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[2014] ZAFSHC 33
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Mpumelelo Projects Construction CC v Sasol Wax (Pty) Ltd (720/2007) [2014] ZAFSHC 33 (13 March 2014)
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Case
No. : 720/2007
In
the matter between:-
MPUMELELO
PROJECTS CONSTRUCTION
CC
.....................................................
Plaintiff
and
SASOL
WAX (PTY)
LTD
................................................................................................
Defendant
HEARD
ON:
10 MARCH 2014
JUDGMENT
BY:
RAMPAI, J
DELIVERED
ON:
13 MARCH 2014
[1]
This is an application for leave to appeal. The applicant was
the plaintiff and the respondent the defendant in the main
action.
For the sake of convenience I shall refer to the parties as in
convention. On 23 January 2014 I made an order
whereby I
dismissed the plaintiff’s action with costs, which costs
included the costs consequent upon the employment of two
counsels.
In addition I also ordered the plaintiff to pay the qualifying and
the reservation fees of five expert witnesses.
[2]
Mr Khang, who appeared for the plaintiff, argued that I committed a
number of misdirections in my reasoning which underlined
my
judgment. Accordingly he submitted that there was a reasonable
prospect that a reasonable court with appellate jurisdiction
might
come to a different conclusion.
[3]
Mr Leeuwner, who appeared on behalf of the defendant, differed.
He argued that the judgment against which the plaintiff
sought leave
to appeal, was above any criticism. It was his view that the
judgment was profoundly considered and well-founded.
Accordingly, he supported the judgment in all respects and urged me
to dismiss the application for leave to appeal with costs.
[4]
The application for leave to appeal was directed at specific aspects
of the judgment. The limited extent of the application
is
apparent from the plaintiff’s notice of appeal.
Consequently the defendant’s reply was confined to those
specific matters raised in the plaintiff’s notice of an
application for leave to appeal. I shall now proceed to examine the
plaintiff’s grounds of appeal
seriatim
.
[5]
“
The honourable court erred in
allowing and admitting the defendant’s experts’ evidence
without notices, as required
by the rules.
”
This was the plaintiff’s first ground of appeal.
The required notices
of all expert witnesses were duly given by the defendant. The
plaintiff objected against the notices of the
defendant’s
expert witnesses at the resumption of the trial and before the
defendant adduced evidence. I dismissed the objection
after
consideration of all the evidence.
[6]
Rule 36(9) pertinently vests the trial court with a discretion to
allow expert evidence, even without any notices in terms of
the rule.
Thus, even if there was any technical non-compliance with the rule,
which the defendant denied, I judicially exercised
my discretion and
allowed the expert evidence of the defendant’s witnesses. In my
view the rule allowed me to do so. The
plaintiff failed to allege any
misdirection or error I committed in the exercise of the discretion
entrusted to me.
[7]
“The court has to exercise a judicial discretion in this
regard, favouring the admission of the evidence subject to the
necessary safeguards.” See Harms:
Civil
Procedure in the Superior Courts
, Lexis
Nexis, December 2013 at B-266. That comment is very apposite and
correct.
[8]
My decision to admit the expert evidence tendered by the defendant
cannot be faulted. The plaintiff was not thereby prejudiced.
If there
was any prejudice, the plaintiff was well entitled to recall any
witness, including its own expert witnesses, if any.
However, the
plaintiff elected not to do so. The election not to do so, materially
watered down its argument to the effect that
my admission of the
defendant’s expert evidence constituted a misdirection.
[9]
At the end of the hearing, I invited the legal representatives to
file heads of argument, which they did. The plaintiff explicitly
enumerated the issues which it reckoned I was called upon to decide.
Those issues were listed in paragraph 13 of the plaintiff’s
heads of argument. The alleged erroneous admission of the expert
evidence, tendered by the defendant’s witnesses, was
conspicuously
absent from that list. On behalf of the defendant, Mr
Leeuwner submitted that the belated complaint of the plaintiff about
the
admission of the expert evidence tendered by the defendant was a
frivolous argument.
[10]
“
The honourable court erred by
finding that none of the expertise of the defendant’s experts
was disputed.
” This was the
plaintiff’s second ground of appeal.
I
am certain that I correctly found that the expertise of the
defendant’s expert witnesses was not disputed. It was evident
from the record that the plaintiff did not dispute their expertise.
The following remark by the plaintiff’s attorney
during the
cross-examination of the defendant’s witness, Ms Fritz,
illustrates the point:
“
Mr
Khang: Mam since
you are an expert
in this …..”
See
page 139 in volume 1 of the record.
It
was not put to Ms Fritz or Mr Rossouw, for that matter, that their
expertise was disputed.
[11]
Similarly, the expertise of Mr Louw was also never disputed.
The nearest indication of some obscure denial of the expertise
of the
defendant’s witness was to be found in the cross-examination of
Mr Louw.
“
But
that burning test, because this is what I am going to argue, is more
or less the same as the test of Mr Opt’Hof because
it is just
based on observations.”
See
page 185 column 4 volume 1.
That,
in my view, did not in any sense detract from the expertise of Mr
Louw, the defendant’s witness. Such a tame remark
did not, in
my view, amount to a challenge of the expertise of the defendant’s
witness. By equating the test carried out
by Mr Louw to that carried
out by Mr Opt’Hof, the plaintiff implicitly recognised Mr Louw
as an expert.
[12]
That remote implication of doubt was completely erased by the
attorney of the plaintiff in the further cross-examination of
the
same witness.
“
So
I would argue that the conditions under which he did it was
substantially the same as the condition under which you conducted
your own, because he is
also an expert
in the field.”
See
page 16 column 3 – 6 volume 1 of the record.
