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[2016] ZAGPPHC 166
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Travel Today (Pty) Ltd v Concorde Travel (Pty) Ltd and Others (11780/2011) [2016] ZAGPPHC 166 (1 April 2016)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
CASE
NO: 11780/2011
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
DATE:
01/04/2016
In
the matter between:
TRAVEL
TODAY (PTY)
LTD
PLAINTIFF
and
CONCORDE
TRAVEL (PTY)
LTD
1
st
DEFENDANT
(Registration
number: 1973/016449/07)
CONCORDE
TRAVEL (PTY)
LTD 2
nd
DEFENDANT
(Registration
number: 1999/005902/07)
B
DTRAVEL (PTY)
LTD 3
rd
DEFENDANT
(Registration
number: 1999/020026/07)
JUDGMENT
SIKHWARI,
AJ
[1]
The plaintiff in this action Is Travel Today (Pty) Ltd, a company
duly registered In terms of company laws of the Republic of
South
Africa with its main place of business at House 45 at Ferreira Street
in the city of Mbombela (''Nelspruit") in the
province of
Mpumalanga. The plaintiff has approached this court for an order in
terms of the prayers stated in the amended particulars
of claim. The
first defendant is Concorde Travel (Pty) Ltd, a company duly
registered under registration number 1973/016449/07.
The second
defendant is Concorde Travel (Pty) Ltd, a company duly registered
under registration number 1999/005902/07. The third
defendant is Bid
Travel {Pty) Ltd,a company duly registered under registration number
1999/020026/07.
[2]
The plaintiff Is a travel agent based in Mbombela (Nelspruit) in
Mpumalanga province and is an affiliate of Concorde (Pty) Ltd,
second
defendant, in terms of the agreement in Bundle 1 at pages 1 - 62.
Therefore, the plaintiff is a member of Concorde Group
of Companies.
The dispute herein is for the period from the 1st day of April 2006
to the 31st day of March 2010.
[3]
At this stage the trial is about an order compelling the defendants,
particularly second defendant, to render to the plaintiff
the account
of for the period from the 1st of April 2006 to the 31st of March
2010 which flows from the contract between
the
third defendant and Galileo Southern Africa [a division of South
African Airways (Pty) Ltd] ('”Galileo”) which
is in
Bundle 2 at pages 116 - 133. This contract was concluded in or during
July 2006.
[4]
At this stage of the trial there will be no attempt to quantify the
amount claimed by the plaintiff or owed to the plaintiff,
If any.
Parties have agreed that that dispute will be postponed
s
i
ne
d
ie
pending the decision of the court on the
rendering of the account.
[5]
The plaintiff called two witnesses. The first witness of the
plaintiff was Mr Clive Highway who was brought to court on the
strength of a subpoena. He testified that he was the employee of
Galileo as a national key account manager dealing with travel
trade.
The contract between Galileo and third defendant was within his scope
of work as part of his work. He presented the Exhibit
A document
which included several tax invoices. He testified further that the
contract between third defendant and Galileo was
for business
purposes. It began on the 1
st
of April 2006. The essence
of the said contract was that Galileo will provide to the defendant
certain computer software such as
laptops, desktop, programs, etc.
Galileo will subsidize the third defendant in terms of the provisions
in clause 5 of the contract
(page 125 of Bundle 2). The subsidy money
will become payable dependant on the thresholds achieved by the third
defendant. Third
defendant will in turn pay the subsidies to the
second defendant for distribution to companies in the Concorde Group
of Companies.
He agreed that Exhibit A shows a series of payments
which were made by Galileo to third defendant.
[6]
The second witness of the plaintiff was Mrs Magda Pretorius. She
testified that she is the shareholder and director of the plaintiff
since 1993. She confirmed the contract between plaintiff and Concorde
Group. At all material times she was not aware of the contract
between third defendant and Galileo. The plaintiff is still
purchasing the computer software from Galileo but at no subsidy
benefits
from the defendants. She testified that she did raise her
complaints to the second and third defendant but she was not
assisted.
