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[2015] ZAGPJHC 9
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Afrifresh Group (Pty) Limited v Alan Jaques Renard (Pty) Limited (2013/16380) [2015] ZAGPJHC 9 (3 February 2015)
REPUBLIC OF SOUTH
AFRICA
SOUTH GAUTENG LOCAL
DIVISION,
JOHANNESBURG
CASE NO. 2013/16380
DATE: 03 FEBRUARY 2015
In the matter between:
AFRIFRESH GROUP (PTY)
LIMITED
.............................................
Plaintiff
And
ALAIN JAQUES RENARD (PTY)
LIMITED
................................
Defendant
JUDGMENT
REDMAN AJ
[1] The defendant (excipient) excepts
to the plaintiff's particulars of claim on the basis that the
particulars of claim are vague
and embarrassing, alternatively lack
averments which are necessary to sustain a cause of action.
[2] The plaintiff's claim is one for
damages in the amount of R3 628 219,00 arising out of the defendant's
alleged breach of an
agreement in terms whereof the defendant was
appointed as the plaintiff's agent to manage and administer the
plaintiff's requirements
for hedging transactions on currencies in
South Africa.
[3] The thrust of the complaints raised
in the exception are aimed at the discrepancies between the pleadings
and the contents of
the written instruction attached thereto. The
relevant paragraphs of the particulars of claim read as follows:
'6. On 24 July 2012, the Plaintiff,
represented by Anton Meinesz, expressly instructed the Defendant,
represented by Herman Schoeman,
to obtain forward foreign currency
cover by means of foreign exchange contracts in terms of the model
recommended by the defendant
up to the following cover amounts for
the weeks indicated:
6.1 week 2012 48: €228 679.00 and
₤38 679.00;
6.2 week 2012 49: €167 522.00 and
₤103 663.00;
6.3 week 2012 50: €87 972.00, ₤38
710.00 and US $6 210.00;
6.4 week 2012 51: €84 935.00 and
₤116 941.00;
6.5 week 2012 52: €135 100.00,
₤120 779.00 and US $20 250.00;
6.6 week 2013 01 €148 589.00 and
₤22 629.00;
6.7 week 2013 02: €133 758.00,
₤192 550.00 and US $19 359.00;
6.8 week 2013 03: €86 480.00, ₤74
889.00 and US $20 457.00;
6.9 week 2013 04: €176 586.00,
₤351 654.00 and US $33 728.00;
6.10 week 2013 05: €271 573.00,
₤24 383.00 and US $31 248.00; and
6.11 week 2013 06: €338 110,00,
₤178 018.00 and US $52 872.00.
7. A true copy of the instructions is
attached marked "C".
8. Properly construed, the instruction
in "C" was to obtain cover for amounts equal to 50% of the
amounts referred to
in respect of week 48 of 2011 to week 06 of 2012
(being the actual transaction amounts during the preceding year), for
the corresponding
weeks of the upcoming season from week 48 of 2012
to week 06 of 2013."
[4] Annexure "C" comprises of
two documents, namely -
4.1. an e-mail addressed by Anton
Meinesz to "Administration",
4.2. a schedule containing (a) a table
reflecting a "sum of receipts" in various currencies for
the period week 48 of
2011 to week 06 of 2013; and (b) a table
reflecting "cover amounts".
[5] In the exception, the defendant
raises four grounds of complaint, some of which overlap. Each of
the grounds is dealt with
hereunder.
First ground
[6] The defendant contends that the
allegations contained in paragraph 6 (read with 7) of the particulars
of claim are factually
incorrect and are not supported by the
contents of annexure "C". The defendant contends that the
weeks referred to
in paragraph 6 of the particulars of claim do not
correspond to the weeks recorded in annexure "C".
[7] It is immediately apparent from a
perusal of the first table reflected in the schedule that the dates
recorded therein are for
the period week 48 of 2011 to week 06 of
2012, and not for the period week 48 of 2012 to week 06 of 2013
(being the dates recorded
in paragraph 6 of the particulars of
claim).
[8] Paragraph 6 of the particulars of
claim, however, does not purport to recite the contents of the table
in annexure "C",
but purports to record the instruction
given by the plaintiff to the defendant.
[9] It is the plaintiff's contention
that the instruction "properly construed" instructs the
defendant to obtain cover
for the weeks 48 of 2012 to week 6 of 2013,
notwithstanding the fact that the weeks recorded in annexure "C"
relate to
the same period for the preceding year.
[10] It is self-evident that an
instruction to obtain forward cover would relate to foreign exchange
contracts in the future. It
would be nonsensical for the plaintiff
to instruct the defendant to obtain forward cover for periods which
had already passed.
