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[2012] ZAGPPHC 222
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Technologies Acceptance (Pty) Ltd v Nsovo Ya Rixaka CC and Another (31805/08) [2012] ZAGPPHC 222 (5 October 2012)
NOT
REPORTABLE
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTH
GAUTENG HIGH COURT, PRETORIA)
Date:
05/10/2012
Case
Number: 31805/08
In
the matter between:
TECHNOLOGIES
ACCEPTANCE (PTY)
LTD
.....................................................
Plaintiff
and
NSOVO
YA RIXAKA
CC
..........................................................................................
First
Defendant
NKATEKO
NORMAN
MASINGI
...............................................................................
Second
Defendant
JUDGMENT
JANSE
VAN NIEUWENHUIZEN AJ
INTRODUCTION
[1]
The plaintiff, a finance company, instituted action against the
defendants for the cancellation of two rental agreements and
ancillary relief.
[2]
The first defendant conducted business as, inter alia, a photocopying
shop and is cited in its capacity as a party to the rental
agreements. The second defendant is cited in his capacity as surety
and co-principal debtor with the first defendant, for the due
and
punctual payment of all amounts due and owing by the first defendant
to the plaintiff.
[3]
On 24 August 2007 the plaintiff and the first defendant entered into
a Master Rental Agreement, which agreement contained the
following
special condition:
"This
constitutes a Master Rental Agreement and each item to be rented by
the User shall be recorded in a separate annexure
and each item shall
be governed by the terms and conditions of this Master Rental
Agreement as though it were a separate agreement
commencing from the
date reflected on such annexure and which terms and conditions the
User by his/her signature acknowledges having
read and understood."
[4]
On the same date the parties concluded a rental agreement in respect
of two copiers, to wit a XEROX C7132 and a XEROX C128.
The agreement,
contained in an annexure to the Master Rental Agreement, was for a 60
month period and the total monthly rent payable
was R 5 736, 77. The
effective date of the agreement was, according to the annexure, 11
January 2007 and the date on which the
first rental was due was 1
August 2007.
[5]
On 27 August 2007 a further rental agreement for a XEROX C118 copier
was concluded between the plaintiff and the first defendant.
The
agreement was once again contained in a separate annexure, with a
rental period of 60 months and monthly rent in the amount
of R 899,
96. The effective date was 24 August 2007 and the due date for the
first rental payment was 9 September 2007.
[6]
The equipment supra, was referred to during the trail as the "initial
equipment" and the equipment will be referred
to herein as such.
[7]
The initial equipment was delivered and installed at the premises of
the first defendant and was utilised by the first defendant
until 3
October 2007, when the equipment was damaged beyond economical repair
due to a burst water pipe.
[8]
The initial equipment was replaced on 29 November 2007 with new
equipment. The annexure in respect of the replacement equipment
was
signed by the first defendant on 24 October 2007 and by the plaintiff
on 14 December 2007. The annexure referred to the same
rental amount
and period, but did not contain an effective date or a due date for
first rental.
[9]
The aforesaid facts are common cause between the parties.
[10]
The plaintiff's claim contained in its summons dated 9 June 2008, was
in respect of arrear rental on the initial equipment.
[11]
On 31 January 2011 the plaintiff served a Notice of Intention to
Amend its particulars of claim.
[12]
The proposed amendment reads as follows:
"7A.1
On or about 3 October 2007 the equipment (the initial equipment) was
damages beyond economical repair.
7A.2
The Plaintiff elected to replace the equipment, as it was entitled to
do.
7A.3
On or about 24 October 2007 the First Defendant, duly represented by
the Second Defendant, signed a new annexure to the rental
agreement
in respect of the replacement
equipment..........................
7A.4
On or about 29 November 2007 the replacement equipment described as 1
x Xerox C128 Copier with serial number 3313698326 and
1 x Xerox 07232
Copier with serial number 3312598280 was delivered to the First
Defendant at its business address situated at Shop
54, Hubyeni
Shopping Centre, cnr R578 & R528, Elim.
7A.5
The new annexure to the rental agreement in respect of the
replacement equipment was duly signed on behalf of the Plaintiff
on
14 December 2007.
7A.6
The terms and conditions of the rental agreement (in respect of the
initial equipment) at all material times applied to the
replacement
equipment."
