2
FOURIE AJ
INTRODUCTION:
[1] The matter at hand concerns the return date of a rule nisi granted by Vele AJ
on 22 October 2024 , wherein the return of certain equipment was ordered,
and on this, the return date, the Respondents are to show cause why the Order
ought not to be made final.
[2] The Applicant's application seeks to secure the return of certain Caterpillar
equipment that was financed by the Applicant under an instalment sale
agreement concluded with the Respondent.
[3] The Applicant contends that they are entitled to the return of the equipment as
the ultimate owners thereof, up until the full purchase price has been repaid.
The Respondents oppose the granting of final relief and pray for the dismissal
of the application.
RELEVANT BACKGROUND FACTS:
[4] To a large degree, the factual premise of the matter is common cause.
[5] The parties agree that the Applicant and the Respondent, respectively,
concluded a Master Instalment Sale Agreement under which the Applicant
financed the equipment and the Respondent received delivery of the
equipment.
[6] The Applicant is the owner of the CAT equipment, and remains such until final
payment in terms of the Master Instalment Sale Agreement.
[7] Since June 2024, the Respondent has fallen into arrears on payments which
ought to have been made in terms of the Master instalment Sale Agreement.
3
[8] The Respondents contend that the equipment in question suffered certain
latent defects and persistent operational problems and breakdowns.
[9] The parties are in agreement that the Respondent entered into a customer
value agreement, being a maintenance agreement with Barlo World, which
was, in essence, an agreement that Barlo World would maintain the CAT
equipment.
[10] In terms of the Master Instalment Sale Agreement, the Respondent was
obliged to maintain the CAT equipment at the Respondent’s costs.
[11] The Respondents have instituted an application under PAIA to obtain certain
maintenance records and agreements in respect of the CAT equipment, and
the PAIA proceedings are still pending.
[12] When the matter was ultimately presented to the Court, the issues were to a
large degree confined to two elements, which the Court believes will lead the
matter to ultimate finalisation, being:
[12.1] Whether the Master Instalment Sale Agreement has been
cancelled, alternatively, in the absence of cancellation of the
agreements, whether return of the CAT equipment to the Applicant
is still appropriate; and
[12.2] Whether the exceptio non adempleti contractus finds application in
the matter, whether the Applicant has performed in terms of the
agreement entered into with the Respondent, and in the absence
of which the Applicant ought not to be allowed to claim performance
or recovery from the Respondent.
[13] The Respondents further state that there has been a material non -disclosure
of facts in the ex parte application, that the Respondent has substantial
4
counterclaims that far exceed any amount allegedly owed, and that the
defence of set-off ought to be considered by this Court. The last two defences
to the application will only find application if the Court is persuaded by the
Respondent’s argument in respect of the identified issues.
CANCELLATION OF THE MASTER INSTALMENT SALE AGREEMENT
[14] The Respondents contend that, if the Court finds that no valid cancellation of
the Master Instalment Sale Agreement did not take place, then the application
ought to immediately be disposed of in favour of the Respondents. At the
commencement of the evaluation into the matter, it is necessary to highlight a
crucial element of the Master Instalment Sale Agreement which both the
Applicant and the Respondent seemingly omitted to deal with in their papers.
As the contract is , however, before me, and as the same has been
incorporated into the evidence , I need to evaluate same, and it is necessary
for me to deal with
Clause 10(i)(g) which states that:
“If an event of default occurs, we (the Applicant) will have the rights and
remedies provided by this agreement. We will also have all rights and
remedies as a secured party under any Law or otherwise.
(i) Among these rights and remedies are to:
……..
(g) Enter premises, where a unit may be located and take
immediate possession thereof and remove (or disable in
place) such unit (and any unattached parts) without notice,
liability or legal process.”
[15] It is common cause between the parties that non -payment constitutes an
event of default.
5
[16] During the argument, and upon being presented by this Clause, the
Respondent could not rebut the notion that the Applicant could have merely
proceeded under the auspices of Clause 10(i)(g). The high-water mark for the
Respondents is that the Applicant chose not to proceed in terms of
Clause 10(i)(g), and as such, should be bound by their election.
