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Cash Converters Southern Africa (Pty) Ltd v Rosebud Western Province Franchise (Pty) Ltd (3) (238/2001) [2002] ZASCA 68 (31 May 2002)

.RTF of original document

THE SUPREME COURT OF APPEAL

OF SOUTH AFRICA

REPORTABLE

Case No: 238/2001

In the appeal of:

CASH CONVERTERS SOUTHERN AFRICA

(PTY) LTD APPELLANT

and

ROSEBUD WESTERN PROVINCE FRANCHISE

(PTY) LTD RESPONDENT

_____________________________________________________________

CORAM: Howie, Schutz, Navsa, Brand JJA and Lewis AJA

_____________________________________________________________

Date of hearing: 23 May 2002

Date of delivery: 31 May 2002

_____________________________________________________________

J U D G M E N T

_____________________________________________________________

BRAND JA

BRAND JA

[1] I have had the benefit of reading the judgments of both Navsa JA and Lewis AJA. I concur in the judgment of Navsa JA and share the views reflected therein. I find myself in respectful disagreement with Lewis AJA. Broadly stated the reason why I cannot agree with her conclusion is that it is wholly dependent on the acceptance of a tacit of the sale agreement ('the sale') that, in my view, does not exist.

[2] I agree with both Navsa JA and Lewis AJA that the two contracts cannot be regarded as one indivisible transaction, as was contended for by Rosebud. There are two separate contracts and, although interlinked, they represented two separate transactions. Once this is accepted, the notion that termination of the franchise agreement ('the franchise') automatically leads to the termination of the sale, can only be founded, as is accepted by Lewis AJA, on a tacit or implied term. This must be so. In the absence of an express term to that effect in either contract I can see no other way. My difficulty lies with Lewis AJA's conclusion that 'there must surely be a tacit term that if the business sold is taken back by Cash Converters there would be a rescission and restitution' of the purchase price. With regard to this conclusion the complications are threefold. First, no such tacit term is referred to in the papers and in argument before this Court Rosebud's counsel expressly disavowed any reliance on any such tacit term. Secondly, the hypothesis of the tacit term relied upon by Lewis AJA for conclusion militates against the express provision in clause 16.4 of the sale that 'no agreed cancellation of this agreement shall be of any force and effect unless in writing and signed by the parties ...'. Thirdly, I am satisfied that the tacit term contended for will not meet the requirements of the so-called bystander test regularly applied by this Court. According to this test the inference of such a term would only be justified if, at the time when the contracts were entered into, the bystander's question as to what would happen to the purchase price upon termination of the franchise, would have elicited the prompt and unanimous response from both parties that, in that event, the whole of the purchase price will be repaid. I have no doubt that, whatever Rosebud's response might have been, that would not have been the response of Cash Converters.

____________________

FDJ BRAND

JUDGE OF APPEAL

CONCUR:

HOWIE JA

NAVSA JA