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[2017] ZASCA 46
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Marais NO and Others v Varicor Nineteen (Pty) Lts t/a Bp Atlantic (843/16) [2017] ZASCA 46 (30 March 2017)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not
reportable
Case
No: 843/16
In
the matter between:
HENDRIK CHRISTOFFEL
MARAIS NO
FIRST APPELLANT
CHRISTINA SUSANNA
MÜLLER NO
SECOND APPELLANT
CHRISTINA
SUSANNA
MÜLLER
THIRD APPELLANT
and
VARICOR
NINETEEN (PTY) LTD t/a BP
ATLANTIC
RESPONDENT
Neutral
Citation:
Marais
& others v Varicor Nineteen (Pty) Ltd
(843/16)
[2017] ZASCA 46
(30 March 2017)
Coram:
Tshiqi, Theron, Mathopo and Van der
Merwe JJA and Coppin AJA
Heard:
24 February 2017
Delivered:
30 March 2017
Summary:
Contract:
whether
agreement to establish a diesel depot constituted extension of an
existing supply agreement between the respondent and a
trust or a new
agreement with trustee of the trust in personal capacity : respondent
satisfied onus to prove the former : appeal
dismissed.
ORDER
On
appeal from:
The
Western Cape Division of the High Court, Cape Town (Gamble J) sitting
as court of first instance):
The
appeal is dismissed with costs.
JUDGMENT
Mathopo
JA (Tshiqi, Theron and Van der Merwe JJA and Coppin AJA concurring):
[1]
This is an appeal against a decision of the Western Cape High Court
(Gamble J). The respondent, Varicor Nineteen (Pty) Ltd t/a
BP
Atlantic (BPA), sued the first and second respondents as trustees of
the Albertinia Dekriet Trust (the Trust) for the outstanding
balance
in respect of the sale and delivery of bulk diesel. Ms Müller
was also sued in her personal capacity as surety for
the Trust.
[2]
When the matter came before the court a quo a separation of issues
was ordered in terms of Rule 33(4) of the Uniform rules of
the court.
The issues to be tried related to whether, as alleged by the BPA, the
agreement concluded in 2003 (the depot agreement)
for the opening of
a new depot was an extension of the contract concluded between it and
the Trust in 2001 and whether in 2003
it concluded a new agreement
with Ms Muller in her personal capacity in which event the Trust
would not be liable. The court a
quo found that there was no
consensus between the parties as to who the contracting parties were
after 2003. It reasoned that there
was an error in personam which
vitiated the consensus. After applying the principle of quasi mutual
assent the court a quo found
that BPA had concluded an agreement with
the Trust and that the parties’ conduct was ‘consonant
with an understanding
that the Trust was the debtor’ of BPA.
With leave of the court a quo, the appellants now appeal to this
court.
[3]
The salient facts are as follows: BPA, with its head office in
Somerset West, was established to distribute petroleum products
on
behalf of BP South Africa. BPA had seven depots in the Western Cape
from which it sold diesel in bulk. In addition, it delivered
bulk
diesel to farmers who had installed storage tanks from which vehicles
and farm implements would be filled. The Trust’s
business
involved the transportation of thatch through the use of a fleet of
trucks. This obviously necessitated a consumption
of diesel on a
large scale. Initially, the Trust made use of a fleet card for the
refuelling of its trucks and this made it easier
for the vehicles to
fill up anywhere in the country with any brand of fuel.
[4]
As BPA was looking to expand its business, in 2001 Mr Cornelius Otto,
it’s sales representative, approached Ms Müller,
his
friend of 40 years, and suggested that the Trust purchase diesel in
bulk from BPA to refuel their vehicles at the premises
from which the
Trust’s business was being conducted, namely, 14 Nywerheidslaan
in Albertinia (the premises). At that stage
there was only a small
tank situated on the premises. Following this discussion, an
agreement was reached between BPA and the Trust
in terms of which the
former supplied the latter with a 9 000 litre diesel tank to
refuel the vehicles. A credit application
form which included the
suretyship was signed by Ms Müller on behalf of the Trust. The
supply agreement was signed by Ms Rika
Harper on behalf of the Trust.
The credit limit granted to the Trust was R20 000 per month.
