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[2013] ZAGPPHC 15
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Absa Bank Ltd v Storm and Another (67427/2011) [2013] ZAGPPHC 15 (1 February 2013)
NOT
REPORTABLE
NORTH
GAUTENG HIGH COURT PRETORIA
CASE
NO: 67427/2011
DATE:01/02/2013
In
the matter between;
ABSA
BANK
LIMITED
.................................................................................
Applicant
and
CORNELIUS
JOHANNES JACOB STORM
..........................................
First
Respondent
JOHN
MORRISON PANELBEATERS
AND
SPRAYPAINTERS
CC
......................................................................
Second
Respondent
JUDGMENT
TEFFO.
J:
INTRODUCTION
[1]
This is an application for an order directing the second respondent
to:
1.1
return possession of a TOYOTA YARIS T1 5 DR with engine number
2NZ4333828 chassis number JTDKW923605046714, registration letters
and
numbers VKX 048 GP (hereinafter referred to as “the vehicle”)
to the applicant against:
1.1.1
payment in the amount of R36 229,50 plus VAT, in favour of the second
respondent;
1.1.2
delivery of a banker’s guarantee to the second respondent to
the value of R10 000,00 plus VAT for the storage fees charged
by the
second respondent which will become due and owing once the second
respondent has proved its claim in a competent court of
law;
1.2
institute an action against the applicant within 30 days of delivery
of the vehicle to the applicant, failing which the aforesaid
guarantee shall lapse.
[2]
The basis of this application is the following:
2.1
The first respondent purchased the vehicle from the applicant in
terms of an instalment sale agreement (“the agreement).
In
terms of the agreement ownership of the vehicle would at all times
remain vested in the applicant until such time as the first
respondent had paid the full amount owing to the applicant;
2.2
The applicant alleges that the first respondent has breached the
terms of the agreement in that he failed to make regular payments
thereon, alienated the asset and also failed to keep the vehicle
insured, alternatively he failed to prevent the lapsing of the
insurance over the vehicle;
2.3
When the first respondent defaulted with his contractual obligations
towards the applicant, it came to the knowledge of the
applicant that
the vehicle was in the possession of the second respondent;
2.4
Enquiries were made and the second respondent provided the applicant
with an invoice dated 7 September 2011 in terms of which
the second
respondent claims the amount of R36 229,50 for the repairs done on
the vehicle and storage costs to the value of R10
000,00;
2.5
The second respondent’s right to possession of the vehicle is
based on a lien;
2.6
The applicant tenders to pay the second respondent’s costs for
the repairs done on the vehicle.
[3]
On or about 2 November 2010 and at Johannesburg, the first respondent
represented by Shauwn Lynch {“Lynch") and the
second
respondent
represented by Alberto Jorge Da Fonseca Faria (“Faria")
entered into a partly written and partly oral agreement
the terms of
which were the following:
3.1
The second respondent would attend to the repairs and paint works of
the vehicle at an agreed cost of R36 229,50 (“the
repair
costs”);
3.2
Should the second respondent be required to store the vehicle a
storage fee of R250,00 per day, would be levied;
3.3
The second respondent would provide a Toyota Tazz motor vehicle with
registration letters and numbers PSH 301 GP, as a courtesy
vehicle
(“the courtesy vehicle")]
3.4
The vehicle would serve as security for any money that may become
payable to the second respondent in respect of the courtesy
vehicle,
including R5 000,00 to cover any accident damage or theft of the
courtesy vehicle, which amount is subject to change,
R250,00 valet
charge and all other liabilities that may arise as a result of
traffic violations, negligence or otherwise; and
3.5
The vehicle shall be detained by the second respondent until the
courtesy vehicle has been returned to it and all amounts due
to it
have been paid in full.
[4]
After the second respondent had complied with all its obligations in
terms of the agreement somewhere in February 2011 Faria
contacted
Lynch telephonically informing him that the vehicle was ready for
collection.
[5]
Lynch informed him that the vehicle had been impounded and was
detained at Sinovale Police Station, Pretoria.
[6]
Faria referred Lynch to the terms of the agreement between the second
and first respondent to the effect that the second respondent
would
not release the vehicle until the repair costs have been paid in
full, the courtesy vehicle had been returned to it and all
costs in
respect of the courtesy vehicle, including R5 000,00 excess, valet
costs and additional damage related costs had been
paid in full
together with storage costs of R250.00 per day that would be levied
in respect of the vehicle.
