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[2015] ZAGPJHC 180
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Nadroc Logistics CC v GLM Logistics (Pty) Ltd (A3102/2014, 5759/2012) [2015] ZAGPJHC 180 (26 August 2015)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG LOCAL DIVISION,
JOHANNESBURG
APPEAL CASE NO:
A3102/2014
CASE NO: 5759/2012
DATE: 26 AUGUST 2015
In the matter between:
NADROC LOGISTICS
CC
.....................................................................................................
Appellant
And
GLM LOGISTICS (PTY)
LTD
............................................................................................
Respondent
J U D G M E N T
CORAM: MABESELE J et ENGELBRECHT AJ:
MABESELE, J:
[1] This is an appeal against the whole
judgment and order of the magistrate, handed down in Palm Ridge on 8
August 2014.
[2] The appellant first applied for
condonation for late filing of this appeal. The application was not
opposed. After I had considered
the reasons for late filing of the
appeal I am of the view that condonation should be granted.
[3] The appellant is NADROC LOGISTICS,
a Close Corporation duly incorporated in terms of the applicable laws
of the Republic of
South Africa having its principal place of
business at 1 ARMSTRONG AVENUE, LA LUCIA, KWAZULU-NATAL and its
registered address at
8 CHERRY STREET, MAYBERRY PARK, ALBERTON.
[4] The respondent is GLM LOGISTICS
(PTY) LTD (Reg. No 2002\011974\07) a company duly incorporated in
terms of the applicable laws
of the Republic of South Africa having
its principal place of business at 6 RODENE AVENUE, GLENVISTA,
JOHANNESBURG.
[5] The dispute between the parties
revolves around a lease agreement entered into by the appellant as
lessee and respondent as
lessor.
[6] In terms of the agreement the
appellant were to use the respondent’s property as a depot for
a logistic business.
[7] The appellant (defendant in a court
below) failed to take occupation of the property on the date upon
which the property was
available. This resulted in the respondent
(plaintiff in a court below) cancelling the agreement and instituting
a claim against
the appellant for breach of agreement. The court a
quo found in favour of the respondent.
[8] The appellant initially raised four
grounds of appeal. At the beginning of hearing of the appeal counsel
for the appellant
abandoned the first ground of appeal after both
counsel were in ad idem that the magistrate was mistaken to award an
amount of
R1 492 000,00 to the respondent, instead of R1 012 320,00.
[9] The second ground of appeal relates
to the magistrate’s finding that the damages suffered by the
respondent flows naturally
and generally from the breach of contract
by the appellant, when the respondent neither pleaded or proved that
the respondent suffered
damages, nor pleaded or proved that there was
a causal link between any breach by the appellant and the damages.
[10] Counsel for the respondent
objected to this ground of appeal on the basis that it did not form
part of the agreed issues that
were to be determined by a court
below.
[11] According to the respondent’s
counsel the magistrate was asked to determine the following:
11.1 Whether or not it was specifically
agreed that the respondent was contractually obliged to ensure that
the appellant received
a 100 KVA electricity supply.
11.2 Whether the respondent informed
the appellant that the property was ready for occupation and, if
found that the respondent
did in fact inform the appellant of the
date of occupation, that such a
notification had to be in writing.
[12] Counsel for the appellant agreed
that these were the issues to be determined by the magistrate and
that evidence was limited
to them.
[13] Counsel argued, however, that at
the close of the respondent’s case he pointed out to the
magistrate that the respondent
did not plead or prove that it
suffered damages.
[14] This argument was raised after the
respondent’s witness, Jakobus Schmidst, had presented evidence
with regard to the
monthly rental of R 40 00, 00 which the appellant
was contractually liable for.
[15] In volume 3 of the record (on
pages 251) Mr Schmidt testified that the rental was R 40 000,00, per
month, excluding VAT and
it was subject to an increase of 10% per
year.
[16] Counsel for the respondent then
asked the witness as follows:
“And you testified that the
premises or you indicated to the defendant that the premises were
ready for occupation on 1 April?......Ja.”