[11] It is the plaintiff's contention
that, on a proper construction of annexure "C", the
defendant was instructed to
obtain forward cover for the forthcoming
season, based on the actual transaction amounts for the preceding
year.
[12] In the e-mail addressed by Anton
Meinesz (forming part of annexure "C") he records the
following:
"Attached are our expected Grape
revenue for the forthcoming season.
The dates are calendar dates and the
amounts that we would potentially want covered are shown in the
middle of the sheet under the
heading "cover amounts".
You guys must apply your model but I am
very comfortable fixing quite a lot of these amounts if you think it
appropriate. I would
try and spread the fixing over the full season
rather than just locking in the earlier amounts (although I know that
the later
fixes will absorb a bit more facility) .." [emphasis
added]
[13] At the foot of the aforesaid
e-mail is an e-mail from Basil Karstel to Anton Meinesz which reads
as follows:
"This is based on last season's
income on Grape and I've taken 50% of this to be covered.”
[14] I am alive to the fact that a
Court should exercise caution when deciding questions concerning the
interpretation of contracts
on exception. The defendant bears the
onus of persuading the Court that on every interpretation no cause of
action has been revealed.
See Francis v Sharp
2004 (3) SA 230
(C) at
237D-I.
[15] Annexure "C" does not
form part of the agreement relied upon by the plaintiff. The
plaintiff contends that annexure
"C" is an instruction
which was given by the plaintiff to the defendant pursuant to the
underlying agreement. Annexure
"C" is a unilateral
instruction and accordingly the defendant's suggestion that the
plaintiff should have sought rectification
of the documents is
misplaced.
[16] When applying the "golden
rule" of interpretation, the Court will give effect to the
ordinary grammatical meaning
of the language contained in a document
unless this would result in some absurdity, repugnancy or
inconsistency. In Natal Joint
Municipal Pension Fund v Endumeni
Municipality
2012 (4) SA 593
(SCA), para [18], the Court summarised
the current legal position relating to the interpretation of
documents as follows:
'The present state of the law can be
expressed as follows: Interpretation is the process of attributing
meaning to the words used
in a document, be it legislation, some
other statutory instrument, or contract, having regard to the context
provided by reading
the particular provision or provisions in the
light of the document as a whole and the circumstances attendant upon
its coming
into existence. Whatever the nature of the document,
consideration must be given to the language used in the light of the
ordinary
rules of grammar and syntax; the context in which the
provision appears; the apparent purpose to which it is directed and
the material
known to those responsible for its production. Where
more than one meaning is possible each possibility must be weighed in
the
light of all these factors. The process is objective, not
subjective. A sensible meaning is to be preferred to one that leads
to
insensible or unbusinesslike results or undermines the apparent
purpose of the document. Judges must be alert to, and guard against,
the temptation to substitute what they regard as reasonable, sensible
or businesslike for the words actually used. To do so in
regard to a
statute or statutory instrument is to cross the divide between
interpretation and legislation; in a contractual context
it is to
make a contract for the parties other than the one they in fact made.
The 'inevitable point of departure is the language
of the provision
itself', read in context and having regard to the purpose of the
provision and the background to the preparation
and production of
the document.'
[17] As indicated above, if one were to
give effect to the dates recorded in the first table in annexure "C",
this would
give rise to an absurdity and would probably undermine the
purpose of the instruction.
[18] In order to aid the Court in the
interpretation of the document, reference may be had to evidence
which may include the circumstances
in which the document came into
existence. See Bothma-Batho Transport v S Bothma en Seun Transport
2014 (2) SA 494
(SCA) at [12].
[19] Bearing in mind that the author
and recipient of the e-mail are businessmen who have had a
relationship since at least 2011,
I am not persuaded that a court
will not find that the interpretation of the instruction contended
for by the plaintiff in paragraphs
6 and 8 of its particulars of
claim is the correct interpretation thereof.
[20] In the light of the aforesaid, it
would be inappropriate to for me to attempt to place an
interpretation on the provisions
of the instruction on exception.
In those circumstances, the first ground of exception cannot succeed.
Second ground
[21] In paragraph 6 of the particulars
of claim, the plaintiff alleges that the foreign exchange contracts
were to be obtained 'up
to' the amounts indicated in that paragraph.
[22] In paragraph 8 of the particulars
of claim, the plaintiff alleges that, '[p]roperly construed the
instruction in annexure "C"
was to obtain cover for amounts
equal to 50%'.
[23] The defendant contents that there
is nothing in annexure "C" which either expressly or on a
proper construction provides
for a term that cover was to be obtained
for 'amounts equal to 50%'.
[24] It is immediately apparent that
paragraphs 6 and 8 of the particulars of claim are incompatible and
contradictory.
