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[2011] ZAGPPHC 8
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Blue Turtle Technologies (Pty) Ltd v Valor IT (Pty) Ltd (38952/09) [2011] ZAGPPHC 8 (24 January 2011)
NOT
REPORTABLE
IN
THE NORTH GAUTENG HIGH COURT, PRETORIA
(REPUBLIC
OF SOUTH AFRICA)
Case
No: 38952/09
DATE:
24/01/2011
in
the matter between:
BLUE
TURTLE TECHNOLOGIES (PTY)
LTD
......................................
PLAINTIFF
and
VALOR
IT (PTY)
LTD
.................................................................................
DEFENDANT
JUDGMENT
Delivered:24/01/2011
RD
CLAASSEN J:
1.
Plaintiff
claimed $200 000 in damages, and costs, from defendant for an alleged
repudiation by defendant of a contract. It is the
Plaintiff's case
that the following oral agreement was concluded (par 4 of the
Particulars of Claim):
1.1
The
Plaintiff would assist the Defendant in its CIPRO-tender by compiling
all the technical data of the allocated portions of the
Vignette
portion of the tender. (The Vignette portion being the software
portion of the tender.)
1.2
The
Plaintiff and the Defendant would share the gross proceeds in respect
of all the Vignette software sold and implementation services
rendered in terms of the tender on a 50/50 basis.
1.3
The
terms in 1.2 and 1.3 above, would be subject to defendant obtaining
the tender.
1.4
Plaintiff
as the sole agent for Vignette would purchase the software from
Vignette at a price of $1 000 000. The price to the client
(CIPRO),
would be $1 400 000. The parties would then split the profit.
2.
In
its plea, defendant admits that
an
agreement
was reached.
3.
It
is common cause that a meeting took place at a Mugg and Bean
restaurant in Lonehill, during September 2008, at which Mr Devlin
Janssens of Vignette and Mr Justin Arnoldi of the plaintiff, and Mr
Moosa Seedat, Mr Josias Molele and Mr Jabu Majiza, from the
defendant, were present. The discussions that took place at that
meeting, form the subject matter of the dispute between the parties.
4.
It
is common cause that defendant was awarded the tender, and that
defendant did not buy the necessary software from Vignette via
plaintiff, but bought it directly from Vignette, for $100 000 less
than it would have obtained it through plaintiff. It is also
not
disputed that plaintiff, at that time, had a contract with Vignette,
to be its distributor for their software in South Africa
(and further
abroad in Africa).
5.
Three
people testified on behalf of plaintiff:
Mr
G van den Bosch, the managing director of plaintiff;
Mr
J Arnoldi, responsible for the
enterprise
content management
(ECM)
at plaintiff;
Mr
M Ladbrook, also at plaintiff, being a Vignette software expert.
Defendant
also called three witnesses:
Mr
Moosa Seedat, its chief executive officer;
Mr
P Hanson, defendant's head of solutions architecture, responsible for
completing the CIPRO bid;
Mr
Jabu Majiza, plaintiff's business development director.
6.
The
relevant portions of defendant's plea (in answer to par 4 of the
particulars of claim set out above) read as follows:
"3.2.3
Vignette indicated its willingness to be the Defendant's software
provider through the Plaintiff as its local agent;
and
3.2.4
The Plaintiff indicated that it had the necessary skills and capacity
to provide Vignette's software solutions in relation
to the CIPRO
tender;
3.3
3.4
In terms of the presentation made by the defendant the plaintiff was
reguested to look at the electronic(sic) content management
aspect of
the tender, being the technical aspect thereof.
3.5
The
Plaintiff indicated its willingness and capability to complete and
provide the electronic content management portion of the
tender.
3.6
The
Plaintiff was given the technical specifications of the tender and
was requested to provide answers thereto within
a
period
of a week by 26 September 2008.
3.7
3.8
During
or about 26 September 2008 the Plaintiff provided an incomplete and
substandard response in relation to the electronic content
management
aspect of the tender. The Plaintiff's respond(sic) did not meet the
specific requirements of what was required in terms
of the tender.
3.9
The
response provided by the Plaintiff did not meet specific requirements
relating to record management and document management
which are
substantial parts of the electronic content management.
3.10
The
Plaintiff's response also did not address the issue of how there was
going to be integration between what they had provided
and other
applications that were relevant to the tender. The Defendant, on
various occasions, indicated its dissatisfaction to
the quantity and
quality of the response provided by the Plaintiff and the Plaintiff
indicated that it was waiting for a response
to some of the answers
to the tender from Vignette Solutions (Pty) Ltd.
