Man Truck & Bus (SA) (Pty) Ltd v Dusbus Leasing CC and Others

• Jurisdiction: South Africa
• Court: Witwatersrand Local Division
• Judge: Rabie AJ
• Judgment Date: 16 February 2001
• Citation: 2004 (1) SA 454 (W)
• Docket Number: 99/29049
• Counsel: P M Levenberg for the plaintiff. M van Wyngaard for the defendants.

Rabie AJ: A

[1] In this action the plaintiff claims, firstly, a declaratory order regarding the ownership and rights of possession and disposal in respect of certain 12 buses; secondly, payment of the sum of R3 189 825,49 from the defendants, being damages arising out of the first defendant's alleged breach of a lease agreement in terms of which the first defendant leased 12 buses from the plaintiff; B and, thirdly, further declaratory relief. The second to ninth defendants are sued as sureties for the obligations of the first defendant. The parties, however, approached this Court in terms of Rule of Court 33(4) to decide certain issues of law which would, if found in favour of the plaintiff, curtail any further proceedings. C

Background

[2] The salient features of the history of this matter should first be referred to. On 27 October 1997, the buses in question were leased by Africa Truck & Bus Company (Pty) Ltd (hereinafter ATB) to first defendant (hereinafter Dusbus or first defendant). On 30 October 1997, the second, third, fifth, seventh and eighth D defendants all signed suretyship agreements in terms of which they bound themselves as sureties in solidum for and co-principal debtors jointly and severally with Dusbus for the due payment by Dusbus of all moneys which Dusbus may then or in future owe to ATB in terms of the said lease agreement in respect of the buses. ATB carries on the E business of selling, renting and leasing of various goods under agreements which agreements are then sold to other entities. Such other entities then step into the shoes of ATB in respect of such agreements. F

[3] On 30 January 1998, plaintiff and ATB entered into a so-called standard with recourse block discounting agreement, which agreement recorded the terms and conditions which would apply if ATB should in future sell and deliver one of its aforesaid agreements with a debtor, to the plaintiff. In terms of the standard with recourse block discounting agreement, ATB would cede all of its right, title and interest in, to and under a particular agreement to the plaintiff once G such agreement were sold and delivered to the plaintiff. At the same time, ATB's ownership of the goods to which such an agreement relates, as well as all securities held in respect of such agreement, would be transferred to the plaintiff. I shall henceforth refer to these rights as the 'ownership, lease and suretyship rights'. H

[4] On 2 February 1998, ATB entered into a 'master lease agreement' with Dusbus in terms of which the same 12 buses were again leased to Dusbus. The reasons for concluding this second lease agreement were not canvassed before me and are, in any event, not relevant for purposes of the issues that have to be decided by this I court. I shall refer to the aforesaid agreement concluded on 2 February 1998 as 'the master lease agreement' and I shall refer to the relevant terms of this agreement below. It is not for present purposes necessary for me to refer further to the lease and suretyship agreements of October 1997. J

Rabie AJ

[5] Also on 2 February 1998, the second to the ninth defendants all signed identical suretyship agreements A in terms of which they bound themselves as sureties in solidum for and co-principal debtors, jointly and severally, with Dusbus for the due payment by Dusbus of all moneys due to ATB.

[6] Subsequent to the aforesaid transactions, ATB sold and delivered the 'master lease agreement' to the plaintiff and B consequently the plaintiff, pursuant to the provisions of the aforesaid standard with recourse block discounting agreement, acquired the rights of ownership in respect of the buses as well as the rights in respect of the suretyship agreements, which had previously vested in ATB - the aforesaid ownership, lease and suretyship rights. C

[7] On the same day, 2 February 1998, the plaintiff entered into a similar 'standard with recourse block discounting agreement' with Opfin (Pty) Ltd (hereinafter Opfin). This agreement had the result that plaintiff, inter alia, ceded to Opfin all of its right, title and interest in and to the aforesaid ownership, lease and D suretyship rights which it had acquired from ATB as aforesaid.

[8] On 26 August 1998, Opfin entered into an agreement with Wesbank, a division of First Rand Bank Ltd (formerly known as First National Bank of Southern Africa Ltd) (hereinafter Wesbank) in terms of which Opfin, inter alia, ceded all of its right, title and E interest in and to the aforesaid ownership, lease and suretyship rights to Wesbank.

