Capital Acceptances (Pty) Ltd v Velakancane Trading CC

• Jurisdiction: South Africa
• Judge: Van Oosten J
• Judgment Date: 02 May 2014
• Docket Number: 160/2014
• Hearing Date: 29 April 2014
• Court: South Gauteng High Court, Johannesburg

Van Oosten J:

[1]

In this application the applicant seeks an order for the attachment and return of a certain Bell grader pursuant to its cancellation of a written lease agreement entered into between the applicant as lessor and the first respondent as lessee. The second and third respondents duly bound themselves as sureties and co-principal debtors in

2014 JDR 0971 p2

Van Oosten J

favour of the applicant for the due and punctual payment by the fist respondent to the applicant of all a mounts due under the lease agreement.

[2]

The respondents have raised two defences: firstly, that the lease agreement was signed by the third respondent on behalf of the first respondent 'under the reasonable impression and belief that the first respondent was purchasing a New Bell Grader….' and, secondly, that the applicant has 'overcharged' the first respondent with the sum of R140 000-00, being value added tax in respect of a portion of the purchase price of the grader that was financed by the Department of Trade and Industry under a scheme of assistance to BEE businesses. Each of the defences will now be considered separately.

[3]

The first defence in essence concerns the nature of the agreement: the written signed lease agreement clearly and beyond any doubt both in its heading (Lease Agreement) and terms (with reference to inter alia the lessor, the lessee and rentals payable) refers to and deals with a lease agreement. Ownership of the grader is specifically dealt with in clause 3 of the agreement: it remains with the applicant 'at all times'. As opposed hereto none of its provisions can, in any way, be reconciled with an agreement of purchase and sale. The respondents contend that an agreement of purchase and sale was in fact concluded which was brought to the fore when, after cancellation of the agreement by the applicant, it dawned on them that in terms of the lease agreement the grader had to be surrendered to the applicant upon expiry of the lease. No reliance is placed on rectification of the lease agreement and it has not been alleged that a common mistake had occurred. Nor has it been alleged that the respondents were misled in any way. The defence raised, at best for the respondents, is one off justus error (Christie The Law of Contract in South Africa 6ed p181). In order to succeed the respondents are required to show that the mistake was reasonable. In signing the lease agreement the third respondent on behalf of the first...