3.11
On
or about 3 October 2008 the Plaintiff indicated to the Defendant that
it was unable to provide all of the technical specifications
required
by the Defendant in relation to the CIPRO tender.
3.12
During
or about 3 October 2008 the Defendant indicated to Vignette Solutions
(Pty) Ltd and the Plaintiff that it was unhappy about
the
non-performance by the Plaintiff and indicated that the Defendant
will address the electronic (sic) content management aspect
of the
tender, on its own.
3.13
The
Defendant completed the electronic(sic) content management portion of
the tender on its own and duly submitted a tender on 8
October 2008.
3.15
At the time that the Defendant notified Vignette Solutions (Pty) Ltd
and the Plaintiff that the Defendant was going to conclude
the
electronic(sic) content management aspect of the tender on its own,
no agreement had been reached between and among the parties
about the
amount or the percentage that the plaintiff would be entitled to in
case it complied fully with the request from the
Defendant.
(For
electronic
read
enterprise)
7.
Plaintiffs
witnesses basically testified according to the particulars of claim.
They denied that their work was sub-standard and
that it was not used
at all by defendant in the tender documents. The also testified that
the defendant "moved the goalposts"
by requiring plaintiff
to do more than originally agreed upon.
8.
The
defendant's version, in court, consisted of various versions:
8.1
In
the plea (paragraph 3), it was agreed that
a
contract
was
concluded, albeit on somewhat different terms. This was also clearly
stated by plaintiff's counsel in the opening address, while
defendant's three witnesses were sitting in court. Defendant's
counsel agreed with the statement. Defendant further pleaded that
plaintiff did not perform adequately in terms of its responses to the
tender, and defendant decided to go it alone, with the assistance
of
Vignette. Defendant further denied that there was any agreement about
the 50/50 split on the gross profit.
8.2
Defendant's
first witness, Mr Seedat, testified that there was no agreement at
all, as defendant had already "registered the
CIPRO opportunity"
with Vignette. He did however concede that a 50/50 split on gross
profit was discussed. His evidence was
that as far as defendant was
concerned, plaintiff and vignette had their own agreement and that
plaintiff was only an agent for
Vignette.
8.3
Mr
Majiza testified that the "agreement" was only a "test
phase" to see whether plaintiff could do the job for
defendant,
with a view to further cooperation in the future. There was
however no agreement reached at all. Furthermore, defendant
did not
need the assistance of plaintiff at all for purposes of the CIPRO
tender.
8.4
Mr
Hanson was the person who finalised the tender for defendant. He
stated that the first response from plaintiff, dated 26/9/08,
was a
preliminary response. They were waiting for more. By the time
plaintiff's further response arrived on 7/10/08, it was too
late.
Defendant had already decided to go it alone. He stated that none of
the responses of the 7
th
were
used. He later had to concede that some of it was used. He also
denied that he said that plaintiffs work was
sloppy
or
sub-standard.
He
could not explain where or from whom that description came from, but
he was the only one from defendant's side who would have
known that
it was sloppy or sub-standard.
8.5
During
the trial defendant's counsel also specifically put on record that
the only two issues remaining were:
8.5.1
Whether
it was a condition of the agreement that the Plaintiff had an
exclusive distributor agreement with Vignette;
8.5.2
Whether
the Plaintiffs technical response amounted to sub-standard or
"sloppy"
work
(as described by the Defendant's counsel).
9.
It
is an interesting fact that much of these different versions were NOT
put to plaintiffs witnesses during cross examination. Defendant's
witnesses also contradicted one another on various other aspects. On
the other hand plaintiffs witnesses were clear in their testimony,
and did not contradict one another.
10.
It
is also an interesting fact that defendant's counsel, in his Heads of
Argument, makes no attempt to weigh up the versions of
the different
witnesses against either the pleadings or the other witnesses. He
simply accepts as a given that the evidence of
the defendant is the
only acceptable evidence. Apart from the fact that it is not very
helpful to the court, it shows a blatant
disregard for the basic
rules evidence and how it is to be evaluated.
11.
A
whole stack of e-mail correspondence between the three parlies, (as
part of Exhibit A), were put before court. None of it was
disputed.
Several things emanate from these writings. It is obvious that the
various parties were all in contact with one another
on more than
just a daily basis. At times it was almost hourly, or even less. All
correspondence was also copied to all concerned.
