CASE
NO. A 191/98

IN
THE HIGH COURT OF NAMIBIA

In
the matter between

DORBYL
VEHICLE TRADING AND FINANCE

and

CORAM:
COETZEE,
A.J.

Heard
on: 1998.06.12

Delivered
on: 1998.09.04

JUDGMENT:

COETZEE.
A.J.:
This
is an opposed application in which the Applicant claims the
following relief from the Respondent:

"1.
Declaring the two rental agreements, marked "B" and
"C" to the Applicant's founding affidavit, to be
cancelled.

4. 
   That
   the Applicant made a material representation to the Respondent
   before entering into the agreements, namely that on the expiry of
   the agreements he would become the owner of the two trailers.

   
   

5. 
   If
   the Credit Agreements Act, 1980 (Act 75 of 1980) applies to the
   transactions the Applicant failed to comply with the provisions of
   section 11 thereof in that the letter of demand addressed to the
   Respondent on 09/01/1998 only provided for seven days notice and
   not 30 days notice as required by the said section and that the
   Applicant is therefore not entitled to claim the return of the
   trailers.

   
   

The
first issue that should, according to the submissions made on behalf
of the Respondent be decided on oral evidence is whether the
agreements are ordinary rental agreements or financial lease
agreements.

In
this regard it is necessary to refer to the fact that the each
agreement is entitled "Rental Agreement" and that the
parties are referred to as "the lessor" and the "lessee"
respectively. The following furthermore appears at the top of page 2
of each agreement under the heading "terms and conditions of
rental
agreement"
(my underlining):

"The
lessor
hereby rents
to the lessee, which rents
on the terms and conditions as set out in this agreement, the goods
described in the transaction schedule for the period and rental
stated therein. The goods shall remain the property of the lessor
and
nothing in this agreement shall be construed as conferring on the
lessee any title, right or interest in the goods other than as
lessee",
(my underlining)

Clause
19 of the agreements furthermore provides as follows:

"This
agreement constitutes the entire agreement between the parties
hereto. No agreement at variance with the terms and conditions of
this agreement shall be of any force or effect unless it is in
writing and signed by the parties to this agreement."

From
the provisions quoted above it is quite clear that the parties to
the agreement themselves determined in great detafl" and qmte
specifically the relationship between them would be one of lessor
and lessee and that the agreements did not confer on the Respondent
any title, right or interest in the trailers other than as lessee.

If
the agreements did not reflect the intention of the parties in this
regard correctly it was open to the Respondent to apply for the
rectification thereof, which he did not do.

In
the circumstances I -come to the conclusion that there is no bona
fide
dispute as to the nature of the agreements and therefore also no
basis for referring the matter to oral evidence on this alleged
issue.

The
second alleged issue that Mr Vaatz submitted should be referred for
oral evidence is the question as to whether an amount of R150 000,00
that the Respondent paid to the Applicant as a deposit on a MAN
mechanical horse should be repaid to the Respondent.

It
appears from the affidavits that a third lease agreement was
concluded between the parties in respect of the aforesaid MAN
mechanical horse. It is common cause that the Respondent paid an
amount of R150 000,00 as an initial payment in respect of the said
vehicle. The Respondent alleges that this amount was paid as a
deposit whereas the Respondent contents that it was paid as initial
rental.

*

According
to a "transaction
schedule" annexed by the Respondent as annexure "I"
,to his opposing affidavit a total amount of R943 127,26 was payable
by the Respondent to the Applicant in respect of this vehicle in
monthly instalments payable from 30/09/1992. The amount of R943
127,26 included an amount of R121 739,30 in respect of insurance for
this vehicle. According to the Applicant's replying affidavit this
amount was the premium for the full 4 years and in the event of, for
instance, the theft of the vehicle, there would be a payment to the
Applicant by the insurer of premium payments relating to the
remaining period of the rental agreement.

It
is common cause that the aforesaid MAN mechanical horse was hijacked
on 23 November 1992, i.e. within a period of two months after it was
delivered to the Respondent. It is also common cause that the
Applicant was at the time of the theft the owner of the vehicle and
therefore entitled to the money payable by the insurer in terms of
the aforesaid insurance agreement. According to the Applicant an
amount of R498 465,00 was in fact paid to it by the insurer in
settlement of its claim in relation to the theft of the vehicle.

