IN THE MAGISTRATES COURT FOR THE DISTRICT OF …

1 1 IN THE MAGISTRATES COURT FOR THE DISTRICT OF DURBAN HELD AT DURBAN CASE NO. 62620/98 IN THE MATTER BETWEEN : Standard Bank of S A Ltd Plaintiff and Kurt Robert Knoop 1st Defendant Erich Schravesande 2nd Defendant ---------------------------------------- ---------------------------------------- ----------- JUDGEMENT ---------------------------------------- ---------------------------------------- ----------- 1. Introduction and Factual background 1)The plaintiff describes itself in its particulars of claim as The Standard Bank of South Africa Limited , a company registered and incorporated with limited liability according to the laws of the Republic of South Africa and which carries on business inter alia at 5th Floor, Standard Bank Centre, 96 First Avenue, Durban. 2)At the time of issue of summons the 1st defendant was described as Webs Trading C C a Close Corporation duly registered and incorporated in accordance with the company laws of the Republic of South Africa and whose chosen domicilium citandi et executandi was 45B Johnson Road, Maydon Wharf, Durban.

2 First defendant, it appears, was subsequently placed under final winding up by virtue of a special resolution registered on 28th July 2004 and as such is 2 represented by its Liquidator Kurt Robert Knoop, When reference is made herein to the 1st defendant, it is to be construed as a reference to the close corporation. 3)The 2nd defendant is Erich Schravesande an adult male whose chosen domicilium citandi et executandi is 64 Venice Road, Morningside, Durban. 4) The 1st defendant as purchaser and plaintiff as seller entered into an instalment sale agreement on the 8th October 1997. 5) The agreement was entered into in writing and a copy thereof is annexed as A to the particulars of claim - it appears to be a standard form contract. In terms of the agreement 1st defendant purchased a 1996 model Land Cruiser VX Ltd motor vehicle from the plaintiff.

3 6)The selling price (including extras) was R 361 to which stamp duty of R was added , bringing the price to R 361 7) First defendant paid an initial payment (deposit) of R 100 8) Finance charges (interest) were declared to amount to R 138 calculated at the then annual finance charge rate (AFCR) of %. 9) After the deduction of the deposit and the addition of the interest, the balance of the purchase price was the sum of R 400 10) The balance of the purchase price was to be paid in 53 monthly instalments of R each, commencing on 8/11/97 and the last/final instalment payable on 7/4/02. 11) Ownership of the vehicle remained vested in the plaintiff and was reserved until the full purchase price had been paid 12) The 1st defendant took delivery of the vehicle 13) The agreement annexure A contains standard provisions that were usual in instalments agreements concluded under the Credit Agreements Act 75 of 1980 , the predecessor of the present National Credit Act 34 of 2005.

4 The pre printed agreement, annexure A , entitles the plaintiff as seller to inter alia the following rights and/or privileges 3 flowing from the agreement viz: (a) Should 1st defendant fail to pay any instalment on due date then the whole balance then outstanding would become due and payable and the plaintiff was entitled to cancel the agreement and repossess the vehicle (b) The interest payable in terms of the agreement, and in the event of cancellation of the agreement, on any amount outstanding by the 1st defendant to the plaintiff would be at the prime rate of the plaintiff (c) In the event that the plaintiff obtained a judgment against the 1st defendant, then the 1st defendant would be liable for the plaintiffs costs on an attorney and client scale (d) First defendant consented to the jurisdiction of the MAGISTRATES COURT 14) The 2nd defendant, in a General Guarantee executed on the 29th July 1997, had bound himself as Surety for and Co-Principal with the 1st defendant to the plaintiff for all monies then owing or which may in future become owing by the 1st defendant to the plaintiff, a copy of which Suretyship is annexed as B to the particulars of claim.

5 In terms of the Suretyship the 2nd defendant: (a) renounced the benefits of excussion (b) consented to the jurisdiction of the MAGISTRATES COURT (c) agreed that in the event of any judgment being granted in favour of the plaintiff against the 2nd defendant , then he would be liable for the costs thereof on a scale as between attorney and client. 15) The COURT was handed a Statement of facts agreed and definition of issues of fact and law in dispute in terms of Rule 29(3),4 and 5 which was accepted by the COURT and marked exhibit A 1 .Such agreement was amended to record that the defendants abandoned their counterclaim. 16) According to paragraph 9 of the agreed facts the vehicle was stolen approximately some 4 months later whilst in the possession of the 1st defendant on 6 February 1998 and it was never recovered. 17) According to paragraph 10 of the agreed facts the defendant ( 1st ?

