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2011
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[2011] ZAKZDHC 56
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Energy X-Ray Trading Company KZN (Pty) Ltd and Another v Sanyati Building (Pty) Ltd and Others (4062/11) [2011] ZAKZDHC 56 (30 November 2011)
In
the KwaZulu-Natal High Court, Durban
Republic
of South Africa
Case
No :4062/11
In
the matter between :
Energy
X-Ray Trading Company KZN (Pty) Ltd
…....................................
First
Applicant
Africa
X-Ray Industrial & Medical (Pty) Ltd
…......................................
Second
Applicant
and
Sanyati
Building (Pty) Ltd
…..................................................................
First
Respondent
The
Red Ants Maintenance & Construction CC
…...........................
Second
Respondent
The
Provincial Administration of KZN
Department
of Works
…........................................................................
Third
Respondent
Judgment
Lopes J
[1] The first applicant seeks an order
declaring it to be the owner of the X-ray machinery and accessories
described in an annexure
to the founding affidavit (‘the
equipment’) together with an order that the first respondent
deliver the equipment
within five days of the date of the order to
the first applicant’s rented warehouse in Durban. Alternative
relief is sought
that the Sheriff be authorised to attach and deliver
the equipment in the event that the first respondent fails to comply
with
the order. Costs are sought.
[2] The applicants seek relief only
against the first respondent. I shall refer to the parties in this
judgment as Energy X-Ray
(first applicant), Africa X-Ray (second
applicant), Sanyati (first respondent) and The Red Ants (second
respondent). I shall also
refer to the applicants collectively as
‘the applicants’, and to the third respondent as such.
[3] The applicants’ cause of
action may be summarised as follows :-
Africa X-Ray is a company which
imports various types of medical equipment into the Republic of
South Africa; and
Energy X-Ray is an associated company
which trades in the sale of the medical equipment imported by Africa
X-Ray;
in August of 2009 The Red Ants asked
Energy X-Ray to provide a quote for the sale and supply of various
types of medical X-ray
equipment and related accessories as
described in the papers;
The Red Ants had apparently concluded
an agreement with Sanyati to sell that equipment to, and instal it
on behalf of, Sanyati;
Africa X-Ray was able to provide some
of the equipment needed from stock, and the balance had to be
imported specifically for
the project;
Africa X-Ray imported the necessary
equipment and made payment for it in full. The submission is that at
that stage Africa X-Ray
became the owner of the equipment;
Energy X-Ray then purchased the
equipment from Africa X-Ray on a rand for rand basis; and
an agreement was concluded between
Energy X-Ray and The Red Ants for the sale of the equipment during
or about October and November
of 2009, and Energy-X-Ray was to
deliver the equipment and instal it at the Park Rynie mortuary, 271
Smith Street, Park Rynie,
KwaZulu-Natal;
The Red Ants were to pay an amount of
R898 509,41 to Energy X-Ray for the equipment, by way a R200 000
deposit with the balance
being paid in due course. Provision was
made in the agreement for a reservation of ownership of the goods in
Energy X-Ray, with
the stipulation that ownership would only pass to
The Red Ants on payment of the full purchase price;
Energy X-Ray also undertook to assist
The Red Ants in completing an application form for the required
licence in terms of the
provisions of s 4 of the Hazardous
Substances Act, 1973 (‘the Act’) to permit the use of an
X-ray device;
Energy X-Ray provided the equipment
and delivered it to the Park Rynie mortuary , but it could only be
installed once the licence
in terms of s 4 of the Act had been
issued;
The Red Ants, in breach of the
agreement with Energy X-Ray failed to make payment of the full
purchase price. The only reason
given for non-payment was that it
had not in turn been paid by Sanyati;
various assurances were given by
representatives of The Red Ants that payment would be made the
moment that Sanyati paid The Red
Ants, but it is common cause that
payment has never been made to Energy X-Ray;
there was also at that time a problem
with the installation of the equipment at the Park Rynie mortuary,
because the relevant
s 4 licence could not be obtained;
eventually because of the
difficulties (for technical reasons) in obtaining the s 4 licence,
the third respondent considered removing
the equipment from the Park
Rynie mortuary to the Gale Street mortuary in Durban. That mortuary
could accommodate the equipment
because it already had a valid s 4
licence. Energy X-Ray and The Red Ants agreed that because the
equipment would no longer be
installed by Energy X-Ray at the Park
Rynie mortuary, The Red Ants would be credited with the installation
costs in the sum of
R25 000 plus VAT;
on the 1
st
June 2010 and
at the request of the third respondent, Energy X-Ray obtained and
provided to the third respondent a quote in the
sum of approximately
R100 000 for the transportation of the equipment from the Park Rynie
mortuary to the Gale Street mortuary,
for the alterations to the
Gale Street mortuary X-ray room, and for the installation of the
equipment there;
on the 2
nd
July 2010 The
Red Ants paid the deposit required to Energy X-Ray in the sum of
R200 000;
representatives of The Red Ants
contacted the representatives of Energy X-Ray in August 2010 and
intimated that the Red Ants were
not being paid by Sanyati and that
they feared that they would not be paid. The advise from the
attorneys acting for The Red
Ants was allegedly that an agreement
should be concluded that Energy X-Ray would uplift the equipment and
return it to its own
storage facility and that the deposit paid by
The Red Ants would be set off as liquidated damages for the
additional costs occurred
by Energy X-Ray in warehousing and
transporting the equipment;
on the 14
th
of September
the equipment was collected on the instructions of Energy X-Ray;
these arrangements were confirmed in
a letter dated the 29
th
of September 2010 sent to the
attorneys acting for Africa X-Ray and a copy was sent to Mr O’Connor
of Sanyati who is reflected
as the Park Rynie Mortuary Project
Manager;
on the 1
st
of October 2010
Sanyati’s attorneys demanded that the equipment be returned,
failing which a spoliation application would
be brought against
Energy X-Ray. That application was delivered in due course, and
resulted in the grant of a spoliation order
dated the 1
st
November 2010;
pursuant to the order the equipment
was returned to the Park Rynie mortuary on the 9
th
of
November 2010;
Energy X-Ray then continued with the
present application after requesting Sanyati to admit that they did
not pay The Red Ants
and that the ownership in and to the equipment
stored vested in Energy X-Ray. That request was not responded to.