The
Respondent now alleges that he, as a result of the circumstances set
out above, is entitled to a refund of the "deposit" of
R150 000,00 paid by him to the Applicant and that he in fact became
entitled to payment of the said amount on the date that the insurer
made the payment to the Applicant. He goes on to say that the
Applicant should have either refunded the amount of R150 000,00 to
him or should have allocated the amount to the instalments payable
by him to the Applicant in respect of the two trailers. He
furthermore states that if the said amount had been credited to the
two accounts relating to the trailers a substantial amount of the
interest claimed by the Applicant would not be claimable and that he
in fact would be entitled to a refund of a sum of the money already
paid."

The
Applicant denies that it had any obligation whatsoever to refund the
amount of R150 000,00 to the Respondent. As indicated earlier it
also denies that the said amount was paid as a deposit and says that
it was paid as initial rental. It furthermore states that the
payment of the amount of R150 000,00 is irrelevant to the present
application as it arises out of an entirely independent agreement
relating to the mechanical horse.

Except
for stating that he is entitled to a refund of the amount of R150
000,00 the Respondent failed to set out any factual or legal basis
for his contention that the amount became repayable to him. The only
possible source of such obligation on the part of the Applicant
would be the agreement concluded between the parties in respect of
the mechanical horse. The Respondent, however, failed to attach a
copy of the said agreement and does not even allege that the
agreement provided for such a refund. It may be that the said
agreement was identical to the agreements in respect of the two
trailers. Even if it can be accepted that this is the position it is
of no assistance to the Respondent as the said agreements certainly
do not provide for a refund of the initial payment in the
circumstances under discussion.

In
the premises I come to the conclusion that the Respondent did not
even make out a prima
facie case
that he became entitled to a refund of the amount of Rl 50 000,00

paid
by him in respect of the mechanicalJiorse^r:r_

It
would, in any event, appear that the question as to whether the
Respondent became entitled to the aforesaid refund is actually
irrelevant to the present dispute between the parties. It is clear
that the Respondent's reliance on the refund of R150 000,00 can only
be of assistance to him in the present circumstances if it can be
said that the Respondent was in law entitled to set off the amount
of R150 000,00 against his own indebtedness to the Applicant in
respect of the two trailers.

In
this regard it is of importance to note that the parties
specifically agreed that all rentals and other payments due shall be
paid without
deductions
strictly on due date (clause 5.4.2) and that the Respondent shall
not be entitled to withhold payment of any rentals for
any reason whatsoever
(clause 5.3).

In
these circumstances it was clearly the intention of the parties that
the lessee (Respondent) would not be entitled to raise set off as a
defence in the event of his failure to pay the monthly instalments.
That they were in law entitled to conclude such an agreement is
clear from the decision Wynns Car
Care Products (Pry) Ltd. v First National Industrial Bank
1991 (2) SA 754 AD.

See
also: Altech
Data (Try) Ltd. v M B Technologies (Pry) Ltd.
1998 (3) SA 748 WLD

I
must add here that nothing, of course, prevented the Respondent from
instituting proceedings for the recovery of the amount of R150
000,00 against the Applicant. Not only did the Respondent failed to
do so but it seems that he also did not, prior
to
these proceedings, informed the Applicant of his contention that he
is entitled to "a __:1
refund
of the said amount or demanded that it be repaid to him or allocated
to his accounts relating to the two trailers.

In
the circumstances it would clearly serve no purpose to refer this
alleged issue to oral evidence and I therefore decline to exercise
the discretion conferred on me in this regard in favour of the
Respondent.

As
far as the merits are concerned Mr Vaatz requested the Court to
first of all consider and decide the Respondent's counterclaim for
repayment of the amount of R150 000,00. The difficulty that I have
with this request is that the Respondent did not, on the papers
before me, institute any counterclaim or counter application of
whatever
nature against the Appellant. Be that as it may, I have already came
to the conclusion, for the reasons stated above, that the Respondent
failed to make out even a prima
facie case
that he is entitled to the alleged refund.

