Buffalo Freight Systems (Pty) Ltd v Crestleigh Trading (Pty) Ltd and Another

The appellant, a freight forwarding and clearing agent, provided clearing and forwarding services to the first respondent, a furniture importer, under standard trading terms granting a credit facility and a contractual lien over goods for unpaid charges. Due to financial difficulties, the first respondent defaulted on payments, leading the appellant to revoke the credit facility while continuing to trade on a cash basis under the same standard terms. After a dishonoured cheque and mounting arrears, a meeting was held on 5 May 2008 to discuss payment. The first respondent alleged that an oral agreement was concluded allowing it to pay arrears as and when funds were available, with the appellant agreeing not to enforce its lien over certain containers paid for in cash. The appellant denied this, contending that payment was to be made weekly and that the standard trading conditions, including the lien, remained applicable. The appellant exercised a lien over five containers and sought confirmation of the lien and payment of the outstanding debt. The High Court dismissed the application and upheld a counter-application for release of containers, prompting this appeal.

The appeal was upheld with costs. The High Court’s order was set aside and replaced with an order confirming the appellant’s lien over the containers, directing the first and second respondents jointly and severally to pay R600,591.05 plus interest, authorising the sale of the goods if payment was not made, and dismissing the counter-application with costs.

The case is significant for reaffirming that revocation of a credit facility does not terminate or vary standard trading terms unless clearly agreed. It clarifies the circumstances in which courts may reject a respondent’s version in motion proceedings as fanciful or untenable, notwithstanding Plascon-Evans, and confirms the enforceability of contractual liens in commercial relationships.