[7]
Under cross-examination she was asked to direct the court to any
agreement or clause of the agreement which allow plaintiff
to have a
share on the subsidy refund in the three agreements involved in the
dispute herein. She replied that her understanding
is that all the
agreements taken as a whole they provide for same. She testified that
plaintiff was qualified to receive compensation
for segments sold
flowing from the Galileo deal. She stated that plaintiff intended to
enjoy the advantages of being part of a
chain of similar travel
agencies and to benefit from the reputation and goodwill of the
second defendant when plaintiff became
a member of the Concorde Group
of Companies. Briefly, that was the plaintiff's case;
[8]
The defendant called one witness, Mr Dawood Tagari. He testified that
from 1993 to 2007 he was the employee of the second defendant
as IT
Officer and managing director. Presently, he is the IT Director at
Bid Travel (Pty) Ltd, third defendant. He admitted the
agreement
between plaintiff and second defendant. He was part of the
negotiating team for the Galileo contract. He testified that
the
Harvey Travel deal was not similar to the plaintiff's deal. There was
no agreement which compels the defendants to share equipment
subsidies with plaintiff.
[9]
Under cross-examination he had no logical answers when it was shown
to him that in page 243 of the bundle, the Concorde Group
of
Companies has contribute R49 980 In the determination of the amount
of R34 349 571 paid by Galileo to third defendant. page
247, the
Concorde Group contributed R43 394 to the total of R33 742 872 which
was paid by Galileo to third defendant. He conceded
that third
defendant is not a holding company. He testified further that the
productivity bonus is not a sector because plaintiff
is not trading
in the software or IT industry but the plaintiff's normal trade is
travel agency. Briefly, that was the case of
the defendant.
[10]
In
D
o
yle
And
An
o
th
e
r
v
Reet
M
o
t
o
rs
P.E.
(Pty)
Ltd
1
971
(3) 760
(
A) at
page
762F-H
the court stated that:
“
In
the absence of Rules, the following general observations might be
helpful:
1.
The plaintiff should aver-
(a)
his right to receive an account, and the
basis of such right, whether
by contract or by fiduciary relationship or otherwise;
(b)
any contractual terms or circumstances having
a bearing on the
account sought;
(c)
the defendant's failure to render an account.
2.
On proof of the foregoing, ordinarily the Court would in the first
instance order only the rendering of an account within a specified
time. The degree of amplitude of the account to be rendered would
depend on the circumstances of each case. In some cases It might
be
appropriate that vouchers or explanations be Included. As to books or
records, It may well be sufficient, depending on the circumstances,
that they be made available for Inspection by the plaintiff. The
Court may define the nature of the account."
[11]
In this case the plaintiff is relying on the existence of a contract
between the plaintiff and the second defendant. The fact
that the
relationship between plaintiff and second defendant is contractual
does not oust the fiduciary nature of the relationship.
Each case is
determined on its own merits.
[12]
In
P
h
ilips
v
F
i
e
l
d
st
o
ne
Africa
(Pty)
Ltd And
Another
2004 (3) SA 465
(SCA) at page 478H-479C, the SCA stated that:
"The
fullest exposition In our law remains that of Innes CJ In
R
o
b
i
nson
v R
a
ndfontein
Estates
Gold
M
i
n
i
ng
C
o
Ltd (
s
u
pra
at 177-80). It Is,
no doubt, a tribute to Its adequacy and a reflection of the
Importance of the principles which It sets out that
It has stood
unchallenged for 80 years and undergone so little refinement.
'Where
one man stands to another in a position of confidence involving a
duty to protect the Interests of that other, he Is not
allowed to
make a secret profit at the other's expense or place himself In a
position where his Interests conflict with his duty.