[17] On 3 August 2024, a letter was dispatched to the Respondent’s legal
representatives, Barloworld Equipment and Caterpillar Financial Services
South Africa, and the letter is not clear on which portions of the letter are
directed to Barloworld Equipment and which portions are directed to
Caterpillar Financial Services South Africa. What is , however, clear from the
letter is the following:
[17.1] The Respondent complains of persistent operational problems with
the equipment.
[17.2] The respondent refers to an administrative error by Barl oworld
Equipment, leading to servicing problems with the equipment.
[17.3] The Respondent refers to non -adherence with the agreement by
Barlo World Equipment.
[18] The Respondent then proceeds with the following crucial statements:
[18.1] “8.1. Our client hereby gives notice of its intention to cancel the
contracts;
8.2. Our client requires you to make urgent arrangements for the
collection and return of your trucks;
8.3 Our client reserves the right to refer all damages suffered to
an appropriate forum for adjudication, including loss of income
occasioned by the inability to use the trucks as required;
6
8.4. Since the trucks are currently not operational and generating
income, our client will not be in a position to fully honour the
instalment agreement concluded with CAT Finance.
We hereby invite your office to provide an amicable solution to the
issues raised by no later than 8 August 2024, failing which our client
will take further steps without further notice to you.”
[19] It is common cause that the issues raised between the parties remain
unresolved.
[20] On 22 August 2024, the Applicant informed the Respondent that the
equipment would be uplifted from the Respondent on 23 August 2024.
[21] On 30 August 2024, the Respondent’s legal representative advanced a letter
to the Applicant seeking a payment holiday for the contract for a period of six
months pending the resolution of the dispute with Barloworld.
[22] On 5 September 2024, the Applicant’s legal representatives addressed an
urgent letter to the Respondent’s legal representatives wherein the following
is necessary to be highlighted:
“3. ………your client invited our client to collect our client’s equipment.
As is evident from the letter attached hereto, our client elected to
accept your tender for delivery of the equipment.”
“4. We further note that you have indicated that your client will not
make the monthly payments to your client as it is contractually
bound to do”
‘”5. Having regard to both your letters, we have advised our client that
your letters dated 3 and 30 August 2024, constitute a repudiation
7
of the agreement. Our instructions are ex abundante , therefore to
cancel the agreement with immediate effect, as we herby do.”
“6. Our client is the owner of the equipment and the entity that financed
the sale thereof. Our client cannot address the operational issues
that your client contends to have, as this is an issue that your client
has to resolve with Barlo world directly. Our client gave no
assurances in respect of the equipment save for what is contained
in the now terminated agreement.”
[23] At the very least, the following issues can summarise the position as per the
correspondence exchanged:
[23.1] On 3 August 2024, the Respondent indicated their intention to
cancel the agreement and tendered back the Applicant’s
equipment. The Respondent states that they will not be making
any further payments in respect of the agreement.
[23.2] It is evident that by 8 August 2024, the issues between the parties
were not yet resolved. As such , it could reasonably be expected,
as per the letter of 3 August 2024, that the Applicant intended to
persist with their intentions as foreshadowed in the letter.
[23.3] By 5 September 2024, the Respondent made no further payments
in respect of the agreement, and by that time the Respondent was
in default of their obligations towards the Applicant in the amount
of R 791 354.98.
[23.4] Both the Applicant and the Respondent referred me to the matter
of Data Color International (Pty) Ltd [1], where the Supreme
Court of Appeal held:
8
“Conceivably, it could therefore happen that one party, in truth
intending to repudiate (as he later confesses), expressed
himself so inconclusively that he is afterwards held not to have
done so; conversely, that this conduct may justify the inference
that he did not propose to perform even though he can
afterwards demonstrate his good faith and his best intentions
at the time. The emphasis is not on the repudiating party’s
state of mind, on what he suggestively intended, but on what
someone in the position of the inn ocent party would think he
intended to do; repudiation is accordingly not a matter of
intention, it is a matter of perception. The perception is that of
a reasonable person placed in the position of the aggrieved
party. The test is whether such a notional , responsible person
would conclude that proper performance, in accordance with a
true interpretation of the agreement, will not be forthcoming.