[5]
BPA’s business grew and in its quest for further expansion, in
2003 Mr Otto again approached Ms Müller at the
premises and
suggested the opening of a diesel depot on the premises, which would
cater, not only for the refuelling of the Trust’s
vehicles, but
also the general public. Pursuant to their discussion, the depot
agreement was concluded in terms of which BPA delivered
diesel to the
premises. According to Mr Otto, this agreement was an extension of
the existing agreement with the same customer
(the Trust) in terms of
which diesel products were still to be delivered at the premises as
before. Mr Otto understood the agreement
to be involving Ms Müller
in her capacity as trustee of the Trust.
[6]
Prior to the depot agreement, the diesel was purchased by the Trust,
for the use of the Trust’s own trucks. With the opening
of the
depot at Albertinia there were purchases of diesel for the Trust’s
use as well as for on sale to members of the public,
especially
farmers. This venture necessitated the replacement of the existing
9 000 litre tank with a 23 000 litre tank.
[7]
The Trust’s account in respect of diesel purchased from BPA was
paid by way of a direct payment from a bank account controlled
by Ms
Müller on behalf of the Trust. The Trust fell into arrears with
its payments with the result that for the period from
July to October
2008 it owed BPA a sum of R7 million, (amount is disputed).
Because no payment was forthcoming, BPA issued
summons against the
Trust, and Ms Müller was sued jointly and severally with the
Trust on the basis of a deed of suretyship
which she executed on 3
September 2001.
[8]
In order to determine the issue in this matter, it is necessary to
devote some attention to the pleadings. In its particulars
of claim,
which were not a model of clarity, BPA simply alleged that the
appellants, without specifying which one, applied for
a credit
facility from it for the purposes of purchasing petroleum products
from time to time. Such facilities, it was alleged,
were granted in
terms of BPA’s standard terms and conditions which were
incorporated in the credit application form and the
supply agreement.
[9]
In their plea, in addition to denying the existence of the agreement
with BPA, the appellants averred that all purchases in
2001 were made
by the Trust in terms of the credit facility agreement; that a new
oral agreement was concluded in 2002 between
Ms Muller trading
personally as Albertinia Diesel Depot, and BPA; that the Trust never
traded in petroleum products and that BPA
sold and delivered diesel
to Ms Müller from 2002 to October 2008. In the alternative the
appellants denied being indebted
to BPA in the amount alleged and
further averred that all the invoices were paid by them. As a result
of this plea, BPA requested
certain further particulars from the
appellants for the purpose of trial, including: who acted on behalf
of the parties, where
it was alleged the oral agreement was entered
into, and of significance when it is alleged that the respondent
(plaintiff) ceased
to make deliveries to the Trust, and why those
deliveries were stopped, where, and on behalf of whom the oral
agreement was concluded.
In response, the appellants stated that it
was Mr Otto who concluded the agreement at the premises, on behalf of
BPA in 2005; that
the Trust never conducted a business involving
petroleum products; that Ms Müller had sold her business, the
Albertinia Diesel
Depot, during October 2008 to Van Rob CC, and that
Mr Esbach, (a managing director of BPA) was aware of the sale as Ms
Müller
personally informed him of it.
[10]
In response to the further particulars for trial, BPA filed a
replication in terms of which it denied that any agreement was
entered into with Mr Otto in terms whereof the diesel would be sold
and supplied to Ms Müller personally. It further alleged
that Mr
Otto was not authorised by BPA to conclude such an agreement with Ms
Müller. BPA introduced an amendment after the
closing argument
in order to rely on the doctrine of quasi mutual assent as an
alternative.
[11]
The court a quo held that Mr Otto’s evidence in respect of the
depot agreement was unconvincing, because he prevaricated
and
demonstrated a lack of certainty. It held that there could never have
been consensus between the parties as to who the contracting
parties
were after 2003, and concluded that there appears to have been an
error in personam
which vitiated consensus. The court a quo proceeded to decide the
case on the basis of the doctrine of quasi mutual assent.
[12]
After analysing the evidence, the court a quo held that the Trust was
bound to the existing terms of the contract concluded
in September
2001. It found that the manner in which Ms Müller conducted the
business of the depot, was consonant with the
understanding that the
Trust was the debtor. It further held that if BPA wanted to contract
with her personally, it would have
taken appropriate steps to do so.