[13]
The same averments are made in respect of a Xerox C118 Copier.
[14]
In introducing these new averments, the plaintiff relied on the
provisions of clause 15.1 of the Master Rental Agreement which
reads
as follows:
"If
any equipment leased in terms of the rental agreement is lost or
stolen and not recovered within a period of 21 days after
such loss
or theft or, in the Plaintiff's sole discretion, is damaged beyond
economical repair, this agreement shall terminate
forthwith in
respect of such equipment, and the First Defendant shall pay all
lease payments (plus VAT if applicable) outstanding
in respect of the
period to such termination; provided that such equipment may, at the
Plaintiffs election, be replaced, in which
event the terms and
conditions of the rental agreement shall apply to such replacement
equipment."
[15]
The defendants filed an objection to the proposed amendment on the
ground that the proposed amendment sought to introduce a
new claim,
based on a different cause of action, more than three years after the
date upon which such claim arose. In the premises,
the defendants
contend that the claim which the plaintiff seeks to introduce had
become prescribed in terms of section 11 of the
Prescription Act, Act
68 of 1969.
[16]
The plaintiff lodged an application for leave to amend its
particulars of claim, which leave was granted by Bosman AJ on 15
August 2011.
[17]
The defendants thereupon filed an amended plea raising, inter alia, a
plea of prescription.
ISSUE
TO BE DECIDED
[18]
The parties were in agreement that the interpretation of clause 15.1
of the Master Rental Agreement will be decisive of the
issues in the
action.
CLAUSE
15.1
[19]
Mr. Grundlingh, appearing on behalf of the plaintiff, contended that
the words "provided that" qualify the first
portion of the
clause and clearly states that the plaintiff may elect to replace the
equipment forming the subject matter of the
existing lease agreements
between the parties with new equipment. He contended, furthermore,
that the same terms and conditions
contained in the existing lease
agreements will be applicable and that the rental agreements will
continue to run until the expiry
of the lease period.
[20]
Mr. Griessel, appearing on behalf of the defendants, held a contrary
view and contended that the existing lease agreements
terminated
forthwith when the initial equipment was damaged beyond economical
repair. According to Mr Griessel, once the plaintiff
elected to
replace the damaged goods a new agreement had to be concluded between
the parties in respect of the new equipment.
[21]
In order to establish which interpretation is correct, the often
quoted test in Coopers & Lybrand v Bryant
[1995] ZASCA 64
;
1995 (3) SA 761
(A) at
676E - 768E is valuable:
"According
to the 'golden rule' of interpretation the language in the documents
is to be given its grammatical and ordinary
meaning, unless this
would result in some absurdity or some repugnancy or inconsistent
with the rest of the instrument... The mode
of construction should
never be to interpret the particular word or phrase in isolation (in
vacuo) by itself... The correct approach
to the application of the
'golden rule' of interpretation after having ascertained the literal
meaning of the word or phrase in
question is, broadly speaking, to
have regard:
1)
to the context in which the word or phrase is used with its
interrelation to the contract as a whole, including the nature and
purpose of the contract...;
2)
to the background circumstances which explain the genesis and purpose
of the contract, ie to matters probably present to the
mind of the
parties when they contracted...;
3)
to apply extrinsic evidence regarding the surrounding circumstances
when the language of the document is on the face of it ambiguous,
by
considering previous negotiations and correspondence between the
parties, subsequent conduct of the parties showing the sense
in which
they acted on the document, save direct evidence of their own
intentions."
[22]
In determining the grammatical and ordinary meaning of the language
used in the contract, regard must be had to legal interpretation
of
the words.
[23]
Stroud's Judicial Dictionary of Words and Phrases Greenberg and
Millbrook 6th Edition at 2105 describes the word "proviso",
inter alia, as follows:
"If
in a deed an earlier clause is followed by a later clause which
destroys altogether the obligation created by an earlier
clause, the
later clause is to be rejected as repugnant, and the earlier clause
prevails... But if the later clause does not destroy
but only
qualifies the earlier, then the two are to be read together and
effect is to be given to the intention of the parties
as disclosed by
the deed as a whole"
[24]
Dictionary of Legal Words and Phrases Claassen, 2nd Edition at P-133
defines the word "proviso", inter alia, as follows:
"A
stipulation introduced into a section of a statute, or into a clause
of an agreement, providing that the preceding part
of the section or
clause is subject to the provisions of such stipulation."
