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[2021] ZASCA 122
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Traxys Africa Holdings Ltd and Another v Westbrook Resources Ltd (509/2020) [2021] ZASCA 122 (23 September 2021)
THE SUPREME COURT
OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not reportable
Case no. 509/20
In the matter
between:
TRAXYS AFRICA
HOLDINGS LTD
(formerly METMAR
LTD)
First Appellant
TRAXYS AFRICA
HOLDINGS (PTY) LTD
(formerly METMAR
(PTY) LTD)
Second Appellant
and
WESTBROOK
RESOURCES LTD
Respondent
Neutral
citation:
Traxys
Africa Holdings Ltd and Another v Westbrook Resources Ltd
(509/2020)
[2021] ZASCA 122
(23 September 2021)
Coram:
Ponnan, Van der Merwe, Mokgohloa and
Plasket JJA and Molefe AJA
Heard
:
26
August 2021
Delivered
:
This judgment was handed down electronically by circulation to the
parties’ legal representatives by email. It has been published
on the Supreme Court of Appeal website and released to SAFLII.
The
date and time for hand-down is deemed to be 09h45 on 23 September
2021.
Summary:
Partly
oral and partly written agreements – whether the terms of the
oral parts of the agreements included an obligation on
the part of
the defendant to commission the equipment it had sold to the
plaintiff – whether the oral parts of the agreements
offended
the parol evidence rule.
ORDER
On
appeal from:
Gauteng
Local Division of the High Court, Johannesburg (Mabesele J, Notshe
and Maenetje AJJ sitting as court of appeal):
1. The appellant’s
appeal is dismissed with costs, including the costs of two counsel.
2. The respondent’s
cross-appeal is upheld with costs, including the costs of two
counsel.
3. The order of the
court below is set aside and replaced with the following order.
‘
1.
The appellant’s appeal is dismissed with costs, including the
costs of two counsel.
2. The respondent’s
cross-appeal is upheld with costs, including the costs of two
counsel.
3. The order of the
court below that appears at paragraph 199.1 of its judgment is set
aside and replaced with the following order.
“
It
is declared that:
(a)
Metmar was obliged to
commission the equipment sold by it to Westbrook, in Croatia, as
alleged in paragraphs 10 and 12 of the particulars
of claim;
(b)
neither Westbrook nor
De Beer was required to attend to the commissioning of the equipment
at their own cost and risk, without any
assistance from or
involvement of Metmar, as alleged in paragraphs 8.13.5 and 8.20 of
the plea; and
(c)
neither Westbrook nor
De Beer attended to the commissioning of the equipment at their own
cost and risk, without any assistance
from or involvement of Metmar,
as alleged in paragraph 8.21 of the plea.”’
JUDGMENT
Plasket
JA (
Ponnan, Van
der Merwe and Mokgohloa JJA and Molefe AJA
concurring):
[1]
The respondent, Westbrook Resources Ltd (Westbrook), conducted a
mineral refining
operation in Croatia which involved the extraction
of manganese from slag. Its efforts were not as successful as it had
wished,
principally because its equipment was not operating, or being
operated, optimally. As a result, it entered into three agreements
with the second appellant, now known as Traxys Africa Holdings (Pty)
Ltd, but then known as Metmar (Pty) Ltd (Metmar). In terms
of these
agreements, Metmar undertook to supply Westbrook with three jigs for
the refining of the manganese.
[1]
[2]
While Metmar supplied the jigs, a dispute arose as to whether Metmar
was required,
in addition, to commission them – to make them
operational according to specifications – or whether Westbrook
was required
to do so. In due course, Westbrook instituted an action
against Metmar in the Gauteng Local Division of the High Court,
Johannesburg
in which it claimed damages arising inter alia from
Metmar’s failure to commission the jigs. It was agreed that the
trial
would run only in respect of the following separated issues:
‘
4.2.1
whether Metmar was obliged to commission the equipment sold by it to
Westbrook in Croatia, as alleged in paragraphs
10 and 12 of the
particulars of claim; or
4.2.2 whether
Westbrook and/or De Beer would attend to the commissioning of the
equipment at their own cost and
risk, without any assistance from or
involvement of Metmar, as alleged in paragraphs 8.13.5 and 8.20 of
Metmar’s plea; and
4.2.3
whether Westbrook and/or De Beer attended to the commissioning of the
equipment on site at their own cost
and risk without any assistance
from or involvement of Metmar, as alleged in paragraph 8.21 of
Metmar’s plea.’
