Act Computers v NVM Beleggings & Versekerings Adviseurs (648/08) [2009] ZASCA 94; [2010] 1 All SA 97 (SCA) (17 September 2009)

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[2009] ZASCA 94
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Act Computers v NVM Beleggings & Versekerings Adviseurs (648/08) [2009] ZASCA 94; [2010] 1 All SA 97 (SCA) (17 September 2009)

THE
SUPREME COURT OF APPEAL
REPUBLIC
OF SOUTH AFRICA
JUDGMENT
Case No: 648/08
No precedential significance
ACT COMPUTERS Appellant
and
NVM BELEGGINGS & VERSEKERINGS ADVISEURS Respondent
Neutral citation:
Act Computers v NVM Beleggings
(
648/2008)
94 [2009] ZASCA (17 September 2009)
Coram:
Mpati P, Lewis, Ponnan
and Snyders JJA and Wallis AJA
Heard:
3 September 2009
Delivered:
17 September 2009
Summary:
Appeal against order to repay moneys where contract
found to have been vitiated by material mistake: no mistake in fact –
contract
embodied in written documents accepted orally. Appeal
upheld.
ORDER
On appeal from:
High
Court, Free State (Beckley and Rampai JJ sitting as a full bench).
(a)
The appeal is upheld
with costs.
(b)
The order of the
court below is set aside and is replaced with:
‘
The appeal
is
dismissed with costs.’
JUDGMENT
LEWIS JA (
Mpati P,
Ponnan and Snyders JJA and Wallis AJA concurring)
[1]
This appeal turns on
whether a contract between the parties, who claimed to have different
understandings as to its nature, was
proved on the terms alleged by
the respondent. The appellant, ACT Computers (ACT), contends that it
rendered services to the respondent,
NVM Beleggings &
Versekerings (NVM), and installed equipment necessary for the
services at ACT’s premises, but that the equipment
remained its
property. NVM, on the other hand, maintains that it bought the
equipment – a radio antenna used for electronic communication.
[2]
NVM is an investment
agent and insurance broker in Kroonstad in the Free State. ACT, also
based in Kroonstad, supplies computer
equipment and services. The
dispute between the parties arose because the sole proprietor of NVM,
Mr C P Booysen, complained, over
several months, that the equipment
installed by ACT was not functioning adequately and that he and his
employees were unable to
gain access to the internet and electronic
databases for its business. Booysen accordingly refused to pay ACT a
monthly subscription
for internet connectivity. Mr H J Knepscheld of
ACT instructed employees of ACT to remove the antenna from NVM’s
premises several
months after it had been installed. There was an
ancillary dispute about the alleged removal of computer programmes
from NVM computers,
in respect of which damages were claimed, but
that is not before us on appeal.
[3] After the antenna was removed
from
NVM’s premises NVM claimed, in the magistrates’ court, Kroonstad,
the repayment of what it alleged was the purchase price
of the
antenna – the princely sum of R3 687.90. The court granted
absolution from the instance on the basis that the contract
between
the parties was not proved. A full bench of the Free State High Court
(Beckley and Rampai JJ) upheld an appeal against
the order, finding
that there had been an error as to the nature of the contract (error
in negotio) which was accordingly void,
and that NVM was entitled to
restitution of the R3 687.90 paid to ACT. ACT appeals against the
order with the leave of the full
bench.
[4]
I shall deal first
with the documents forming the basis of the contract as pleaded by
the parties. NVM itself alleged that the contract
was partly written
and partly oral, attaching the written portions to the particulars of
claim, and ACT admitted that these documents
were the written
portions of the contract. In my view, the documents are
determinative of the dispute. They comprised a letter
attaching two
quotations.
[5]
On 25 August 2003
Knepscheld, on behalf of ACT, wrote to Booysen proposing the
installation of a cordless network ‘WiFi’ system
for NVM. He
explained the various installation permutations and stated that
because the equipment was highly specialised, and was
designed
specifically for ACT, it was not offered for sale.
1
[6]
The first quotation
was for one ‘WiFi 100Mb Internet Link’, ‘Mounting & Unit
Installation’, ‘Panning & Fine Tune’,
‘Firewall &
Routing’ and ‘Security & Voice over IP Config’. The ‘Unit
Price’ was R3 235, plus VAT of R452.90,
the total being R3 687.90.