I
have also dealt with the Respondent's contention that the agreements
are not ordinary rental agreements but in fact "financial lease
agreements". In this regard I found that the parties very
clearly and definitely defined their respective roles and that it
was specifically agreed that "nothing in (the) agreement shall
be construed as conferring on the lessee any title, right or
interest in the goods other than as lessee" (preamble at top of
page 2)

TheJRespondent
also relies on the fact that a material representation was made to
him _:
prior
to the conclusion of the agreements, i.e. that he would become
the
owner of the trailers at the expiry of the agreements. This
allegation is denied by the Applicant. Even if it be accepted that
the alleged representation was made to the Respondent it is of no
assistance to him in the present proceedings as he, at the time of
the conclusion of the agreement, expressly agreed that he would only
have the rights of a lessee in the two trailers and nothing more. As
indicated above the Respondent did not apply for the rectification
of the agreement in this regard. It is trite law that a lessee does
not have the right to claim ownership of the goods at the expiry of
an agreement of lease. It should also be noted that any agreement
conferring ownership in the goods on the lessee at the expiry of the
agreement would certainly provide that ownership will only pass if
and when the instalments payable in terms thereof have been paid in
full. In the matter under discussion it is common cause that the

Respondent
did not pay all the instalments and that he is in fact in arrear in
a considerable amount.

The
possible defence relating to the applicability of the Credit
Agreements Act 1980 (Act 75 of 1980) (hereinafter referred to as
"the Act) was raised for the first time by Mr Vaatz in his
heads of argument. I say "possible" defence because Mr
Vaatz himself stated that the defence would only be available to the
Respondent if the provisions of the said Act are in fact applicable
to the transactions under discussion.

Clause
23 of each agreement provides the agreement shall in all respects be
governed and construed in accordance with the laws of the Republic
of South Africa. In the pre-amble to the agreement the following is
stated -regarding the applicability of the Act:

"Should
the Act apply to this transaction then clauses 30 and 31 shall not
be applicable to this agreement. Whether or not the Act applies
hereto is reflected in the transaction schedule hereunder."

Unfortunately
the parties did not indicate in the said schedule whether the Act
applies or not. The Respondent did not place any evidence before me
to prove that the provisions of the Credit Agreement Act of the
Republic of South Africa apply to the interlink trailers forming the
subject matter of the agreements between the parties. Where the
Respondent wishes to rely on the defence that the Applicant did not
comply with the provisions of the South African Act, the onus
certainly lies upon him to prove what the law is and that it in fact
applies to the transactions under discussion. Schapiro
v Schapiro 1904 TS 673

Failing
such proof the Court must apply the Namibian law, adopting the
fiction that the foreign law is the same as the law of Namibia. This
presumption does not only apply to the common law but also to law
governed by a statute.

Bank
of Lisbon v Qptichem Kunsmis (Edmsl Bpk
1970 (1) SA 447 (W)

Prior
to Independence the Credit Agreements Act, 1980 (Act 75 of 1980) of
the Republic of South Africa was applicable in Namibia. In terms of
section 140 of the Namibian Constitution the said Act remained in
force in the Republic of Namibia until

repealed
or amended by Act of Parliament.

In
terms of section 2 of the Act the provisions of the Act shall only
apply to such agreements or categories of agreements as the Minister
may determine from time to time by notice in the Gazette. This was
in fact done by the Minister in GN R2573 of 12 December 1980. A
perusal of this notice clearly shows that the provisions of the Act
do not apply to interlink trailers.

See
also:
Dorbyl
Vehicle Trading and Finance Company (Pry) Ltd. v K Luchtenborg,
t/a
Lugtenborg Transport,
unreported decision of the TPD, given on 24/11/1992.

As
the Act does not apply to the transactions between the parties the
Respondent can obviously not rely on the non compliance with section
11 of the Act.

From
the aforegoing it is clear that the Respondent cannot rely on any of
the defences raised by him or on his behalf by Mr Vaatz. If follows
that the Applicant is entitled to the relief claimed by it. For
practical reasons it is, however, necessary that prayer 3 be amended
to read as follows:

"3.
That failing the return of the trailers to the Applicant forthwith,
the Sheriff or his Deputy be authorised and directed to take
possession of the trailers, wherever the same may be found and to
deliver same to a

representative
of the Applicant to be identified by the Applicant's

attorneys
of record."

Mr
Vaatz indicated during argument that he does not object to the
prayer being so amended.

Subject
to the said amendment an order is granted in terms of prayers 1 to 5
of the Applicant's notice of motion.