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[2026] ZAMPMHC 22
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Da Costa Construction Welding CC and Others v First Asset Finance (A14/2024) [2026] ZAMPMHC 22 (12 May 2026)
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IN THE HIGH COURT OF
SOUTH AFRICA
MPUMALANGA DIVISION,
MIDDELBURG
CASE NO: A14/2024
(1)
REPORTABLE: NO
(2)
OF INTEREST TO OTHER JUDGES: NO
(3)
REVISED:
DATE 12/05/2026
SIGNATURE
In the matter between:
DA COSTA CONSTRUCTION
WELDING CC
FIRST APPELLANT
JOHANNES JOCOBUS
OOSTHUIZEN
SECOND APPELLANT
JABUKWANE JULY
MOKWENA
THIRD APPELLANT
and
FIRST ASSET
FINANCE
RESPONDENT
Delivered: This
judgment was handed down electronically by circulation to the
parties’ legal representatives by email. The
date for hand-down
is deemed to be on 12 May 2026.
JUDGMENT
(Coram :
Phahlamohlaka J et Mphahlele JP)
Phahlamohlaka J
Introduction
[1]
This is an appeal against the whole of the judgment and order of the
magistrate’s court
sitting at Bethal (“the court
a
quo
”), where the court
a quo
granted judgment in
favour of the respondent (the plaintiff in the court
a quo
)
against the appellants (the defendants in the court
a quo).
[2]
The appellants and the respondent entered into a rental agreement in
terms whereof the respondent
leased certain equipment to the
appellants. The cause of action in the particulars of claim was for
payment of arrear rental and
the balance of the contractual term.
[3]
At the outset, the appellants are applying for condonation for the
late filing of the appeal record.
The application is not opposed. We
have considered the application and are satisfied that we ought to
exercise our discretion in
favour of condoning the appellants’
failure to file the appeal record on time.
Brief Factual Matrix
[4]
On 12 December 2014, the first appellant and respondent entered into
a written agreement for the
rental of CCTV equipment. The second and
third appellants signed written deeds of suretyship.
[5]
The equipment was installed in December 2014. On 22 March 2016, the
equipment was struck by lightning,
resulting in a power surge that
rendered the system damaged beyond economic repair. This aspect was
confirmed by the respondent’s
own expert technician. Despite
the damage, the first appellant continued paying rentals via debit
order until 20 June 2016. The
respondent subsequently cancelled the
agreement on 11 October 2016, alleging breach due to nonpayment from
July 2016 onwards.
[6]
The court
a quo
refused an application for absolution from the
instance at the close of the respondent's case, finding that a
prima
facie
case had been established. After the appellants closed
their case without leading evidence, the court
a quo
handed
down judgment in favour of the respondent. In the judgment, the court
a quo
held that clause 12.4 only applied if the equipment was
actually insured in terms of clauses 12.1 and 12.2. The court
a
quo
concluded that clause 12.4 did not deal with termination
because clause 16 was the specific termination clause for breach.
Grounds of Appeal
[7]
The appellants raised the following main grounds of appeal:
7.1
The appellants contend that the court
a quo
ought to have
interpreted clause 12.4 in isolation from other clauses.
7.2
The court
a quo
erred by making a finding that the appellants
were obliged to adduce evidence after their application for
absolution from the instance
was dismissed.
7.3
The court
a quo
erred by not disregarding the certificate of
balance that was not presented as evidence by the author thereof.
7.4
The court
a quo
erred in making a finding that the first
appellant breached the agreement by failing to make rental payments
after June 2016.
Issues
[8]
The appeal on merits turns on a very crisp issue of the proper
interpretation of the rental agreement.
The bone of contention
between the parties centres on the proper interpretation of clause
12.4 of the agreement, namely, whether
the rental agreement has
self-terminated in terms of this clause.
[9]
There are two other issues to be determined, namely failure to
mitigate damages by the respondent
and the validity of the
certificate of balance.
The legal principles
[10]
The case heavily relies on the established principles of contractual
interpretation. The principles espoused
in
Natal
Joint Municipal Pension Fund v Endumeni
,
[1]
are crystal clear.
Endumeni
emphasises that when interpreting contracts, the court must take into
consideration the text, context and the purpose of the agreement.
Analysis
[11]
The court
a quo
identified that clause 12.4 cannot be read in
isolation. Clause 12.4 provides that:
“
In
the event of the equipment being lost, or stolen or, in the opinion
of the (respondent) damaged beyond economical repair, this
agreement
will terminate and the first appellant will pay all rentals plus VAT
outstanding in respect of the period prior to such
termination
provided that this agreement will not terminate if the parties reach
agreement on the substitution of the equipment.”
The court
a quo
further found that clauses 12.1 and 12.2 impose a strict obligation
on the renter to insure the equipment.
[12]
The following are the clauses of the agreement that are relevant to
this appeal:
“
12.1
Subject to the clause 12.3 where applicable, from the time of
delivery of the equipment to the Renter until time of delivery
of the
equipment back to FAF on the termination date (or the actual date of
delivery if the Renter returns the equipment after
the termination
date), the Renter will bear all risk in regard to loss or damage to
the equipment howsoever caused, fair wear and
tear excepted, and will
indemnify FAF accordingly.