At the foot of the quotation were the words:
‘
These
prices are valid for 7 days only. Goods remain the property of ACT
Computers
until fully paid. All goods carry a ONE YEAR carry-in warranty.’
[7]
The second quotation
was for internet connectivity at a monthly rate of R570 including
VAT. This quotation also carried the words
stating that goods
remained the property of ACT unless fully paid for, a statement
plainly inappropriate for the monthly provision
of internet
connectivity. Equally plainly, the words were printed routinely on
all ACT’s quotations, irrespective of whether
they were for sales
or services.
[8]
Knepscheld’s
evidence was that the written quotations were accepted orally by
Booysen, and the antenna was in fact installed.
A tax invoice dated 8
October 2003 was sent to NVM for ‘Labour – WI-FI 100MN Internet
link’ for R3 687.90 (including VAT)
and for ‘WiFi CONNECTION
08/10/03-31/10/03’ for R379.68 (being for two-thirds of October).
Payment by NVM of R4 515 was made
by cheque to ACT on 18 November
2003. That, it appears, was in respect of the invoice of 8 October
and the monthly payment for
internet connectivity for November. NVM
made no further payments to ACT.
[9]
ACT workmen removed
the antenna from NVM’s premises on 19 March 2004, following
numerous complaints about the equipment and lack
of internet
connectivity by Booysen, and constant attempts by ACT to resolve the
problems. An email sent by Booysen on the same
day, 19 March, listed
the many problems that required attention and set out a suggested
readjustment of amounts claimed by ACT.
Knepscheld responded, also on
the same day, questioning Booysen’s claims and stating that the
only solution was for ACT to remove
the equipment (which it promptly
did) and for NVM to find another service provider in Kroonstad.
[10]
NVM duly claimed
the amount that it alleged it had paid for the antenna removed by
ACT. ACT’s defence to the claim was that the
antenna was its
property which it was entitled to remove when it cancelled the
contract with NVM. Both Booysen and Knepscheld testified
in the
trial. Their versions of what had been agreed differed as I have
indicated. The trial court concluded, because of that,
that there was
no contract, and therefore no breach of contract. The court could
thus, it reasoned, make no finding and granted
absolution from the
instance.
[11]
The high court, on
appeal, came to a different conclusion, one not advanced by ACT at
all either in the trial or on appeal: that
there was no consensus and
therefore no contract. It decided that because there were different
intentions as to the nature of the
contract and its terms, the
contract was vitiated by error and that NVM was entitled to
restitution of its payment of R3 687.90.
[12]
On appeal to this
court NVM confirmed that the letter and quotations set out the terms
of the contract and were accepted orally
by it. The only argument
advanced in support of its case was that the statement at the foot of
the quotation for the equipment
and installation – that goods
remained the property of ACT until fully paid for – and that
payment in full had been made, meant
that the antenna had been sold
to it. But NVM also conceded that these words, routinely used on ACT
quotations, did not change
the nature of the contract, if it were for
services, to one for sale. The reservation of rights in the event of
a sale clearly
cannot mean that there was in fact a sale.
[13]
NVM conceded also
that the statement in the letter accompanying the quotations that the
equipment was not for sale clearly meant
just what it said: the
equipment would be installed at the premises of NVM but would remain
ACT’s property. In my view, ACT proved
that the contract was not
one for the sale of the antenna or anything else, but was rather one
for the installation of its own
equipment and rendering of services.
Accordingly, the trial court should have dismissed NVM’s claim and
not granted absolution
from the instance.
[14]
It follows also
that the decision of the court below – that there was dissensus
rendering the contract invalid, and that ACT should
repay R3 687.90
to NVM – must be reversed.
[15]
(a) The appeal is
upheld with costs.
(b)
The order of the
court below is se aside and is replaced with:
‘
The appeal
is
dismissed with costs.’
------------------------
C H Lewis
Judge of Appeal
Appearances:
For the Appellant: P J T de Wet
Instructed by: Grimbeek van Rooyen & Vennote
Kroonstad
Symington & de Kok
Bloemfontein
For the Respondent:  J Y Claasen SC
Instructed by: Thabo Grimbeek
Kroonstad
Naude Attorneys
Bloemfontein
1
‘Aangesien die toerusting hoogs gespesialiseerd
is en spesifiek vir ACT opgestel word, word dit nie te koop
aangebied nie.’