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[2010] ZAECPEHC 83
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Global Telematics South Africa (Pty) Ltd v Versitrade 540 (Pty) Ltd t/a Southern Transport (2192/07) [2010] ZAECPEHC 83 (16 March 2010)
9
IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE, PORT ELIZABETH)
CASE
NO: 2192/07
In
the
matter
between:
GLOBAL
TELEMATICS SOUTH AFRICA (PTY) LTD
….........................................
PLAINTIFF
and
VERSITRADE
540 (PTY) LTD t/a
SUTHERLAND
TRANSPORT
…............................................................................
DEFENDANT
JUDGMENT
MAGEZA
AJ:
[1]
Plaintiff is Global Telematics South Africa (Pty) Ltd, a company
that conducts business in Information Technology and
Telecommunications,
including installation of hardware and software
applications in vehicles to enable satellite tracking and fleet
management
[2]
Defendant
is Versitrade 540 (Pty) Ltd t/a Sutherland Transport, a registered
company with registration number 2003/013569/07 which
conducts a
business of leasing out of trucks and vehicles.
Background
:
[3]
On the 31 March 2006 and at Port Elizabeth, Plaintiff, duly
represented by Antionetta Sanna, and Defendant, duly represented
by
D S Van Der Westhuizen, entered into a written agreement.
[4]
The essential terms of the
agreement
were
that:-
4.1.
Plaintiff would install and rent to defendant, Telematics Control
Units, that is, satellite and fleet management equipment
for 37
(thirty seven) of defendant's vehicles.
4.2.
Plaintiff would
in
addition, provide to defendant the following services:
4.2.1.General
package radio service for cellphone alerting for alarms, panic
button and over rev sensors;
4.2.2.
Driver behaviour, harsh braking and harsh acceleration monitoring;
4.2.3.
Immobilisation including relay cutting;
4.2.4.
Receiving of free SMS messages for the purpose of health checks or
tracking and fleet management
[5]
On the 3
rd
October
2007, Plaintiff issued and served summonses against the Defendant on
the grounds that Defendant breached the agreement
by failing to pay
the rental due from
January
2007
to March 2007, The summons is for payment of the amount of R72
760.50, being
arrear
rental
as.
well as the amount of R698 179.41 for damages due to Defendant's
breach.
[6]
Plaintiffs case is that the written agreement consists of:-
6.1.
The Principal Document titled, Telematics Solutions Agreement
incorporating
the
terms
and
conditions;
6.2.
A Proposal Form;
6.3.
An Order Form; and
6.4.
An Order Confirmation document.
These
documents form part of the summons.
Defendant's
plea
.
[7]
Defendant denies that a valid agreement was concluded between the
parties, in that on its reading of the contract, no rental
is
stipulated in the alleged agreement.
[8]
Defendant's alternative plea is that in terms of the provisions of
clause 1.2.1 of the standard terms and conditions of the
Telematics
Solutions agreement, the agreement consists only of documents signed
by both parties
and
that
the
proposal form and order form is not signed by both parties and
therefore does not form part of the agreement.
The
issues before court
[9]
At the start of the hearing counsel for both parties brought to my
attention that the parties had agreed to the separation
of merits
and
quantum
and
that the
only
issue
before me on the merits was the determination of whether the parties
had concluded a valid
agreement.
This
preliminary issue was argued on the papers and no evidence was led
or witnesses heard.
The
four documents
:
[10]
The documents relevant to the enquiry are the following:
10.1
The
principal agreement, titled "Telematics Solutions Agreement"
is a standard pro forma contract. It is the type of
in-house
standard agreement large businesses utilise for purposes of
recording the service or product based agreements they enter
into
with the public.
The
definition section of the Terms and Conditions Agreement contains
two clauses on which the defendant relies for the assertion
that no
agreement exists on which Plaintiff can found a claim based on
breach of contract. These clauses are:-
1.2.1.
'agreement' means this agreement including the front page and
installation reports) as well as any other annexure signed
by both
parties from time to time incorporated by reference into this
agreement;
1.2.2.
'annexure' means collectively all documents incorporated into this
agreement irrespective of whether they have been attached
to or
incorporated by reference in this agreement on or after the date of
signature including invoices.
10.2
The
"order confirmation" document has evidently been generated
by Plaintiff and bears the Plaintiffs company name and
address at
the top. The document was prepared according to its date on the 30
March 2006, a day before signature of the main
agreement and was
presumably intended by Plaintiff to form part of the main agreement
that was to be concluded and signed on
the 31 March 2006.
10.2.1.
The price per TCU (vehicle satellite tracking and fleet management
equipment) is reflected in particular in the one page
document
headed "order confirmation" as R575.00 (five hundred and
seventy five rands) rental per month for each vehicle.
The number of
required units is set out as 37 (thirty seven). There is on the
bottom right hand corner of the document an entry
marked
Installation date-31 March 2006.