The inferred intention accordingly serves as the criterion for
determining the nature of the threatened actual breach.”
[24] In the same matter, the Court stated that:
“The repudiation is sometimes set to consist of two parts: the act of
repudiation by the guilty party, evincing a deliberate and unequivocal
intention no longer to be bound by the agreement, and the act of his
adversary, “accepting” and thus completing the breach.”
[25] I align myself with what the Court stated in the matter of South African Forestry
Co Ltd v York Timbers Ltd [2] where the Court stated that:
“It is clear, I think, that in particular circumstances, conduct of a
contracting party can constitute a breach of contract in the form of
malperformance and a repudiation. A fair example of this is to be found
in the present case. York’s conduct amounted to a breach in the form of
9
failure to comply with its obligations in terms of Clauses 3.2 and 4.4.
However, at the same time it also amounted to a repudiation, and that
York conveyed the clear indication to SAFCOL of its intention not to
comply with those obligations in the future either. In these
circumstances, the contracts were in my view duly terminated when
SAFCOL accepted York’s repudiation in its letter of 10 November 1998.”
[26] The non-performance by the Respondent is common cause. The tender for
the return of the Applicant’s equipment is also a common cause. The only
reasonable inference that a reasonable Applicant could have made under the
circumstances is that the Respondent was no longer of the intention to comply
with its contractual obligations towards the Applicant. The fact that the
Respondent then further proceeded in the coming months up until the date of
the hearing of the matter, is indicative that the actions of th e Respondent
amounted both to a repudiation of the agreement, and that at the very least
and even if the Court does not accept that the contract was cancelled by the
Respondent on 3 August 2024, the repudiation was accepted by the Applicant
on 5 September 2024, further alternatively the contract was cancelled by the
Applicant on 5 September 2024, due to the actions of the Respondent.
[27] The acceptance of the repudiation or the cancellation followed the
Respondent's direct actions of non-payment, and the perception was brought
into being by the Respondents' letters and intention.
[28] Evaluating the aforesaid against the contractual rights of the Applicant in terms
of Clause 10(i)(g) of the Master Instalment Sale Agreement, the cancellation
defence of the Respondent holds no merit.
10
EXCEPTIO NON ADIMPLETI CONTRACTUS:
[29] The principles in respect of the exceptio turn on reciprocity, and the principle
that in many contracts, the common intention of the parties, expressed or
unexpressed, is that there should be an exchange of performances. [3]
[30] The principle is , accordingly, that neither party should be entitled to enforce
the contract unless they have performed or are ready to perform their own
obligations. [4]
[31] As expressed by the Court in Thompson v Scholtz [5] the defence is a
stalemate defence to a claim ex contracto and not a remedy for breach of
contract.
[32] Simply put, the question this Court needs to answer is whether the Applicant
had any contractual obligation towards the Respondent which was not
complied with, which would afford the Respondent the right to invoke the
exceptio and withhold payment from the Applicant.
[33] The Respondent submits that severe latent defects existed in the equipment,
rendering the equipment unfit for purpose. The question is , accordingly, ex
contracto, in what way the Applicant failed to perform.
[34] The high-water mark for the Respondent is its reliance upon Common Law
principles of reciprocity, statutory consumer rights, the complied warranty of
fitness for purpose, public policy against unfair terms, and constitutional rights
to fair contractual dealings. No real particularity to these averments has been
given by the Respondent.
[35] It is widely accepted that the Master Instalment Sale Agreement was signed
in December 2022, that the contract was kept intact for at least a year and a
half, and that the Respondent performed in terms of the agreement.
