Stu Davidson and Sons (Pty) Ltd v Eastern Cape Motors (Pty) Ltd

In November 2012, Stu Davidson and Sons (Pty) Ltd (Davidson) purchased a Ford Ranger from Eastern Cape Motors (Pty) Ltd (Motors) and traded in a 2012 Volkswagen Transporter vehicle for R245,000. Patrick Davidson advised Motors' representative that the vehicle had been in a collision and showed pictures of cosmetic damage. The trade-in declaration contained a warranty that "the vehicle has not been involved in a substantial/major accident (particularly if it will affect resale value)." After the sale, when Motors attempted to resell the vehicle, it discovered that Volkswagen had written it off due to major accident damage and cancelled the manufacturer's warranty. Davidson had actually purchased the vehicle from a body shop for R130,000 and spent R60,000-R70,000 on parts to repair it over 4-6 weeks. A quotation from Prestige Auto Body Repairers showed repair costs of R261,946. Motors eventually sold the vehicle to Mr Hechter for R150,000, sustaining a loss of R95,000. Motors sued for damages for breach of warranty in the Regional Court, Port Elizabeth.

• Whether the warranty in the trade-in declaration that the vehicle had not been involved in a substantial/major accident (affecting resale value) was breached
• Whether the warranty term was too vague to be enforceable
• Whether the contract should be rectified to reflect an alleged agreement that Motors would investigate the accident before purchasing
• Whether special leave to appeal should be granted and whether special circumstances existed to justify the Supreme Court of Appeal entertaining the appeal

The appeal was struck from the roll with costs. The full bench's order that Davidson pay R95,000 to Motors as damages for breach of warranty was upheld.

1. A warranty in a contract of sale is a binding contractual term, not a mere expression of opinion. 2. Where a warranty clearly defines the warranted state of affairs (here, no substantial/major accident affecting resale value), it will be enforced according to its plain meaning and is not unenforceable for vagueness. 3. For special leave to appeal to be granted and maintained, something more than reasonable prospects of success is required - there must be special circumstances such as an important legal question, manifest denial of justice, or special significance to parties or the public. 4. The granting of special leave on petition to the President is not decisive - the court hearing the appeal must independently determine whether special circumstances exist, often having access to the full record not available to judges considering petitions. 5. A party who abandons a counter-claim for rectification and fails to cross-appeal cannot raise that issue as a ground of appeal.

Pillay AJA made observations emphasizing that the full picture of a case sometimes emerges only at the hearing of the special appeal, when the court has the complete record before it, unlike the two judges considering petitions. The court also noted that clause 12 of the special conditions (stating the vehicle had not been involved in any accident) was not amended despite Patrick Davidson advising of the collision, though this inconsistency was not determinative given the clearer warranty in the trade-in declaration. Lewis JA noted that the evidence of Mr Hechter (that he would not have paid R150,000 had he known the extent of damage) and the fact he eventually sold at profit after repairs, further demonstrated the effect on resale value, though this was not strictly necessary for the decision.

This case clarifies the principles governing special leave to appeal to the Supreme Court of Appeal. It confirms that: (1) granting special leave on petition is not decisive - the court hearing the appeal must independently determine whether special circumstances exist; (2) the test requires something more than reasonable prospects of success; (3) factors weighing against special leave include minimal amounts in issue, no important legal questions, no factual disputes requiring reconsideration, and no public significance. On contractual interpretation, the case illustrates that clear warranty terms in commercial contracts will be enforced according to their plain meaning, and warranties are binding contractual terms, not mere expressions of opinion. The case also demonstrates the importance of properly pursuing remedies - abandoning a counter-claim for rectification and failing to cross-appeal means that ground cannot be raised on appeal.