South Africa: High Courts - Gauteng

Case No: A 1044/05

Date heard: 30/04/2007

Date of judgment: 17/08/2007

UNREPORTABLE

In the matter between:

S. L. Sello

APPELLANT

and

W. R. Nasson

RESPONDENT

JUDGMENT

DU PLESSIS J:

Towards the end of 1998 the appellant (defendant in the court a quo)

bought a Golf motorcar in terms of an instalment sale agreement that he had

concluded with Wesbank. On 16 June 1999 the appellant and the respondent

(plaintiff) entered into a "use agreement" in terms whereof the respondent took

possession of the motorcar and undertook to pay to Wesbank the instalments

due under the instalment sale agreement.

After the respondent (plaintiff) had paid R48 211,88, in October 2002, the

appellant (defendant) took repossession of the car. Alleging that the appellant

had repudiated their agreement and the he had accepted the repudiation, the

respondent sued the appellant for repayment of the R48 211,88. The

magistrate's court at Cullinan granted judgment in favour of the respondent for

the amount. This is an appeal against that order. I shall refer to the appellant

and the respondent respectively as the defendant and the plaintiff.

The written user agreement provided in clause 9 thereof that, after he had

paid all the instalments in respect of the car, the plaintiff was to restore

possession thereof to the defendant. In the magistrate's court the plaintiff sought

rectification of the written agreement by deleting clause 9 thereof and by inserting

in its stead a clause that reads as follows:

"Once all payments due to the Bank have been paid by the User (plaintiff)

to the Bank, the Owner (defendant) will transfer ownership of the vehicle

to the User."

The magistrate's court granted an order so rectifying the user agreement.

Against that order there is no appeal and I proceed on the footing that the

agreement has been rectified and reads as set out above.

The facts relating to the defendant's alleged repudiation of the user

agreement are to a large extent common cause and I briefly set them out. In

June 2000 the plaintiff failed to pay the required instalment of some R 1400 to

Wesbank. In the following two months, however, he rectified the position by

paying 1 % instalment in each of these months. After that the plaintiff, on several

occasions, made late payments but he did not fail to pay until June 2002 when

he again missed an instalment. The plaintiff consulted an employee of the bank

and told her that he was at that stage having difficulty to make the required

payments. She told him that, as long as he made some payments in order to

show his commitment, Wesbank would not take action. Accordingly, while

paying the full instalment in July 2002, in August 2002 he paid only R250 and in

September 2002 he paid only R700. At the beginning of October 2002 he

regularly paid the full instalment again.

When the contract was entered into in June 1999 the plaintiff worked and

lived in the vicinity of Witbank. He furnished the defendant with his contact

details, including his cellular telephone number. The parties had contact with

each other. In the course of 2001 the plaintiff started with a new employer and

he relocated to Mandini, KwaZulu-Natal. The plaintiff testified that he gave to the

defendant his new contact details while the defendant denies that. Although in

general she preferred the testimony of the plaintiff to that of the defendant, the

learned magistrate held that the plaintiff did not furnish the defendant with his

contact details when he relocated to KwaZulu-Natal. I am not convinced that this

finding by the learned magistrate was entirely correct, but as this aspect was not

fully argued before us, I proceed on the assumption that the plaintiff did not give

his contact details to the defendant when he relocated.

In about June 2002 Wesbank contacted the defendant and told him, so he

said, that the instalments were about three months in arrears and that his

account was not conducted satisfactorily. In view of the facts that I have

summarised, I cannot understand how Wesbank could have told the defendant

that the account was about three months in arrears. It must be accepted,

however, that the bank told the defendant that the account was not conducted

satisfactorily. According to the defendant, the bank also sought repossession of

the car.

Being unable to contact the plaintiff, the defendant went to the South

African Police Services (SAPS) and laid a charge of theft of the car against the

plaintiff. In his statement to the police, the defendant gave the impression that,

since the user agreement had been entered into, the plaintiff had just

disappeared. That, on the defendant's own version, was incorrect as it was

common cause that the parties had had contact on several occasions. The

statement further conveyed that the plaintiff had made regular payments until

about April 2002 and, incorrectly, that he had then stopped paying. It will be

recalled that, since April 2002, the plaintiff did not pay in June 2002 but paid the

full instalment in July 2002. In August he paid only R250.