11
[36] When the maintenance dispute with Barloworld arose, that dispute effectively
flowed over to the Applicant, and the Respondents then withheld further
payments to the Applicant. It seems more likely that the Respondents stopped
payments to the Applicant because they were unable to perform, rather than
because they believed the Applicant was at fault, given the correspondence
exchanged.
[37] It is noteworthy from the correspondence exchanged prior to the litigious
process that the Respondent did not blame the Applicant for causing the non-
performance, and it has always been the case that Barloworld was the cause
of the Respondents falling in arrears with the Applicant.
[38] The relevant portions of the contract to be highlighted are the following:
“1. You, by execution of this agreement agree that your payment and
performance obligations under this agreement are absolute and
unconditional. Your payment and performance obligations are not
subject to cancellation, reduction, or set-off for any reason.”
“15. …….the agreement constitutes the sole record of the agreement
between the parties in regard to the subject matter thereof. No
party shall be bound by any express or implied term,
representation, warranty, promise or the like, not recorded in the
agreement.”
“19. No person or entity, including, without limitation, the supplier, dealer
or manufacturer of any unit, is authorised to act as our agent
regarding this agreement.”
“No waiver, modification, or change in this agreement will bind us
unless provided by us in writing. Oral agreements are not binding.”
12
[39] Other than the Applicant's obligation to provide financing for the ultimate
purchase of the equipment, the contract imposes no further contractual
obligations on the Applicant.
[40] The Respondent's argument evolved significantly over the course of the
matter, and it was ultimately stated that the Respondent relies on Van Niekerk
v First Rand Bank Limited. [6]
[41] It is crucial to highlight the fact that the Court in Van Niekerk supra evaluated
the matter under the principles of the actio redhibitoria, of which it is
fundamental that the contracts between the parties be cancelled, and a
reciprocal restoration of what was paid and delivered pursuant to the sale be
undertaken on the principles of the restitutio in integrum. [7]
[42] It is noteworthy to distinguish Van Niekerk from the current matter in that, in
Van Niekerk, the defects complained of were noticed within four days of the
delivery of the vehicle, whereas in the current matter, the issues seem to relate
to the issues by Barloworld in their continued maintenance of the equipment,
and whereas in Van Niekerk, the defects were common cause as being latent
defects, in the current matter the existence of latent defects is at this stage
speculation. The existence of non -performance by Barlo world might be
common cause , but the existence of latent defects at the time whe n the
agreement was concluded is not.
[43] It is crucial to state that, under the contract, the maintenance of the equipment
is an obligation that the parties have agreed lies with the Respondent, not with
the Applicant. As such, the reciprocal duty the Respondent wishes to enforce,
being the maintenance of the equipment, is one that the contract burdens the
Respondent with, not the Applicant.
13
[44] In this regard, the contract states that:
“3. ….. you, at your expense, will maintain each unit in good operation
order, repair and condition, and perform maintenance at least as
frequently as stated in an applicable operator’s guide, service
manual or lubrication and maintenance guide.”
[45] Under the circumstances of the current matter, the Court is not convinced that
the purported defence by the Respondent in terms of the exceptio is a valid
defence against the relief the Applicant ultimately seeks. The Applicant does
not seek a declaration of rights, nor damages. The Applicant seeks the return
of certain equipment solely.
[46] The aforesaid is to be evaluated against the backdrop of the Respondent
having tendered the return of the equipment to the Applicant, and the
sentiment that the units are non-operational and unsuitable for their intended
purpose.
[47] Upon evaluation of the contractual terms between the parties, the defence
raised by the Respondent cannot be sustained.
PRACTICAL EFFECT OF THE RETURN OF THE EQUIPMENT:
[48] The practical effect of the return of the equipment to the Applicant would be
the following:
[47.1] It would give effect to the Respondent’s wishes in terms of their letter
of 3 August 2024.
[47.2] The equipment is non-operational, and can in any event not be utilised
for its intended purpose by the Respondent.
14
[47.3] The Respondent is in breach of their contractual duty towards the
Applicant, and as such, the Applicant is entitled to take possession of
the equipment.