However one crucial
bit of information was not given to plaintiff. That was the fact that
defendant was going "to go it alone".
Plaintiff was only
informed of this fact on 16 February 2009, i.e. after the tender was
awarded to defendant, and plaintiff was
asking about the way forward
with the supply and installation of the software. It was also only
then that plaintiff became aware
of the fact that defendant bought
the software directly from Vignette. The actual price paid by
defendant to Vignette only became
known to plaintiff during the
evidence, being $100 000 less that via plaintiff. (On account of this
information, plaintiff applied,
at the end of the evidence, to have
the amount of the claim amended to $250 000.)
12.
Another
issue that arose, related to the specific parts that plaintiff had to
complete in the bid. It is common cause that a second
meeting was
held on 22/9/08 at the offices of "Tibco", another company
that was to help with certain aspects of the bid.
A dispute arose
thereafter as to what parts of the bid plaintiff had to complete. It
is clearly illustrated in some of the correspondence
that passed
between the parties:
12.1
On 3 October 2008 an e-mail was addressed by Moosa Seedat, to,
inter
alia,
Marc
Ladbrook. This e-mail reads as follows:
*Hi
Justin,
Subsequent
to our initial meeting in Lonehill, I met with Harry and Marc at the
TIBCO offices where we cleared out what Blue Turtle
needed to do and
provide. One area was to answer all questions relevant to
ECMA/ignette in annex "B". You are welcome
to confirm this
with Harry/Marc.
I
trust that this will sort out this to and fro of emails. Please
assist in completing the annexure "B" so that we can
finish
up the tender response over this weekend.
Thanks
and Kind Regards
Moosa
Valor IT."
12.2
On
the same day, approximately two hours later, Marc Ladbrook responded
to this e-mail. The response of Ladbrook reads as follows:
"Hi
Moosa,
Just
a
correction
here. I do recall the following that was agreed upon at the meeting
at TIBCO's offices.
1.
Harry
on at least three accounts confirmed and specifically stated ECM,
Collaboration and Portal with regards to annexure "B".
All
the responses were yes.
2.
I
specifically asked if we were supposed to answer the Records and
Document management and the response was no as it was going to
be
handled by someone else.
3.
Security,
it was mentioned, it was going to be handled by Novelle.
4.
Integration
it was indicated that we should not worry about it. (if you recall I
did bring this up saying that we could possibly
integrate Tibco BPM
using a portlet).
Kind
regards.
0
12.3
Seedat
did not dispute the contents of the last-mentioned e-mail in his
response. On the same day he responded to this e-mail as
follows:
"
Thanks Marc,
Are
you
guys going to respond to the sections highlighted in annex "B"
as sent to you by Jabu yesterday? Please confirm.
Thks
Moosa."
12.4
These e-mails were in response to an e-mail sent by Ladbrook of
plaintiff to Justin Arnoldi, Devlin Janssens and Harry Nicholson,
the
previous day, and not to any representative of defendant. It
La.
contained
the following statements:
I
would like to escalate this problem with the response to the
CIPRO-tender. Valor IT have come back to us with more than what was
stipulated in our meeting with them on the 22
nd
of September. Although this was a confusing meeting to begin with as
TIBCO and ourselves were not sure what part of the tender
to respond
to (TIBCO had already been in meeting with Valor IT prior to this).
Eventually we came to agreement in which Harry on
at least three
accounts confirmed with Moosa that we were only going to respond to
annexure "B" with BMC
;
Portal and Collaboration in which all responses were yes.
I
know I specifically asked Moosa if we were supposed to respond to the
Records and Document management systems (as I come from
this space)
and the response was no. Moosa also indicated not to worry about
Security as this would be handled by some other party....
I
really do feel that if there was any misunderstandings with regards
to who should do what this could have been raised by Valor
IT by the
latest Monday (29 September) and we could have managed to get more
questions/reviews in as Vignette have not come back
to us at that
stage.
Please
let us know would you like proceed with this.
13.
It
is noteworthy that on the very same day that defendant allegedly
decided "to go it alone", they also attempted to "shift
the goalposts", by requesting additional input from plaintiff.
It is also to be noted that this was but a few days before
the bid
had to be put in. And one of the complaints of defendant was that it
did not get the necessary responses timeously. From
a perusal of
these facts, it is clear that the evidence of defendant's witnesses
is not only confusing, but also unreliable.
14.
