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[2014] ZAGPPHC 125
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Gondwana Marketing (Pty) Ltd and Another v Sidney Bonnen Birch T/A LF Birch & Son (A903/2011) [2014] ZAGPPHC 125 (12 March 2014)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT
OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
CASE
NO: A903/2011
DATE:
12 MARCH 2014
In the matter
between
GONDWANA
MARKETING (PTY)
LTD
.....................................................
First
Appellant
WYNAND
SCHALEKAMP
.......................................................................
Second
Appellant
And
SIDNEY BONNEN
BIRCH t/a LF BIRCH &
SON
...........................................
Respondent
J U
D G M E N T
MAKGOKA, J:
[1] This is an
appeal and a cross appeal (both with leave of the court below)
against the orders in the judgment of a single Judge
of this court
made on 19 August 2011. The appeal and cross-appeal concern the
competence of the court below to order compliance
with an earlier
order of this court, and whether the applicant is entitled to payment
of a full contractual amount following non-compliance
with an
undertaking to pay an agreed reduced contractual amount.
[2] The appellants
were the respondents in the court below, where the cross- appellant
was the applicant. For the sake of convenience,
I refer to the
parties as described above. The genesis of the dispute between the
parties is a written agreement concluded between
the first respondent
and the applicant in terms of which the applicant supplied ostrich
meat at an agreed price expressed in euros,
for exportation to
Europe. The first respondent took delivery of a consignment of the
meat by collecting it from the Commercial
Cold Storage where it was
stored for the applicant. Subsequently, the first respondent exported
the meat to Europe. Sometime after
the meat arrived in Europe, the
first respondent alleged that the meat was rotten.
[3] The applicant,
though not agreeing with the allegation, agreed to accept a reduced
price for certain quantity of the meat, and
to the destruction of the
rest. This was conditional upon the first respondent providing the
applicant with copies of the export
documents as well as the records
and photos of the meat as inspected in Europe, in order to establish
the veracity of the first
respondent’s allegations. The first
respondent undertook in writing to provide these records, but failed
to comply with the
undertaking. The applicant launched an application
seeking an order to compel the first respondent to do so.
[4] On 16 April 2010
this court ordered the first respondent to furnish the applicant with
certain documentation. It is worth noting
that paragraphs 1 and 2 of
the order followed the wording of the applicant’s acceptance of
the reduced amount. The applicant’s
acceptance, contained in an
email dated 12 December 2007, reads:
‘I accept the
€5/kg provided that I can first have copies of the export
documents as well as the records and photos of
the meat as inspected
in Europe…’
[5] It is convenient
to set out fully, the terms of the order:
‘1. The
respondent is directed and compelled to furnish the applicant with
copies of all documents relating to the exportation
of all ostrich
meat (‘the ostrich meat’)
supplied by the
applicant to the respondent in the period between 1 July 2007 to 30
November 2007; and
2. Copies of any and
all records and photographs of the ostrich meat as inspected in
Europe;
3. The documentation
to be provided shall include but not be limited to:
3.1 Documents
relating to the shipping and arrival of any meat in Rotterdam;
3.2 Documents
relating to the storage of the meat in Rotterdam between 24 September
2007 and 18 October 2007 or any other time;
3.3 Documents
evidencing the core and container temperature readings prior to the
departure of the ship referred to by the respondent’s
representative in paragraph 28.2 of the respondent’s answering
affidavit;
3.4 Veterinary
inspection documents produced in Europe;
3.5 Documents that
connect container MWCU 564.717-7 referred to in annexure ‘TC’
to the shipment in question and the
allegedly rotten meat;
3.6 Documents
relating to the storage and freezing of meat from the time when it
was removed from commercial cold storage until
the moment it was
opened in Holland;
3.7 Documents
relating to the disposal of any allegedly rotten meat;
3.8 Documents
relating to the amount that the respondent was paid by any customer
of the respondent in relation to any meat supplied
by the applicant
to the respondent.’
(my emphasis)
[6] Dissatisfied
with the first respondent’s efforts in complying with the
order, the applicant lodged a further application,
seeking a
declaratory order that the first respondent was in contempt of court
of that order and seeking to imprison the second
respondent, as the
sole director and thus the ‘directing mind and will’ of
the first respondent. In addition, the applicant
sought an order for
the first respondent to pay the full (original) price of the meat.
[7] On 19 August
2011 the court (Mngqibisa-Thusi) dismissed the contempt application
against both the respondents, but ordered the
first respondent to
comply with the order of 16 April 2010, within three months of the
judgment, failing which the first respondent
was to pay €88 560
to the applicant. The first respondent was also ordered to pay the
applicant’s costs. The respondents
and the applicant are
aggrieved with the terms of the order, for different reasons, hence
the present appeal and cross-appeal.
