Pellow and Another v Club Refrigeration CC (469/03) [2004] ZASCA 91; [2006] 3 All SA 420 (SCA); 2006 (1) SA 230 (SCA) (29 September 2004)

Pellow and Another v Club Refrigeration CC (469/03) [2004] ZASCA 91; [2006] 3 All SA 420 (SCA); 2006 (1) SA 230 (SCA) (29 September 2004)

The Supreme Court of Appeal held that the contract between Club Refrigeration and Fisher Foods was a contract of locatio conductio operis, not an instalment sale, and therefore section 84(1) of the Insolvency Act did not apply. The reservation of ownership clause in Club Refrigeration's tender, incorporated into the JBCC agreement, was valid and effective. The JBCC agreement's interim certificate mechanism allowed for the identification of unpaid goods, and since Club Refrigeration had not been paid for the goods in question, it retained ownership. The tripartite agreement between Club Refrigeration, the liquidators, and the IDC provided that the proceeds of the sale of the goods would be...

Citation
[2004] ZASCA 91
Parties
Appellant: A D Pellow NO; Appellant: S Williams NO; Respondent: Club Refrigeration CC
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
29 September 2004
Case Number
469/03
Procedural Posture
Civil Appeal / Appeal From Court a Quo
Outcome
Appeal dismissed with costs.
Judges
Scott, Mthiyane, Cloete, Erasmus, Jafta
Legal Topics
Reservation of Ownership, Locatio Conductio Operis, Insolvency of Employer, Movable Property, Contract Interpretation
Commercial and Corporate Civil Procedure Reservation of Ownership Locatio Conductio Operis Insolvency of Employer Movable Property Contract Interpretation

Case Brief

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Parties

A D Pellow NO

Appellant

S Williams NO

Appellant

Club Refrigeration CC

Respondent

Procedural Posture

Civil Appeal / Appeal From Court a Quo

Legal Issues

  1. 1 What is the effect of a reservation of ownership clause in a lump sum building contract when the employer becomes insolvent before completion of the works?
  2. 2 Does section 84(1) of the Insolvency Act apply to a contract of locatio conductio operis?
  3. 3 Was ownership of the movable goods retained by Club Refrigeration until payment was made?

Ratio Decidendi

The Supreme Court of Appeal held that the contract between Club Refrigeration and Fisher Foods was a contract of locatio conductio operis, not an instalment sale, and therefore section 84(1) of the Insolvency Act did not apply. The reservation of ownership clause in Club Refrigeration's tender, incorporated into the JBCC agreement, was valid and effective. The JBCC agreement's interim certificate mechanism allowed for the identification of unpaid goods, and since Club Refrigeration had not been paid for the goods in question, it retained ownership. The tripartite agreement between Club Refrigeration, the liquidators, and the IDC provided that the proceeds of the sale of the goods would be...

Court Disposition

Appeal dismissed with costs.

Orders

  • The appeal is dismissed.
  • The respondent is entitled to the proceeds of the sale of the goods.