[7]
The second respondent contends that it has been forced to store the
vehicle to date of application, has levied storage charges
since 1
March 2011 but it has not received payment in respect of the repair
costs or the storage of the vehicle. According to it
the amount due
to it amounts to R124 979,50 calculated as follows:
Repair
costs of vehicle as agreed
.................................
R 36 229,50 Storage costs of vehicle (from 1 March2011 to 6
February 2012)
…
.......................................................................................
R 83 500,00 Excess in respect of courtesy vehicle
(as
agreed - subject to change)
......................................
R
5 000,00
Valet
fee (as
agreed)
.......................................................
R
250.00
TOTAL
...............................................................................
R124
979,50
[8]
At the hearing of this application the parties informed me that the
courtesy vehicle has been released and returned to the second
respondent.
[9]
Counsel for the applicant conceded that the repair costs amount to
R36 229,50 and not R35 311,40 as referred to in paragraph
1 of the
Notice of Motion. An amendment of this paragraph was then applied for
and it was accordingly granted. There was also an
application for
condonation of the late filing of the replying affidavit. The second
respondent did not object to it and the application
was also granted.
[10]
The second respondent contends that the applicant has not tendered
adequate security to substitute the vehicle.
[11]
It further contends that it has a lien over the vehicle for the
repair costs and storage fees. According to it the vehicle
serves as
security until the courtesy vehicle is returned to it and all the
amounts due to it in respect of the courtesy vehicle
have been
settled.
[12]
The second respondent also contends that the guarantee only makes
provision for payment to be made to it should the applicant
be
ordered to do so. It does not provide for a situation where the
second respondent obtains an order against the first respondent
and/or Lynch. The guarantee does not also provide for legal costs or
the payment of VAT.
[13]
Its further contention is that it would be prejudiced in the extreme
and its rights would be left unprotected should it be
ordered to
release the vehicle on any terms before the courtesy vehicle has been
returned to its possession.
[14]
The issue for determination is whether the security provided for by
the applicant is adequate for the claim of the second respondent.
[15]
In Zeda Financing (Pty) Ltd v Du Toit t/a AMCO Diensstasie
1992 (4)
SA 157
(O) at 1601 to 162D Wright J made the following remarks:
“
According
to Voet 16.2.21 security can be given to defeat a Hen in certain
circumstances, i quote from Gane's translation vol 3
at 172:
'But
is one who has a right of retention held liable to restore the thing
to his opponent whenever the latter tenders sound security
for the
refund of expenses or payment of wages? It appears that that ought to
be left to the discretion of a circumspect Judge
according as it
shall have become clear from circumstances either that he who ought
to restore is deliberately aiming at holding
back possession of the
thing too long under cover of expenses or wages; or on the other hand
that the person owing the expenses
has it in mind to recover the
thing under security, and then by a lengthy and pettifogging
protraction of the suit to make the
following up of the expenses,
wages and the like a difficult matter for his opponent.'
[16]
Kroon J in Peter Cooper & Company v De Vos
[1998] 2 All SA 237
(E) said the following:
It
is clear that Voet in his previous remarks on para 15 above as
referred to in the judgment of Zeda Financing (Pty) Ltd v Du Toit
t/a
Amco Dienstasie as quoted by Wright J, only refers to security for
the refund of expenses or the payment of wages’, i.
e. for the
amount of the debt allegedly due to the lien-holder. For the purpose
of calculating the amount of security to be lodged,
the value of the
property subject to the lien is therefore irrelevant (see National
Industrial Credit Corporation Ltd v Meiring
1940 OPD 191).
"
[17]
In Spitz v Kesting
1923 WLD 45
at 49 Tindall J articulated the
position as follows:
“
Even
where the claim in respect of which the jus retentionis is asserted
is made in good faith, the court has the power to order
delivery to
the owner against adequate security. Each case will depend on its
particular facts and the court, in exercising its
discretion, will
have regard to what is equitable under all the circumstances bearing
in mind that the owner should not be left
out of his property
unreasonably and on the other hand should not be given possession if
his object is, after getting possession,
to delay the claimant’s
recovery of expenses.
