Saflec Security Systems (Pty) Ltd v Group Five Building (East Cape) (Pty) Ltd

• Jurisdiction: South Africa
• Judge: Kannemeyer JP
• Judgment Date: 28 June 1990
• Citation: 1990 (4) SA 626 (E)
• Hearing Date: 25 May 1990
• Court: Eastern Cape Division

Kannemeyer JP:

The applicant is the manufacturer of electronic security equipment. The respondent company carries on business as a building contractor. It was awarded a contract by the Department of Prisons for G the building of a new prison at Cradock. For purposes of this contract two 'walk-through metal detectors' were required.

The applicant alleges that the respondent appointed B & J Electrical (Ciskei) (Pty) Ltd as a subcontractor to, inter alia, install the metal detectors and that B & J Electrical (Ciskei) (Pty) Ltd negotiated with H it to purchase them. It is further alleged that a close corporation, Doculam CC, has an exclusive marketing franchise for the sale of the applicant's products in the Eastern Cape and is entitled to commission on all sales of the applicant's products in that area whether it solicited the sale or not. Doculam CC has an agent for the Eastern Cape, Wellsafe (Pty) Ltd. The applicant says that the following 'arrangement' I was made between it, B & J Electrical (Ciskei) (Pty) Ltd and Doculam CC:

(a)

the walk-through metal detectors would be sold by applicant to Doculam CC and by Doculam CC to B & J Electrical (Ciskei) (Pty) Ltd in turn;

(b)

the walk-through metal detectors would be installed by Wellsafe J (Pty) Ltd;

Kannemeyer JP

(c)

A B & J Electrical (Ciskei) (Pty) Ltd were to pay the price of the metal detectors to Doculam CC;

(d)

the applicant would physically deliver one metal detector direct to Cradock Prison, Cradock, and the other would be delivered to Wellsafe (Pty) Ltd.

B By order dated 1 November 1988, B & J Electrical (Ciskei) (Pty) Ltd ordered the metal detectors from the applicant. (Annexure A to the founding affidavit.) The applicant delivered the metal detectors and on 28 November 1988 issued two invoices, one in respect of each detector. They are identical save that one gives the Cradock Prison as the delivery address and the other Wellsafe (Pty) Ltd. On the back of these invoices the 'conditions of sale' are printed in barely legible print. C (See annexure B to the founding affidavit.) The eighth condition reads:

'8. Property of the goods delivered

(a)

Notwithstanding delivery of goods to the customer, ownership therein shall remain vested in us until such time as the full purchase price has been paid and in the event of payment not D being made, then we shall have the right, without prejudice to our rights, on reasonable notice to the customer to claim cancellation of the contract, forfeiture of all moneys paid and return of the goods delivered in default of the payment concerned.

(b)

The risk of such goods shall, however, pass to the customer immediately upon delivery.

(c)

The customer shall keep the goods at the address stated by him E on the invoice and shall not remove them or permit them to be removed therefrom nor deliver possession thereof to any third party without our prior consent in writing and then only to such address specified in such consent.'

The metal detectors are presently on the site at the new Cradock Prison which, it is alleged, is in the respondent's possession. It F appears that these detectors do not have to be built into the building in which they are to be used; they merely have to be plugged into an electric plug.

The applicant says that it has not been paid for the detectors and that, accordingly, it remains the owner thereof. B & J Electrical G (Ciskei) (Pty) Ltd has been placed under liquidation.

On the above facts the applicant claims the return of the detectors.

The respondent denies that B & J Electrical (Ciskei) (Pty) Ltd was its electrical subcontractor for the Cradock Prison contract. The Chief Quantity Surveyor for its Eastern Cape office, Mr A Robertson, who deposed to an affidavit in support of the respondent's opposition to the H applicant's claim, says the subcontractor was B & J Electrical Division (Pty) Ltd. However, he admits that both of these companies are now in liquidation.

Mr Robertson says that to his knowledge the detectors were installed and that the respondent paid B & J Electrical Division (Pty) Ltd for them. He denies that the respondent had any knowledge of the I 'arrangement' between the applicant and the various other firms mentioned above.

The respondent further denies that the applicant has made out a case for the incorporation of the conditions of sale mentioned above into the sale to Doculam CC as it alleges and accordingly denies that ownership of the detectors remains vested in the applicant. In the alternative the J respondent

Kannemeyer JP

A submits that, even if the applicant has shown that it retained ownership, it is estopped from claiming return of the detectors.

It will be convenient first to consider the question of the ownership of the detectors.

It is trite law that the sale and delivery of the detectors by the applicant did not operate to transfer the dominium unless the price was B paid, security was found or credit was given. Laing v South African Milling Co Ltd 1921 AD 387 at 394. It is also well established that dominium can by agreement be retained by the seller in a credit sale until payment is made. In Laing's case supra Juta JA said at 402:

'Where therefore a sale takes place on credit and delivery is made and C the parties agree that the property shall not pass until the price is paid, this is what is termed a sale on a suspensive condition, that is, until the condition is fulfilled there is no sale. Such agreement must be however clearly expressed.... The intention of the parties is gathered from the terms of the contract and there is in such a case no room for the mental reservation on the part of the seller that he did D not intend to pass the dominium.'

In the present case it is not suggested that the sale was other than one on credit. Indeed, in the light of the 'arrangement' alleged by the applicant it could hardly be argued that it was otherwise and in any event the invoices relied on by the applicant indicate that the amount E due had to be paid within 30 days. The enquiry must thus be if, when the detectors were sold, there was a clearly expressed agreement that the applicant reserved its ownership.

Notwithstanding the 'arrangement', which Mrs Tranter on behalf of the applicant says was not 'a contract in the sense that it had a binding legal effect', B & J Electrical (Ciskei) (Pty) Ltd did not order the F detectors from Doculam CC but direct from the applicant. (Annexure A to the founding affidavit.) The applicant thereupon delivered the detectors on 28 November 1988 at the same time that the two invoices, annexures B and C to Mrs Tranter's founding affidavit, were issued (para 8 of her affidavit). The applicant now seeks to persuade me that the terms G contained on the reverse side of the invoices were incorporated in the contract of sale.

It seems to me that, for present purposes, it is immaterial whether the nominated electrical subcontractor was B & J Electrical (Ciskei) (Pty) Ltd, to whom reference hereinafter will be made as 'B & J', or B & J Electrical Division (Pty) Ltd. There was obviously an H inter-relationship between these companies. Which of them actually ordered the detectors is not of any consequence. I accept that B & J contracted to buy the detectors. The vital question is with whom B & J contracted. The mere fact that B & J placed the order with the applicant and not with Doculam CC is not conclusive proof that it was contracting with the applicant. According to Mrs Tranter's...