10.2.2.
In the top and middle part of the left hand column are signatures of
both the Plaintiff and Defendant appended next to
two
deletions/corrections. At the left bottom side of the document
immediately below an entry 'contact customer care on: 0861505505*
is
a signature said to be that of Defendant's authorised
representative. There is no signature on the right hand side for the
Plaintiff.
10.3.
The "Order Form", unlike the "order confirmation"
document referred to above, appears to have been generated
by the
Defendant and not by the Plaintiff. It is in the form of an invoice,
on Defendant's own letterhead-Sutherland Transport-and
is signed by
the Defendant's authorised signatory. Of interest is the fact that
the price on Defendant's 'order form' is the
price set out in
Plaintiff's "Order Confirmation" document aforesaid.
10.4.
The document referred to as "Proposal Document" is a 38
(thirty eight) page profile of the broad and comprehensive
services
provided by the Plaintiff and outlines ail the technical products
and services provided by Plaintiff. It is what I would
regard in
commercial parlance as a marketing document modified in certain
respects to address itself to Defendant's possible
requirements and
solutions.
Analysis
of the evidence
:
[11]
What appears to me to be of importance is the following:-
11.1.
Plaintiff and Defendant must have entered into discussions regarding
the possibility of the Defendant renting the satellite
tracking and
fleet management equipment sometime before the agreements were
signed on the 31 March 2006. This is evident, among
others, from the
Proposal Document which on the face of it reflects a preparation
date of 23 February 2006, a full month before
signature date of the
main agreement. For these discussions to have led to the signing of
an agreement, it must be that the parties
were serious and committed
to what each wanted out of the agreement;
11.2.
Prior to the 31 March 2006, documents were exchanged between the
parties and this must have been with a view to each familiarising
themselves with the detail therein in so far as these impacted on
their respective future rights and obligations;
11.3.
The most important document, the Principal Agreement referred to
above was signed on the 31 March 2006. This document reflects
a
description of the products rented; the duration; the nature of
contract; reservation of ownership as well as other ancillary
terms
save for the rental amount.
11.4.
As regard pricing at the top of page 3 of the Principal Agreement it
is said This contract serves as a master open-ended
agreement and
all refer to the terms and conditions and pricing stipulated on any
relevant documentation and annexures hereto,
now and in the future."
In addition to this, sections 1.2.1 and 1.2.2 of the terms and
condition (restated above) anticipates
the possible inclusion in
recording the agreement in writing of 'any other annexure signed by
both parties from time to time
incorporated by reference into this
agreement.
1
The
'order confirmation' document is precisely such an anticipated
possible 'annexure';
11.5.
The 'order confirmation' is a document generated by Plaintiff as
owner of the goods rented. This document reflects the price
per
month per vehicle to be paid by Defendant. The document is signed by
Defendant in all material respects, that is at two places
in the
mid-body of the agreement as well as at the bottom. The Plaintiff
signed at two places in the mid-body of the agreement.
The parties
signed the 'order confirmation' simultaneously with the main
agreement intending it to form part of the agreement;
11.6.
I have already stated that the Proposal Document appears to be no
more than Plaintiffs Commercial Marketing document or
Product
Profile suitably adjusted to invite Defendant to do business. This
is borne out by both the language and content of the
product
articulation on the one hand and the fact that the document was
prepared for Defendant in February 2006, some one month
prior to
conclusion and recordal of the agreement. It is not a document that
is essential in enquiring whether or not a valid,
agreement was
concluded by the parties;
11.7.
Similar
considerations
apply to the 'order form' prepared by
Defendant
on
the same date and place of signature of the main agreement. At best
it provides us with some evidence that Defendant had indeed
applied
its
mind
to
the issue of price and at worst that Defendant was clearly anxious
to be bound. To the extent that the document does not introduce
anything new in
regard
to
the essentialia of the rental agreement, it does not take the matter
any further and it is possible to come to a finding without
taking
it into account.
[12]
It appears to me that the parties met to conclude an agreement which
to all intents and purposes was intended to create a
binding legal
agreement. Defendant expressed its intention to be bound by signing
the Principal Agreement and the Order Confirmation
at the same
sitting.
It
is also clear from the conduct of the Defendant subsequent to the
conclusion of this agreement on 31 March 2006 that he viewed
it as
binding. Not only did the Defendant gladly receive the goods and
continue to use them, he in fact paid the required rental
for some 9
(nine) months until'he defaulted in January 2007. Defendant does not
deny that following signature in March 2006,
Plaintiff installed the
TCU's as had been agreed, and that the Defendant was quite happy to
utilise these until the alleged breach
of January to March 2007.
[13]
In my view, bar the Plaintiffs failure to sign at the bottom right
hand corner of the order confirmation, the Principal Agreement
and
the order confirmation document set out the essentialia for a valid
rental agreement. Does this omission then by the Plaintiff
to sign
at the bottom of the order confirmation lead to invalidity? The
answer must be no.