[18]
At 503D-E in Astralita Estates (Pty) Ltd v Rix
1984 (1) SA 500
(C)
the court remarked as follows:
“
It
is open to the court to order the return of the owner’s
property to him against the provision of sufficient security. The
owner of the property, however; has no right to claim return of his
property on this basis, i.e. against provision of security
- the
grant of this relief is a matter for the discretion of the court’
(see also Hochmetals Africa (Pty) Ltd v Otavi Mining
Co (Pty) Ltd
1968 (1) SA 571
(A) at 582E, Forfif (Pty) Ltd v Macbain
1984 (3) SA
611
(W)).
[19]
In Brooklyn House Furnitures (Pty) Ltd v Knoetze and Sons
1970 (3) SA
264
(A) the appellant sold certain furniture under a hire purchase
agreement and one of the clauses in the agreement provided that the
purchaser should not, without the seller’s consent, cause the
furniture to be stored subject to storage charges. The purchaser
breached the agreement and entered into an agreement with the
respondent in terms of which the respondent removed and stored the
furniture.
[20]
The respondent who bona fide believed that the purchaser was the
owner, claimed a lien and refused to hand over the furniture
unless
compensation for the removal and storage was first paid. The court
held that a possessor who in terms of an agreement with
a third
party, obtains possession of a thing for improvement or custody, does
not obtain possession in an unlawful manner and,
if he takes care of
or improves the thing for the benefit of the owner, he satisfies the
requirement for the coming into existence
of a right of retention
against the owner. The court accordingly held that the respondent was
entitled to a lien against the appellant
to retain possession of the
furniture until he had been compensated for his necessary expenses.
[21]
In the present matter the applicant as the owner of the vehicle in
terms of an agreement with the first respondent, obtained
a summary
judgment against the first respondent for the return of the vehicle
after the first respondent defaulted with his obligations
in terms of
the agreement. It came to the knowledge of the applicant that the
vehicle was in the possession of the second respondent.
It is common
cause between the parties that the first respondent took the vehicle
to the second respondent for repairs. The second
respondent repaired
the vehicle and kept it to itself after the first respondent failed
to pay its repair costs and additional
costs incurred as agreed. It
is also common cause that in terms of an agreement between the first
and the second respondents there
were also storage costs, the issue
of the courtesy vehicle and costs incidental thereto in addition to
the repair costs of the
vehicle.
[22]
When the applicant approached the second respondent for the vehicle,
the second respondent claimed a lien on the vehicle and
furnished the
applicant with an invoice for the repairs done on the vehicle
including the storage costs in the amount of R10 000,00.
[23]
The applicant contends that the second respondent is not entitled to
claim storage costs from it as the agreement relating
to the storage
costs was only between the first and the second respondents. On the
other hand the second respondent contends that
the lien it exercises
over the vehicle includes the repair costs, storage costs and the
fact that the vehicle serves as security
until the courtesy vehicle
is returned to it and all amounts due to it in respect of the
courtesy vehicle have been settled. Accordingly
the second respondent
claims an amount of R124 979,50 which amount includes the repair
costs, storage costs, excess in respect
of the courtesy vehicle and
the valet fee.
[24]
The applicant tenders payment for the repair costs plus VAT together
with the delivery of a banker’s guarantee to the
value of R10
000,00 plus VAT for the storage fees in dispute in its application
for the return of the vehicle in question. The
second respondent
contends that the applicant's guarantee is wholly inadequate in the
circumstances. Counsel for the second respondent
referred to the
matter of Van Niekerk v Van der Berg
1965 (2) SA 525
(A) and Mancisco
& Sons CC v Stone
2001 (1) SA 168
at 176. He submitted that in
Van Niekerk v Van der Berg the court held that a Hen is a right of
retention acquired over property
by a party who has expended money in
respect of the said property. Counsel argued that a lien may flow
from a contract which covers
all that is due to the creditor under
the contract in respect of the work done and expenses incurred in
respect of the property.
[25]
The second respondent’s counsel referred also to the matter of
Brooklyn House Furnishers (Pty) Ltd v Knoetze and Sons
where it was
held that a lien claimed in the absence of an agreement, is
restricted to useful expenses, that being expenses which
add value to
the property which include repair costs and on the other hand
necessary expenses, those expenses without which the
article would
perish and include storage fees. Counsel submitted that in respect of
the adequacy of security the court is asked
to destroy the “undoubted
right to possession" by substituting same for something else.
[26]
His further submissions were that the court must seriously consider
all contentions raised by the lien holder. Further that
the court
will not make an order which diminishes the right of retention, thus
by ordering security to be provided for less than
the amount of the
lien holder’s claim (Mancisco & Sons CC v Stone supra).
