Singh v BMW Financial Services (SA) (Pty) Ltd and Another

Mr Khoosial Singh purchased what he believed to be a new BMW X5 motor vehicle in December 2005. The sale agreement, financed through BMW Financial Services, expressly recorded that the vehicle would be ‘first registered’ in 2006. After delivery, it emerged that the vehicle had in fact been registered on three occasions in 2005, including in the dealer’s name. Despite assurances from the dealer, SMG Auto Durban, the registration history could not be rectified. Mr Singh tendered return of the vehicle and ultimately sought cancellation of the contract and restitution of all monies paid once specific performance became impossible.

The appeal was upheld with costs. The sale agreement was declared cancelled. Mr Singh was ordered to return the vehicle, and BMW Financial Services was ordered to repay the deposit and instalments paid, together with interest calculated as determined by the Court. The respondents were ordered jointly and severally to pay the costs of appeal.

The case clarifies that a contractual description such as the year of first registration of a motor vehicle can constitute an essential term of a sale agreement. It affirms that breach of such a term entitles a purchaser to cancel the contract and claim restitution, and it provides authoritative guidance on the calculation of mora interest in restitutionary claims following cancellation.