator [2014] ZASCA 114; [2014] 4 All SA
411 (SCA).
15 National Credit Regulator v Southern Africa Fraud Prevention Services NPC [2019] ZASCA 92, 2019
(5) SA 103 (SCA).

appeal. There must be both reasonable prospects of success and compelling
circumstances justifying the grant of special leave.16

[41] The NCA provides, in s 148(2) that a participant in a hearing before a full panel
of the National Consumer Tribunal may:
‘(a)
apply to the High Court to review the decision of the Tribunal in that matter;
(b)
appeal to the High Court against the decision of the Tribunal in that matter, other than
a decision in terms of section 13817 or section 69(2) or 73 of the Consumer Protection Act,
2008, as the case may be.’
The decision of the Tribunal in issue in this case is not one that is excluded from the
right of appeal.

[42] The Tribunal is not a court or part of the judicial system set out in s 166 of the
Constitution. It does not exercise judicial authority in terms of s 165 of the
Constitution. Instead it is an independent and impartial tribunal of the kind
contemplated in s 34 of the Constitution. While its role generally is one of
adjudication,18 it is nonetheless a body of an administrative nature in the same way
as the CCMA is an administrative body.19 As such its proceedings are subject to
judicial review and this is recognised in s 148(1)(a).

[43] Within the framework of the judicial system, a decision by a court on appeal to
it within the meaning of s 16(1)(b) of the SC Act is either an appeal from a magistrates’
court or an appeal from a high court sitting at first instance. The question raised by
this case is whether such appeals are the only appeals with which s 16(1)(b) is
concerned, or whether it applies equally to statutory appeals from persons, bodies or
tribunals falling outside the judicial system.

[44] Statutes other than the NCA provide for appeals to the high court from decisions
of administrative bodies or officials. There is a diverse range of such provisions. One

16 Westinghouse Brake and Equipment (Pty) Ltd and Another v Bilger Engineering (Pty) Ltd 1986 (2)
SA 555 (A) at 560E-H; Van Wyk v S; Galea v S [2014] ZASCA 152; [2014] All SA 708 (SCA); 2015 (1)
SACR 584 (SCA) para 21.
17 Section 138 deals with consent orders.
18 Section 27 of the NCA.
19 Sidumo and Others v Rustenburg Platinum Mines Ltd and Others [2007] ZACC 22; 2008 (2) SA 24
(CC) paras 81-88 and 122-141.

instance is the appeal against decisions made by the registrar under s 33 of the
Registration of Copyright in Cinematographic Films Act 62 of 1977. The statute
provides that an appeal to the high court lies against a decision by the registrar.20
Other statutes have similar provisions. Under s 20 of the Health Professions Council
Act 56 of 1974 an appeal lies to the high court against the decision of the Health
Professions Council, a professional board or a disciplinary appeal committee. Under
s 24(1) of the Pharmacy Act 53 of 1974 there is a similar right of appeal to the high
court against any decision by the South African Pharmacy Council. The decisions
thus rendered subject to appeal range from registration issues to disciplinary matters.
By no means all are issues of law.

[45] When magistrates conduct enquiries in terms of s 9, read with ss10 or 12, of
the Extradition Act 67 of 1962, they are acting in an administrative capacity. Their
decision is confined to whether the person concerned is liable to extradition, after
which the decision on extradition itself is that of the Minister. In terms of s 13 of the
Act the decision of the magistrate is appealable to the high court having jurisdiction.
As the magistrate was not sitting as a court this is not the same as an appeal, whether
civil or criminal, from a magistrates’ court to the high court.

[46]  A further example, in what cannot purport to be a comprehensive survey, is
provided by s 21(1) of the Films and Publications Act 65 of 1996, which provides that
if the Review Board classifies a film as XX or X18, the publisher or distributor, or
person who applied for its classification, may appeal to the high court against the
decision. The court’s decision on the issue of classification is then deemed to be a
decision by the Film and Publication Board. This is a decision of a purely
administrative nature. So is the decision of the Air Services Licensing Council to grant
or refuse a licence to a prospective air services provider in terms of s 16 of the Air
Services Licensing Act 115 of 1990. However, it too is the subject of an appeal to the
High Court in terms of s 25 of that Act.

20 The registrar is the Commissioner appointed under s 189 of the Companies Act 71 of 2008 as the
head of the Companies and Intellectual Property Commission (the CIPC).

