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[2019] ZAGPPHC 297
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GBS Mutual Bank v Flighting Boyz Outdoor CC and Another (29946/2016) [2019] ZAGPPHC 297 (12 July 2019)
IN THE HIGH COURT OF SOUTH
AFRICA
GAUTENG DIVISION, PRETORIA
(1)
REPORTABLE:
NO
(2)
OF
INTEREST TO OTHER JUDGES: NO
Case Number: 29946/2016
12/7/2019
In
the matter between:
GBS
MUTUAL BANK
Plaintiff
and
FLIGHTING
BOYZ OUTDOOR CC
First Defendant
RIAAN
VAN
STADEN
Second Defendant
JUDGMENT
DU PREEZ, AJ:
INTRODUCTION:
1.
It is common cause between the parties,
among others, that:
1.1
The
plaintiff has the necessary
locus
standi
in this action (although same
was denied in the defendants' amended plea);
1.2
On
27 June 2013 and at Pretoria:
1.2.1
Technofin
(Pty) Ltd
(''Technofin" )
entered into a written Master Rental
Agreement
("the
MRA")
with the first defendant, duly represented by the second defendant,
in terms of which the first defendant rented a Bizhub
C224e Colour
Copier
("the equipment')
at
a total monthly rental of R2,397.68 for a initial rental period of 60
months;
1.2.2
The
second defendant granted a written guarantee in favour of Technofin
in terms of which he, among others, bound himself jointly
and
severally as co-principal debtor and for the primary continuing
obligation for the proper and punctual payment by the first
defendant
to Technofin;
1.2.3
Technofin
in writing ceded to the plaintiff its right, title and interest in
and to the rental due in terms of the MRA and ownership
in and to the
equipment with a 50% recourse.
1.3
The
equipment was duly delivered to the first defendant;
1.4
On
5 November 2015, the defendants were in arrears with the rental in
the amount of R2,589.69 and the plaintiff duly cancelled the
MRA in
writing (although the plaintiff's initial version was that the MRA
was cancelled on 8 March 2016, its legal representative
conceded
during the trial that 5 November 2015 could be accepted as the date
of cancellation);
1.5
The
plaintiff repossessed the equipment pursuant to the cancellation of
the MRA and in accordance therewith.
2.
In
its amended particulars of claim, the plaintiff claimed, among
others, payment in the amount of:
2.1
R7,655.81, being the outstanding rentals
as at date of the termination of the MRA;
2.2
R49,129.13 as pre-estimated liquidated
damage of all rentals which were not yet due and payable as at date
of termination of the
MRA,
less the
value of the goods
[own emphasis].
3.
In paragraph 5.2 (d) of their amended
plea, the defendants' asserted, among others, that if the plaintiff
had
locus standi
in
the action, the plaintiff was entitled to claim payment of the arrear
amount due as at the date of cancellation, being 5 November
2015, and
payment of the rentals which were not yet due and payable as at
cancellation of the MRA
less the
value of the copier
[own emphasis],
plus VAT.
THE
MAIN POINT OF DISPUTE THAT THE COURT HAS TO ADJUDICATE UPON:
4.
At the commencement of the trial, the
parties contended that the Court had to adjudicate upon the following
disputes between them:
4.1
The
date upon which the MRA was cancelled
("the
cancellation aspect') ;
4.2
Whether
the plaintiff was entitled to the damages claimed in the amended
particulars of claim
("the
damages aspect').
5.
It
is, however, unnecessary for the Court to adjudicate upon any of the
two disputes between the parties, because:
5.1
The
plaintiff conceded that the MRA was cancelled on 5 November 2015 and
not 8 March 2016 as alleged by the plaintiff in its amended
particulars of claim;
5.2
Upon
the defendants admitting the plaintiffs
locus
standi
in the action, they also
admitted, if regard is had to paragraph 5.2 (d) of their amended
plea), the plaintiffs entitlement to claim
the said damages.
6.
At
the end of the trial, it is apparent that the real issue that the
Court has to determine, is whether the plaintiff has proved
the
pre-estimated liquidated damages.
DISCUSSION:
THE
RELEVANT TERMS AND CONDITIONS OF THE MRA:
7.
The
relevant terms and conditions of the MRA (the references to "User",
"Technofin" and "goods" should
respectively be
read as "the first defendant", "the plaintiff' and
"the equipment"), are the following
(own emphasis and
omissions):
"12.1
An event of default shall occur if User-
12.1.1
fails to make punctual
payment of any of the payables, or
12.1.2
breaches any term of this
agreement or of any other agreement between the parties
...
"
"12.2
Upon an event of default
...
Technofin
may,
at its election
and without prejudice to any other remedy which it may have in terms
of this agreement or otherwise:
12.2.1
without
notice claim immediate payment of all payables whether due for
payment or not, provided however; that if user does not make
immediate payment Technofin
may,
notwithstanding the election to claim
immediate payment in terms of this sub-clause, claim the relief set
out in below: or
12.2.2
without notice cancel this agreement,
obtain possession of the goods and
recover
from User payment of all amounts due in terms hereof which are in
arrears
at the date of the
cancellation, together with,
as
pre-estimated damages, the difference between:
12.2.2.1
the total of the future
rentals which would have been payable in terms of this agreement
(whether such amounts are
then due for payment or not) if this agreement had continued in force
for the contract period; and
12.2.2.2
the value of the goods
if recovered by Technofin as determined in accordance with clause
12.5
...