[17] Counsel proceeded:
“So if one calculates that, the
claim from 1 April for the remainder of the lease period would be 22
months. Is that correct?.....That
is correct. And it is calculated
at R 40 000,00 per month excluding VAT for the remainder of 2012 and
then ten percent increase
would count for 2013. Is that
correct?.....That is correct.”
[18] Counsel then said:
‘Your Worship I have asked my
attorney to calculate this and it is a simple mathematical equation
and the initial attorney,
I do not know how she calculated the
initial amount of 1492, but the calculation in respect of 22 months
only comes out to R 1
012 320,00’
[19] It is so that the respondent did
not allege in the pleadings that it suffered damages.
[20] Respondent pleaded as follows:
‘The defendant has despite
demand, failed and or refused to make payment to the plaintiff in the
amount of R 1 492 000,00.’
And
‘In the premises the defendant is
indebted to the plaintiff in the amount of R1 492 000,00 which amount
is due, owing and
payable.’
[21] According to the appellant’s
counsel the respondent must have alleged and proved the following:
(a) The contract;
(b) Breach of the contract
(c) Damages suffered by the respondent;
(d) The loss was not too remote
[22] It is common cause that the
parties agreed on the issues to be determined by the magistrate.
This ground of appeal did not
form part of the said issues. For this
reason alone, this ground of appeal cannot stand.
[23] Regardless the issues that were to
be determined by magistrate the respondent presented evidence through
Mr Schmidt with regard
to the loss the respondent suffered due to
cancellation of the contract.
[24] Mr Ramsden who appeared for
appellant did not raise an objection against evidence being led by Mr
Schmidt. Instead, Mr Ramsden
said the following:
‘My colleague closed after his
sole witness yesterday testified by quantifying the matter or should
I say re-quantifying the
matter and he pointed out that there had
been a calculation error and that it was a lesser sum being claimed.
I am not going to
argue for absolution at this stage……..it
is not necessary to argue it at this stage because we would in any
case
have to lead evidence……’
[25] In view of the above it can hardly
be said that the appellant suffered prejudice as a result of the
evidence which was not
pleaded to
[26] The appellant, in my view,
presented all the evidence that could assist the court to come to a
just conclusion ( Mkwanazi V
Van der Merwe and Another
1970 (1) SA
609
(A); Esso Standard SA (PTY) LTD V Katz
(1981) (1) SA 964
(A)).
[27]I am mindful, also, of the caution
highlighted by Holmes, J.A in Mkwanazi (supra, 618) that the
substance of justice should
not be stifled by formalism.
[28] In view of the above, the
magistrate correctly found that the damages suffered by the
respondent flows naturally and generally
from the breach of contract
by the appellant. Therefore this ground of appeal has no substance.
[29] The third ground of appeal relates
to the magistrate’s finding that no mention was made in the
lease agreement as to
the amount of power to be installed, when
special condition 22.2 of the lease agreement expressly states that
‘it is to be
noted that the respondent has applied for water
and electrical connection’. It was argued that the magistrate
should have
interpreted the special condition to be a reference to
the respondent’s application to the Municipality of Ekurhuleni
for
a 100 KVA electrical connection.
[30] Clause 22.2 of the agreement
reads:
‘Lessor to ensure that there is
electrical and water connection to the property: it is to be noted
that the lessor has applied
for water and electrical connection but
in the event that connection has not been made as per the starting
day of this agreement,
the agreement will be postponed until such
time as electrical and water connection has been made.’
[31] There is clearly no mention of the
amount of the electrical power in the special condition 22.2 of the
agreement.
[32] It is so that the respondent
applied to the municipality for a 100 KVA electrical connection.
However, the respondent installed
a 20 KVA power supply to the
property. In my view the respondent complied with clause 22.2 of the
special condition in that the
respondent ensured that there is
electrical connection to the property. The respondent did not
undertake to provide 100 KVA power
supply. Therefore argument that
the magistrate should have interpreted special condition with
reference to something which the
respondent did not bind itself has
no merit. Moreover there is no evidence that parties agreed that the
respondent supply 100 KVA
electrical connection. The result is that
this ground of appeal cannot stand.