[47] Some statutes are alive to problems that may arise from granting an appeal
directly to the high court and address this specifically. Thus under the Patents Act 57
of 1978 decisions by the registrar are appealable to a Commissioner of Patents21 and,
under s 76, decisions of the Commissioner are appealable to the court. Under s 29
of the Copyright Act 98 of 1978, the Commissioner of Patents is also the Copyright
Tribunal and decisions by the Commissioner are likewise appealable to the court.
However, both statutes provide that the appeal is to be noted and prosecuted ‘in the
manner prescribed by law for appeals against a civil order or decision of a single
judge’. The appeal accordingly starts on the footing that it is dealt with from a
procedural perspective as if the Commissioner were a court. That is not surprising
given that the Commissioner is a judge or acting judge of the high court. By way of
contrast under s 42 of the Designs Act 195 of 1993 a decision by the registrar is
appealable to the court and the registrar’s decision is deemed to be an order or
judgment of a magistrate.

[48] There does not appear to be any authority on the meaning to be accorded the
words ‘given on appeal to it’ in terms of s 16(1)(b) or to whether any of these various
kinds of appeals fall within those words or are treated when they come before the
high court as being heard by a court of first instance. The same words appeared in
s 20(4) of the Supreme Court Act 59 of 1959, the predecessor of the SC Act. It read:
‘No appeal shall lie against a judgment or order of the court of a provincial or local division in
any civil proceedings or against any judgment or order of that court given on appeal to it
except—
(a)
in the case of a judgment or order given in any civil proceedings by the full court of
such division on appeal to it in terms of subsection (3), with the special leave of the appellate
division;
(b)
in any other case, with the leave of the court against whose judgment  or order the
appeal is to  be made or, where such leave has been refused, with the leave of the appellate
division.’

21 The Commissioner of Patents is a judge or acting judge designated by the Judge President of the
Gauteng Division of the High Court to perform the functions of the Commissioner. See s 8 of the
Patents Act.

[49] This provision confined the need to obtain special leave to appeal under sub-
sec (a) to cases of an appeal to the full court against a decision by the high court.
Statutory appeals did not fall under this section and accordingly, even if they were
heard by the full court, that court was entitled to grant leave to appeal to this court
under sub-sec (b).22 For that reason the appeal to this court in De Beer23 proceeded
with the leave of the high court that had determined the appeal from the Medical and
Dental Council under s 20 of Act 56 of 1974.

[50]  In principle there are a number of reasons why s 16(1)(b) of the SC Act should
be confined to applications for leave to appeal against decisions by the high court
given on appeal to it from other courts within the judicial system, that is, the
magistrates’ courts and full bench appeals from the high court sitting at first instance.
The first is that there is a fundamental difference between an appeal from a court and
an appeal from a body outside the judicial system. The latter may be an administrative
tribunal, or a board or official dealing with purely administrative matters, where the
decision in question may have little or no legal content, but may be a matter of
administrative discretion. The ‘appeal’ brings it before the court for the first time. By
contrast, once a matter has been heard by a court of first instance and the dissatisfied
party has exercised a right of appeal, the right to a further appeal should depend not
only on the question whether there are reasonable prospects of success, but also on
the existence of some compelling circumstances warranting a further appeal. The
reason for such a limitation lies in the principle that there should be finality in
litigation.24 Accordingly the law places a limit on the number of appeals that may be
pursued within the court system and empowers appellate courts to regulate the cases
that come to them by way of provisions requiring leave to appeal from those courts.

[51]  The second point of principle lies in the fact that an appeal within the justice
system is a clearly defined process, whereby the correctness of the decision of the
court appealed from is assessed within defined boundaries. The appeal proceeds on
the record of the proceedings in the lower court and the factual findings of that court
and its exercise of discretion in reaching its decision are given respect and only

22 New Balance Athletic Shoe Inc v Dajee NO and Others 2011 BIP 139 (NG).
23 De Beer v Die Raad vir Gesondheidsberoepe [2006] ZASCA 115; 2007 (2) SA 502 (SCA) para 1.
24 Nestle (South Africa) (Pty) Ltd v Mars Inc 2001 (4) SA 542 (SCA) para 16.

departed from on limited grounds. That is by no means true of statutory appeals from
tribunals and officials.

[52]  The first issue in a statutory appeal is to ascertain the nature of the right of
appeal conferred by the statute. In determining that question courts follow the
taxonomy laid down by Trollip J in Tikly v Johannes.25 Broadly speaking there are
three possibilities. The appeal may be a complete rehearing and fresh determination
of the subject of the appeal. It may be an appeal in the conventional sense of a
rehearing on the merits, but on the same evidence and information as was before the
original decision-maker, subject to the limitation inherent in the decision-maker not
necessarily being in the same situation as a court of record. Thirdly the appeal may
be a review, involving a limited rehearing, with or without additional information and
evidence, to examine not the merits of the decision, but the manner in which it was
arrived at. Unlike appeals within the judicial system therefore statutory appeals may
have a widely varying nature and involve different types of hearing.