[8] The first
respondent appeals against the part of the order ordering it to
comply with the order of 16 April 2010, as well
as the order for
payment in the event of a default, and the costs order against it. It
contends that it was not competent for the
court below to make an
order in those terms. On the other hand, the applicant contends that
it was incompetent for the court to
again order the first respondent
to furnish the information, as such an order had already been made on
16 April 2010. The applicant
argues that the court should simply have
ordered the first respondent to make payment of the balance of the
original price. In
addition, the applicant cross-appeals against the
dismissal of his contempt application.
[9] The issue for
determination is substantially two-fold:
(i) whether the
court below was competent to order the first respondent to comply
with the order of 16 April 2010;
(ii) whether
it was competent for the court below to order payment of the full
(original contract amount) €88 560 in
the event of the first
respondent not complying with the order of 16 April 2010.
[10] It is
disputed between the parties whether or not the first respondent has
complied with the order of 16 April 2010. The
applicant contends that
there has not been compliance. The respondents argue the contrary.
But this does not really matter now,
as the court below has,
impliedly, on 19 August 2011, found that the first respondent had not
complied with the order (by extending
the period during which the
first respondent had to comply with the order). That finding has not
been challenged in the respondents’
notice of appeal. In fact,
it is contended in the notice of appeal, which argument was also
advanced in the heads of argument,
that the first appellant does not
have in its possession, the documents referred to in the court order
of 16 April 2010.
[11] During
argument before us, this argument was persisted with, especially with
regard to the contempt cross-appeal. But that
argument is not open to
the first respondent, for the simple reason that since it became
aware of the court order of 16 April
2010, it has not, once it
realised its inability to comply with it, approached the court for
reconsideration of the order. An order
of court is valid and
enforceable, until it is set aside or varied by that court or a
higher tribunal. As a result, it must be
assumed that since the court
order came to its attention, the first respondent accepted its terms,
and had to comply with them.
[12] Even if this
conclusion is wrong (that the court below has already found the first
respondent to have failed to comply with
the order of 16 April 2010),
the applicant has persuasively demonstrated that the first respondent
has dismally failed to furnish
the documents mentioned in the court
order. For example, in its attempt to comply with paragraph 2 of the
order, which enjoins
the first respondent to furnish copies records
and photographs of the meat as inspected in Europe, the respondent
provided a video
purporting to demonstrate that the meat was rotten.
[13] However, that
video turned out to be irrelevant, as it had been taken in South
Africa, and not in Europe as ordered by the
court. The date of the
video is 12 November 2007, nearly two months after the meat had
already been shipped from South Africa to
Europe, on 24 August 2007.
The date of production of the meat in the video is 18 March 2007,
whereas the date of the production
of the meat in question is,
according to the respondent’s commercial invoice for export
purposes, 25 May 2007.
[14] I therefore
have no doubt in concluding that the respondent has failed to comply
with the order of 16 April 2010. What should
be considered next, is
the effect of that failure. In particular, we should determine
whether that failure entitles the applicant
to judgment for the
balance of the original purchase price.The respondents contend that
the applicant is not entitled to judgment
in the full agreed amount
without issuing a summons.
[15] Two points
are proffered for this argument. First, that there are disputes of
fact, which cannot be resolved on the papers
as a result of which the
matter has to be referred for either oral evidence or trial. Second,
that the agreement in terms of which
the applicant accepted the
reduced price, constituted a novation of the initial agreement
between the parties. I consider these
contentions, in turn.
[16] The disputes
of fact, are said to be constituted by the following:
(a) The applicant
was aware that there was a problem with its ostrich meat, hence it
agreed to a reduced price;
(b) The laboratory
tests show that the meat was not suitable for human consumption;
(c) The applicant
dispatched only 7 150 kilograms of meat to Europe, which was the
quantity that the settlement was accepted, as
opposed to the 12 600
kilograms;
(d) Independent and
impartial parties have deposed to affidavits to the effect that the
applicant’s meat was rotten and not
fit for human consumption.
[17] The argument
that there was a problem with the meat cannot now be said to
constitute a dispute of fact, due to following
circumstances: The
applicant accepted, provisionally, the respondents’ averment of
the meat being rotten. The condition was
that the respondents would
furnish acceptable proof for that allegation. Having failed to do so,
it therefore does not lie in the
mouth of the respondents to say
there was a problem with the meat, as the respondents now seek to do.