[2]
[3]
The trial of these issues commenced before Satchwell J. Before the
first witness had
completed his evidence, however, she recused
herself after an application for this relief had been brought by
Metmar. It was agreed
by the parties that when the matter proceeded
before another judge, the evidence already given ‘would be
admitted into evidence
before the (new) trial court’, whereupon
the cross-examination of the first witness would continue. The trial
resumed anew
before Makume J. He found that Westbrook had proved
partly oral and partly written agreements that included terms that
Metmar was
obliged to commission the jigs. Instead of making
appropriate orders to answer the separated issues, however, he issued
a declarator
that Metmar was liable for whatever damages Westbrook
was able to prove. He thus found in favour of Westbrook on the merits
despite
the fact that at least one further significant issue still
had to be determined. In that, he ranged beyond the separated issues
that had been specifically agreed upon by the parties as requiring
adjudication.
[4]
This error resulted in applications for leave to appeal and to
cross-appeal by Metmar
and Westbrook respectively. Appreciating that
he had erred and misdirected himself, Makume J granted leave to both
parties to appeal
and to cross-appeal respectively to a full court of
the Gauteng Local Division of the High Court, Johannesburg. After
concluding
that Metmar was indeed obliged in terms of the agreements
to commission the jigs, Mabesele J, with Notshe and Maenetje AJJ
concurring,
made the following order:
‘
1
The appellants’ appeal is dismissed.
2 The respondent’s
cross-appeal is upheld.
3. The order of the court a quo
is set aside and substituted as follows:
“
The
appellants are ordered to pay the costs of the action and the appeal,
as well as the costs of their unsuccessful application
for amendment,
including the costs of two counsel.”’
As a result, the
full court also did not answer, as it was required to do, the
questions posed for determination.
[5]
It is apparent that the order of the full court compounded the error
of the court
of first instance. Despite both having considered the
separated issues in their judgments, and having expressed views in
that regard,
neither issued any substantive order concerning those
findings. At the core of the problem thus created is the trite
principle
that an appeal lies against the order made by the court,
not against its reasoning.
[6]
For Westbrook, as plaintiff in the court of first instance, to
ultimately succeed
in its claim against Metmar, it was necessary that
the questions posed for determination be answered in its favour. That
had not
occurred in either of the courts below. In the absence of a
finding in its favour, that was effectively the end of the road for
Westbrook: it would not have been able to prosecute its claim to
finality. The separated issues not having been answered at all
(and
certainly not against Metmar), it could very well have been content,
in the event of its appeal succeeding, with no more than
the adverse
costs order of the full court being set aside. It was not necessary
for it to insist that the questions posed be answered
at all, much
less that they be answered in its favour. In Westbrook’s heads
of argument, it was submitted that the appeal
should be dismissed. In
the absence of a cross-appeal, however, no further relief could have
been sought by it from this court.
In the hearing of the appeal,
which was with the special leave of this court, the difficulty was
pointed out to counsel that in
the absence of a cross-appeal, the two
possible outcomes would have been that the order of the full court
would either have been
set aside or would have remained in place.
That would have the unsatisfactory result that, through no fault of
the parties and
despite a lengthy trial and two appeals, the
separated issues would remain unresolved. In the face of this
predicament, both counsel
assured us that both parties wanted the
separated issues to be decided. That being so, the matter proceeded
on the basis that Westbrook
would be granted leave to file a notice
of cross-appeal. The effect was that in the event of Westbrook being
successful, it could
obtain an answer in its favour on the separated
issues, rather than a meaningless costs order that would still leave
the substantive
dispute between the parties unresolved. The notice of
cross-appeal has since been filed.
The pleadings
[7]
The original particulars of claim cited De Beer as the third
defendant. Those particulars
of claim were amended when the claim
against De Beer was withdrawn. I shall now examine Westbrook’s
amended particulars of
claim and the amended plea filed by Metmar.
[8]
The crux of Westbrook’s claim is that between August and
November 2008 it, represented
by Mr Shaun Walton and Mr Ian Howe, and
Metmar, represented by Mr Piet Boshoff, ‘concluded a partly
oral, partly written
agreement in terms of which Metmar would sell,
deliver and commission certain mine equipment to and for
[Westbrook]’. (In
truth, as I have indicated above, there were
three separate agreements containing essentially similar terms.)
