Udc Bank Ltd v Seacat Leasing and Finance Co (Pty) Ltd and Another

• Jurisdiction: South Africa
• Judge: Human J, Van Reenen J and Esselen J
• Judgment Date: 17 August 1979
• Citation: 1979 (4) SA 682 (T)
• Hearing Date: 21 March 1979
• Court: Transvaal Provincial Division

Human J:

C On 22 August 1978 the appellant brought an urgent application on notice of motion for the following relief:

(b)

interdicting and restraining the first and second respondets from proceeding with the sale of certain one AMC K2000 Universal Grinding Machine, serial No 1226, which had been advertised to take place on 28 August 1978;

(c)

D interdicting and restraining the respondents from alienating, using, disposing of or otherwise dealing with the aforesaid machine pending the outcome of the application for an order in terms of para (e);

(d)

ordering the first respondent to pay the costs of the application, provided that, in the event of the second respondent opposing the E application, ordering the first and second respondents jointly and severally to pay the costs of the application;

(e)

declaring the applicant the owner of the aforementioned machine and ordering the first and second respondents to forthwith place the applicant in possession thereof;

(f)

F granting alternative relief.

The applicant, UDC Bank Ltd, is a company duly incorporated and registered in accordance with the laws of the Republic of South Africa and carrying on business as a registered bank with its principal place of business at 55 Fox Street, Johannesburg.

The first respondent, Seacat Leasing and Finance Co (Pty) Ltd, a limited G liability company, carries on business as financial brokers specialising in the discounting of lease and hire-purchase agreements.

The second respondent is a company with limited liability duly incorporated according to the company laws of the Republic of South Africa, carrying on business as auctioneers at 74 Siemert Road, New H Doornfontein, Johannesburg. Second respondent did not oppose the application.

IRVING STEYN J dismissed the application with costs.

In the founding affidavit filed in support of the application the appellant averred that it was the owner of the machine which it sold to Auto - Parts Manufacturing Co (Pty) Ltd (hereinafter referred to as "Auto - Parts") in terms of a hire-purchase agreement which is dated 15 June 1976. The purchase price of the machine when it was sold to appellant was R33 000. In terms of the hire-purchase agreement ownership of the machine remained vested in the appellant and was not to pass to Auto - Parts

Human J

until the full amount due had been paid. In addition to the machine appellant sold two other items each at R15 000 making a total purchase price payable by Auto - Parts of R63 000. Auto - Parts made a cash payment A of R13 000. Inclusive of finance charges of R20 504,26 Auto - Parts had to pay an amount of R70 514,66. This amount had to be paid in monthly instalments of R1 469,31. Auto - Parts defaulted in payment of the instalments due in terms of the agreement. Auto - Parts made payments regularly and on due date until 1 June 1977 when it defaulted in the B payment of the instalment which was due. Auto - Parts was placed in final liquidation on 15 August 1978 at the instance of the appellant and Mrs J Steyn was appointed provisional liquidator on 15 July 1978 by the Master of the Supreme Court.

The machine could not be located when Auto - Parts fell into arrear until it was placed in liquidation. Mrs Steyn was then informed that the machine C was stored at the premises of the second respondent. It is common cause that the machine was at the date of the launching of this application in possession of the second respondent who had on instructions of first respondent arranged a sale of the machine by public auction to take place on 28 August 1978.

D On 16 August 1978 appellant's attorneys wrote to first respondent's attorneys in the following terms:

"We attach hereto a copy of the hire-purchase agreement entered into between UDC and the company (Auto - Parts) in respect of the AMC K2000 Universal Grinding Machine, serial No 1226 ('the machine').

It is clear from the aforesaid hire-purchase agreement that ownership of the machine is vested neither in your clients nor the company (Auto - Parts) but in UDC, a fact of which your clients are well aware.

E UDC are most concerned to learn that your clients intend selling the machine on 28 August by public auction and we are instructed to inform you that, unless we receive a written undertaking from you clients by not later than 2 pm on Friday, 18 August, we are instructed to launch an urgent application to interdict your clients from selling the machine."

F No reply was received to the latter and the requested undertaking was not forthcoming. It is to be noted, however, that the parties have agreed that the machine will not be sold until the appeal noted against the order of IRVING STEYN J has been determined.

It is common cause that a company known as Seacat Investments (Pty) Ltd (hereinafter referred to as 'Seacat Investments') is the holding company G of the first respondent which has the same directors as the first respondent.