[27]
I agree that the starting point in this matter is that an owner does
not have an automatic right to demand delivery of his
property upon
tender of adequate security. It is within the court’s
discretion to order delivery of property to the owner
against
adequate security.
[28]
The facts in the present matter are different to the facts in the
Brooklyn House matter in that the applicant in the present
matter
argues that its tender and guarantee are based on the invoice that it
got from the second respondent. Now the second respondent
has
increased the amount of the storage costs and it is relying on the
issue of the courtesy vehicle which it was not part of.
The second
respondent concedes that the invoice was provided by it to the
applicant’s representative, Mr Scheepers, on the
understanding
that the amount was going to be settled at the time and time was of
the essence. Realising that the applicant did
not settle the amount,
it cancelled the agreement between it and Scheepers. Although the
applicant denies the agreement between
Scheepers and the second
respondent it is interesting to note that now the second respondent’s
claim also includes the costs
incurred in respect of the courtesy
vehicle.
[29]
From the papers it is clear that the issue of the courtesy vehicle is
between the first and the second respondents. It is afso
clear that
as early as February 2011 the second respondent had finished
repairing the vehicle. According to Faria, a representative
of the
second respondent, the first respondent was unable to fetch the
vehicle at the time because the courtesy vehicle was impounded
by the
Sinovale Police. Since then the second respondent kept the vehicle
and now the courtesy vehicle has been released and returned
to the
second respondent in November 2012. The invoice in terms of which the
applicant prepared the tender and guarantee is dated
7 September
2011. Had the first respondent managed to obtain the vehicle as early
as February 2011, the matter could not have reached
this level and
this could have diminished the costs. Surely I cannot find justice in
the fact that the applicant’s ownership
over the vehicle should
be withheld on the issues surrounding the courtesy vehicle, (Peter
Cooper & Co v De Vos supra), should
this be allowed, it would be
tantamount to depriving the owner of its property unreasonably (Spitz
v Kesting supra).
[30]
The contention by the second respondent that at the time the invoice
dated 7 September 2011 was furnished to the applicant
it thought that
cash was going to be paid to settle the claim is therefore rejected
for the reasons advanced above.
[31]
The same applies to the second respondent’s contention that the
guarantee does not provide for a situation where it obtains
an order
against the first respondent and/or Lynch. This argument is without
merit as the applicant is not a party to the agreement
between the
first and second respondents and/or Lynch.
[32]
As to the contention that the application should fail because the
guarantee does not provide for legal costs, it does not always
follow
in this kind of an application that security should include the legal
costs. Each case will depend on its particular facts,
and the court
in exercising its discretion will have regard to what is equitable
under all the circumstances bearing in mind that
the owner should not
be left out of its property unreasonably and on the other hand should
not be given possession if his objective
is, after getting possession
he would delay the claimant’s recovery of expenses. For the
reasons advanced in para [28] above
I cannot find any reason why the
issue of legal costs should be a bar to the granting of this
application. In the circumstances
it is my view that the inclusion or
non-inclusion of the legal costs in the guarantee is not a
requirement for adequate security.
[33]
I agree with counsel for the second respondent that the guarantee
should include VAT to accord with the prayers in the notice
of
motion.
[34]
In my view the security furnished is in substitution of the lien. The
second respondent is therefore not entitled to any more
security than
that provided by the lien. Accordingly the guarantee constitutes
adequate security and removes any prejudice that
might otherwise be
suffered by the second respondent.
[35]
This application must therefore succeed.
[36]
In the result I make the following order:
36.1The
application is granted with costs.
36.2
The applicant is ordered to correct the guarantee and make provision
for the amount tendered to include VAT to accord with
prayer 1 of the
Notice of Motion.
M J TEFFO
JUDGE
OF THE NORTH GAUTENG HIGH COURT, PRETORIA
COUNSEL
FOR THE APPLICANT: P I OOSTHUIZEN
INSTRUCTED
BY: DELPORT VAN DEN BERG INC COUNSEL FOR THE SECOND
RESPONDENT:CHERIE
DE VILLIERS-GOLDING
INSTRUCTED
BY: MC VAN DER BERG ATTORNEYS
DATE
OF HEARING: 28 NOVEMBER 2012
DATE
OF JUDGMENT: 1 FEBRUARY 2013