Absa Technology Finance Solutions (Pty) Ltd v Michael’s Bid a House CC and Another

The second respondent, Michael Rose, conducted business through the first respondent close corporation, Michael’s Bid a House CC. In July 2008, the CC entered into a written ‘master rental agreement’ with Sapor Rentals (Pty) Ltd for the hire of a colour printing machine over a 36‑month period, with monthly rental payments. Rose signed as surety. Ownership of the machine was expressly reserved to the lessor, with an obligation on termination to return the goods. Sapor ceded its rights under the agreement to Absa Technology Finance Solutions (Pty) Ltd. After dissatisfaction with the machine and alleged failures by the supplier (Westrand Office Equipment), the CC stopped paying rentals. Absa Technology sued for arrear and future rentals. The High Court held that the agreement was effectively a credit agreement under the National Credit Act 34 of 2005 (NCA), requiring compliance with ss 129 and 130 before enforcement. Absa Technology appealed.

The appeal was upheld. The order of the High Court was set aside and substituted with judgment in favour of Absa Technology against the first and second respondents, jointly and severally, for payment of R111 533.98 plus interest at six per cent above the prime rate a tempore morae until payment.

The case is significant for clarifying the scope of the National Credit Act in relation to common‑law leases of movable property. It confirms that rental agreements that do not provide for the passing of ownership at the end of the term fall outside the NCA, and it strongly reasserts the parol evidence rule in the context of attempts to recharacterise commercial agreements as credit transactions. The judgment provides certainty for financial institutions and commercial lessors.