[9]
Westbrook’s particulars of claim set out the material express,
implied or tacit
terms of the agreements in detail. The agreements
entailed the following: (a) Metmar undertook to sell and deliver to
Westbrook
three metal recovery plants, or jigs, as well as certain
ancillary equipment; (b) Metmar undertook to commission the jigs at
the
mining site (in Croatia) on delivery or within a reasonable time
thereafter; (c) payments would be made by Westbrook to Metmar in
accordance with the written part of the agreements, contained in
three pro forma invoices, the terms of which will be set out below;
and (d) the purchase price of each jig was $450 000, totaling
$1 350 000 for the three jigs.
[10]
Westbrook pleaded that Metmar delivered the jigs – one in
December 2008 and the other two
in March 2009 – and that Metmar
breached the agreements by failing to commission the jigs on delivery
or within a reasonable
time thereafter. Westbrook paid all amounts
due to Metmar in terms of the agreements except for the final
payments payable on the
commissioning of the jigs.
[11]
As a result of the breach of the agreements, Westbrook averred, it
was unable to complete its
mining operations timeously. It ceased
those operations in May 2011, when they ought to have been concluded
by October 2009. It
suffered damage because of the breach of the
agreements, comprising loss of profit and the additional cost that it
incurred in
conducting its mining operations ‘at a reduced
efficiency and output’. It claimed $6 910 112 in
damages from
Metmar.
[12]
In its plea, Metmar admitted that between August and November 2008
it, represented by Boshoff,
concluded partly oral and partly written
agreements with Westbrook, represented by Walton and Howe, in terms
of which it sold the
jigs to Westbrook. It pleaded that the express,
implied or tacit terms of the agreements were that: (a) the equipment
and its price
were as reflected in the pro forma invoices – the
written part of the agreements; and (b) that Westbrook and De Beer
‘would
attend to the commissioning of the specified equipment
on site at their own cost and risk, without any assistance or
involvement
of Metmar’.
[13]
Although Metmar pleaded that it had ‘placed’ the jigs ‘at
the disposal’
of Westbrook, it denied that it was a term of the
agreements that it was required to deliver the equipment to
Westbrook’s
site in Croatia. Instead, it said, it had ‘arranged
for the transport and delivery of the specified equipment, at
[Westbrook’s]
cost, ex works the supplier’s plant, to
Rotterdam’. Westbrook then arranged for the transport of the
jigs to its site
in Croatia.
[14]
Finally, Metmar denied that it was a term of the agreements that it
would commission the jigs.
Instead, it pleaded, Westbrook and De Beer
‘attended to the commissioning of the specified equipment on
site at their own
cost and risk, without any assistance from or
involvement of Metmar’.
[15]
An attempt was made by Metmar to amend its plea to withdraw its
admission of a partly oral and
partly written agreement having been
concluded with Westbrook. Its application to amend its plea was
dismissed on the basis that
it had not been brought in good faith.
The agreements
The written
part of the agreements
[16]
It is common cause that during the period from August to November
2008, Westbrook and Metmar
concluded three agreements, which were
partly oral and partly written, in terms of which Metmar sold three
jigs to Westbrook. The
issues that require determination in this
appeal relate to the terms of those agreements, in particular,
whether the obligation
to commission the jigs fell on Metmar or
Westbrook.
[17]
It is common cause that the written part of the agreements is
embodied in the three pro forma
invoices. The first invoice was dated
13 October 2008. It stated that the equipment was to be shipped from
Durban. Next to the
heading ‘INCO TERMS’ the invoice
provided:
‘
EX
WORKS Supplier Plant South Africa for shipment to Sibernik via
Rotterdam.’
[18]
The total purchase price specified in the invoice was $450 000.
Next to the heading ‘PAYMENT
TERMS’, the following
appears:
‘
35%
= US$157 500.00 – On Containerization in South Africa
35% = US$157 500.00 –
On Advice of Bill of Lading Date
30% = US135 000.00 –
On Plant Commissioning in Croatia.’
For the rest, the
invoice contained Metmar’s banking details, a description of
the equipment and the number of containers
in which the equipment was
packed. It also stated that the country of origin was South Africa.
[19]
The second and third invoices, both dated 14 November 2008, were
essentially similar. They differed
in one noteworthy respect.
