Blacher v Josephson (A15/22) [2023] ZAWCHC 27; 2023 (3) SA 555 (WCC) (14 February 2023)

Blacher v Josephson (A15/22) [2023] ZAWCHC 27; 2023 (3) SA 555 (WCC) (14 February 2023)

The court held that the arbitral award was based on a compromise agreement (third AOD) which itself derived from earlier unlawful credit agreements. The respondent was not registered as a credit provider as required by the National Credit Act, rendering the original agreements unlawful and invalid. The compromise did not transform the unlawful nature of the underlying agreements into something new and valid; it merely attempted to settle the contractual claims arising from those agreements. The award did not create a new, independent cause of action but rather reinforced the original, unlawful claims. Enforcing the award would contravene the objectives of the NCA and public policy by...

Citation
[2023] ZAWCHC 27
Parties
Appellant: Colin Stuart Blacher; Respondent: David Josephson
Court
Western Cape High Court, Cape Town
Jurisdiction
South Africa
Judgment Date
14 February 2023
Case Number
A15/22
Procedural Posture
Civil Appeal / Appeal Against Order Enforcing Arbitral Award
Outcome
Appeal upheld; order enforcing arbitral award set aside; application for enforcement dismissed; each party to pay their own costs.
Judges
Sher, Le Grange, Gamble
Legal Topics
National Credit Act, Unlawful Credit Agreement, Arbitration Award Enforcement, Compromise Agreement, Public Policy, Registration of Credit Provider
Banking and Finance Civil Procedure National Credit Act Unlawful Credit Agreement Arbitration Award Enforcement Compromise Agreement Public Policy Registration of Credit Provider

Case Brief

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Parties

Colin Stuart Blacher

Appellant

David Josephson

Respondent

Procedural Posture

Civil Appeal / Appeal Against Order Enforcing Arbitral Award

Legal Issues

  1. 1 Whether the arbitral award based on a compromise agreement is enforceable when the underlying credit agreements are unlawful under the National Credit Act.
  2. 2 Does a compromise agreement (third AOD) constitute a new, independent cause of action, or does the statutory prohibition permeate through to the award?
  3. 3 Is enforcement of the arbitral award contrary to public policy given the illegality of the underlying credit agreements?

Ratio Decidendi

The court held that the arbitral award was based on a compromise agreement (third AOD) which itself derived from earlier unlawful credit agreements. The respondent was not registered as a credit provider as required by the National Credit Act, rendering the original agreements unlawful and invalid. The compromise did not transform the unlawful nature of the underlying agreements into something new and valid; it merely attempted to settle the contractual claims arising from those agreements. The award did not create a new, independent cause of action but rather reinforced the original, unlawful claims. Enforcing the award would contravene the objectives of the NCA and public policy by...

Court Disposition

Appeal upheld; order enforcing arbitral award set aside; application for enforcement dismissed; each party to pay their own costs.

Orders

  • The appeal is upheld.
  • The order of the Court a quo is set aside and replaced with an order dismissing the application for enforcement of the arbitral award.