CIV/APN/203/87

IN THE
HIGH COURT OF LESOTHO

In the
Application of :

J.R.
BOTHMA Applicant

vs

KUNI
SEKHOANE Respondent

JUDGMENT

Delivered
by the Honourable Mr. Justice J.L. Kheola on the 30th day of
September, 1987

On the
28th June, 1987 the Applicant moved an urgent application in which he
sought an order in the following terms:

1. That
   the Deputy Sheriff of the above Honourable Court be directed and
   empowered to attach, remove and take into his possession
   one 1984
   MAN Bus, 16-200 FOC, with engine number SB1068SA002492J and chasis
   number 32210671067 and with present registra­tion
   number AA
   546, from the Respondent or any other party in whose possession the
   said vehicle might be found.

   
   

2. That
   the Respondent be called upon to show cause, on a day to be
   determined by the above Honourable Court, why the vehicle referred

   to in paragraph 1 above should not be handed over to the Applicant
   and why he should not be ordered to pay the costs of this

   application in the event of opposition thereof.

   
   

3. That
   paragraph 2 above operate as an Interim Order, and

   
   

4. Further
   and/or alternative relief."

   
   

2

A rule
nisi was issued and made returnable on the 20th July, 1987, The
respondent anticipated the return day to the 15th July, 1987.
On the
anticipated return day the parties agreed that the deputy Sheriff
should not remove the bus from the respon-dent and the
respondent
undertook not to remove the vehicle out of the district of Maseru.
The matter was postponed to the 27th July, 1987.
On that day the rule
was extended to the 23rd September, 1987 . when the matter was argued
before me. I reserved my judgment to
30th September, 1987.

The facts
of the case are simple and straightforward. On the 2nd March, 1984
the applicant entered into a hire-purchase agreement
with Standard
Credit Corporation in which the latter sold a bus to the applicant.
It is common cause that that bus is the same
one the applicant is now
seeking to repossess from the respondent. The appli­cant paid a
deposit of R27,000 leaving a balance
of R77,652 to be paid in
thirty-five (35) monthly instalments of R2.157. It was a specific
term of the agreement that the ownership
of the vehicle would remain
vested in the seller (Standard Credit Corporation) until the
applicant had fully paid for the bus.

However,
in breach of the terms of his contract with the seller, on the 26th
May, 1984 the applicant entered into a hire-purchase
agree­ment
with one Sebatana Russell in which he purported to sell the same bus
to the said Russell. The preamble of the agreement
shows that the
applicant had entered into the contract of sale with the seller with
the sole intention of helping Russell who did
not have sufficient
funds. It shows that the deposit of R27,000 came from Russell and
that he was to pay R5,000 monthly instalment
to the applicant until
full payment was made. It was a specific term of the agreement that
ownership of the bus would remain vested
in the applicant until the
full price had been paid.

3

In
January, 1987 and allegedly in breach of the terms of his contract
with the applicant, Russell sold the bus to a Durban based
firm
called Buscraft. During the same month Buscraft in turn sold the bus
to the present respondent for R55,000. He paid a deposit
of R10,000
and is paying a monthly instalment of R1,250. The purchase was
financed by W.M.N. Investments (Lesotho) (Pty) Ltd.

While the
bus was still changing hands a series of appli-tions was being made
in this Court in an attempt to repossess it. The first
one is
CIV/T/700/85 made on the 24th July, 1986 in which the present
applicant cited S. Russell as the respondent. For some unknown
reason
that application was not pursued to finality and yet at that time the
vehicle ought to have been in the possession of Russell.

On the
17th November in CIV/APN/359/86 Standard Credit Corporation cited the
present applicant as the first respondent and S. Russell
as the 2nd
respondent in an attempt to repossess the vehicle. That application
has not been finalised.

In the
meantime on 2nd June, 1987 Standard Credit Corporation and the
present applicant purported to enter into a deed of cession
whereby
the parties agreed that the applicant (cessionary) would pay the
amount of R19,121-32 in full and final settlment of the
agreement
between the parties. The cedent received this amount in full and
final settlement, and the cedent thereby ceded, out
and out, in rem
suam, all its rights, title and interest to a certain credit sale
agreement to the cessionary who accepted the
cession.