Although the purchase price for the second and third jigs was also
$450 000 each, the payment terms
differed from the first
invoice. Four payments were envisaged as follows:
[3]
‘
25%
= US$112 500.00 Deposit on Order (19.11.2008)
25% = US$112 000.00 On
Containerization in South Africa
20% = US$90 000.00 On Advice
of Bill of Lading Date
30% = US$135 000.00 On Plant
Commissioning in Croatia.’
[20]
There is no material uncertainty as to the meaning of the written
part of the agreements. It
is evident that they contain terms
relating to delivery, purchase price and payment. It is not suggested
that the commissioning
obligation is a tacit term of the written part
of the agreements.
The oral part
of the agreements
[21]
The evidence concerning the terms agreed to orally is, however,
contested. It is to that evidence,
tendered by Walton for Westbrook,
and Boshoff for Metmar, that I now turn. This evidence traverses the
period prior to Metmar’s
involvement in Westbrook’s
Croatian operation until some time after the delivery of the three
jigs.
[22]
Walton testified that both Westbrook and Metmar were commodity
traders. Westbrook was also involved
in the operation in Croatia
where it was refining manganese. Walton and Boshoff were close
friends and business associates. When
they met by chance in Hong Kong
in March or April 2008, Walton told Boshoff of the problems of
inefficiency that Westbrook was
experiencing in its Croatian
operation. Part of the problem appeared to be that Westbrook did not
have an experienced operator
to run and to manage the operation.
[23]
Boshoff suggested that De Beer may be the ideal person to fulfil this
role and undertook to speak
to him. He also saw an opportunity for
Metmar: if the efficiency of the plant could be improved, Metmar
could purchase the enhanced
production that was not committed for
sale to existing clients. On 16 April 2008, Boshoff sent an e-mail to
Walton in which he
said that he had spoken to De Beer and that he
suggested a meeting with De Beer. He also said that he was keen to
assist Westbrook
with technical people and, in return, hoped to
obtain for Metmar ‘material for sale’. The next day
Boshoff e-mailed
Walton to tell him that De Beer thought it best for
him to inspect the plant before meeting with Walton. Later, Boshoff
and De
Beer went to inspect the plant. Walton said that he had
suggested that Boshoff visit the plant because he ‘got the
feeling
that he wanted to be involved more than just taking tonnage
from the output of the equipment, new equipment’.
[24]
It was made clear in later correspondence that De Beer’s
function at that stage was to
assess the Croatian operation and that
Metmar would obtain ‘a portion of the saleable tonnage’
produced by the plant
in due course. Boshoff gave a great deal of
advice to Walton and sang the praises of De Beer as the person who
would solve all
of Westbrook’s problems in respect of both the
acquisition of new equipment and the management of the plant.
[25]
A meeting took place in Croatia in August 2008 between Walton and
Howe, on the one hand, and
Boshoff and De Beer, on the other. They
identified two problems with the jig that was being used: it did not
operate efficiently
and it was not able to process slag that had been
broken down to a fine size. This resulted in a large amount of
wastage in the
refining process. De Beer’s advice was that
Westbrook should purchase a jig that could process the fine material.
He also
suggested that the plant’s efficiency and output could
be further enhanced by Westbrook purchasing more jigs.
[26]
It was decided that Westbrook and De Beer should enter into a
management agreement. Negotiations
followed. It was agreed that De
Beer would be paid a management fee of $17 500 a month by
Westbrook to manage the site.
[27]
De Beer began to look for jigs to purchase. In all of his
correspondence with Westbrook on this
issue, Boshoff was copied.
Walton did not know why this was so but assumed that there was an
agreement of some sort between Metmar
and De Beer. His assumption
proved to be correct, as I shall explain shortly.
[28]
De Beer found one Mathys Prinsloo to erect and commission the jigs
that were still to be purchased.
Walton’s understanding was
that the process would entail a ‘back to back purchase’
by De Beer of the first jig
(for processing fine material) and that
De Beer was ‘effectively going to have the equipment
commissioned onsite’ by
Prinsloo. In this scenario, Westbrook
would pay for the commissioning.
[29]
Metmar entered the picture at this point. Boshoff telephoned Walton
in early September 2008.
He said that Metmar wanted to be involved in
the purchase of the jig. Walton testified that ‘[Boshoff]
wanted us to contract
with Metmar for the supply of the commissioned
jig’. This suited Walton because he trusted Boshoff implicitly
and was not
entirely trusting of De Beer. He said of Boshoff that he
knew that ‘we would get that piece commissioned in Croatia if
he
said so’. The oral part of the agreement in respect of the
first jig was thus concluded.