Acting on the defendant's charge against the plaintiff, the SAPS on 14

October 2002 in Mandini arrested the plaintiff on a charge of theft. He was

detained, but the charge against him was later withdrawn. The police took

possession of the car and gave it to the defendant who remained in possession

thereof.

It is the plaintiffs case, and the trial court held, that by repossessing the

car with the help of the police, the defendant repudiated the agreement. It is not

in issue that, if the defendant had repudiated the agreement, the plaintiff had duly

accepted the repudiation, thereby cancelling the agreement. The defendant

contends, however, that he did not repudiate the agreement.

In terms of the agreement the plaintiff was entitled to possession of the car

and, once he had paid all the instalments, to transfer of ownership thereof.

Clause 10 of the agreement provides that if the plaintiff breached the agreement,

the defendant would be entitled "without notice to cancel" the agreement and to

take repossession of the car. There is no other term in the agreement entitling

the defendant to repossess the car. It follows that, unless and until the defendant

had duly cancelled the agreement, he was not entitled to repossess the car.

The defendant did not plead that he had cancelled the agreement. Yet, he

had the car removed from the plaintiff's possession and he took and retained

possession thereof. He did not tender return of the car to the plaintiff. In so

doing, the defendant, seen objectively, exhibited a deliberate and unequivocal

intention no longer to be bound to the agreement, thus repudiating it (Highveld 7

Properties (Pty) Ltd and Others v Bailes 1999 (4) SA 1307 (SCA) at 1315B).

It follows that when the plaintiff accepted the defendant's repudiation, the

agreement was cancelled.

As a result of the cancellation of the contract, each party had to return to

the other whatever he had received in terms of the contract. It is common cause

that the defendant already is in possession of the car. Because the contract has

been cancelled, he is obliged to repay to the plaintiff the amount that he had

received in terms thereof which amount the parties agreed is R48 211,88. It

stands to reason that the defendant cannot retain both the car and the money. In

this regard it must be borne in mind that that agreement had been rectified and in

terms of the rectified agreement the plaintiff did not pay for the mere use of the

car.

The defendant pleaded that, since the plaintiff had breached the contract

prior to the defendant's repudiation, the plaintiffs allegation that he had accepted

the repudiation was "irrelevant in law". This contention also underlies one of the

defendant's grounds of appeal. Although Mr Potgieter spent little time on this

aspect in argument, I understood him to submit that, once a party is in breach of

a contract, he cannot, while so in breach, cancel the contract based on the other

party's repudiation thereof. As authority for this submission Mr Potgieter referred

us to Datacolor International (Pty) Ltd v Intamarket (Pty) Ltd [2000] ZASCA 82; 2001 (2) SA 284

(SCA) at 302E where Nienaber JA said: "One party, having repudiated a

contract, cannot retroactively nullify it as a potential cause of action by taking

advantage of the opposite party's later breach and cancelling the contract before

the opposite party thought of doing so." This dictum is not authority for the

proposition that counsel put forward. What the learned judge of appeal was

saying is that a party who has breached a contract cannot nullify that breach by

subsequently cancelling the contract based on the opposite party's repudiation.

Put differently, even if a party who has breached a contract subsequently cancels

the contract based on the opposite party's breach, the first breach remains

exactly that with all its consequences. It could thus happen, the learned judge of

appeal pointed out later, that both parties lawfully cancel a contract based on

each other's breach. That did not happen in this case, as the defendant did not

purport to cancel the contract but simply acted contrary to its terms by taking and

retaining possession of the car. I might add that, even if the defendant had

cancelled the contract based on the plaintiffs breach, the result in this particular

case would have remained the same: the contract would have come to an end

and each party would have had to restore whatever he had received in terms

thereof. That is so because neither party claimed that he had suffered damages

as a result of the other's breach.

It follows that the learned magistrate correctly granted judgment for the

plaintiff in the amount referred to plus interest and costs and that the appeal

cannot succeed.

The following order is made:

The appeal is dismissed with costs.

B. R. DU PLESSIS

Judge of the High Court

I Ag ree

L. M. MOLOPA

Judge of the High Court

Appellants Attorneys:

PT. Rautenbach 012 323 8520

Respondents Attorneys:

Serfontein Viljoen & Swart