[9] At this stage of the history of transactions, Dusbus was, accordingly, liable to fulfil its obligations in terms of the master lease agreement concluded on 2 February 1998, towards Wesbank. Similarly, the second to the ninth defendants were all liable to F Wesbank in terms of the aforesaid suretyship agreements signed by them on 2 February 1998.

[10] Initially, Dusbus complied with its obligations in terms of the master lease agreement. However, approximately a year later and in respect of the rentals due on 7 February 1999, Dusbus failed to pay any amount to Wesbank. On 7 May 1999, Dusbus again failed to G pay the relevant rentals and the aggregate amount outstanding at that point, totalled R301 247,56. Despite due notice given by Wesbank to Dusbus, Dusbus failed to pay the outstanding amount.

[11] On 27 May 1999, Wesbank cancelled the master lease agreement with Dusbus and repossessed all the buses after obtaining an H ex parte order in the magistrate's court for the district of Johannesburg.

[12] Plaintiff appeared in the picture again on 30 September 1999, when Wesbank and Opfin entered into a so-called 'Agreement of Re-cession' with plaintiff. In terms of this re-cession agreement Wesbank and Opfin, inter alia, ceded back to I plaintiff the ownership, lease and suretyship rights held by them (and previously held by plaintiff) in respect of the 12 buses. In summary, plaintiff was, at this point, again, the holder of all ownership rights in respect of the buses, as well as of the rights as lessor in terms of the master lease agreement and the suretyship agreements. In J

Rabie AJ

order to obtain cession of these rights, plaintiff paid to Wesbank the amount of A R5 629 177,72 (the amount outstanding on the master lease agreement) which amount it became entitled to recover from Dusbus and the sureties pursuant to the agreement of re-cession.

[13] At some point after Wesbank had obtained possession of the buses (as a result of the aforesaid Magistrate's Court application), Wesbank delivered the buses to plaintiff. Wesbank also withdrew its B application in the magistrate's court to enable plaintiff to proceed in the High Court for similar relief. Consequently, no final judgment was given in the magistrate's court proceedings determining the ownership of the buses which were, at the time of the conclusion of the agreement of re-cession, in the possession of the plaintiff. C

The present action

[14] On 19 November 1999, plaintiff instituted the present action against Dusbus and the sureties in its capacity as lessor by cession. In its particulars of claim, plaintiff claimed the following relief: First, an order declaring the plaintiff the owner of the buses; D that it is entitled to the possession of the buses; and that it is entitled to dispose of the buses as it deems fit. Secondly, the plaintiff claims damages in the amount of R3 189 825,49, which plaintiff allegedly suffered as a result of Dusbus' aforesaid breach of the master lease agreement and the subsequent termination thereof. E This amount was computed by deducting the appraised value of the buses as at the date of Dusbus' default, from the total amount of damages allegedly suffered and which plaintiff had paid to Wesbank pursuant to the agreement of re-cession and, for all practical purposes, in exchange for the ownership, lease and suretyship rights. That amount accorded with the amount outstanding on the original master lease F agreement. Thirdly, the plaintiff claimed a further declaratory order which need not be referred to.

[15] In the defendants' plea, the second to ninth defendants, who are represented by the same attorneys as the principal debtor (Dusbus), do not deny that they bound themselves as sureties and co-principal debtors with Dusbus under the various G suretyship agreements attached to the plaintiff's particulars of claim. Instead, jointly with Dusbus, they raise a number of defences which relate to the validity of the plaintiff's claim against the principal debtor, Dusbus. They contend that, because the principal debtor has certain defences, they too have defences. H

[16] As a result of admissions made by the defendants in their plea, the plaintiff concluded that there was no serious dispute of fact with regard to prayer 1 of the particulars of claim, ie the issue of ownership, the right of possession and right of disposal of the buses. Consequently, on 20 June 2000, plaintiff launched a separate application (hereinafter the application or the application I proceedings) in this Court for declaratory relief in the same terms as prayer 1 of the particulars of claim in the present action. The plaintiff (as applicant) cited Dusbus and second defendant as the respondents in that application. For the sake of clarity, I shall repeat the prayers in the application. They are the following: J

Rabie AJ

'1. An order declaring that: A

1.1

the applicant is the owner of the buses;

1.2

the applicant is entitled to possession of the buses;

1.3

the applicant is entitled to dispose of the buses as it deems fit.'

[17] Initially, Dusbus and second defendant, acting through the same firm of attorneys which jointly represents all the defendants in this action, filed a notice of intention to oppose the application...