[30]
On 10 October 2008, Metmar and Haba Services CC, the entity through
which De Beer conducted his
business, concluded a profit-sharing
agreement in relation to Westbrook’s operation in Croatia and
another operation in Iran.
It provided for a 65 percent/35 percent
split of the net profits on ‘capital equipment’ in both
Iran and Croatia and
the same split in respect of performance bonuses
earned by De Beer in Iran and Croatia. There would, however, be no
sharing of
De Beer’s management fee of $17 500 paid by
Westbrook.
[31]
On the same day, Metmar sent the invoice for the first jig to
Westbrook. Walton described the
agreement as a ‘contract with
effectively progress payments and as you hit the various trigger
points, then you make payments’.
He described it as a ‘normal
commercial agreement’.
[32]
On 16 October 2008, De Beer e-mailed Walton to inform him that two
further jigs had been ordered
and that they would be ready for
shipping by mid-December 2008. He asked whether Westbrook wanted
Metmar or himself to ‘handle
this deal and the logistics’.
Walton said that he far preferred Metmar to De Beer, stating that ‘I
definitely wanted
to deal with someone I trusted and I wanted to deal
with Metmar’. He informed De Beer of his choice and also
discussed the
matter with Boshoff.
[33]
During his cross-examination, Walton furnished more detail. He
clarified that the agreement concluded
in September 2008 in respect
of the first jig did not include the second and third jigs. After De
Beer had informed him of the
availability of the second and third
jigs, he spoke to Boshoff because, following from the first
agreement, Westbrook wanted Metmar
to assume responsibility for the
second and third jigs too.
[34]
Walton stressed that Westbrook purchased all three jigs from Metmar
on ‘a commission basis
in Croatia’. When he spoke to
Boshoff, he said that ‘we agreed that we wanted to carry on in
the same way’. He
made it clear that this occurred in October
2008 and that Metmar agreed to ‘take on the supply of the
commissioned equipment’
– that it would, in other words,
‘supply equipment commissioned on site in Croatia’.
[35]
On 17 November 2008, Boshoff sent an e-mail to Walton in which he
confirmed the purchase of the
two jigs, confirmed that orders had
been placed and said that the payment of deposits was required. He
suggested a payment scheme
that involved four payment events. They
were that 25 percent of the purchase price was to be paid
immediately, 25 percent on containerization,
20 percent on the date
of the bill of lading and the final 30 percent ‘on plant
commissioning in Croatia’. Boshoff
asked Walton to confirm
Westbrook’s acceptance ‘so that invoicing can be done’.
Westbrook’s acceptance
was communicated to Metmar on the same
day.
[36]
Walton was asked about an invoice submitted by Haba Services to
Metmar dated 4 December 2008.
It related to ‘Project management
in Croatia Jig 2 & 3 Partial payment’. He said that Metmar
was not involved in
any other project in Croatia apart from
Westbrook’s, and that therefore the invoice ‘can only be
talking about work
that Hendrik de Beer was doing on Metmar’s
behalf with relation to the jigs in Croatia’.
[37]
On 30 January 2009, Walton received an e-mail from Boshoff who wrote
that he had met with De
Beer and that ‘everything is going
according to schedule although I believe delays were caused due to
the foundations for
the first jig’. As far as the second and
third jigs were concerned, he said that ‘[c]ontainerisation is
taking place
for both and shipment will also take place soon’.
He reminded Walton that payment would be required on containerisation
and
‘once again on Bill of Lading date’. He suggested
that ‘on final commissioning of the three recovery plants in
Croatia’ they go to Bosnia to explore possibilities there.
[38]
A Metmar general ledger showed that on 22 December 2008, Metmar paid
Haba Services two identical
amounts of R132 467.98. Both
payments were described as ‘PROJECT MANAGEMENT IN CROATIA’
with references of ‘JIG
ML 8021B’ and ‘JIG ML
8021C’. These references are the references that appear on the
invoices for the second
and third jigs. Walton said that the payments
were for the commissioning of these jigs by Haba Services on behalf
of Metmar. Similar
entries were made for 28 February 2009.
[39]
By May 2009, all three of the jigs had been delivered but problems
had been experienced with
their commissioning. None were working.