[47.4] If the Respondent is able, at a later stage, to prove that a latent defect
existed and that the Applicant is responsible towards the Respondent
for damages as a result thereof, the Applicant or any other liable party
will at that stage be ordered to compen sate the Respondent for
damages suffered as a result of their actions.
[47.5] If the Respondent ultimately rely on the matter of Van Niekerk, supra,
and they succeed with their claim in holding the Applicant liable,
premised on the actio redhibitoria if restitutio in integrum is applied,
the equipment will in any event have to be returned to the Applicant,
and damages will be paid by the Applicant to the Respondent.
[49] Having regard to all the facts of the current matter, the Court can find no
justifiable reason for the equipment to remain with the Respondent, even if a
cautious approach to future litigation is to be taken.
[50] Having established the Respondent's default, the Applicant is entitled to take
possession of the equipment.
[51] Any and all ancillary remedies available to the Respondents lie in damages
claims against the parties they ultimately wish to hold accountable.
[52] At this stage, the existence of latent defects in the equipment has not been
proven as of the time the agreements with the Applicant were concluded. The
only proven deficiencies pertaining to the equipment are the non-performance
by Barloworld.
15
[53] The Court is not persuaded by the attempted argument of the Respondent to
regard the Applicant and Barlo world as intertwined to the degree that they
ought to be regarded as functioning as the same entity. The fact that the
Master Instalment Sale Agreement expressly burdened the Respondent with
the maintenance of the equipment, leading to the Respondent entering into a
free-standing service agreement with Barloworld, to which the Applicant is not
a party, is indicative that an external obligation with an external company other
than the Applicant came into existence.
[54] The Court is mindful , however, that the Respondent may wish to pursue a
damages claim against the Applicant in respect of latent defects that existed
at the time when the Respondent took possession of the equipment. Whether
the Respondent is able to prove such latent defects and to la y the cause
thereof at the door of the Applicant, is neither for this Court to establish nor
evaluate at this time.
[55] The Court believes , however, that the Respondent needs to be provided an
opportunity to have its experts evaluate the equipment, and if they so wish, to
draw reports in respect of the equipment to establish whether any facts
present themselves in respect of the equipment which the Re spondent might
wish to use at a later stage.
[56] If the Court does not come to the aid of the Respondent in ordering such a
right for the Respondent, the possibility exists that the equipment will be sold,
repaired or destroyed, which would lead to an impossible situation for the
goods to be evaluated at a later stage.
COSTS:
[57] The Applicant prays for a costs order to be granted in their favour on a punitive
scale. Similarly, the contentions by the Respondent are that punitive costs
ought to be paid by the Applicant. The Court, although persuaded that a cost
17
Counsel for the Applicant: Adv C Gibson
Instructed by: Senekal Simmonds Incorporated
Counsel for the Respondent: Adv S Janse van Rensburg SC
Instructed by: Lacante Henn Incorporated
Judgment reserved on: 7 May 2026
Date of delivery: 13 May 2026
______________________________________________________________
[1] Data Color International (Pty) Ltd v Intamerket (Pty) Ltd 2001 (2) SA 284
(SCA)
[2] South African Forestry Co Ltd v York Timbers Ltd 2005 (3) SA 323 (SCA)
[3] Cradle City (Pty) Ltd v Lindley Farm 528 (Pty) Ltd (1212/2016) [2017] ZASCA
185; 2018 (3) SA 65 (SCA) (6 December 2017)
[4] Euhar Truck & Bus (SA) Pta Ltd v Dorbyl Limited t/a Dorbyl Transport Products
& Busaf Case 38/03 (25 March 2004) at paragraph 12
[5] Thompson v Scholtz 1999 (1) SA 232 (SACA)
[6] Van Niekerk v First Rand Bank Limited 2026 (2) SA 516 SCA (10 December
2025)
[7] Van Zyl v Credit Corporation of South Africa Limited 1960 (4) SA 582 (A)