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Avoitech (Pty) Ltd and Another v Lesedi Motors (Civil Appeal No. 28 of 204) [2005] BWCA 11; [2004] 2 B.L.R. 190 (CA) (28 January 2005)

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IN THE COURT OF APPEAL OF BOTSWANA
HELD AT LOBATSE
Court of Appeal Civil Appeal No. 28/04
In the matter between:
1st Appellant 2nd Appellant
AVOITECH (PTY) LTD OAGILE S. MOIPOLAI
And
LESEDI MOTORS    Respondent
Mr. Y. S. Moncho for the 1st Appellant
2nd Appellant in Person
Mr. B. B. Tafa for the Respondent
JUDGMENT
CORAM: ZIETSMAN JA
LORD SUTHERLAND JA AKIWUMI JA
LORD SUTHERLAND JA:
The first appellant is a company and the second appellant is the managing director thereof. The respondent company is an authorized dealer of Land Rover vehicles. On 3 August 2001 the second appellant acquired from the respondent a Land Rover Discovery B 105 AHC ("AHC") the purchase price being P250 000. The sale was invoiced to

Wesbank who paid PI40.OOO, the balance of PI 10 000 being paid by the second appellant. On 14th November 2001 the first appellant acquired from the respondent a Land Rover Discovery B 933 AHH ("AHH") the purchase price being P213 520. Although this sale purports to be invoiced to Barclays Bank, no money was paid by that bank. The price was settled by payment by the first appellant of P25 000 and the trade in of another Land Rover at a trade in value of PI88 520. The appellants allege that both of these vehicles suffered serious and apparently incurable defects, as a result of which on 17 July 2002 they returned both vehicles to the respondent and purported to cancel the sale agreements.
By Notice of Motion dated 5th August 2002 the appellants sought an order that both agreements be cancelled, that the respondents should refund the purchase price of the vehicles (in the case of AHH said to be (P218 036.20) and any further and/or alternative relief the court may deem fit. The application eventually came before Collins J. who dismissed the first appellant's claim on the grounds that (i) the claim was in reality for damages and not restitution and that such a claim was not available in motion proceedings, and (ii) that any breach of contract arising from the defects was not sufficiently material as to warrant rescission. He dismissed the second appellant's claim on the ground that
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as there was no privity of contract between the appellant and the respondent, the appellant had no locus standi injudicio.
Although a number of legal issues arise in this appeal, it is critical for
both appellants on the facts to establish that the defects complained of
were of sufficient materiality as to justify the radical remedy of
rescission. I would accept the test set out in Singh v Mc Carthy Retail
Ltd 200 (4) SA 795;-
"The test, whether the innocent party is entitled to cancel the contract because of mal-performance by the other, in the absence of a lex commisoria, entails a value judgment by the court. It is essentially, a balancing of competing interests -that of the innocent party claiming rescission and that of the party that committed the breach. The ultimate criterion must be one of treating both parties, under the circumstances, fairly, bearing in mind that rescission, rather than specific performance or damages, is the more radical remedy. Is the breach so serious that it is fair to allow the innocent party to cancel the contract and undo all its consequences?"
In considering the information before the court, it is also very relevant to
bear in mind that this is an application by way of Notice of Motion where
the approach is different to that which might be appropriate to evidence
given in court of the trial of an action. In application proceedings an
applicant can only succeed on the basis of facts stated by the respondent
and any facts contained in his own affidavits which are admitted by the
respondent. If therefore there is a genuine dispute on the facts, the
applicant will find himself having to accept the respondent's version. See
Plascon - Evans Paints (Ptv) Ltd v. Van Riebeeck Paints 1984 (3) SA
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623: Tamarillo (Ptv) Ltd v B N Aitken (Ptv) Ltd 1982 (1) SA 398: Ngqumba v Staatspresident 1988 (4) SA 224.