The principle
underlies an extensive field of legal relationship. A guardian to his
ward, a solicitor to his client, an agent to
his principal, affords
examples of persons occupying such a position. As was pointed out In
The
Aberdeen
R
a
i
lw
a
y
C
om
pa
n
y v
Bl
a
l
kie
Bros
(1 Macq 461
at 474), the doctrine is to be
found In the civil law
(
D
igest
18.1.34.7),
and must of necessity form part of every civilised system of
jurisprudence. t prevents an agent from properly entering
into any
transaction which would cause his Interests and his duty to clash. f
employed to buy, he cannot sell his own property,
if employed to
sell, he cannot buy his own property, nor can he make any profit from
his agency save the agreed remuneration; all
such profit belongs not
to him, but to his principal. There is only one way by which such
transactions can be validated, and that
is by the free consent of the
principal following upon a full disclosure by the agent....
"Whether
a fiduciary relationship Is established will depend upon the
circumstances of each case... But, so far as I am aware,
It Is
nowhere laid down that In these transactions there can be no
fiduciary relationship to let in the remedy without agency.
And It
seems hardly possible on principle to confine the relationship to
agency cases.
"The
principle so stated remain true, not only for this country, but also
In many Commonwealth (and United States} jurisprudence."
[13]
The
''
S
h
o
rt
e
r
O
xford
E
n
g
l
i
sh
D
ict
i
o
n
a
ry",
Ed, 2002, defines 'fiduciary' as "something that secures
trust'' or "a person who holds a position of trust with respect
to someone else; a trustee..."
[14]
t is the view of this court that the contractual relationship between
the plaintiff and the second defendant was based on trust.
t has all
the material elements of fiduciary relationship.
[15]
The next leg of the dispute is the interpretation of the contract
between plaintiff and first and second defendant(s) as well
as the
contract between second defendant and third defendant and the
contract between third defendant and Galileo. The dispute
is whether
these contracts should also benefit the plaintiff in so far as
subsidies flowing from the Galileo deal are concerned.
[16]
The court must take into account the context of the contract when
interpreting the contract. In List
v
J
u
n
g
e
rs
1979 (3) SA 106
(A) at page 664H, Schreiner JA stated that "the
legitimate field of interpretation should not be restricted as a
result of
excessive peering at the language to be Interpreted without
sufficient attention to the contextual scene".
[17]
AJ Kerr, in his work entitled
"The
Pr
i
nc
i
ples
o
f the Law
o
f C
o
ntract",
Butterworths,6tti Ed at page 389 has stated that "the
standard approach to ascertaining the common intention of the parties
who disagree on the meaning of an express provision of their contract
is to consider the nature, purpose and context of the contract....The
words cannot be cut out, pasted on a clean sheet of paper, and then
considered with a view to determining their meaning; ie If
they "must
not be interpreted in the abstract and out of context". It
should be noted that 'evidence of mutually known
facts may be
admitted to identify the meaning of a descriptive term".
[18]
In
E
n
ge
l
b
recht v S
e
nwes
Ltd
2007 (3) SA 29
(SCA), Malan AJA stated that "the
Intention of the parties is ascertained from the language used in its
contextual setting
and in the light of admissible evidence. Evidence
of background fact is always admissible. Those facts, matters
probably present
in the minds of the parties when they contracted,
are part of the context and explain the 'genesis of the transaction'
or its 'factual
matrix'. Its aim is to put the court 'in the armchair
of the author(s) of the document. Evidence of 'surrounding
circumstances'
is admissible only if a contextual interpretation
fails to clear up an ambiguity or uncertainty. Evidence of what
passed between
the parties during negotiations that preceded the
conclusion of the contract is admissible only in the case where
evidence of the
surrounding circumstances does not provide
'sufficient certainty'."
[19]
The plaintiff joined the Concorde of Companies for the sole purpose
of making profit and benefiting from the advantage of being
part of a
chain of similar travel agency and access goodwill and expertise. The
third defendant also entered into a contract with
Galileo for the
sole purpose of making profit for both companies; being the Concorde
Group of Companies and the Galileo. Galileo
had great interest in the
effective running of the travel agencies using Its technology and the
agencies were also benefitting
from the subsidy in the software
technology for the sole purpose of rendering effective and
profit-making travel agency business.