[14]
Where no statutory obligation to reduce to writing exists, the
parties may elect to reduce a verbal agreement into writing
merely
for purposes of facilitating proof of its terms.
[15]
In these aforegoing instances, unlike the position where reduction
to writing is statutorily required, the courts have always
sought to
ascertain
the
intention of the parties as a matter of substance rather than of
form.
[16]
In this regard it is important to bear in mind that whilst courts
will not readily create a contract for the parties where
there is
hone, courts are also disinclined to stifle commercial enterprise by
readily
finding
agreements
undertaken in good faith unenforceable.
[17]
In
Murray
and Roberts Construction Ltd v Finat Properties (Pty) Ltd
1991
(1) SA 508
(A) at 514D-E, the learned Judge stated.-
"It must be allowed
at once that PCI is composed in a somewhat staccato fashion, and
that its terse language is often clumsy
and not ideally clear. For
example, it does not appear from clause 1 by what means and
according to what criteria MRC and the
Board are to achieve the
'finalisation' of the price for erven. PCI is, however, 'a
commercial document executed by the parties
with a clear intention
that it should have commercial operation' (see the remarks of Col
man J in
Burroughs
Machines Ltd v Chenille Corporations of SA (Pty) Ltd
1964
(1) SA 669
(W) at 670F-H); and a Court should therefore not lightly
hold its terms to be ineffective,'*
[18]
In Law of Contract, 5
th
Edition
by R H Christie at 154>
"The court should
not be astute to find that there is no enforceable contract simply
because there is some doubt about its
terms, but should brush the
doubt aside if the terms can be ascertained with reasonable accuracy
or reasonable certainty. The
approach to be adopted was well
expressed by
Colman J in
Burroughs
Machines Ltd v Chenille Coprn ofSA (Pty) Ltd
19641
SA669(W)670G,
"it
Is my task therefore to examine exh. 'A' in order to see whether or
not it fixes a price, or provides for the fixing
of a price with the
requisite degree of
certainty,
in
so
doing 1 must, I think, have regard to the fact that exh. 'A' is a
commercial document executed by the parties with a clear
intention
that it should have commercial operation. I must therefore not
lightly hold the document to be ineffective. 1 need
not require of
it such precision af language as one might expect in a more formal
instrument, such as a pleading drafted by counsel.
Inelegance,
clumsy draftsmaship or the loose use of language in a commercial
document purporting to be a contract win not Impair
its validity as
long as one can find therein, with reasonable certainty, the terms
necessary to constitute a valid contract."
[19]
The cases relied on by Counsel for the Defendant for the proposition
that written contracts must peremptorily be attended
at all times by
signature on the designated space provided for in the document are
decisions wherein writing is required by statute
as opposed to those
where parties elect to reduce their agreement as a matter of choice
in order to facilitate proof.
[20]
For example, in
Brack
v City State Townhouses (Pty)Ltd
1982
(3) SA 364
(W), the sale of land agreement was governed by section
(1)
(1)
of
Act 71 of 1969 and in
Dairy
v Blackburn, Jeffreys & Thorpe Estate Agency
1985
(2) SA 178
(E) the sale of land was subject to the provisions of Act
68 of 1986.
[21]
There is in law a marked difference between the first and latter
instance. This was put by Innes AJ in
Goldbfatt
v Freemantle
1920
AD 123
at 128 as follows:
"Subject to certain
exceptions, mostly statutory, any contract may be verbally entered
into; writing is not essential to
contractual validity. And if
during
n&goti^ons
mention
is made of a written document, the Court will assume that the object
was merely to afford facility of proof of the verba!
agreement
unless it is clear that the parties intended that the writing should
embody the contract. (Grotius 3.14.26 etc). At
the same time it is
always open to parties to agree that their contract shall be a
written one (see Voet 5,173; V Leeuwen. 4.2,
sec. 2, Decker's note);
and in that case there will be no binding obligation until the terms
have been reduced to writing and
signed. The question is in each
case one of construction."
[22]
In the result, I am satisfied that both parties intended to enter
into an agreement in the terms set out in the written agreement
and
annexures to the summons.
I
therefore make the following order:
(a)
That the principal agreement and "order confirmation"
annexure to the plaintiff's summons is a valid/binding agreement
between the parties;
b)
The defendant is ordered to pay the plaintiffs costs.
P
T MAGE ZA
ACTING
JUDGE OF THE HIGH COURT
Counsel
for the Plaintiff: Mr E S Grobbelaar
Attorneys
for the Plaintiff: Listen, Brewis & Co
35
Albany Road
PORT
ELIZABETH
Counsel
for the Defendant: Mr SC
Rorke
Attorneys
for the Defendant: John Vosloo Attorneys
122-1
5t
Avenue
Newton
Park
PORT
ELIZABETH
Heard
on: 16 February 2010
Delivered
on: 16 March 2010