6 Failed to pay the 1st of the instalments ( ) which was due in November 1997 and/or all subsequent instalments. 4 18) In terms of the agreed facts the parties agree that: 1. In the event that it be found that the 1st defendant was not excused payment by reason of the issues raised in the plea and defined and set forth hereunder , it is agreed that :- (a) the plaintiff was entitled to cancel the agreement , annexure A , upon the failure to pay the monthly instalment for November 1997 and subsequent monthly instalments; (b) as at that date , the amount outstanding in terms of the agreement was R 282 2. (a) in the event of a judgment being granted in favour of the plaintiff for R 282 , then the defendants are liable therefore jointly and severally. (b) interest is payable on the said judgment from 1 November 1997 to date of payment at the prime rate of the Standard Bank of South Africa.

7 (c) the prime rate of the Standard Bank of South Africa is as set forth in the schedule, annexure B to the statement of agreed facts (no such schedule was annexed and it was agreed that plaintiff would put up proof of same via an affidavit of an officer of the bank in due course should the need arise for same). 19) The defined disputes of fact were delineated in paragraph 11 on pages 5 and 6 of defendants amended plea and more specifically repeated and set out in paragraph C 1 of the statement of agreed facts. The COURT was requested to ignore the contents of paragraphs C 2 and C 3 of the statement of agreed facts. As per the defined issue of factual dispute, the defendants deny that the installment sale agreement annexure A is enforceable on the ground/s that: 1. The Land Cruiser VX Ltd motor vehicle which was the subject of the installment sale agreement was a motor vehicle illegally imported into the Republic of South Africa, alternatively it was a stolen motor vehicle 2.

8 In the event of it being found by the COURT that the said motor vehicle was an illegally imported vehicle, then the 5 plaintiff could not have lawfully been in possession of the said motor vehicle and in turn could not place Webs Trading CC in lawful possession of the said motor vehicle 3. In the premises, the plaintiff could not lawfully comply with its obligation in terms of the installment sale agreement to give delivery of the said motor vehicle to Webs Trading CC 4. By virtue of the subject of the installment sale agreement not being capable of being in the lawful possession of anybody in the Republic of South Africa, the installment sale agreement itself is illegal, invalid and unenforceable 5. In the event of it being found by the COURT that the said motor vehicle was a stolen motor vehicle, then the plaintiff could not have sold the said motor vehicle to Webs Trading CC and the installment sale agreement is therefore illegal, invalid and unenforceable 6.

9 By virtue of the installment sale agreement being illegal, invalid and unenforceable, the accessory claim against the 2nd defendant as surety is unenforceable 20) With regards to the issue of law, the plaintiff contends that even if all such issues of fact pleaded in paragraph 11 of the (amended) plea are decided in favour of the defendants, the agreement is still lawful and binding upon the defendants and that proof of such facts do not excuse the 1st defendant from performance in terms of the agreement annexure A by reason of the following provisions of annexure A which read as follows:- 2. Delivery Purchaser has selected the goods from the supplier thereof (Supplier) and Seller has no knowledge of the purpose for which the goods are required by the purchaser; Purchaser shall, at its own cost, procure and take delivery of the goods from Seller or Supplier and shall hold the goods on behalf of the Seller for the duration of the agreement.

10 Delivery or tender of delivery by Seller or Supplier to Purchaser within 30(thirty days) of the date hereof shall be deemed to be delivery of the goods by Seller to Purchaser. Supplier shall not act as Sellers agent for the purpose of delivery; 6 shall inspect the goods on behalf of Seller before taking delivery and shall accept the goods on Sellers behalf so that ownership of the goods shall pass to Seller. Purchaser warrants to Seller that the goods will not be defective in any way and shall be suitable for the purpose for which they have been acquired. Purchaser is not authorized to act as Sellers agent except for the purpose of inspecting the goods and accepting delivery. If this agreement is not subject to the Credit Agreements Act (Act 75 of 1980) the Purchaser agrees that no warranties or representations have been given or made as to the state, condition or fitness of the goods.