Microsure (Pty) Ltd and Others v Net 1 Applied Technologies South Africa Ltd

• Jurisdiction: South Africa
• Judge: Koen J
• Judgment Date: 22 April 2009
• Citation: 2010 (2) SA 59 (N)
• Docket Number: 4047/2008
• Hearing Date: 28 March 2009
• Counsel: MG Roberts SC (with him CG van der Walt) for the applicants. AJ Rall SC (with him RM van Rooyen) for the respondent.
• Court: Natal Provincial Division

Koen J:

[1] This is an application based on the mandament van spolie. The relief claimed by the applicants is in the following terms:

1.

I That this application be heard as one of urgency and that the rules relating to the service of these papers be and are hereby dispensed with in terms of rule 6(12).

2.

That a rule nisi be and is hereby issued calling on the respondent to show cause on the . . . day of March 2008 at 09h30 or so soon thereafter as counsel may be heard why an order in the following J terms should not be granted:

Koen J

(a)

That the respondent be and is hereby ordered and directed to A forthwith restore to the possession of the applicants the equipment referred to in clause 1.3 of the agreements pertaining to the undermentioned branches of the applicants, such to include but not limited to the re-activation of the point of sale terminals, bio-metric fingerprint scanners and merchant cards:

(i)

Ladysmith, KwaZulu-Natal; B

(ii)

Estcourt, KwaZulu-Natal;

(iii)

Mkondeni, Pietermaritzburg, KwaZulu-Natal;

(iv)

New Germany, KwaZulu-Natal;

(v)

Dundee, KwaZulu-Natal.

(b)

That the respondent be ordered to pay the costs of this C application, such to include the costs occasioned by the employment of two counsel.

(c)

That further or alternative relief be granted to the applicants.

3.

That the order set forth in para 2(a) above operate as an interim interdict pending the final determination of this application.'

[2] At the hearing of argument, only the first, second, fourth and seventh D applicants (the applicants) persisted with the claim for such relief.

[3] The respondent has for some time been a successful contractor in respect of the payment of government pensions and grants in KwaZulu-Natal, the Northern Cape and North West Province. Pension moneys E due to pension beneficiaries are paid by the government to the respondent. Merchants, such as the applicants, enter into agreements with the respondent to utilise its services to facilitate access by beneficiaries to their funds through the merchants. The funds are accessed not only through these merchants but also at certain pension paypoints where the respondent utilises its own system and equipment. F

[4] The salient features of the agreements concluded between the applicants and the respondent are described by both the applicants and the respondent. There is not much dispute, but where there are any factual disputes, the application must, on the authority of the decision in Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A), G be decided on the respondent's version.

[5] In terms of the agreements between the parties, each of the applicants was, inter alia:

(a)

Entitled to use a point of sale terminal, a biometric fingerprint scanner and merchant cards supplied to them by the respondent; H

(b)

the applicants had access to the respondent's server (computer) at its main place of business by way of an electronic on-line dial-up by a Telkom line or a GPRS connection.

[6] The practical implementation of the agreements entailed the following. I Pension and grant payments take place on specified dates. A beneficiary will know his or her pension or grant date at a particular venue. On that date or thereafter, the beneficiary would be entitled to approach one of the approved merchants for the payment of the pension or grant. In terms of the agreement concluded between a particular merchant and the respondent, the beneficiary could, instead of approaching a pension J

Koen J

A payout point, approach one of the applicant merchants. The merchant will then cause a dial-up connection to be made to the main server of the respondent. Once a dial-up connection has been made, the main server of the respondent would, by means of an electronic process, authenticate the merchant card. If the merchant card is authenticated and recorded as B 'alive', the pension beneficiary would be able to undertake a transaction on the point of sales device. With the merchant smart card remaining at the point of sales terminal, the beneficiary would insert his or her beneficiary card into the device. The device would then request the insertion of the beneficiary's finger into the biometric fingerprint scanner, which then electronically verifies and authenticates the fingerprint C with the cardholder's fingerprint stored on the beneficiary card. If the authentication process relating to the fingerprint is unsuccessful, no transaction can be concluded. If successfully authenticated, the main server of the respondent would cause the pension/grant entitlement to be reflected on the beneficiary's card. That would conclude the transaction.

D [7] In the event of the beneficiary requiring cash or purchases from the merchant, the beneficiary would insert his/her own card in the device and request a transaction, for example, the withdrawal of a certain portion of his pension payout. Upon such a request being made, the point of sales device prompts the beneficiary to insert his or her finger E into the biometric fingerprint scanner, at which stage there is an authentication of the beneficiary cardholder with the fingerprint requesting a withdrawal. If funds had been downloaded onto the beneficiary card and are available, it is possible for the merchant to effect payouts to the beneficiary without having to go on-line to the respondent's server. F Once the beneficiary has concluded a transaction, funds are transferred from the beneficiary card onto the merchant's card. The merchant utilises its own capital to effect payment to the beneficiary of the amount requested and approved. The equipment in the merchant's possession would enable it to continue processing cash withdrawals and sales, G regardless of whether or not it had access to the respondent's server.

[8] The merchant in turn is entitled, at an opportune time, to cause a further dial-up connection to be made to the main server of the respondent, to obtain settlement from the respondent in respect of the moneys paid to beneficiaries. Settlement takes place when requested on H the device, with the data being forwarded to the main server of the respondent. A calculation is done and the total amount paid out by the merchant on behalf of the respondent, less the relevant commission payable by the merchant to the respondent, is then transferred to the bank account of the relevant merchant, usually within 48 hours.

I [9] A merchant therefore cannot settle its merchant card or load social grants onto beneficiaries' smart cards if it does not have access to the respondent's server.

[10] It is not in dispute, or at least the version of the respondent, that:

(a)

The applicants are in possession of the equipment, being:

(i)

J the point of sale terminal;

Koen J

(ii)

a biometric fingerprint scanner; and A

(iii)

a merchant card which was originally activated by the respondent;

(b)

the applicants had peaceful and undisturbed possession of the...