These findings form the core of this appeal.
[13]
I now proceed to deal with the evidence and the arguments of both
parties. At the hearing of the appeal both counsel were in
agreement
that a finding that there was no new agreement as contended for by Ms
Müller would be dispositive of this appeal
and it would not be
necessary for this court to deal with the court a quo’s finding
with regard to the doctrine of quasi
mutual assent. The answer in
this appeal lies in the proper analysis of the evidence of various
witnesses together with supporting
documentary evidence tendered at
the trial.
[14]
Ms Müller testified that the agreement embodied in the credit
application of 2001 came to an end in 2003 after the bulk
diesel
contract was orally concluded with her as a sole proprietor at the
premises. It was her evidence that the Trust was never
mentioned in
the discussion or agreement. She stated that in terms of the 2003
agreement, she agreed to buy diesel as a new client
and which would
not only be for her own use, but also for the purpose of on selling
it to members of the public. In other words,
this agreement ushered
in a new era because a different entity was hence forth the debtor
instead of the Trust. She testified that
the credit terms in respect
of the depot agreement were completely different to those in the
credit application in that, in terms
of the new agreement initially
she had to pay for the diesel before it was delivered and that it was
only later on, when the credit
agreement were amended, that she was
given 30 days’ credit.
[15]
She further explained that save for sharing premises with the Trust,
there was no relationship between it and the depot: the
entities had
different secretaries, kept separate financial records, and their
offices were administered by different people. Her
husband (Mr
Marais) was not involved in the depot business and was aware that the
depot was her personal business, which was kept
separate from the
Trust, so as to not prejudice the interests of the Trust
beneficiaries, in the event that the depot was not a
financial
success. When asked why all the invoices from 2003 to 2004 onwards
were issued in the name of the Trust, she suggested
that when the
invoices changed from Albertinia Dekriet Trust to Albertinia Dekriet,
she understood that to be a reference to her
personally. When pressed
further in cross examination she stated that she asked a BPA
employee, whom she thought was named Linda,
to rectify the error.
When this was not done she did nothing thereafter.
[16]
As regards the account reference number ie ALB009 appearing in the
invoices and statements for payment of the diesel. Ms Müller
could not give an acceptable explanation for it, which was always
used in reference to the Albertina Dekriet Trust. According to
her
she never opened the post and as such did not see what appeared in
the invoices. This evidence was contradicted by Ms Conradie,
who
testified that Ms Müller was hands-on and opened the post
herself. Ms Müller was also unconvincing as to whether
the Trust
and depot shared the same VAT number. What made her explanation more
startling is the fact that the Trust’s VAT
number was inserted
on the invoice of the depot, despite the fact that neither she
personally, nor the depot were registered
for VAT. This state
of affairs continued for a period of four years until 2008 when the
depot was sold. In an attempt to extricate
herself from this morass
she testified that her employees were aware that the Trust and the
depot were separate and distinct entities.
Realising the apparent
improbability in her evidence she absurdly suggested that South
African Revenue Services (SARS) did not
find the discrepancies to be
unacceptable.
[17]
Furthermore, she denied receiving a letter of demand from Mr Esbach
(snr), the managing director of BPA who had been concerned
about the
account of the Trust which was substantially in arrears. This letter
was addressed to the Trust and not Ms Müller
personally because
Mr Esbach regarded the Trust as the company debtor. This is supported
by the fact that the credit facilities
were granted to the Trust
owing to its creditworthiness and not Ms Müller personally. I
did not understand Ms Müller
to have said that her personal
creditworthiness was assessed by BPA before the alleged new contract
was concluded. In an attempt
to distance the Trust from the debt to
BPA, Ms Müller testified that the supply of the thatch was a
business conducted by
her as a sole proprietorship, and that the
business of the Trust was that of transport.
[18]
With regards to Mr Otto, it is common cause that he approached Ms
Müller in 2001 with a business opportunity to purchase
diesel
from BPA to fuel the Trust’s own trucks at Albertinia. To this
end, a credit application form, which was annexed to
the particulars
of claim, was signed with a credit limit of R20 000. In addition
Ms Müller signed as surety for the Trust.