[18] The failure
to furnish proof, in the form of documentation set out in the court
order of 16 April 2010, means that the respondents’
claims
regarding the meat cannot be substantiated. This leads to an
irresistible inference that such documentation does not exist,
and
logically, that there was nothing wrong with the meat. As a result,
it cannot tenably be argued that a dispute of fact exists
on this
aspect.
[19] The
respondents’ contention that laboratory results showed that the
meat was not fit for human consumption suffers
the same criticism. In
this regard, the respondents rely on a report by Swift Micro
Laboratories (Swift) dated 19 June 2007 report,
in which an analysis
is purportedly given of batch number W19/098 at the top of the second
page. This has a high TMA reading and
a high coliform reading for
samples from the first respondent’s plant. The respondents have
furnished no proof for this bald
statement.
[20] There is
therefore no merit in any of the contentions by the respondents.
However, in an addendum report by Swift dated 15
May 2007, the same
batch has low readings. This raises questions about the correctness
of all aspects of the Swift report since
the same batch returns
different readings. It should be borne in mind that both these
documents emanate from the respondents. As
a result, the respondents
should not be permitted to use inconsistencies in its own evidence to
create a dispute of fact.
[21] I turn now
to the respondents’ contention on novation. The argument is
that the agreement in terms of which the applicant
accepted the
reduced price, constituted a novation of the original agreement.
Therefore, so is the argument, the non-fulfilment
of the novated
agreement does not entail that the original agreement becomes
effective again. The original agreement is no longer
extant. The
applicant should have sued for specific performance of the novated
agreement. To consider this argument, it is necessary
to restate the
general principles applicable to how an agreement becomes novated.
[22] Novation
occurs when an existing obligation is replaced by a new one, the
existing obligation being thereby discharged (Christie’s
The
Law of Contract in South Africa, 6 ed, p466). The onus lies on the
party alleging novation to establish it. In view of the
fact that it
involves a waiver of rights, clear and cogent proof of the alleged
novation would be required (Woolfson’s Credit
(Pty) Ltd
(formerly Vavasseur (SA) Credit (Pty) Ltd v Holdt
1977 (3) SA 720
(N). It is furthermore trite that the parties can, through a
novation, vary one obligation in an ‘old contract’ and
replace it with another obligation, leaving the other terms intact
(Tauber v Van Abo
1984 (4) SA 482
(E) at 485C).
[23] The
requirements for a successful defence of novation are neatly
summarised in Barclays National Bank Ltd v Smith
1975 (4) SA 675
(D)
as follows at 683B-D:
‘(a) the onus
of proving novation rests on the person alleging novation (Antonie en
Andere v Koekoe
1966 (2) SA 610
(O) at page 613; Trust Bank of
Africa Ltd v Dhooma
1970 (3) SA 304
(N) at 307;
(b) the intention
to novate is never presumed (Van Coppenhagen v Coppenhagen
1947 (1)
SA 576
(T) at 578-581);
(c) the question is
one of intention and that, in the absence of any express declaration
of the parties to effect novation can’t
be held to exist except
by way of the necessary inference from all the circumstances of the
case (Electric Process Engraving and
Stereo Co. v Irwin
1940 AD 220
at 226-7;
(d) the
circumstances of the case …include the conduct of the parties
(French v Sterling Finance Corporation (Pty) Ltd
1961 (4) SA 732
(A)
at 736. See also Swadiff (Pty) Ltd v Dyke N.O.
1978 (1) SA 928
(A)
at 940G-H.’
[24] In the
present matter, there is no express declaration of the parties to
effect novation to their agreement. I am unable,
on the facts before
us, to infer from the circumstances of the case, that the parties
intended to do so. Nothing in the conduct
of the parties points to
that direction, either. Bearing in mind that novation is not to be
presumed, I conclude that the respondents
have failed to discharge
the onus on them to establish that the agreement between the parties
was novated by the applicant’s
conditional acceptance of the
reduced contractual amount on 12 December 2007. If anything, that
acceptance, being conditional,
logically means it fell off in the
event of non-fulfilment of the condition on which it was premised,
and the original agreement
remains intact.
[25] To sum up on
the respondent’s contentions: there is no merit in either of
the contentions on the alleged dispute of
fact or novation. In light
of that, there is nothing standing in the path of the applicant
obtaining judgment. Given this conclusion,
I find it unnecessary to
consider in detail, the applicant’s contempt
counter-application. The following brief remarks, would,
to my mind
suffice.
[26] I have
already pointed out earlier, that it appeared to be the respondents’
case that they were unable to give full
effect to the court order as
some of the documents the first respondent was ordered to furnish to
the applicant, were not in its
possession. I also remarked that under
those circumstances, the prudent course for the respondents to adopt,
would be to approach
the court for variation of the order on the
basis of impossibility of performance. It did not do so, and I think
that can be attributed
more to a relapse in legal counsel than to a
deliberate and conscious non-compliance with the court order.