I deal first with the defects alleged in respect of the first appellant's vehicle AHH, purchased in November 2001. The first record of this vehicle being booked in for rectification of faults is dated 21 February 2002, the recorded mileage being 15257 km. The only significant complaints were of gear problems and brake shudder. The same complaints are repeated on 25th February and 18th March, and on 25th March the front brake disc and pads were replaced. Sometime in April the vehicle was sent to South Africa in order to have the gear box problems rectified. By letter of 21st May, the appellants asked for a status report on both vehicles. This was supplied by the respondent on 23 May and in relation to AHH it was said that if the brake shudder persisted the brake discs would be changed, and as far as the gearbox problem was concerned the vehicle was in South Africa where the problem was diagnosed and rectified and the vehicle would be ready to be returned the following week. The appellants appear to have been dissatisfied , and on 25 June there was a meeting between the second appellant and two executives of the respondent. The meeting was intended to be an amicable one to resolve the problem, but it turned acrimonious. The respondent made certain offers to repurchase the vehicles, but these offers were rejected. By letter dated 3 July from the
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appellants' attorneys, the appellants demanded P225 150 for AHH and P205 233 for AHC. The respondent did not reply, and on 17 July the vehicles were returned, and by letter from the appellants' attorneys the sale agreements were purported to be cancelled.
In the respondent's answering affidavit from Duncan April, it is conceded "that there were major problems experienced" with AHH. However it is also averred that the gearbox problem had been rectified by the manufacturer in South Africa, and that on the date when the vehicle was abandoned at the respondent's premises, "the only outstanding issue was the brake shudder." Of the various defects affecting AHH, I am satisfied that the only one which is established to be in existence at the time of the purported cancellation is the brake shudder. Was that in itself serious enough to warrant rescission? It is not suggested that the braking capacity of the vehicle was affected, or that the vehicle was rendered in any way unroadworthy. It is not known how severe the shudder was, and shudder can range from major jolting down to minor vibration. In the absence of evidence about the degree of shudder, it is in my view difficult to say that this defect was so material after the vehicle had covered 25 000 km as to justify the radical remedy of rescission. Although the judge a quo found other reasons for dismissing the claim he also found that the breach complained of was not in the circumstances material such as to entitle the first appellant to cancel the contract. I am
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unable to find that the judge a quo was wrong in coming to that conclusion and accordingly the appeal must be dismissed.
As far as the second appellant's vehicle's AHC is concerned it was purchased on 3rd August 2001. The vehicle records show regular complaints of brake shudder, and on at least two occasions brake discs were replaced. Brake discs and pads do wear out through normal usage, and by the time AHC was returned to the respondent it had covered 59505 km. The affidavit of Mr. April states "it is correct that B105 AHC has experienced minor difficulties and these have been rectified.... The booking sheets show that the vehicle was continually returned for minor issues and that the only major issue was a brake shudder. Holzapfel [the respondent's After Sales Manager] informs me that this brake shudder has been attended to and that it is, in his opinion, there is no longer any brake shudder." An affidavit from Holzapfel confirms the contents of Mr. April's affidavit so far as it relates to him. Because the appellant has chosen to proceed by way of application rather than action, he must accept the assertions contained in the respondent's affidavits. It is clear from that evidence that any brake shudder, if any still exists, was not at the date of purported cancellation of such materiality as to warrant the remedy of rescission, particularly as by that time the vehicle was eleven months old and had covered nearly 60 000 km. The second appellant's appeal must therefore also be dismissed on this ground.
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As the appeals must fail on the facts, it is not necessary to deal with the various legal issues which might arise in different circumstances. I would only say that in relation to privity of contract, the problem as to the true construction of various different types of financial instruments in relation to ownership could easily be resolved by obtaining a cession from the finance company of any interest they may have.
The order of this court is that the order of the court a quo is confirmed and the appeals are dismissed with costs.
DELIVERED IN OPEN COURT AT LOBATSE THIS 28th DAY OF
JANUARY 2005.
LORD R. I. SUTHERLAND JUDGE OF APPEAL

I agree
N. W. ZIETSMAN JUDGE OF APPEAL


I agree
A. M. AKIWUMI JUDGE OF APPEAL

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