At that stage because
the Trust did not require large quantities of fuel, a supply of a
single 9 000 litre diesel storage
tank was installed at her
premises. This was in accordance with the supply and installation
agreement signed by Ms Rika Harper
on behalf of the Trust. According
to Mr Otto’s evidence, when BPA was looking to expand its
business, a depot in Albertinia
was identified as its first venture
to supply diesel to commercial clients and members of the public.
[19]
In 2003, Mr Otto approached Ms Müller at her offices in
Albertinia and an agreement was concluded for the establishment
of
the depot. Mr Otto testified that the 2003 depot agreement was an
extension of the existing agreement with the same customer
(the
Trust) in terms of which diesel products were to continue to be
delivered at the same premises. He made it very clear in his
testimony that any new agreement with a new client would have to be
done with the consent of BPA and followed up by paperwork.
As a sales
representative he could not conclude an agreement, be it orally or in
writing, with a new client without the authority
of BPA. In answer to
the allegation of an oral agreement he testified as follows:
‘
As
daar ‘n mondelingse ooreenkoms was sou daar papierwerk ingevul
gewees het
. . . . Daar is geen mondelingse ooreenkomste wat ek met hierdie
kliënte aangegaan het nie . . . . So ons sou, kon daaroor
gepraat het en ons kon daardeur besigheid doen . . . .’ (My
emphasis.)
[20]
Again, when pressed for an answer to the question whether the name
‘Albertinia Dekriet Trust’ was ever mentioned
in relation
to the entity to be involved in the expansion of the existing
facility. The evidence was as follows:
‘
Is
ek nou reg, ek het nou net vir u gevra is die naam Albertinia Dekriet
Trust of enige komponent daarvan ooit gebruik in die gesprek
en u
antwoord was dit is 13 jaar gelede ek kan nie onthou nie. Is dit die
regte antwoord? --- U Edele, as dit ‘n ander naam
was die dag
dan sou ek die dag gesê het maar daar moet die volgende
papierwerk gedoen word. So ek het aanvaar dat dit Albertinia
Dekriet
Trust is.
Vir
die oomblik, Mnr Otto, aanvaar ek dat u dit aanvaar het. My vraag is
heeltemal ‘n ander een. My vraag is nie wat u gedink
het in u
kop nie. My vraag is u loop in en u sê hallo Sunet en u maak
van haar ‘n voorstel, is die woorde Albertinia
Dekriet Trust of
enige komponent daarvan ooit gebruik in daardie gesprek? --- Dit kan
wees, U Edele. Dit is 13 jaar terug.
Maar
u kan nie onthou nie en u kan nie sê dat dit gebruik is nie/ -
- - Nee, ek kan nie sê dit is gebruik nie.’
That
exchange, apparently, influenced the trial judge to conclude that
there was dissensus between Mr Otto and Ms Müller. I
will expand
on this later in the judgment.
[21]
With reference to the new depot arrangement, Mr Otto was steadfast in
his evidence and responded as follows:
‘
Dit
is 13 jaar terug, u Edele, ek kan nie onthou of dit 13 jaar terug is
nie. Ons het ‘n, ons het ‘n krediet applikasie
met haar
gehad en dit was baie makliker gewees anders moes hulle weer aansoek
doen daarvoor. En as ek dit reg onthou was daar gesê
ons gaan
aan op Albertinia Dekriet Trust se besigheid.’
[22]
The sum total of his evidence demonstrates that Mr Otto regarded the
Trust as the company debtor and not Ms Müller personally.
When
confronted about the two separate names later written or displayed on
the building, he answered: ‘Ek kan nie vir u ja
sê nie,
ek weet nie. Ek het nie notisie daarvan geneem nie. Ek het [sic]
Nywerheidslaan 14 was Albertinia Dekriet Trust met
wie ek handel
gedryf het’. He went on to say: ‘Ek het haar gesien as
die trust. So ek het haar gesien as die Albertinia
Dekriet Trust.’
This piece of evidence demonstrates that he was unconcerned about
what was written or displayed on the buildings
because he regarded
the Trust as the company debtor.