4

It will
be necessary to consider the validity of the contract entered into by
the present applicant and Sebatana Russell. The contract
is dated the
26th May, 1984 and the applicant purported to sell the aforesaid bus
to Russell under a hire-purchase agreement. It
is common cause that
at that time the applicant had not paid Standard Credit Corporation
in full and that the ownership in the
bus still remained vested in
Standard Credit Corporation. In terms of article 4 of the
hire-purchase agreement the applicant was
prohibited from alienating
or encumbering the goods sold to him until he had paid the purchase
price in full. The applicant failed
to observe this term of the
agreement and purported to sell the vehicle to Russell. I have come
to the conclusion that such agreement
was null and void; was also
illegal and in contravention of the provisions of the South African
Statute which regulates hire-purchase
agreements. The applicant is
asking this Court to enforce the terms of a contract that was null
and void ab initio. This Court
cannot do that. An attempt is being
made. to rely on a deed of cession entered into by the applicant and
Standard Credit Corporation
on the 2nd June, 1987 i.e. three years
after the applicant and Sebatana Russell entered into a contract that
was null and void
ab initio. In the case of York Estates Ltd v.
Wareham, 1950 (i) S.A. 125 the Court had to interpret Section 65 of
the Town and
Country Planning Act of 1945 which provided that "no
person shall sell or lease or offer for sale or lease any portion of
a property or enter into any contract or arrangement or do any act
which may lead to the subsequent sub-division of property unless
the
permission of the Minister has been obtained for the sub-division of
such property." (my underlining). The parties had
entered into a
contract of sale of a piece of land in 1946 and obtained the
permission of the Minister in 1947. . The buyer then
sought an order
for specific performance and at page 128 Lewis, A.C.J. said:

5

"The fact that the Miniter's approval to the sub­division
was subsequently given before the plaintiff sought to enforce
the
contract is immaterial. It is not alleged that after obtaining the
Minister's approval a new contract was entered into. In
the Cape
Dairy v. Sim case which dealt with an illegal sale of cattle on a
Sunday, it was sought to rely on ratification of the
sale made on the
following Thursday. Innes, C.J., observed at p. 170: there can bet no
ratification of a contract which is prohibited
and made illegal by
statute. In the case of Spiers v. Hunt (1908 (I), K.B. 720) it was
held that an illegal promise by a married
man to marry a woman made
during the lifetime of his wife did not give the right to bring an
action for breach of promise against
him, even after the death of his
wife. In that case PHILLIMORE, J. quoted with approval the '
following dictum:

"It is wholly fallacious to suppose that a contract is not
illegitimate if the act agreed to be done would not be illegal
at the
time of its contemplated performance. Such is not the law. A contract
is totally void if, when it is made, it is opposed
to morality or
public policy."

The
applicant deliberately entered into a contract with S. Russell
knowing very well that under the terms of the contract between
him
and Standard Credit Corporation he was prohibited from alienating or
encumbering the property before he had paid for it in
full. The
contract was null and void and cannot be ratified by a subsequent
deed of cession.

The bus
has changed so many hands that it would be totally unfair to deprive
the present respondent of the possession of the bus.
He has bought
the bus from an innocent third party who knew nothing about the
nullity of the contract between Russell and the applicant.
The
appli­cant fraudulently parted with the bus and is estopped from
claiming repossession of the bus from innocent third parties.
If the
application were made by Standard Credit Corporation it would be a
different matter because they never purported to sell
the vehicle to
Russell, they (Standard Credit Corporation) would be entitled to
repossess the vehicle-from any person to whom the
applicant purported
to sell it. They would

6

also be
entitled to recover it from any innocent third parties who did not
know that the applicant had no authority to transfer
it. But the
applicant is estopped from claiming the vehicle from any person who
derives his title from Russell to whom he (applicant)
unlawfully and
fraudulently purported to sell the vehicle. On this ground alone the
rule must be discharged.

The
second ground why the rule has to be discharged is that there is a
serious dispute of fact which cannot be determined on paper.
That
issue is to be settled in CIV/T/700/85 which is still pending before
this Court. Sebatana Russell is not a party to the present

application but has filed an affidavit showing that he has paid for
the bus in full.

In the
result the rule is discharged with costs.

J.L.
KHEOLA

JUDGE.

30th
September, 1987.

For the
Applicant -Mr. S.C. BUYS

For the
Respondent - Mr. G.G. NTHETHE