[25]
The Appellate Division held in Mphosi v Central Board for
Co-operative Insurance Ltd
1974 (4) SA 633
, that the effect of a
proviso is to qualify the obligations imposed by the substantive
provisions of a section. In reaching this
finding, Botha JA referred
on 645 D to an earlier decision that read as follows:
"The
fallacy of the proposed method of interpretation (i.e. to treat a
proviso as an independent enacting clause) is not far
to seek. It
sins against the fundamental rule of construction that a proviso must
be considered in relation to the principal matter
to which it stands
as a proviso...."
[26]
The words "provided that" in clause 15.1 clearly qualifies
the provision, in the preceding part of the clause, that
the rental
agreements shall terminate forthwith. It is not a separate enacting
clause.
[27]
Having regard to the nature and purpose of the agreements between the
plaintiff and the first defendant, it is clear that they
intended to
enter into a rental agreement in respect of photocopiers for an
agreed time and at an agreed rental.
[28]
The plaintiff and first defendant in including clause 15.1 in the
agreement, foresaw a situation in which the equipment might
be
damaged beyond economical repair during the subsistence of the lease
agreements. Provision was therefore made for the agreements
to
terminate forthwith with certain subsequently consequences. This part
of the clause was, however, made subject to the stipulation
that the
plaintiff may elect to replace the equipment.
[29]
If a new rental agreement had to be entered into between the parties,
as contended by Mr. Griessel, a new period of lease at
a new rental
had to be agreed between the parties. Should the parties not be able
to agree, the election of the plaintiff to replace
the equipment
becomes nonsensical.
[30]
Mr. Griessel argued that the interpretation suggested by Mr.
Grundlingh will be detrimental to the first defendant, in that
the
plaintiff could delay until the end of the rental period to deliver
the replacement equipment, whilst the first defendant had
to continue
paying the rent in terms of the agreement. The first defendant will,
in such circumstances have a remedy against the
plaintiff and I do
not deem the scenario sketched by Mr. Griessel to be so repugnant as
to justify a departure from the ordinary
meaning of the words
contained in the clause.
[31]
In the premises, I agree with Mr. Grundlingh's interpretation of the
clause and find that new rental agreements were not concluded
between
the parties upon the plaintiff's election to replace the equipment.
[32]
In the circumstances, the amendment effected by the plaintiff did not
introduce a new claim, based on a different cause of
action and the
special plea is dismissed.
RELIEF
[33]
The second defendant admitted during his evidence that it was not
possible to return the equipment to the plaintiff.
[34]
The parties were ad idem that the order suggested by Mr. Grundlingh
in his heads of argument should therefore follow.
COSTS
[35]
Both the Master Rental Agreement and the Deed of Suretyship makes
provision for a cost order as between attorney and client
and such an
order should therefore follow.
[36]
The costs of the opposed motion decided by Bosman AJ provided that
such costs should be costs in the cause and the cost order
awarded
herein will include such costs.
[37]
The following order is made against the first and second defendants,
jointly and severally, the one to pay the other to be
absolved:
1.
The cancellation of the rental agreement concluded between the
plaintiff and the first defendant on 24 August 2007 is hereby
confirmed;
2.
The defendants are ordered to pay the plaintiff the amount of
R500,024.56;
3.
The defendants are ordered pay interest to the plaintiff on the
amount of R500,024.56 at 15.5% per annum calculated from 16 July
2008, to date of final payment;
4.
The cancellation of the rental agreement concluded by the first
defendant and the plaintiff on 27 August 2007 is hereby confirmed;
5.
The defendants are ordered to pay to the plaintiff the amount of
R76,523.09;
6.
The defendants are ordered to pay interest to the plaintiff on the
amount of R76.523.09 at 15.5% per annum calculated from 16
July 2008,
to date of final payment;
7.
The defendants are ordered to pay the plaintiff's costs on an
attorney and client scale, which costs will include the costs of
the
opposed motion as per the order of Bosman AJ dated 15 August 2011.
JANSE
VAN NIEUWENHUIZEN
ACTING
JUDGE OF THE HIGH COURT