This resulted in a meeting in Zurich between Walton and Boshoff in
which Walton explained
the dire state of affairs to Boshoff. When
Walton was asked whether Boshoff had ever denied that Metmar was
responsible for the
commissioning of the jigs, his answer was:
‘
No,
Mr Boshoff never denied they are responsible for commissioning to me.
Only when these proceedings started did he deny that they
are
responsible for commissioning. Never ever has he denied . . . has he
made that assumption to me.’
[40]
Boshoff undertook to ‘get hold of Hendrik de Beer and find out
what the hell was going
on and put it right’. On 14 May 2009,
he e-mailed Walton to say that he appreciated the fact that Walton
had come to Switzerland
to discuss the problems with him. He reported
that teething problems had been experienced with commissioning the
first jig, but
he believed they had been resolved. He said that
according to his information, the other two jigs had been
commissioned and ‘should
you confirm this, will get these jigs
invoiced’. Walton said that this e-mail was not correct because
the jigs had not been
commissioned in that ‘one did not operate
at all’ and the others ‘just did not function’.
[41]
That there were problems with the commissioning of the jigs appears
to have been accepted by
Metmar in its correspondence with Westbrook.
De Beer was not paid his management fee for September 2009 by
Westbrook because he
simply left the project, having been remiss in
the execution of his duties before he walked out.
[42]
A meeting was held in Monte Carlo in early November 2009 to try to
resolve the problems in respect
of the commissioning of the jigs. It
was agreed that Boshoff, who did not deny that the jigs were still
not commissioned, would
revert with proposals. When he did, in an
e-mail to Howe dated 11 November 2009, it was to demand payment of
the outstanding amounts,
being the last tranches in respect of each
jig – the final, post-commissioning payments. Walton described
this response as
being ‘just unreal’ because it ignored
what had been discussed at the meeting. Westbrook refused to pay
because the
jigs were not in working order.
[43]
On 13 January 2010, a meeting was held at Bryanston, Johannesburg
between representatives of
Westbrook and Metmar. From the minutes it
is clear that it was accepted by all that the first jig had still not
been commissioned.
The aim of the meeting was to explore how this
problem would be resolved by Metmar. They agreed to a number of steps
that Metmar
would take in order to make the first jig operational.
The minutes of the meeting recorded, in relation to the list of
steps, that
‘[a]ll costs for Metmar’s account relating to
the above’. The parties accepted that the second and third jigs
had been commissioned, because they were being used. When Izak
Dippenaar inspected the plant, however, he reported that the jigs
were in fact extracting very little manganese and that these jigs
were not in working order. This was communicated to Boshoff on
17
February 2010.
[44]
Metmar continued, throughout 2010 and into 2011, to address the
problem of the three jigs not
functioning properly. On 23 April 2010,
for instance, Boshoff sent an e-mail to Walton in which he assured
him that ‘I am
trying my level best to ensure the correct
equipment is purchased for Croatia’; on 19 July 2010, he sent
an e-mail to Walton
in which he said that he had been informed that
the necessary equipment had arrived at the plant and that ‘Matt
Prinsloo
is there for the commissioning’; in mid-August 2010,
Boshoff was still assuring Walton of ‘Metmar’s commitment
to take us to the final stage of commissioning Jig 1’; and in
an e-mail dated 23 September 2010, Mr Jacques Porter of Metmar
wrote
to Howe to inform him that he, Porter, had been ‘tasked to
handle the final stage of commissioning’. Despite
all of these
assurances, Metmar’s efforts did not meet with success as far
as Westbrook was concerned.
[45]
By April 2011, all attempts to find a solution had come to an end. By
then, the battle lines
had been drawn and the parties were set on an
inexorable path to the doors of the high court.
[46]
I turn now to the evidence of Boshoff. I shall not spend as much time
on it as I did on the evidence
of Walton because his version is
simply a denial of the major building blocks of Westbrook’s
claim.
[47]
In accordance with Metmar’s plea, Boshoff testified that the
commissioning of the jigs
was arranged between Westbrook and De Beer.
As far as he was concerned, De Beer had been required to commission
the jigs and Westbrook
was required to pay him in terms of the
management agreement concluded by them. Despite this, Metmar was
asked by De Beer to attend
to the shipping of the jigs. The reason
for this was that, De Beer, being a one-person operation, did not
have the capacity to
deal with this aspect of the transaction.