First respondent filed an answering affidavit. Mr Roger Levy, a director of first respondent, on behalf of first respondent, stated in the answering affidavit that it was denied that the appellant was the owner of the machine or had ever been the owner. He averred that the machine was in H fact owned by "Seacat Investments" and that the machine was purchased by this company from Union Motor Equipment Co (Pty) Ltd (hereinafter referred to as "Union Motor") on 1 February 1977 at a price of R42 050 which purchase consideration was paid the same day. Annexure "B" to the answering affidavit is a copy of the invoice issued by Union Motor to Seacat Investments in respect of the machine. Seacat Investments took delivery of the machine from Union Motor and leased the machine to Auto - Parts in terms of a written agreement of lease, dated 1 February 1977, which is attached to the affidavit, annexure "C".

Human J

Auto - Parts acknowledged having received the machine from Seacat Investments. Annexure "D" reads as follows:

"To:	Seacat Investments (Pty) Ltd
	A Acknowledgment and warranties
We, the undersigned, Auto - Parts Manufacturing Co (Pty) Ltd, do hereby warrant and represent to you that:
1 (a) We have taken and accepted delivery of the undermentioned goods hired by us from you in terms of an agreement of lease dated 1 February 1977.
(b) B The goods were at the time of such delivery and still are in good and proper condition and repair and satisfactory in every respect.
(c) We will not raise as an excuse or defence for the due peformance of our obligations in terms of the aforesaid agreement the fact that the goods were not properly delivered to us or were defective C and not fit for the purpose intended.
2. We do hereby acknowledge that:
(a) you have purchased the goods from a third party; and
(b) based on the representations and warranties contained in 1 above, you will effect payment of the purchase price of the goods.
Dated at Johannesburg, 1 February 1977.
D Signed ............
Lessee
Auto - Parts Manufacturing Co (Pty) Ltd
Description of goods:
E One only new AMC Cylindrical Grinding Machine model K2000. Serial No 1226.
One only new Breda BRP300/3000 Centre Lathe. Serial No 221/75."

Auto - Parts was unable to fulfil its obligations in terms of the lease agreement and voluntarily surrendered the machine to Seacat Investments in F terms of a written document. This document is not dated but reads as follows:

"Voluntary surrender

We, the undersigned, Auto - Parts Manufacturing Co (Pty) Ltd, do hereby voluntarily surrender to Seacat Investments (Pty) Ltd

One only new AMC Cylindrical Grinding Machine model K2000, serial No 1226.

G One only new Breda BRP 300/3000 Centre Lathe, serial No 221/75.

We hereby confirm that we are indebted to Messrs Seacat Investments (Pty) Ltd in the sum of R49 533,82, in respect of lease agreement No 2459 and under-take that in the event of Messrs Seacat Investments (Pty) Ltd suffering damages as a result of the voluntary surrender of the above-mentioned machines, we confirm that we will pay such damages to Messrs Seacat Investments (Pty) Ltd which they may sustain as a result H thereof, on demand."

This document is signed by Kelvin Rice, director of Auto - Parts.

It is common cause that the machine was in possession of the second respondent with instructions to sell the machine. In issuing such instructions the first respondent was acting on behalf of Seacat Investments alleged to be the true owner of the machine.

In the replying affidavit appellant set out how it became owner of the machine.

(a)

It purchased the machine from Union Motor on 7 June 1976.

Human J

Annexure "E" to the replying affidavit is an invoice M24572 by Union Motor dated 7/06/1976 issued to appellant reflecting that the machine A had been purchased for a sum of R33 000 together with two other items for a total purchase consideration of R63 000. The invoice further reflects that appellant instructed Union Motor to deliver the machine to Auto - Parts.

(b)

The purchase price was duly paid by appellant to Union Motor. On 17 June 1976 appellant wrote to Union Motor as follows:

B "We have pleasure in enclosing our cheque number 17034 for the sum of R63 000 in settlement of your invoice No 24572, dated 7 June 1976, in respect of the above."

A cheque for R63 000, dated 17 June 1976, was attached and duly paid.

(c)

C The machine was delivered to Auto - Parts on 17 June 1976 on the instructions of the appellant and in terms of the hire-purchase agreement with Auto - Parts.

(d)

Receipt of delivery of the machine was acknowledged by Auto - Parts. On 17 June 1976 Auto - Parts, as per annexure "H" to the D replying affidavit, acknowledged that it had received delivery...