In
addition Technofin shall be entitled to claim from the User the
amount of any Value Added Tax ("VAT") payable in respect
of
such damages. If the goods are returned to or repossessed by
Technofin, it shall be entitled to dispose of same in such manner
and
on such terms and conditions as it may in its sole discretion
determine.
12.2.3
Where
User before or after termination of of this agreement has failed to
fulfil any obligation hereunder, Technofin shall be entitled
(but not
obliged) to perform or procure performance of such obligation on
User's behalf Technofin may claim the cost of such performance
from
User on demand.
12.4
12.5
On
termination of the agreement as provided for in this clause, and
should it be necessary for the goods to be valued, on termination
of
the agreement as provided for in this clause 12, User authorises
Technofin to appoint a sworn appraiser nominated by Technofin,
to
determine the value of the goods. User agrees and undertakes to
accept such valuation. If the goods
are
not recovered by Technofin for any reason whatsoever, the value shall
be deemed to be nil."
8.
On
a proper interpretation of the aforesaid provisions of the MRA in
respect of the present matter, it follows that as the plaintiff
claims the pre-estimated liquidated damages provided for in the MRA:
8.1
Such
pre-estimated liquidated damages comprise the difference between the
future rentals which the first defendant would have paid
in terms of
the MRA and the value of the equipment after the plaintiff had
repossessed same;
8.2
The
said value of the equipment should be determined by a sworn
appraiser;
8.3
The
value of the equipment will only be nil if the plaintiff is unable to
recover the equipment from the first defendant;
8.4
Even
though the plaintiff is entitled to dispose of the equipment, the
proceeds do not play any role in determining the pre-estimated
liquidated damages
[1]
- same is ascertained by the difference between the future rentals
and the value of the equipment as determined by the appraiser.
9.
Any
other interpretation will fail to give effect to the true intention
of the parties and will not make business sense.
THE
PLAINTIFF'S CASE:
10.
The plaintiffs only witness was Mrs
Chantelle Booysen, an employee of Technofin, who testified, among
others, on the conclusion
of the MRA, the first defendant's default,
the plaintiffs repossession of the equipment and the fact that the
original supplier
of the equipment did not want to repurchase the
equipment as same was an outdated model.
11.
As the plaintiff has repossessed the
equipment, it follows that the value of the equipment cannot be
deemed to be nil.
12.
The plaintiff did not present any
admissible evidence as to the value of the equipment and the fact
that the plaintiff was unable
to sell the equipment, is irrelevant as
far as the determination of the value of the goods is concerned.
[2]
13.
It follows that the plaintiff has failed
to prove the pre-estimated liquidated damages that it claims.
14.
The plaintiffs reliance on an unreported
judgment by Murphy, J
[3]
does not meet muster, because the relevant contractual provisions in
that matter differs from the present one, because it did not
provide
for an appraiser's sworn valuation to be used to determine the value
of the goods.
15.
This Court is unable to deduct from the
evidence presented what the amount of the alleged pre-estimated
liquidated damages is.
16.
The plaintiff is, on the defendants'
admission, entitled to judgment in respect of the arrear rentals.
COSTS:
17.
The defendants also conceded that the
plaintiff is entitled to the costs of suit, but contended that same
should be on a Magistrate's
Court Scale.
18.
Although
the Court has a wide discretion as far as costs are concerned, the
defendants' contention as to costs is correct, especially
because
none of the plaintiff's claims fell outside the jurisdictional
limitations as far as Magistrate Courts are concerned.
ORDER:
19.
The Court accordingly grants the
following order:
19.1
Judgment
in respect of the arrear rentals as on 5 November 2015 in favour of
the plaintiff and against the first and second defendants
jointly and
severally, the one to pay the other to be absolved, in the amount of
R2,589.69;
19.2
Interest
a
tempore morae
on
the judgment amount of R2,589.69 at 10,25% per annum;
19.3
Costs
of suit on the Magistrate's Court Scale;
19.4
In
respect of the plaintiffs claim for pre-estimated liquidated damages,
absolution from the instance is granted.
DB
DU PREEZ
ACTING
JUDGE OFTHE HIGH COURT
GAUTENG
DIVISION, PRETORIA
12
JULY 2019
Counsel
for the plaintiff: MR T MINNIE
(ATTORNEY)
Instructed
by: THOMAS MINNIE ATTORNEYS
Counsel
for the defendants:
ADV D HEWITT
Instructed by: BARNARD INC
[1]
Cf
Mufamadi
&
Others v Dorbyl Finance (Pty) Ltd
1996
(1) SA 799
(A) regarding a contract where the plaintiff had an
election to use either the proceeds of the sale or a valuation to
determine
the pre-estimated liquidated damages.
[2]
In terms of clauses 12.2.2 (including 12.2.1 and 12.2.1) and 12.5.
[3]
Absa Technology Finance Solutions (Pty) Ltd v Stopforth
&
Others
(70737 /20120 [2014] ZAGPPHC 446 (20 March 2014)