[4] The defences raised by Sanyati to
the vindicatory application were :-
that it had paid for the equipment in
full, and taken delivery and transfer of ownership from The Red Ants
in the bona fide belief
that The Red Ants had the right to transfer
ownership in and to the equipment;
Sanyati called upon The Red Ants to
assist in its defence against Energy X-Ray and notified The Red Ants
that should Energy X-Ray
succeed in the vindicatory application, it
would seek damages including the return of the purchase price from
The Red Ants; and
Sanyati has what it refers to as
‘serious doubts’ about the claim of Energy X-Ray that it
reserved ownership in and
to the equipment when it sold it to The
Red Ants. Sanyati accordingly requires the matter to be referred for
the hearing of oral
evidence on this issue.
[5] It is clear from the opposing
affidavit of Sanyati that it concluded an agreement with The Red Ants
in terms of which The Red
Ants were to supply and instal the
equipment. It alleges that it was part of that agreement that once
the equipment had been delivered
on site, it would become the
property of the third respondent. The suggestion is made that Energy
X-Ray must have known that ownership
of the equipment will be
transferred by The Red Ants to Sanyati, who would in turn transfer
ownership to the third respondent.
[6] It is not clear to me how this
conclusion can be drawn because had the above taken place, it would
have been necessary that
The Red Ants acquired ownership in and to
the equipment. As Sanyati professes to have no knowledge of the
contractual arrangements
concluded between Africa X-Ray, Energy X-Ray
and The Red Ants, in my view there is no real, genuine or bona fide
dispute of fact
raised in this regard as envisaged in
Plascon-Evan
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(AD)
at 634 E – 635 C.
[7] This rule discussed in
Wightman
t/a J W Construction v Headfour (Pty) Ltd and
another
[2008] ZASCA 6
;
2008
(3) SA 371
(SCA), para 13 where Heher JA stated:-
‘
A real,
genuine and bona fide dispute of fact can exist only where the court
is satisfied that the party who purports to raise the
dispute has in
his affidavit seriously and unambiguously addressed the fact said to
be disputed. There will of course be instances
where a bare denial
meets the requirement because there is no other way open to the
disputing party and nothing more can therefore
be expected of him.
But even that may not be sufficient if the fact averred lies purely
within the knowledge of the averring party
and no basis is laid for
disputing the veracity or accuracy of the averment. When the facts
averred are such that the disputing
party must necessarily possess
knowledge of them and be able to provide an answer (or countervailing
evidence) if they be not true
or accurate but, instead of doing so,
rests his case on a bare or ambiguous denial the court will generally
have difficulty in
finding that the test is satisfied. I say
“generally” because factual averments seldom stand apart
from a broader matrix
of circumstances all of which needs to be borne
in mind when arriving at a decision. ... There is thus a serious duty
imposed upon
a legal adviser who settles an answering affidavit to
ascertain and engage with facts which his client disputes and to
reflect
such disputes fully and accurately in the answering
affidavit. If that does not happen it should come as no surprise that
the court
takes a robust view of the matter.’
[8] Mr
Bingham
, who appeared
for Sanyati drew my attention to a number of aspects of the
documentation put up by the applicants demonstrating
the importation
of the equipment by Africa X-Ray. The suggestion is that these
documents do not demonstrate that the equipment
was purchased, and
that ownership could not have vested in, Africa X-Ray in the first
place.
[9] However, it is clear from the
documents that Africa X-Ray and Energy X-Ray work together to ensure
the importation and distribution
of the equipment. The order
confirmation from Energy X-Ray to The Red Ants clearly incorporates a
reservation of ownership clause.
There is no doubt that Energy X-Ray
sold the equipment to The Red Ants. Sanyati admits to having had a
contract to purchase it
from The Red Ants.