[27] It has been
said that where a party has not complied with a court order, but did
attempt to give effect to the order, his
inability to give full
effect thereto was not of his own doing, that party will not be
guilty of contempt (Mynhardt v Mynhardt
1986 (1) SA 456
(T). I
therefore conclude that the applicant has not established, on a
balance of probabilities, that the first respondent wilfully
disobeyed the court order.
[28] What remains
for determination is the quantum of the applicant’s claim. The
respondents claim that the applicant
supplied only 7150 kilograms of
meat, instead of 12600 kilograms. The applicant’s purported
proof of its claim that it supplied
12 600 kilograms of meat, is
contained in its email dated 7 July 2007 in which it confirmed
acceptance of the first respondent’s
quotation. The relevant
part of the email reads:
‘I hereby
confirm that we accept your price of:
1. €12,00/Kg
for all the Fan Fillet that we have in stock at Commercial Cold
Storage in City Deep (Excepting for the approx.
1,3 Tonne of Fan
Fillet deboned at EDPLA) which leaves us a balance of about 4,9 Tonne
inclusive of;
€6,30/Kg
for all the Big Steak that we also have in stock at Commercial Cold
Storage in City Deep which is about 7,7 Tonne.’
[29] This is the
high water-mark of the plaintiff’s claim, from it is clear that
the applicant has not proved its claim
for the full price on a
balance of probabilities. The respondents, have, on the other hand,
have demonstrated, with reference to
the invoices, that the applicant
delivered 7150 kilograms of meat. Therefore, there seems to be merit
in the respondents’
assertion. The applicant is in the
circumstances entitled to judgment for 7150 kilograms worth of meat.
What that amount is in
euros, is something we are not in a position
to determine without the assistance of the relevant evidence, e.g. of
the exchange
rate variables.
[30] To sum up:
the issues identified in para [9] are answered as follows:
(a) The applicant
has not established that the first respondent was in contempt of the
court order made on 16 April 2011;
(b) it was not
competent for the court below to again order the respondents to
comply with the order of 16 October 2010, as it was
functus officio;
(c) the court below
was correct in holding that the applicant was entitled to judgment,
but misdirected itself in making that conditional
upon the respondent
complying with the order of 16 April 2010. The court also misdirected
itself in not taking into account that
the applicant had failed to
prove that he supplied 12 600 kilograms of meat, instead of 7150
kilograms.
[31] The sum total
of these findings is that the respondent’s appeal falls to
fail. The applicant’s cross-appeal should
succeed to the extent
referred to above. Costs should follow the event. However, to be fair
to both sets of parties, the costs
order should reflect the
applicant’s failure to establish contempt on the part of the
first respondent, both in the court
below, and before us.
[32] In the result
the following order is made:
1. The appellants’
appeal is dismissed;
2. The respondent’s
cross appeal is dismissed, save to the extent reflected in this
order. The order of the court below is
set aside and the following is
substituted for it:
‘(a) The
applicant’s application to declare the first and second
respondents to be in contempt of court is dismissed;
(b) The first
respondent is ordered to pay the applicant an amount (in South
African rand equivalent of the euro 7150 kilograms
of ostrich meat,
as on 1 February 2008;
(c) the
respondents are ordered to pay 80% of the costs of the application,
jointly and severally, the one paying the other to
be absolved.’
3. The appellants
are ordered to pay 80% of the costs of the appeal, jointly and
severally, the one paying the other to be absolved;
4. To the extent
necessary, the parties may approach this court, once the amount
referred to in 1 (b) above has been determined,
to make such amount,
an order of this court. Should there be a dispute as to the
determination of the amount, either of the parties
may, on 5 days’
notice to the other, set the matter down for this court, with the aid
of the necessary evidence, to determine
that amount.
T.M. MAKGOKA
JUDGE OF THE HIGH
COURT
I agree
V.V. TLHAPI
JUDGE OF THE HIGH
COURT
I agree
S.P. MOTHLE
JUDGE OF THE HIGH
COURT
DATE OF HEARING
: 5 JUNE 2013
JUDGMENT
DELIVERED : 12 MARCH 2014
FOR THE 1ST &
2ND APPELLANTS : ADV. J VLOK
INSTRUCTED BY
: DREYER & DREYER ATTORNEYS, PRETORIA
FOR THE
RESPONDENT
(CROSS-APPELLANT)
: MR. K. VAN HUYSSTEEN
INSTRUCTED BY
: VAN HUYSSTEEN INC., JOHANNESBURG AND
S. GERBER ATTORNEYS,
PRETORIA