[23]
In this court counsel for the appellants supported the findings of
the court a quo that there was lack of consensus which vitiated
the
agreement. He contended that because Mr Otto, in evidence, wavered
and demonstrated a lack of certainty regarding the identity
of the
parties involved in the agreement, BPA had failed to prove the
contract sued upon. Mr Otto was subjected to a searching
cross
examination intended to establish that a new agreement came into
being. This was clearly designed to extricate the Trust
from its
debts by contending for a new contract. Although Mr Otto had several
problems explaining the identity of the parties to
the depot
agreement, the common thread in his evidence was that no new entity
was involved. He and BPA always regarded the Trust
as the debtor. It
is clear from the record that he was consistent in that regard.
[24]
Notwithstanding the minor discrepancies in his evidence Mr Otto came
across as a honest and candid witness. He freely made
concessions
where necessary. He readily conceded that given the considerable
passage of time he could not remember all the details
leading to the
conclusion of the agreement. What emerged clearly in his evidence is
his consistency that the agreement was with
the Trust. When his
evidence is assessed objectively it is corroborated by Ms Conradie
and Ms Viljoen in all material respects.
Both these witnesses gave a
clear and coherent account of the events in so far as it related to
their duties with Ms Müller
or the Trust.
[25]
Ms Müller’ evidence on the other hand was unsatisfactory
and she got herself into a knot. She sought refuge in the
financial
statements prepared by the tax consultant, Mr Barnard. The financial
statements do not support her evidence at all. During
cross
examination she was evasive and unconvincing with her responses. She
came across as being unnecessarily argumentative. She
offered no
plausible responses to the damaging evidence against her by failing
to explain the vital discrepancies in the documents.
[26]
I agree with counsel for BPA that the criticism of Mr Otto by the
trial court is without foundation. It is correct that during
cross
examination Mr Otto was hesitant and admitted that due to the passage
of time he could not remember everything but he was
adamant that
there was only one contract concluded with the Trust. In my view
counsel’s persistent cross examination did
not go any distance
in discrediting him. Mr Otto went further and stated that if there
was a new client this would have been followed
up by paperwork as it
is standard procedure with BPA. This evidence was not seriously
disputed.
[27]
Again there was positive evidence by Mr Otto that there was no new
client. In my opinion there is no basis upon which that
evidence
could be rejected. The evidence should not be judged in isolation but
the mosaic of evidence should be judged as a whole.
In fairness to Mr
Otto one must bear in mind that he was testifying about events which
occurred more than 13 years ago and given
the fact that he dealt with
many transactions, expecting him to remember all the details is
impossible. It bears mentioning that
not only Mr Otto but also Ms
Müller struggled to remember certain events leading to the
conclusion of the agreement. Mr Otto’s
evidence fully justifies
the manner in which BPA’s claim was formulated. It was not even
suggested that the instructions
he gave to his legal advisors was
inconsistent with the evidence he gave as a witness. In the absence
of such cross examination
and such foundation, it is clear from the
authorities that it was incorrect to make an adverse finding against
him. Mr Otto’s
evidence was corroborated by supporting
documents, ie invoices and statements, which indicate that the
petroleum products were
delivered in Albertinia and that the debtor
was reflected as Albertinia Dekriet Trust. Furthermore the credit
application, supply
and installation agreements support his evidence
that the Trust was BPA’s debtor.
[28]
What is clear from the evidence is that prior to 2003 the diesel was
purchased by the Trust for its own trucks. When the depot
was opened
the contractual relationship between the Trust and BPA remained the
same. Diesel was still delivered at the same premises
to the same
people. There was, in my view, no change or alteration of the
parties’ contractual obligations. As aptly put
by counsel for
BPA it was ‘business as usual’. I agree with counsel for
BPA that what occurred in 2003, when the agreement
was extended, is
decisive in this matter. In my view what transpired years after for
instance when the depot had separate names
being written against
buildings and separate accounts being opened is irrelevant. To my
mind the conduct of the parties during
the depot discussion is
critical. Ms Müller’s professed understanding that she
became a new customer under a new agreement
is untenable.
[29]
There was, in my view, one continuous agreement which, given the
business of selling diesel, allowed for some price fluctuations.