[48]
When Boshoff was asked to comment on Walton’s evidence that
Boshoff had telephoned him
and agreed to take over the sale of the
first jig from De Beer, he said:
‘
M’Lord,
firstly with regards to the call [in] September 2008 on a Friday
night. I cannot confirm
there was a call,
nor was not. It is a long time ago. There was obviously telephone
discussions on shipping, on various other matters,
but I cannot . . .
cannot confirm whether there was a call or not. With regards to the
content and specifically . . . where it
is stated that Metmar wanted
to contract for the supply of the [indistinct] and you know was
happy. I deny that there was such
a discussion on commission.’
[49]
In respect of the second and third jigs, Boshoff denied that he spoke
to Walton and assumed responsibility
on behalf of Metmar for their
commissioning. His evidence seems to be that the commissioning of
these jigs was also to be done
by De Beer in terms of his management
agreement with Westbrook. He testified that, for the most part, he
had no knowledge of the
difficulties that were being experienced by
Westbrook.
[50]
In dealing with the evidence and the documents that suggested that
Metmar was more than a mere
shipper of the jigs, and that pointed to
it having assumed the obligation to commission the jigs, Boshoff’s
evidence left
much to be desired. He was simply unable to answer this
evidence with any measure of credibility and his evidence often
verged
on the absurd. For the most part, however, he would not commit
himself to answer questions if he could not find the answer in the
trial bundle. He refused to answer the simplest and most obvious of
questions, often by saying that he did not want to speculate
or
comment on probabilities. He admitted to having a very limited
independent recollection of events. He relied on this tactic
even
when he obviously had knowledge, such as of the profit sharing
agreement between Metmar and De Beer.
The trial
court’s evaluation of the evidence
[51]
The trial court made strong credibility findings in favour of Walton.
It said of him that he
had ‘withstood long cross-examination’
and had ‘remained steadfast that Metmar together with De Beer
undertook
to commission the jigs in Croatia’. He was described
as a ‘reliable and calm witness who did not exaggerate issues’.
[52]
Makume J made equally strong credibility findings against Boshoff. He
was described as ‘evasive’.
He ‘could not respond
to simple questions relating to the commissioning issue’. His
evidence was ‘unnecessarily
longwinded which in the end did not
produce any credible answer’.
[53]
Makume J concluded his evaluation of the evidence with a
consideration of the probabilities.
He held:
‘
An
examination of the probabilities in this matter strongly point out to
and support the version of the Plaintiff. The most glaring
one being
that why did Metmar credit Westbrook with various amounts incurred as
commissioning expenses and which had been paid
to De Beer. Also after
the departure of Hendrik De Beer they fully assumed that role and
paid for the travelling and other expenses
of Matt Prinsloo and Izak
[Dippenaar]. Thirdly, as early as 2009 when De Beer was still on site
Walton complained to Boshoff about
the jigs not having been
commissioned and this caused them loss. Boshoff did not on a single
day say to Walton that it was not
their responsibility to commission
the jigs. He Boshoff instead told Walton that he will speak to De
Beer and see to it that the
work is done properly. This clearly was
in accordance with their joint venture agreement and to cap it all
long after April 2010
when they had drawn the final joint venture
account they still communicated with De Beer about expenses incurred
after April 2010
and those were commissioning expenses.’
[54]
On the basis of all of these findings, Makume J was satisfied that
Westbrook had proved both
the oral and the written parts of the
agreements that it relied upon for its claim. The full court agreed
with the trial court’s
factual findings.
[55]
An appeal court is bound by the factual findings of a trial court in
the absence of misdirection
on the part of the trial court.
[4]
The trial court’s factual findings are not tainted by any
misdirection that I can detect. They are therefore presumed to
be
correct. The result is that the matter must be decided on the basis
of the credibility findings in favour of Walton and against
Boshoff,
and in accordance with the probabilities that the trial court
highlighted.
[56]
Makume J is correct that the probabilities in favour of Metmar having
undertaken the commissioning
obligation in relation to all three jigs
is overwhelming. The evidence is consistent, from the time when
Metmar stepped in to supply
the first jig until the Bryanston
agreement, that, far from denying the commissioning obligation,
Metmar embraced it throughout.
[57]
The trial court found correctly that the written and oral parts of
the agreements, as pleaded
by Westbrook, had been proved. Metmar
argue, however, that the evidence of the oral agreements offends
against the parol evidence
rule.