.
[10] The reservation of ownership is
referred to in a number of documents including :-
(a) a letter by the representative of
Energy X-Ray under the guise of Natal Imaging Services for the
upliftment and transportation
of the equipment from the Park Rynie
mortuary to the Gale Street mortuary, which quotation was addressed
to the third respondent
and dated the 9
th
of June, 2010;
and
(b) a letter addressed by the
attorneys acting for Energy X-Ray to the attorney acting for The Red
Ants wherein reference is made
to the reservation of ownership in
their agreement. This was copied to Sanyati during or about September
2010. The reply to that
letter dated the 1
st
of October
2010 makes no challenge to the reservation of ownership, but instead
addresses only the question of the spoliation.
That matter is again
addressed in a letter to Sanyati’s attorneys dated the 6
th
of October 2010. Once again the reply dated the 6
th
of
October does not deal with the issue of reservation of ownership.
Later correspondence dealing with the reservation of ownership
was
not replied to.
[11] Although these letters are well
after the conclusion of the various contracts, they negate any
suggestion of recent fabrication
of the reservation of ownership
claim. In these circumstances I am not persuaded that Sanyati has
raised a genuine, real and bona
fide dispute of fact with regard to
the ownership of the equipment by Energy X-Ray. That reservation of
ownership must trump any
subsequent dealings between The Red Ants and
Sanyati.
[12] With regard to the doubts
expressed by Sanyati about the existence of a reservation clause in
the contract between Energy X-Ray
and The Red Ants, I am satisfied
that, on a balance of probabilities, such a reservation clause did
exist. The only matter then
left to be answered is whether the
applicants are estopped from claiming under the rei vindicatio.
[13] A party who wishes to rely on
estoppel must plead it and prove the essentials required.
See
:
Absa Bank Ltd v I W
Blumberg and Wilkinson
[1997] ZASCA 15
;
1997 (3) SA 669
(SCA) at 677 H.
In this matter it would be necessary
for Sanyati to demonstrate that a representative of the applicants
made a representation to
Sanyati that The Red Ants was the owner of
the property or entitled to dispose of it.
See
: Info Plus
v Scheelke and another
[1998] ZASCA 21
;
1998 (3) SA 184
(SCA) at 194 F – G.
That representation could have been made by words or conduct. As
there is no allegation in the answering
affidavits of a clear and
unequivocal oral representation by any representative of the
applicants, it is necessary to look at their
conduct. The test for a
representation by conduct is whether someone in the position of the
applicants should reasonably have expected
that Sanyati would be
misled by the conduct of the representatives of the applicants and
that the representatives of Sanyati acted
reasonably in understanding
the representation in the sense in which they did.
See
:
Concor Holdings (Pty)
Ltd t/a Concor Technicrete v Potgieter
2004 (6) SA 491
(SCA) at
495 B – F
[14] The allegations in the answering
affidavit are confined to the conduct of The Red Ants and Sanyati,
together with an allegation
that the applicants must have known that
ownership in the equipment would be transferred by The Red Ants to
Sanyati who would in
turn transfer ownership to the third respondent.
How the representatives of the applicants did so, is not made clear,
particularly
when Energy X-Ray relies on the express reservation of
ownership, of which the representatives of The Red Ants would
certainly
have been aware. The representation which may have induced
the representatives of Sanyati to believe that they had acquired
ownership
in and to the equipment which they had passed on to the
third respondent could only have come from The Red Ants.
[15] The only behaviour then in favour
of Sanyati which remains to be considered is whether the fact that
the applicants sold the
equipment to The Red Ants knowing that it
would ultimately be acquired by the third respondent constituted a
representation which
would have entitled Sanyati (and the third
respondent) to believe that ownership in and to the equipment would
pass to those parties.
[16] Given the requirement that the
applicants assist The Red Ants in the obtaining of the necessary s 4
licence it must be accepted
that all parties knew of the involvement
of the applicants and that they were the source of the equipment. A
reservation of ownership
is not an unusual stipulation in a
commercial contract. Indeed, it is a wise precaution taken by a
commercial entity which parts
with expensive equipment, and for which
it is not immediately to be paid in full therefor.
[17] I do not believe that it was
reasonable for representatives of Sanyati to suppose, on those facts
alone, that ownership in
the equipment passed to it upon payment to
The Red Ants simply because it was a term of the contract between
Sanyati and the third
respondent that Sanyati would transfer
ownership of the equipment to the third respondent. There is no
evidence before me that
this is something of which the applicants
were aware. In those circumstances the test set out above has not
been satisfied.
[18] Accordingly I grant an order in
terms of prayers 1, 2 and 3 of the Applicants Notice of Motion dated
the 30
th
of March 2011. The First Respondent is to pay the
costs of the application.
Date of hearing : 11
th
November 2011
Date of judgment : 30
th
November 2011
Counsel for the Applicants : A D
Collingwood (instructed by Gavin Price Attorneys)
Counsel for the Respondents : M
Bingham (instructed by Norton Rose Incorporated)