This relationship of Galileo
and the third defendant was intended to achieve the same business
objectives which were intended between
plaintiff and defendants.
[20]
This background information which is common cause between the parties
creates a picture in the mind of the court that the plaintiff
has
entered into the contract with second defendant for the sole purpose
of maximising profit out of the above stated advantages.
t Is
unfortunate that the defendants now want to cash money alone by
entering Into the Galileo deal without inviting the plaintiff
and
went on to keep it away from her.
[21]
When the plaintiff discovered the deal and made enquiries, she was
pushed from pillar to post with no reasonable explanation
given for
excluding her save to tell her that her contract Is not similar to
that og Harvey World Travel. No details of the differences
were ever
explained to the plaintiff.
[22]In
page 126 of the Bundle which is a contract between the third
defendant and Galileo the second defendant Is listed as one
of the
companies which will benefit from the deal. t is common cause that at
the material times In question the plaintiff was part
of the second
defendant; and therefore, was entitled to benefit.
[23]
When Concorde Group's productivity contributions were calculated and
paid to the third defendant by Galileo, they included
the
contributions by the plaintiff. Concorde and the third defendant
received millions of rands in financial benefits flowing from
the
Galileo deal. The evidence by Mr Tagari to the extent that their
contracts are not secretive is not persuasive If one takes
into
account the fact that the plaintiff did not know about the Galileo
deal for a very long time after It has come into existence.
[24]
The interpretation of the three contracts involved herein favours the
version of the plaintiff, and therefore the plaintiff
has made a
case
that she entitled to receive the account based on the contractual
relationship between the parties and / or on the fiduciary
relationship
which was created In the circumstances of this
case.
[25]
The defendants' refusal to render the account is well documented on
the letters written to the plaintiff by the defendant insisting
that
the plaintiff is not entitled to the subsidies. It will not make
business sense for the plaintiff to join the Concorde Group
of
Companies but be excluded from Galileo deal or any other lucrative
deal. This will defeat the very same purpose for which the
plaintiff
has joined up forces with other travel agency in the same industry
under the banner of Concorde Group of Companies. This
interpretation
of the contract which excludes the plaintiff in the Galileo deal is
absurd, and this court rejects it.
[26]
In the premises, I make the following order:
1.
That the second defendant is ordered to render to the plaintiff
within 15 (fifteen) days from the date of the court order
hereof an
account, supported by documentations, in respect of the period from
the 1st: day of April 2006 to the 31st: day of March
2010 setting
out:
1.1.
The amounts paid by:
1.1.1.
Galileo [a division of South African Airways (Pty) Ltd] to the
Concorde Group of Companies and / or the
second defendant.
1.1.2.
Third defendant (from money received from Galileo) to the Concorde
Group of Companies and / or second defendant.
1.2.
The
pro
r
a
ta
share of the
productivity of the plaintiff, measured as sectors, in respect of the
amounts paid to the Concorde Group of Companies
and
I
or
second
defendant,
as set out in 1.1above.
2.
That the third defendant is ordered to render an account to the
plaintiff for the period from the 1
st
: day of April 2006
to the 31st: day of March 2010, duly supported by documentations
setting out:
2.1.
All accounts paid by Galileo flowing from the agreement between the
third defendant
and Galileo, dated July 2006.
2.2.
All amounts paid by the third defendant to the second defendant
flowing from the
agreement between the third defendant and Galileo,
dated July 2006.
3.
That the debatement of the accounts rendered by the second and third
defendants is postponed
s
i
ne
d
i
e
.
4.
That payment of the amount found to be owing by the second
and
/ or third defendants(s) to the plaintiff Is postponed
s
i
ne
d
i
e
.
5.
That costs are reserved; to be determined at the finalisation of the
trial on Issues referred to at paragraphs
3 and 4 above which are
postponed
s
i
ne
d
i
e
.
DATED
IN PRETORIA ON THIS THE 1
st
DAY OF APRIL 2016
___________________________________________
SIKHWARI,
AJ
ACTING
JUDGE OF THE
HIGH
COURT, PRETORIA