Info Plus v Scheelke 1998 (3) SA 184 (SCA)

Info Plus v Scheelke 1998 (3) SA 184 (SCA)

Facts

Info Plus, a computer software company, entered into a hire-purchase agreement with Scheelke for the purchase of a Mercedes-Benz motor vehicle. The agreement stipulated that ownership of the vehicle would remain vested in Info Plus until receipt by it of all amounts payable by Scheelke.

Scheelke paid all of the instalments due under the agreement, but he failed to pay the final instalment on time. Info Plus cancelled the agreement and demanded that Scheelke return the vehicle. Scheelke refused to return the vehicle, arguing that he had become the owner of the vehicle by virtue of his payment of all of the instalments.

Info Plus instituted a vindicatio action to recover possession of the vehicle. Scheelke argued that the vindicatio action was unsuccessful because he had become the owner of the vehicle.

Issue

The main issue in the case was whether Scheelke had become the owner of the vehicle by virtue of his payment of all of the instalments due under the hire-purchase agreement.

Reasons

The Supreme Court of Appeal (SCA) held that Scheelke had not become the owner of the vehicle by virtue of his payment of all of the instalments due under the hire-purchase agreement. The court found that the ownership clause in the agreement was clear and unambiguous, and that the clause gave Info Plus the right to retain ownership of the vehicle until receipt by it of all amounts payable by Scheelke.

The court also held that the fact that Scheelke had paid all of the instalments due under the agreement did not mean that he had acquired ownership of the vehicle. The court found that the payment of instalments is simply a way of discharging a debt, and that it does not automatically result in the transfer of ownership.

Conclusion

The court held that Info Plus was still the owner of the vehicle and that it was entitled to recover possession of the vehicle from Scheelke.

Summary

The case of Info Plus v Scheelke 1998 (3) SA 184 (SCA) is a landmark case in South African law. The case is particularly important for its analysis of the following issues:

• The concept of ownership in hire-purchase agreements;
• The effect of ownership clauses in hire-purchase agreements; and
• The distinction between the payment of instalments and the transfer of ownership.

Concept of ownership in hire-purchase agreements

In a hire-purchase agreement, the seller remains the owner of the goods until the buyer has paid all of the instalments due under the agreement. This is known as a retention of title clause.

Effect of ownership clauses in hire-purchase agreements

Ownership clauses in hire-purchase agreements are valid and enforceable. This means that the seller has the right to retain ownership of the goods until the buyer has paid all of the instalments due under the agreement.

Distinction between the payment of instalments and the transfer of ownership

The payment of instalments under a hire-purchase agreement is not the same as the transfer of ownership. The payment of instalments is simply a way of discharging a debt. Ownership is only transferred to the buyer once the buyer has paid all of the instalments due under the agreement.

Impact of the Case

The case of Info Plus v Scheelke 1998 (3) SA 184 (SCA) has had a significant impact on the law of hire-purchase in South Africa. The case has clarified the concept of ownership in hire-purchase agreements, the effect of ownership clauses in hire-purchase agreements, and the distinction between the payment of instalments and the transfer of ownership.