Mufamadi and Others v Dorbyl Finance (Pty) Ltd. (469/92) [1994] ZASCA 46 (29 March 1994)

Mufamadi and Others v Dorbyl Finance (Pty) Ltd. (469/92) [1994] ZASCA 46 (29 March 1994)

Clause 14.2 of the agreement does not grant the seller unfettered power to manipulate damages. The seller must elect either an appraiser's valuation or the net sale price, and is bound by that election. The clause does not allow the seller to obtain both valuations and then choose the most advantageous. The buyer may challenge the valuation for collusion or bad faith. The clause, properly construed, is not contrary to public policy. Therefore, the damages awarded by the court a quo stand, and the appeal against the award of damages fails. Interest on damages is to run from the date of judgment, not from the date of cancellation.

Citation
[1994] ZASCA 46
Parties
Appellant: Wilson Rasilingwani Mufamadi; Appellant: Jesse Ntanganedzeni Muthige; Appellant: Alpheus Ofhani Makhuvha; Appellant: Highson Thaetshelesani Makhuvha; Respondent: Dorbyl Finance (Pty) Limited
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
29 March 1994
Case Number
469/92
Procedural Posture
Civil Appeal / Appeal From Supreme Court of Venda
Outcome
Appeal dismissed, except that interest on the sum of R366,018.15 is to run from 24 March 1992 instead of 5 July 1990.
Judges
Joubert, Hefer, Nestadt, F H Grosskopf, Mahomed
Legal Topics
Suretyship, Damages for Breach of Contract, Public Policy, Contractual Interpretation
Commercial and Corporate Suretyship Damages for Breach of Contract Public Policy Contractual Interpretation

Case Brief

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Parties

Wilson Rasilingwani Mufamadi

Appellant

Jesse Ntanganedzeni Muthige

Appellant

Alpheus Ofhani Makhuvha

Appellant

Highson Thaetshelesani Makhuvha

Appellant

Dorbyl Finance (Pty) Limited

Respondent

Procedural Posture

Civil Appeal / Appeal From Supreme Court of Venda

Legal Issues

  1. 1 Whether clause 14.2 of the Instalment Sale Master Agreement is contrary to public policy and therefore void.
  2. 2 Whether the appellants are entitled to a credit for the cash price at which the repossessed goods were sold when calculating damages.
  3. 3 From which date interest on damages should run.

Ratio Decidendi

Clause 14.2 of the agreement does not grant the seller unfettered power to manipulate damages. The seller must elect either an appraiser's valuation or the net sale price, and is bound by that election. The clause does not allow the seller to obtain both valuations and then choose the most advantageous. The buyer may challenge the valuation for collusion or bad faith. The clause, properly construed, is not contrary to public policy. Therefore, the damages awarded by the court a quo stand, and the appeal against the award of damages fails. Interest on damages is to run from the date of judgment, not from the date of cancellation.

Court Disposition

Appeal dismissed, except that interest on the sum of R366,018.15 is to run from 24 March 1992 instead of 5 July 1990.

Orders

  • The appeal is dismissed, save that interest on the sum of R366,018.15 is to run from 24 March 1992 instead of 5 July 1990.
  • The appellants are to pay the costs of the appeal, including the costs of the application for condonation.