[25] If the defendant was expressly
instructed to obtain forward foreign currency cover up to the amounts
reflected in the second
table in the schedule attached to annexure
"C" (which records amounts equal to 50% of the transactions
for the preceding
year), this is irreconcilable with the allegation
in paragraph 8 that the defendant was to obtain cover equal to 50% of
the transactions
for the preceding year.
[26] During argument, counsel for the
plaintiff conceded that paragraphs 6 and 8 are contradictory and that
paragraph 8 did not
accord with the contents of annexure "C".
[27] In annexure "C", it is
recorded that the amounts reflected in the second table of the
schedule are amounts that the
plaintiff "… would
potentially want covered …". It is further recorded
that Meinesz was "…
very comfortable fixing quite a lot
of these amounts".
[28] Nowhere in annexure "C"
is the defendant instructed to obtain cover for amounts equal to 50%
of the transaction amounts
for the preceding year. The use of the
terms "potentially" and "quite a lot" indicate a
discretionary instruction
to the contrary.
[29] Where a document contains an
express provision, no tacit term can be imported into that document
which contradicts the expressed
term. See FJ Hawkes & Co Ltd v
Nagel
1957 (3) SA 126
(W) at 132C and Robin v Guarantee Life
Assurance Co Ltd
[1984] ZASCA 72
;
1984 (4) SA 558
(A) at 567A-F.
[30]
The instruction in annexure "C"
appears to provide the defendant with a discretion as to the amount
of cover it was to
obtain and on no possible construction of the
written document is there room for the interpretation that the cover
was to equal
50% of the transaction amounts during the preceding
year.
[31] The plaintiff's cause of action is
clearly based on its interpretation of the instruction as recorded in
paragraph 8 of the
particulars of claim.
[32] In paragraph 9 of the particulars
of claim, the plaintiff alleges that the defendant, '[i]nstead of
only entering into
foreign exchange contracts in the amounts
instructed by the Plaintiff' in … annexure "C" …,
the Defendant
entered into foreign exchange contracts for the periods
instructed in excess of the amounts instructed contrary to the
express
instructions of the Plaintiff ...'.
[33] The express instructions referred
to in paragraph 9 of the particulars of claim clearly refer to the
instructions as construed
by the plaintiff in paragraph 8 of the
particulars of claim.
[34] The plaintiff accordingly contends
that the defendant breached the agreement by failing to enter into
foreign exchange contracts
for the relevant periods in amounts equal
to 50% of the actual transaction amounts for the preceding year.
[35] In the light of the inconsistency
between paragraph 8 of the particulars of claim and annexure "C",
I am satisfied
that the plaintiff has not made out a cause of action
entitling it to claim damages for breach of contract arising out of
the defendant's
failure to comply with the instruction as contended
for by the plaintiff.
[36] In addition, the contradiction
between paragraphs 6 and 8 of the particulars of claim read with
annexure "C", render
the particulars of claim as a whole
vague and embarrassing. It is impossible to distil from annexure
"C" and the allegations
contained in paragraph 6 of the
particulars of claim the interpretation placed on the agreement by
the plaintiff in paragraph 8
of the particulars of claim.
[37] It has been held that a summons
would be vague and embarrassing if there is an inconsistency
amounting to a contradiction between
the summons and the documents
relied upon as the basis of the claim. See Keeley v Heller 1904 (TS)
101.
[38] The defendant would be embarrassed
in pleading to the contradictory averments in paragraphs 6 and 8 of
the particulars of claim
and would be prejudiced if it was compelled
to do so.
[39] In the circumstances, the second
ground of the exception is upheld.
Third and fourth grounds
[40] The defendant contends that the
term "properly construed" as recorded in paragraph 8 of the
particulars of claim
is incompatible with the claim in paragraph 6
that the terms were express.
[41] Paragraph 6 of the particulars of
claim, does not indicate that the terms contained therein were
express, but merely indicates
that the defendant was "expressly
instructed".
[42] I am not persuaded that by
pleading that the instruction should be properly construed in a
certain way renders the particulars
of claim as a whole vague and
embarrassing.
[43] There is nothing irreconcilable
between the use of the word "potentially" contained in
annexure "C" and
the allegation that the instruction was
given expressly.
[44] The defendant must accordingly
fail on the third and fourth grounds.
[45] I make an order in the following
terms:
1. The defendant's exception is upheld;
2. The plaintiff is afforded ten days
within which to amend its particulars of claim;
3. The plaintiff is ordered to pay the
costs.
N P G REDMAN
Acting Judge of the High Court
Heard: 29 August 2014
Judgment delivered: 03 February 2015
Appearances:
For Plaintiff: Adv. L Burger SC
Attorneys: Hayes Incorporated
For Defendant: C Acker
Attorneys: Jordaan & Wolberg