The
changes that occurred in volume and structurally in her premises
resulted from expansion if the business. This, however, does
not mean
that the foundational agreements ie the credit and supply and
installation agreements were changed.
[30]
It appears from Ms Müller’s evidence that she did not
expressly inform Messrs Otto or Esbach that the depot was
to be
conducted as a sole proprietorship. It would seem to me that if this
had been suggested to them that BPA was now dealing
with a different
entity, Mr Esbach, as the managing director of the company would have
taken steps to assess Ms Müller’s
personal
creditworthiness. At that stage BPA was satisfied with the
creditworthiness of the Trust. The fact that it was not done
supports
Mr Otto’s evidence and is further corroborated through Mr
Esbach’s letter which confirmed that the Trust and
not Ms
Müller personally, had purchased diesel from BPA. The objective
facts demonstrate that Ms Müller only raised the
issue of sole
proprietorship when the company was already in the red. Another
reason which militates against the acceptance of
Ms Müller’s
evidence is that after the letter of demand was sent to her in 2007
she proceeded with the application for
a licence for the depot. This,
in my view, was another attempt to distance the Trust from the
agreement. It is common cause that
there was an existing contract
between BPA and the Trust. The Trust was never substituted as a party
in the depot agreement. Having
regard to the probabilities, the
version of Ms Müller was rightly rejected by the court a quo.
[31]
I have no doubt that the opening of the depot had no impact on the
contractual relationship between BPA and the Trust. It consequently
did not usher in a new era. The business of supplying and delivering
diesel to the same premises and to the same people remained
the same.
I am fortified by Mr Otto’s evidence that he saw the Trust as
Albertinia Dekriet Trust. Ms Müller’s
evidence that a new
contract was concluded is not supported by any objective evidence. On
the contrary, the documentary evidence
tendered by BPA points to a
different conclusion. Numerous documents contradicted Ms Müller’s
evidence and established
that there was no new agreement, for
example, the depot’s VAT number was that of the Trust; and its
invoices and bank statements
reflected BPA’s details.
[32]
To sum up, I conclude that the appellants failed to adduce evidence
that after 2003 BPA supplied diesel to Ms Müller personally.
I
find Mr Otto’s evidence, as fully corroborated by other
witnesses and documents tendered at the trial, to be consistent
with
an extension of the 2001 agreement. Consequently I find Ms Müller’s
evidence to be improbable and false. It follows
that the appeal must
be dismissed.
[33]
There is another matter that needs to be addressed. This relates to
the issue of onus. Counsel for the appellants criticised
the court a
quo for placing the onus on Ms Müller to establish that she was
the debtor of BPA. In its findings the court reasoned
‘that to
the extent that Ms Müller contends for an agreement between the
parties she has set up a special defence which
attracted the onus of
proof in respect of the agreement’. With respect to the learned
judge this finding is incorrect. The
general rule is that a plaintiff
who sues on a contract must prove his contract even though this may
involve proving a negative
and that the additional term alleged by
the defendant was not agreed to by the parties.
[1]
It
was incumbent upon BPA to prove that it contracted with the Trust
represented by one of its trustees, Ms Müller. In doing
so it
had to prove the contract sued upon. Burdening Ms Müller with
the onus was impermissible and against the weight of authority
on
that point.
[2]
[34]
The appeal is dismissed with costs.
________________________
R
S Mathopo
Judge
of Appeal
APPEARANCES:
For
appellants: R S van
Riet SC
Instructed
by:
Dekker
Attorneys, Mossel Bay
C/o
Werksmans Attorneys, Cape Town
Lovius
Block Attorneys, Bloemfontein
For
respondent: C H J Maree
Instructed
by:
Millers
Incorporated, George
C/o
Van der Spuy & Partners, Cape Town
Symington
& De Kok, Bloemfontein
[1]
See
Stocks
& Stocks (Pty) Ltd v T J Daly & Sons (Pty) Ltd
1979 (3) SA 754
(A).
[2]
See
Kriegler
v Minitzer and Another
1949 (4) SA 821
(A) at 826-8;
Topaz
Kitchens (Pty) Ltd v Naboom Spa (Edms) Bpk
1976 (3) SA 470
(A) at 472-4);
Da
Silva v Janowski
1982 (3) SA 205
at 220 (A).