[33] Counsel for the appellant argued
with regard to the fourth ground that the respondent breached the
agreement in that it failed
to notify the appellant in writing of the
commencement date of occupation of the property as it was obliged by
clause 17.1 of the
agreement.
[34] It is common cause that the
respondent’s representative informed the Chief Executive
Officer of the appellant telephonically
about the date of occupation
of the property and the latter became aware of the date.
[35] Clause 17.1 of the agreement
reads:
‘Each party chooses domicilium
citandi et executandi at his address as set out in clause 1, at which
address all notices and
legal process in relation to this agreement
or any action arising therefrom may be effectually delivered and
served.’
[36] During argument counsel for the
respondent asked for the following to be considered:
36.1 Whether or not the respondent was
contractually obliged to give written notice of the date of
occupation;
36.2 And if so, whether or not the
respondent’s failure to give written notice, as alleged by the
appellant, constituted a
material breach of the agreement;
36.3 Whether or not the verbal
communication of the occupation date to the Chief Executive Officer
of the appellant was sufficient
notice of occupation.
[37] Clause 17.1 provides that all
notices and legal process in relation to the agreement be delivered
and served at the address
chosen by the parties. The address of the
appellant at which notices were to be delivered and served is No. 1
Armstrong Avenue,
La Lucia, (KwaZulu-Natal). The respondent, in my
view, was obliged to deliver and serve notice of the commencement
date of occupation
of the property to the appellant’s address.
The question is whether a verbal communication constituted a material
breach
of the agreement.
[38] Counsel for the respondent argued,
with reference to the matter of Aucamp v Morton
1949 (3) SA 611
(A),
that if found that the respondent was obliged to inform the appellant
of the occupation date in writing the appellant cannot
escape the
admission that it was aware of the fact that the property was ready
for occupation as at 1 April 2012.
[39] In Aucamp, supra, at 620,
Watermeyer, CJ said:
‘On the other hand there are
other obligations which, though they must be performed, are not so
vital that a failure to perform
them goes to the substance of the
contract.’
[40] Van der Merwe et al (Contract,
General Principles 3rd ed. 2007, at 356) said the following:
‘The test for seriousness has
been expressed in a variety of ways, for example, that the breach
must go to the root of the
contract, must affect a vital part or term
of the contract, or must relate to a material or essential term of
the contract, or
that there must have been a substantial failure to
perform …’ (see also, Britz v Du Preez
1952 (2) SA 756
(T) at 757; Radiotronics (Pty) Ltd v Scott, Lindberg & Co., Ltd
1951 (1) SA 312
(T)).
[41] The representative of the
respondent informed the Chief Executive Officer of the appellant
verbally about the commencement
date of occupation of the property.
To my mind it cannot be said that verbal communication destroyed the
foundation of the contract
or affected the vital part or term of the
contract. Therefore this ground of appeal must fail.
[42] Save for the appellant making
payment to the respondent in the amount of R1 012 320,00, the appeal
should be dismissed.
[43] In the result, I make the
following order:
43.1 The appeal is dismissed with
costs.
M M MABESELE
JUDGE OF THE HIGH COURT OF SOUTH
AFRICA
GAUTENG LOCAL DIVISION, JOHANNESBURG
I agree:
N A ENGELBRECHT
ACTING JUDGE OF THE HIGH COURT OF
SOUTH AFRICA
GAUTENG LOCAL DIVISION, JOHANNESBURG
Date of Judgment : 26 August 2015
Date of Hearing : 27 July 2015
Attorneys for the Appellant: Andrew
Inc. Attorneys
Counsel for the Appellant : Adv
Peter Ramsden
Attorneys for the Respondent : Otto
Krause Inc. Attorneys
Counsel for the Respondent : Adv.
Shaun Mc Turk