I
do not intend to deal with all the arguments on behalf defendant. As
stated earlier, no attempt was made to analise and compare
the
evidence of the various witnesses. The evidence contradicted the
pleadings as well as the statements of defendant's counsel.
Counsel
for defendant makes short shrift of the fact that the evidence
contradicted the pleadings. It is stated as follows in the
Heads of
Argument:
The
defendant presented evidence that supported what was stated in its
plea.
Any
suggestion that the defendant's witnesses contradicted what is
contained
in
its plea is not only less than frank; it is based on the selective
reading of the
plea
explanation contained therein.
It
only needs to be read and compared with what has been set out
earlier, to see that it is a fallacious attitude. The case needs
to
be adjudicated on the basis of plaintiffs evidence.
15.
In
dealing with the issues not put to plaintiffs witnesses in cross
examination, he makes the following allegation:
During
cross-examination of Mr Hansom and Mr Majiza, the plaintiffs' counsel
raised an issue that the witnesses' versions were not
put to the
plaintiff witnesses. Such a statement is devoid of any truth. To even
to begin to make an issue therefrom is like the
plaintiff is
clutching on straws.
From
a reading of the evidence it is quite clear that the issues raised
earlier were definitely not put to the witnesses. Some of
them were
quite crucial, and gave plaintiff no chance to reply thereto. One is
thinking particularly of the evidence of Mr Hanson,
regarding what
portions were used and what not. The fact is however that he
eventually had to admit that plaintiffs material was
used.
16.
The
first question that arises is whether there was indeed a contract as
alleged and testified to by plaintiffs witnesses. There
can be no
doubt that plaintiffs witnesses were honest and reliable. There were
no contradictions of any material nature. The only
issue that they
did differ on, is as to what material is normally contained in the
enterprise
content management
software.
The point is however that whatever may
normally
be
contained therein, the dispute related to what was
agreed
that
plaintiff had to provide. This is where defendant's witnesses'
reliability comes into play, read with the various e-mails referred
to above.
17.
One
must also consider the probabilities. It is inconceivable that the
plaintiff would have gone to all the trouble it did, if there
was no
binding agreement, at least in its mind. The absence of the testimony
of Mr Janssens must be evaluated in this respect.
He was sub-poenaed
by plaintiff to give evidence,
duces
tecum,
but
also to give evidence on the facts. He did not appear. It is probably
understandable, because it seems quite clear that he played
a double
role in this whole affair. His evidence alone could have given the
answer to the dispute between the parties. However
it is clear that a
deal was made between
defendant
and Vignette, to go behind plaintiffs back. That is to my mind the
only reasonable inference to be drawn from the
facts
as
gleaned from the evidence of both parties. To my mind no
negative
inference can
be
drawn
from
plaintiff's
failure
to
have Janssens arrested and brought before
court
to
testify. If anything, a negative inference can be
drawn
against defendant,
because
it
allegedly
had
an agreement with Vignette. However
that
was
not
pleaded
at
all.
18.
Having
said all that, it is
clear
to
me that plaintiff's version, on the evidence, the probabilities and
credibility, is the preferred version, and plaintiff has
succeeded in
discharging the onus resting on it.
19.
A
further issue needs to be addressed. Defendant
raised
the
issue of not joining Vignette as a party to the proceedings. As
indicated
already,
Mr
Seedat
tried
to
convey that plaintiffs contract was in actual fact
with
Vignette
to
provide defendant with the necessary responses on Vignette's behalf.
Because of that, it was argued that Vignette
ought
to
have been joined. There is no merit in this argument. Plaintiffs case
in simply that it had a contract with
defendant,
and
no one else. If anything, defendant
would
have
had reason to
join
Vignette.
20.
Lastly
there is the
Issue
of plaintiff's application to amend
the
amount of its
claim,
from
$200
000 to $250 000. There was no objection raised to the application.
The evidence regarding the amount is not in dispute. Plaintiffs
case
has all
along
been
that the gross profits would be shared on a
50/50
basis.
There can thus be no problem with granting the amendment. It must be
added
that
plaintiff also claimed
damages
for the implementation portion of the contract. This
part
of
the claim was withdrawn
in
initio.
I
therefore
grant
judgment
in
favour
of plaintiff
as
follows:
1.
Payment
of the amount of $250 000,00
2.
Interest
on the said amount at 15.5 per cent per annum
a
tempore morae
3.
Costs
of suit
R
D CLAASSEN
Judge
of The High Court Of South Africa.