Capitec wins battle to repossess R2m Porsche from Sandton clinic
A health clinic’s bid to hold on to a R2.1m Porsche 911 Carrera S after defaulting on its finance agreement has ended in defeat, with the Supreme Court of Appeal (SCA) ordering the luxury vehicle to be returned to Capitec Bank.
The court found Ubuntu Family Health Centre Grayston no longer had a lawful right to possess the Porsche after its agreement with Capitec was cancelled following its failure to service the R31,000 monthly instalment.
The judgment, handed down on Wednesday by judge Fayeeza Kathree-Setiloane, centred on whether the clinic’s entry into business rescue could prevent Capitec from repossessing the vehicle.
According to the judgment, Capitec financed R2,115,000 of the Porsche’s R2.35m purchase price. Ubuntu was required to repay the amount over 60 months, including 59 monthly instalments of R31,638.68, followed by a balloon payment of R634,500.
Ownership of the Porsche remained with Capitec until all amounts owed under the agreement had been paid, but the clinic fell behind on its payments.
Capitec sent a demand on October 26 2023, giving Ubuntu seven days to settle its arrears. The clinic failed to do so.
Ubuntu director Ridwaan Adams, who had made a R100,000 payment towards the arrears, refused to allow them to take the vehicle and declined to disclose where it was
On November 17 Capitec cancelled the agreement. Later that day, Capitec’s attorney and representatives went to the clinic’s premises in Sandton to take possession of the Porsche.
However, Ubuntu director Ridwaan Adams, who had made a R100,000 payment towards the arrears, refused to allow them to take the vehicle and declined to disclose where it was.
Capitec gave Ubuntu another opportunity to raise funds and settle the matter. At a later meeting, Adams proposed paying R500,000 a few days later with further discussions about settling the remaining debt over six months.
Kathree-Setiloane said Capitec was in the right as those undertakings were not fulfilled.
“It is common cause that, owing to Ubuntu’s breach, the agreement was validly cancelled on November 17 2023, prior to the commencement of business rescue,” she said. “Ubuntu was thus in unlawful possession of the Porsche, entitling Capitec to institute vindicatory proceedings for its return.”
When Capitec’s appointed auctioneers returned to the clinic on December 1 to take possession, Adams refused them access, insisting a court order was required.
The dispute later became complicated when Ubuntu entered business rescue and was subsequently liquidated.
No purpose connected to the process of business rescue warrants the company under business rescue being protected against proceedings to recover property that it neither owns or lawfully possesses— Judge Fayeeza Kathree-Setiloane
The high court initially sided with Ubuntu, finding the vehicle was lawfully in its possession and that the Companies Act’s business rescue moratorium prevented Capitec from recovering it.
The SCA overturned that decision. Kathree-Setiloane said the law did not allow business rescue to protect a company from proceedings to recover property it no longer had a lawful right to possess.
“No purpose connected to the process of business rescue warrants the company under business rescue being protected against proceedings to recover property that it neither owns or lawfully possesses,” she said.
“It follows that continued possession of property belonging to persons or entities other than the company in business rescue becomes unlawful for purposes of the act once the right to possession has been validly cancelled.”
The moratorium did not extend to proceedings seeking the return of such property, said Kathree-Setiloane.
The court found Ubuntu’s agreement had been validly cancelled before the company entered business rescue, meaning it was already in unlawful possession of the Porsche.
“The respondent [clinic] is ordered to forthwith deliver to the applicant [Capitec] a 2020 Porsche 911 Carrera S Coupe motor vehicle,” said Kathree-Setiloane.