12.2
The Renter will keep the equipment insured against all risks for the
full new replacement value thereof
with a reputable insurer. The
Renter will advise the insurer issuing such policy of FAF’s
interest in the equipment/asset
and will procure that FAF’s
interest as owner of the equipment is endorsed on the policy. The
policy will further provide
for any proceeds under the policy to be
paid to FAF unless FAF agrees otherwise in writing. The Renter will
furnish FAF with a
copy of such insurance policy within 10 (ten)
business days of the commencement date. The Renter shall be liable
for any insufficiency
of the insurance as contemplated herein.
12.4
In the event of the equipment being lost, stolen or, in the opinion
of FAF, damaged beyond economic
repair, this agreement will terminate
and the Renter will pay all rentals plus VAT outstanding in respect
of the period prior to
such termination, provided that this agreement
will not terminate if the parties reach agreement on the substitution
of the equipment.
12.5
In the event of loss or destruction of the equipment, the Renter will
notify FAF within seven days
of such loss or destruction.”
[13]
The appellants’ case is that the equipment was damaged to the
point of being unusable. However, because
the respondent has not
adduced evidence, one can hardly find any evidence that the
appellants informed the respondent of the damage
in compliance with
clause 12.5 of the agreement.
[14]
Indeed, clause 12.4 makes provision that in the event of the
equipment being lost or damaged, the agreement
shall terminate. The
appellants argued that the agreement terminated in terms of clause
12.4 because the equipment was damaged
beyond economic repair. The
appellants further argued that the court
a quo
erred by
reading clause 12.4 together with clause 12.2 and 12.5.
[15]
In
Capitec
Bank Holdings Limited v Carol Lagoon Investments
,
[2]
the court emphasised that contract interpretation should be a
holistic process, avoiding the distortion of plain language by
emphasising
context. Unterhalter J stated as follows:
[3]
“
Our
analysis must commence with the provisions of the subscription
agreement that have relevance for deciding whether Capitec Holdings’
consent was indeed required. The much-cited passages from
Natal
Joint Municipal Pension Fund v Endumeni
Municipality (Endumeni)
offer guidance as to how to approach the interpretation of the words
used in a document. It is the language used, understood in
the
context in which it is used, and having regard to the purpose of the
provision that constitutes the unitary exercise of interpretation.
I
would only add that the triad of text, context and purpose should not
be used in a mechanical fashion. It is the relationship
between the
words used, the concepts expressed by those words and the place of
the contested provision within the scheme of the
agreement (or
instrument) as a whole that constitute the enterprise by the recourse
to which a coherent and salient interpretation
is determined. As
Endumeni
emphasised, citing well-known cases, ‘the inevitable point of
departure is the language of the provision itself’.”
[16] In
my view, considering both
Endumeni
and
Capitec
, it
would be absurd to read clause 12.4 of the agreement in isolation.
The purpose of the agreement could not have been to provide
for
self-termination, even in circumstances where the other clauses of
the agreement were not complied with.
[17]
The agreement placed a duty on the appellants to report any damage to
the equipment. No evidence was presented
by the appellants that this
was done. Further, no evidence was presented by the appellant that
the equipment was ensured in compliance
with the agreement.
[18]
The agreement makes a provision that the certificate of balance shall
serve as
prima facie
proof of indebtedness. The appellants
failed to adduce evidence to rebut the certificate of balance. The
appellants instead elected
to close their case without adducing any
evidence. Therefore, in my view, the court
a quo
did not
misdirect itself by accepting the certificate of balance on the face
of it.
[19] As
alluded to earlier, the agreement placed a duty on the appellants to
report any damage to the equipment.
The record does not show whether
the appellants reported the damage to the equipment as is required by
the terms of the agreement.
In my view, if one reads the agreement
wholistically, one cannot fault the court
a quo
for having
made an order in favour of the respondent.
[20]
For the aforesaid reasons, the appeal stands to fail.
[21] I
cannot find any reason to deviate from the trite principle that the
successful party must be awarded costs.
Order
[22] In
the result, I propose the following order:
1
The condonation for the late filing of the appeal record is granted.
2
The appeal is dismissed with costs, including costs of counsel to be
taxed on scale
B.
KF PHAHLAMOHLAKA
JUDGE OF THE HIGH COURT
MPUMALANGA DIVISION,
MIDDELBURG
I
agree.
It is so ordered.
SS MPHAHLELE
JUDGE PRESIDENT
MPUMALANGA DIVISION,
MIDDELBURG
Appearances
For
the Appellants:
Adv
Boonzaaier
Instructed
by:
Cohen
Cronje & Van der Walt Inc.
For
the Respondent:
Adv
Kloek
Instructed
by:
Marianne
Pretorius Attorneys
Judgment
reserved:
14
November 2025
[1]
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012 (4) SA 593 (SCA).
[2]
Capitec
Bank Holdings Limited v Carol Lagoon Investments
2022
(1) SA 100 (SCA).
[3]
Ibid
para 25.