Prudential Authority of the South African Reserve Bank v Msiza and Another (78587/2018) [2021] ZAGPPHC 624 (21 September 2021)

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

CASE NUMBER: 78587/2018

NOT REPORTABLE

NOT OF INTEREST TO OTHER JUDGES

REVISED

21 SEPTEMBER 2021

In the matter between:

THE PRUDENTIAL AUTHORITY OF THE

SOUTH AFRICAN RESERVE BANK APPLICANT

AND

MAMPHE DANIEL MSIZA FIRST

RESPONDENT

ADVOCATE TERRY MOTAU SC (NO) SECOND

RESPONDENT

JUDGEMENT - APPLICATION FOR LEAVE TO APPEAL

TLHAPI J

[1] This is an application for leave to appeal against the judgment and orders granted on 11 August 2020 to the Supreme Court of Appeal alternatively, to the full court of this division. The application was opposed by the first respondent.

[2] It is contended on behalf of the first respondent that the applicant neglected to prosecute its appeal for a period of six months after lodging same on 25 August 2020, until enquiries were made in March 2021. An investigation by my registrar revealed that the applicant's documents had probably not reached the appeals registrar due to an incorrect email address.

[3] The grounds of appeal are based on stated errors in the judgment and orders which according to the applicant raise good reasons why leave should be allowed in terms of section 17 (1)(a)(i) and (ii) of the Superior Courts Act 10 of 2013 ("the Act"): The grounds are the following:

1.1 For the purposes of review proceedings, administrative action is not limited to such conduct as fall within the definition of PAJA only;

1.2 The interests of justice demand that the principle of the rule of law, and the rules of natural justice, be extended to individuals who are suspected of wrong doing by the investigator;

1.3 The applicant had a right to be heard before adverse findings, remarks or conclusions were made in an investigation conducted in terms of sections 136 and 137 of the Financial Sector Regulation Act 19 of 2017 ("the FSR Act")

1.4 An investigation conducted under the FSR Act, and the preliminary findings reached pursuant to it, can be equated to a commission of inquiry, and that the same procedural fairness requirements pertain in each;

1.5 The investigation conducted by the first respondent and/or the preliminary findings, remarks and/or conclusions were reviewable under PAJA or as the exercise of a public power, for want of procedural fairness.

1.6 Procedural fairness, in the context of this case, demanded that The Applicant be afforded a right to be heard before the first respondent issued his report;

1.7 Once the first respondent formed a suspicion that the applicant had a role in the impropriety at VBS, he had to verify the source and content of the WhatsApp messages which gave rise to such suspicion by obtaining the applicant's version.

1.8 The Court was not called upon to evaluate the truth of the versions set out in the affidavits, or to consider the justification of the contents of the reports set out in the second respondent's answering affidavit;

1.9 The contents of paragraph 73, 80, 81 and 90 of the report are reviewable."

[4] The Act provides:

"Section 17(1)

(1) Leave to appeal may only be given where the judge or judges concerned are of the opinion that:-

(a) (i) the appeal would have reasonable prospect of success, or

(ii) there is some other compelling reasons why the appeal should heard, including conflicting judgments on the matter under consideration.

(b) the decision sought on appeal does not fall within the ambit of section 16(2)(a); and

(c) where the decision sought to be appealed does no dispose of all the issues in the case, the appeal would lead to a just and prompt resolution of the real issues between the parties

[5] It is now trite that in granting leave to appeal in terms of section 17(1)(a)(i) of the Superior Courts Act of 2013 the threshold is now higher than existed under the previous Supreme Court Act of 1959. In the judgment of Bertelsmann J in Mont Chevaux Trust v Goosen 2014 JDR 2325 (LCC) the following is stated:

"It is clear that the threshold for granting leave to appeal against the judgment of a High Court has been raised in the New Act. The former test whether leave to appeal should be granted was a reasonable prospect that another court might come to a different conclusion, see Van Heerden v Cronwright and Others 1985 (2) SA 342 (T) at 343H. The use of the word "would" in the new statutes indicated a measure of certainty that another court will differ from the court whose judgment is sought to be appealed against." (my underlining)

[6] That the threshold has been raised has been confirmed, referred to and cited with approval in several judgements; Notshokudu v S [2016] ZASCA 112 (7 September 2016) at paragraph 2. In Caratco (Pty) Limited v Independent Advisory (Pty) Limited 2020 (5) SA 35 (SCA) the following is stated at paragraph [2]

"In order to be granted leave to appeal in terms of s 17(1)(a)(i) and s 17(1)(a)(ii) of the Superior Courts Act an applicant for leave must satisfy the court that the appeal would have a reasonable prospect of success or that there is some other compelling reasons why the appeal should be heard. If the court is unpersuaded of the prospects of success, it must still enquire whether there is a compelling reason to entertain the appeal. A compelling reason includes an important question of law or a discreet issue of public importance that will have an effect on future disputes. But here too, the merits remain vitally important and are often decisive."

[7] I have considered arguments of both counsel and their heads of argument. It is correct that the investigation was conducted in the public interest. The investigations conducted by the applicant were in my view akin to an investigation conducted in a commission of enquiry. The investigations were not confined to VBS. employees only. The interrogations and or consultations led by the second respondent involved the likes of Mr Matsepe, whom it is reported had ties with the first respondent. The question raised as I understand it is whether an implicated person should be given an opportunity to be heard before adverse remarks, findings or recommendations are made against him.

[8] While I still hold the view that an implicated person has the right to an opportunity to state his version even at investigation stage and, even where there is no certainty that the recommendations of the investigations would be adopted by the applicant, important issues are raised in the grounds stated above. Though distinguishable in fact, it seems to me that this issue is not settled in our law as seen from the authorities relied upon by the applicant in this application. I therefore conclude that there are reasonable prospects in the appeal and that leave should be granted.

[9] In the result the following order is made.

1. The application for leave to appeal to the full court of this division is granted and costs of this application shall be costs in the appeal.

TLHAPI VV

(JUDGE OF THE HIGH COURT)

MATTER HEARD ON: 08

JUNE 2021

JUDGMENT RESERVED ON: 08

JUNE 2021

ATTORNEYES FOR THE APPLICANTS: WERKSMANS ATT.

ATTORNEYS FOR THE RESPONDENTS: MALULEKE INC.