[53] The third point concerns the nature of a statutory appeal and the terms in which
the right of appeal is granted. These may, when properly construed, mean that the
appeal to the high court is final and not subject to any further appeal at all. That may
especially be the case when the statute provides that the decision by the court will
stand in the place of or be deemed to be the decision of the original decision-maker.26
If the appeal to the high court is taken to result in a decision by that court given on
appeal to it there will be conflict between the statute conferring the right of appeal and
the SC Act. That is manifestly undesirable.

[54] The fourth point is that it is almost inevitable, as recognised expressly in
s 148(2)(a) of the NCA, that the decisions of statutory bodies and officials in these
matters will constitute administrative action and be subject to judicial review under
the provisions of PAJA.27 Such proceedings are conventionally pursued in the high

25 Tikly and Others v Johannes NO and Others 1963 (2) SA 588 (W) at 590H-591A.
26 See for example The Minister of Labour v Building Workers’ Industrial Union 1939 AD 328 and Rohrs
v Newmarch 1915 AD 108. Statutory appeals against decisions by officials or boards in licencing cases
were held not to raise a lis or dispute between the applicant for a licence and the licencing authority.
Accordingly decisions by the court given on appeal from the licencing authority were not appealable.
See Maske v The Aberdeen Licensing Court 1930 AD 30 at 36 and the authorities there referred to.
27 The Promotion of Administrative Justice Act 3 of 2000.

court before a single judge sitting at first instance. That judge will deal with the
question of leave to appeal against the judgment and may direct that it be heard
before either a full court or this court, depending on the nature and complexity of the
issues raised. It seems anomalous that, if the dissatisfied party was content to
proceed by way of an appeal on the record of the administrative decision-maker, any
appeal flowing from the judgment would require special leave to appeal from this
court, when common experience teaches that there may be considerable overlap
between appeal and review grounds.

[55] Finally, I revert to the point made earlier that the test for granting special leave
to appeal is more stringent than the test for leave to appeal, Given the fact that
restrictions on the right of appeal have been held by the Constitutional Court to
constitute a limitation on the right of access to courts under s 34 of the Constitution,
it seems to me that we should prefer an interpretation of s 16(1)(b) that least restricts
the ability of a disappointed litigant to seek relief by way of an appeal within the justice
system.

[56] For those reasons I conclude that an appeal from the decision of a high court
under s 148(2)(b), whether constituted of a single judge, or two judges, or as a full
court, lies with leave of that court sitting as a court of first instance. Such leave should
be sought in terms of s 16(1)(a) of the SC Act and not by way of an application for
special leave to appeal from this court.

[57] That leaves the disposal of this appeal. The parties were understandably
anxious that having come this far they should receive a judgment on the merits. They
came in good faith having received special leave to appeal from this court, without
any query being raised as to the correctness of that approach until shortly before the
hearing. To strike the appeal from the roll only for them to retrace their steps through
the high court and, if refused leave, back to this court, but against a lesser standard
for the grant of leave to appeal, would be a gross technicality and waste of resources.
Even more so would be a repeat hearing of an issue that has been fully argued.

[58] It seems to me that this constitutes special circumstances in which the court
can in the exercise of its inherent jurisdiction to regulate its own procedure condone

the irregular manner in which this appeal reached us. There are clear indications in
the high court’s judgment that, had leave to appeal been sought from it, the
application for leave would have been dismissed. Inevitably that would have led to an
application for leave to appeal to this court and, given that an application for special
leave was granted, the conclusion must be that ordinary leave would have been
granted. Accordingly in the special circumstances of this case, which will not be
repeated, because the issue of the proper approach to the application of s 16(1)(b)
will be resolved by this judgment, the appeal should be dealt with on its merits in
accordance with the judgment of Eksteen AJA.

________________________
M J D WALLIS
JUDGE OF APPEAL

APPEARANCES:

For Appellant:

P L Carstensen SC
Instructed by:

Mothle, Jooma, Sabdia, Pretoria
Matsepes Inc, Bloemfontein

For Respondent:

A P H Cockrell SC with P B J Farlam SC
Instructed by:

Edward Nathan Sonnenbergs Inc, Pretoria

Lovius Block, Bloemfontein