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[2014] ZAGPJHC 105
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Capital Acceptances (Pty) Ltd v Velakancane Trading CC and Others (160/2014) [2014] ZAGPJHC 105 (2 May 2014)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT
OF SOUTH AFRICA
(GAUTENG LOCAL
DIVISION, JOHANNESBURG)
CASE
NO: 160/2014
DATE:
02 MAY 2014
In the matter
between
CAPITAL
ACCEPTANCES (PTY)
LTD
...................................................
APPLICANT
And
VELAKANCANE
TRADING CC
.........................................
FIRST
RESPONDENT
KWENZEKILE
MTHETHWA
........................................
SECOND
RESPONDENT
VELAKANCANE
MTHETHWA
.......................................
THIRD
RESPONDENT
Contract –
Lease – Practice - Attachment of grader pursuant to
cancellation of lease agreement pending proof of damages
- two
defences raised by lessee - first defence justus error - requirements
of - absence of proof of reasonable mistake - defence
rejected -
second defence - alleged overcharge in respect of VAT - VAT correctly
charged on total purchase price although portion
thereof subsidised -
defence unsustainable - application granted
J U
D G M E N T
VAN OOSTEN J:
[1] In this
application the applicant seeks an order for the attachment and
return of a certain Bell grader pursuant to its cancellation
of a
written lease agreement entered into between the applicant as lessor
and the first respondent as lessee. The second and third
respondents
duly bound themselves as sureties and co-principal debtors in favour
of the applicant for the due and punctual payment
by the fist
respondent to the applicant of all a mounts due under the lease
agreement.
[2] The respondents
have raised two defences: firstly, that the lease agreement was
signed by the third respondent on behalf of
the first respondent
‘under the reasonable impression and belief that the first
respondent was purchasing a New Bell Grader….’
and,
secondly, that the applicant has ‘overcharged’ the first
respondent with the sum of R140 000-00, being value added
tax in
respect of a portion of the purchase price of the grader that was
financed by the Department of Trade and Industry under
a scheme of
assistance to BEE businesses. Each of the defences will now be
considered separately.
[3] The first
defence in essence concerns the nature of the agreement: the written
signed lease agreement clearly and beyond any
doubt both in its
heading (Lease Agreement) and terms (with reference to inter alia the
lessor, the lessee and rentals payable)
refers to and deals with a
lease agreement. Ownership of the grader is specifically dealt with
in clause 3 of the agreement: it
remains with the applicant ‘at
all times’. As opposed hereto none of its provisions can, in
any way, be reconciled
with an agreement of purchase and sale. The
respondents contend that an agreement of purchase and sale was in
fact concluded which
was brought to the fore when, after cancellation
of the agreement by the applicant, it dawned on them that in terms of
the lease
agreement the grader had to be surrendered to the applicant
upon expiry of the lease. No reliance is placed on rectification of
the lease agreement and it has not been alleged that a common mistake
had occurred. Nor has it been alleged that the respondents
were
misled in any way. The defence raised, at best for the respondents,
is one off justus error (Christie The Law of Contract
in South Africa
6ed p181). In order to succeed the respondents are required to show
that the mistake was reasonable. In signing
the lease agreement the
third respondent on behalf of the first respondent is presumed, at
least prima facie, to have been acquainted
with the contents of the
lease agreement and that he knew what it contained (Glen Comeragh
(Pty) Ltd v Colibri (Pty) Ltd and another
1979 (3) SA 210
(T) 215A-C
quoted with approval in KPMG Chartered Accountants (SA) v Securefin
Ltd and another
2009 (4) SA 399
(SCA) para [28]). The allegations in
support of the defence are that it had always been the intention of
the respondents to purchase
the grader and that they were under the
impression that a purchase and sale agreement had been concluded. The
allegations clearly
fall short of proof of reasonableness. Caveat
subscriptor applies and I am not satisfied either that a mistake had
occurred or
that the mistake, had it occurred, was reasonable. It
follows that the first defence must fail.
[4] The VAT defence
is short lived: the amount of VAT reflected in the agreement and paid
by the applicant, was calculated on the
total purchase price paid to
the seller in respect of the grader. The fact that a portion of the
purchase price (R1m) was financed
by the Department of Trade and
Industry is of no moment. The liability for payment of VAT is based
and calculated on the full purchase
price.
[5] In the absence
of any sustainable defence the applicant is entitled to the relief
sought.
[6] In the result
the following order is made:
1. The sheriff of
the high court is authorised and directed to attach, seize and hand
over to the applicant a Bell model grader,
with serial number
BMG644893, VIN number 1DW670GXJCC644893 and engine number
PE6068H872270, wherever it may be found.
2. The applicant is
granted leave to apply on the same papers, duly supplemented, for
such damages as it may have suffered following
the cancellation of
the agreement of lease, to be calculated in terms of clause 12 of
that agreement.
3. The respondents
are ordered, jointly and severally, the one paying the other to be
absolved, to pay the costs of this application
on the scale as
between attorney and client.
FHD VAN OOSTEN
JUDGE OF THE HIGH
COURT
COUNSEL FOR
APPLICANTS ADV DT v R DU PLESSIS SC
APPLICANT’S
ATTORNEYS DRSM ATTORNEYS
COUNSEL FOR
RESPONDENTS ADV N ALLI
RESPONDENTS’
ATTORNEYS KHUMALO MASONDO
DATE OF
HEARING 29 APRIL 2014
DATE OF
JUDGMENT 2 MAY 2014