Question posted in the Consumer Protection Law category relating to Western Cape
A few definitions –
A photo voltaic solar cell is a device which collect solar rays and produces electricity. A solar panel is a collection of solar cells and a solar array is a group of solar panel.
History
During the last 12 months I have purchased 3676 solar cells from The Sun Exchange in four different array projects at various institutions in South Africa. The project overview document defines me as the owner and leaser of the cells. The cells were leased to the Sun Exchange Bewind Trust. The cost of these cells varied in each project, totalling R53,593.00.
Earlier this year The Sun Exchange informed cell owners that they were looking to sell the arrays to a third party. They did not request my permission to sell my cells.
This week they informed me that the sale was now complete, and they were prepared to pay me R309,949.12, a loss to me of R43,643.88. I have rejected this offer.
The project document includes a buy out clause which states:
The end user for each project has the right to buy out the system at any point during the lease period. Included in each project document is the buy out schedule showing the price they will have to pay per solar cell in each year of the lease, should they choose to exercise this option. In the first 12 months this gives me my initial cost (R353,593.00).
Q1. Are The Sun Exchange right to sell my cells without my permission?
Q2. Have they broken the law in doing so?
Q3. Am I entitled to the full amount I paid if I decide to sell my Cells to them.
Message from the Lawyer
Hi there and thank you for your question,
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Q1 - it sounds to me as if the project documentation's buy-out clause gives the end user the right to buy the system during the lease period. What it does not do is to give The Sun Exchange the right to sell your cells on your behalf, unless you give them permission to do so. If the cells were purchased from The Sun Exchange by yourself, then YOU are the owner of the cells. If you have leased them to the Bewind Trust, that does not change the fact that you are the owner of the cells. Therefore, I do not see any legal basis upon which The Sun Exchange has the right to sell your cells.
Q2 - no, they haven't really broken the law, they just do not have the legal right to sell the cells (because they are not the owner of the cells) and they do not have the ability to pass ownership of the cells to a third party (again, because they are not the owner). Therefore, in law, their actions are actually a nullity. You would remain the owner of the cells. The third party would not become of the owner of the cells. If they have accepted money from a third party for the cells, then the third party would want their money back.
Q3 - you would be entitled to payment of the purchase price which you negotiate. If you are the owner of the cells, then why should you not receive the ENTIRE amount that they are sold for?! I would expect to receive everything. Maybe, less a commission.
Message from the client
I have never seen, read, signed or certified these documents.
Everything involved in the sales/purchase process was carried on line via their website and I suppose there may have been a tick box accepting their terms/conditions/agreement but I do not remember such things. Further, for 2 of the projects 2 or more separate purchases were made on different dates, yet there is only 1 CEO for each project reflecting the total number of cells purchased for that project.
Having read a paper on consumer law do these clauses come under the heading as "onerous"?
My course of action is to challenge Sun Exchange of the points but look for your advice on this.
The clauses are:
2.2 Each Solar Cell Owner hereby irrevocably nominates, mandates and appoints Sun Exchange as its
representative with full power of attorney and authority to procure such number of Solar Cells secured by
the Solar Cell Owner during a Crowdsale, to enter into the Asset Lease, and to do all such things
necessary to implement the Asset Lease and give effect to the terms thereof as well as the terms of this
Agreement. Without detracting from the generality of the aforegoing, Sun Exchange shall irrevocably be
authorised to perform all such acts and take all such steps as contemplated by this Agreement on behalf
of the Solar Cell Owner, including but not limited to selling the Solar Asset pursuant to the provisions of
this Agreement and taking such legal steps as may be necessary to enforce the rights of each Solar Cell
Owner pursuant to the Asset Lease. The Solar Cells and related rights and assets constituting the Solar
Cells shall automatically become subject to this Agreement upon the Crowdsale End.
47 Sale of Solar Asset
47.1 Without detracting from any inherent and/or fundamental legal right of the trustees of Sun-Ex to
administer and dispose of the assets under its control pursuant to its trust deed and/or under the
common law, and/or statute, the Parties record and agree that Sun Exchange shall have the right to, at
any time during the Asset Lease Period, sell the Solar Asset and all its component parts (the "Sale
Asset") for and on behalf of Sun Exchange and the Solar Cell Owners, (collectively the "Sellers") to a
willing and able purchaser (the "Purchaser") on the basis set out herein.
47.2 The price at which Sun Exchange shall be entitled to sell the Sale Asset on behalf of the Sellers to the
Purchaser ("Sale Price") shall be at a fair and reasonable value of the Sale Asset, to be determined by
the Sun Exchange in its sole and absolute discretion exercising such discretion reasonably
47.3 Each Solar Cell Owner hereby irrevocably nominates, mandates, authorises and appoints Sun
Exchange as its representative with full power of attorney and authority to sell the Sale Asset pursuant
to the provisions of this clause 47, and to do all such things necessary to conclude and implement an
agreement for the sale of the Sale Asset. Without detracting from the generality of the aforegoing, Sun
Exchange shall irrevocably be authorised to perform all such acts and take all such steps as
contemplated by this Agreement on behalf of the Solar Cell Owner, including but not limited to agreeing
the price for the Sale Asset with the Purchaser, signing an agreement of sale, receiving payment and
taking any and all such legal steps as may be necessary to enforce the rights of each Solar Cell Owner
pursuant to the sale of the Sale Asset.
47.4 Upon the Sale Asset being sold by the Sun Exchange in accordance with the provisions hereinabove,
and payment having been made by the Purchaser, Sun Exchange shall distribute, within thirty (30)
days of receipt of the Sale Price from the Purchaser (whether paid to Sun-Ex out of escrow or
otherwise, into its bank account), the proceeds of the Sale Price for the Sale Asset, less any
Impositions, Solar Equipment Value (as defined below), upfront fees including facilitation fees) Project
Expenses and charges (including legal fees), to the Solar Cell Owners in the Project, pro rata in
accordance with their respective Ownership Percentages.
47.5 For purposes of this clause 47, "Solar Equipment Value" shall be the Fair Market Value of the Solar
Equipment as determined by an Expert appointed by the Auditors for such purpose. The determination
by Sun-Ex of the fair and reasonable value of the Solar Equipment shall be final and binding upon the
Parties.
47.6 Notwithstanding the transfer of ownership in respect of the Sale Asset to the Purchaser pursuant to any
sale contemplated by this clause 51, Sun-Ex agrees that it shall, during any interim period calculated
from the date of transfer of ownership of the Sale Assets aforesaid, until such time as it complies with
its obligations to distribute the proceeds of the Selling Price in accordance with clause 51.4 above,
continue, insofar as it receives any Consumer Rental in such period, to distribute Cell Owner Rental to
Cell Owners in accordance with the provisions of this Agreement
48 Upon the distribution contemplated by clause 47.4 above having been made by Sun Exchange to a Cell
Owner, this Agreement shall automatically terminate vis-à-vis such Cell Owner, who shall have no
further claims of any nature against Sun Exchange.
Message from the Lawyer
I think that the question which needs to be answered is whether that CEO is binding on you or not. You need to print everything out and go over it carefully to understand what you agreed to, and when. The statement "SIGNED AND CERTIFIED" indicates that this agreement was specifically "signed" (perhaps digitally) and I do not think that a simple tick box would have been sufficient. I think that it might be worthwhile appointing a private attorney to represent you in this dispute and go through all of the documents and then write a letter to Sun Exchange laying out your version / understanding of what they can and can't do!