The parol
evidence rule
[58]
The parol evidence rule, although perhaps reduced somewhat in its
operation in recent times,
remains part of our law. Unterhalter AJA,
in
Capitec
Bank Holdings Limited and Another v Coral Lagoon Investments 194
(Pty) Ltd and Others
,
[5]
explained that ‘the parol evidence rule or integration rule
requires that, save in exceptional circumstances such as fraud
or
duress, where the parties to a contract have reduced their agreement
to writing and assented to that writing as a complete and
accurate
integration of the contract, extrinsic evidence is inadmissible to
contradict, add to or modify the contract’.
[59]
The parol evidence rule requires modification when an agreement is
partly oral and partly written.
The partial integration rule comes
into play in such instances. Its operation was set out thus by this
court in
Affirmative
Portfolios CC v Transnet Ltd t/a Metrorail
:
[6]
‘
The
parol evidence rule applies only where the written agreement is or
was intended to be the exclusive memorial of the agreement
between
the parties. Where the written agreement is intended merely to record
a portion of the agreed transaction, leaving the
remainder as an oral
agreement, then the rule prevents the admission only of extrinsic
evidence to contradict or vary the written
portion without precluding
proof of the additional or supplemental oral agreement.‘
[60]
That is the position in this case. The written agreements deal with
delivery, purchase price
and payment and say nothing as to who bore
the obligation to commission the jigs. The oral agreements do not
contradict or vary
the written agreements but rather supplements them
by placing the obligation to commission on Metmar. The parol evidence
rule is
not infringed in this case by receipt of the evidence of the
oral agreements.
Conclusion
[61]
As the evidence established that an obligation was borne by Metmar to
commission the jigs on
site in Croatia, the result is that Metmar’s
appeal must fail, Westbrook’s cross-appeal must succeed and the
questions
posed by the separated issues must be answered in favour of
Westbrook. I make the following order.
1. The appellant’s
appeal is dismissed with costs, including the costs of two counsel.
2. The respondent’s
cross-appeal is upheld with costs, including the costs of two
counsel.
3. The order of the
court below is set aside and replaced with the following order.
‘
1.
The appellant’s appeal is dismissed with costs, including the
costs of two counsel.
2. The respondent’s
cross-appeal is upheld with costs, including the costs of two
counsel.
3. The order of the
court below that appears at paragraph 199.1 of its judgment is set
aside and replaced with the following order.
“
It
is declared that:
(a)
Metmar was obliged to
commission the equipment sold by it to Westbrook, in Croatia, as
alleged in paragraphs 10 and 12 of the particulars
of claim;
(b)
neither Westbrook nor
De Beer was required to attend to the commissioning of the equipment
at their own cost and risk, without any
assistance from or
involvement of Metmar, as alleged in paragraphs 8.13.5 and 8.20 of
the plea; and
(c)
neither Westbrook nor
De Beer attended to the commissioning of the equipment at their own
cost and risk, without any assistance
from or involvement of Metmar,
as alleged in paragraph 8.21 of the plea.”’
C Plasket
Judge
of Appeal
APPEARANCES
For the
appellant:
C H J Badenhorst SC and J A Booyse
Instructed
by:
Adams & Adams, Pretoria
Symington
& De Kok, Bloemfontein
For the
respondent:
A J Eyles SC and L Choate
Instructed by:
Fasken Martineau, Johannesburg
Webbers
Attorneys, Bloemfontein
[1]
In
this judgment I shall, for the sake of consistency with the
pleadings and the record, refer to the appellant as Metmar, rather
than Traxys.
[2]
The
role of Mr Hendrik de Beer will be explained below. He was
originally the third defendant in the trial. Westbrook withdrew
against him during the course of the trial.
[3]
The
total of the payments in each of the second and third invoices
amounts to $449 500. Nothing turns on this discrepancy
between
the payment schedule and the total.
[4]
R v
Dhlumayo and Another
1948
(2) SA 705-706.
[5]
Capitec
Bank Holdings Limited and Another v Coral Lagoon Investments 194
(Pty) Ltd and Others
[2021]
ZASCA 99
;
[2021] (3) All SA 647
(SCA) para 38.
[6]
Affirmative
Portfolios CC v Transnet Ltd t/a Metrorail
[2008]
ZASCA 127
;
2009 (1) SA 196
(SCA) para 14. See too
Mike
Ness Agencies CC t/a Promech Boreholes v Lourensford Fruit Company
(Pty) Ltd
[2019] ZASCA 159
;
[2020] 1 All SA 314
(SCA) paras 18-19.