This
statement in fact indicated that the expertise of the witness was not
disputed and that, on the contrary, it was implicitly
conceded and
admitted as a given fact. In view of this, it cannot now be
convincingly argued that the expertise of the defendant’s
witness was challenged at the trial.
[13]
The honourable court erred in finding that –
“
Both
parties signed a written contract into which certain standard and
general terms of sale had been incorporated by reference.”
This
was the plaintiff’s third ground of appeal.
It
is so that there was no single document or written contract signed by
both parties, which incorporated the defendant’s
standard
general terms of sale. However it was an undisputed fact that each of
the order confirmations incorporating the general
terms of sale, was
signed by Dr C.S. Chalera, on behalf of the plaintiff. Those two
order forms were prepared by the defendant
and presented to the
plaintiff for signing. Dr Chalera signed them for and on behalf of
the plaintiff.
[14]
The documents so signed at the request of the defendant could
logically be regarded as also having been signed by the defendant.
Those order confirmations made reference to the standard general
terms of sale. Such terms of sale were expressly incorporated
into
the order forms by reference. Granted I made an error by saying that
there was a written contract signed by both parties.
However, any
reliance on lack of the defendant’s signature on the order
confirmations was disingenuous. Both parties treated
the order
confirmations as though they had been signed by both parties.
[15]
The credit application form which Dr C.S. Chalera also signed on
behalf of the plaintiff, similarly incorporated the standard
general
terms of sale by reference. Those terms of sales were expressly
incorporated into the credit application signed for and
on behalf of
the plaintiff. Those terms had no bearing on the memorandum of
understanding at all. The contention that the plaintiff
thought that
those terms of sales referred to the memorandum of understanding and
not to the credit agreement, failed to impress
me. Accordingly, there
were at least two documents signed by Dr C.S. Chalera on behalf of
the plaintiff whereby the plaintiff accepted
that the standard
general terms of sales were applicable and binding on the plaintiff
as the purchaser of the defendant’s
product.
[16]
The honourable court erred in finding
that –
“
Defendant
conclusively proved that the plaintiff received the attachment of a
document titled Standard General Terms of Sale.”
This
was the plaintiff’s fourth ground of appeal.
The
document in which the standard general terms of sale were embodied,
was attached to the defendant’s email, together with
another
document which was completed and signed by the plaintiff’s Dr
C.S. Chalera. One of the two attachments was the credit
application
form to which I have already referred. Those documents were attached
to one and the same email. The email was
exhibited in court for
all to see. It was undisputed that Dr Chalera received the email,
downloaded the credit application form,
printed it, signed it and
faxed it back to the defendant’s employee, Ms Cawood.
[17]
I found that it was unlikely that Dr Chalera received the attached
credit application form, but not the standard general terms
of sale
which, according to the heading of the email, were also attached.
It was significant to note that notwithstanding
the email heading, Dr
Chalera never pointed out to the defendant that there was only one
document and not two attached to the email.
[18]
At paragraph [21] of the judgment I said the following about this
particular ground of appeal:
“…
it
can be objectively deduced from the proven facts that it appeared
more probable than not that Dr Chalera received such a document
on
behalf of the plaintiff; that Dr Chalera’s undisputed actual
receipt, completion, signing and ultimate faxing of the credit
application form, which was also attached to the same email militated
against his denial. In coming to this conclusion I am fortified
by
the fact that although Dr Chalera initially denied that he actually
received the email itself, he later admitted he in fact
did.”
In
the circumstances I am not persuaded that I have misdirected myself
in coming to that conclusion.
[19]
The court
a
quo
erred in finding that –
“
The
samples of the product were not supplied to the plaintiff for the
purpose of marketing.”
That
was the fifth ground of appeal.
The
evidence relating to the purpose for which the samples were supplied
to the plaintiff, was undisputable if not common cause.
I found that
the samples were supplied by the defendant to the plaintiff for the
purpose of testing the product and not for the
purpose of marketing
it. However, according to the plaintiff’s own witnesses, the
product was sold to them straight away.
They reacted angrily towards
Dr Chalera, because they believed he had sold them the product of a
very poor quality.
[20]
It was a hollow argument to say a distinction had to be made between
testing the product, on the one hand, and testing the
market, on the
other hand. In my view there was no fundamental distinction.
The testing entailed the supply of the product
to the targeted end
consumers in order to gauge or ascertain whether they would react
positively or unfavourably to the use of
the product. Such a
commercial exercise had nothing to do with the chemical or scientific
analysis of the product.
[21]
At paragraph [35] of the judgment I dealt with the matter as follows:
“…
the
plaintiff approached the defendant and proposed purchasing and
reselling the latter’s product. The defendant gave the
plaintiff ample samples of the product to enable the plaintiff to
test the market. The plaintiff did so and later returned for
further
supplies. The defendant then required the plaintiff to apply for
credit…”
[22]
I may add that the first samples were provided by the defendant to
the plaintiff free of charge. However, the plaintiff did
not freely
test the market or the product. When the plaintiff returned to the
defendant for further supplies of the product, the
defendant no
longer wanted to supply such samples free of charge, which was why
the defendant required the plaintiff to apply for
credit. By doing
so, the defendant did not thereby endorse the samples that were
further provided to the plaintiff as being suitable
for the purpose
for which the plaintiff wanted them.
[23]
Although the plaintiff had to pay for those samples, the purpose for
which the defendant supplied the samples to the plaintiff
did not
change. It remained the same. The purpose was still aimed
at testing the consumer market and not commercially
selling the
samples for a profit. In the light of the aforegoing I am not
persuaded that I erred in finding that the samples
of the products
were not supplied to the plaintiff for the purpose of marketing.
[24]
The honourable court erred in finding
that –
“
The
plaintiff failed to prove the misrepresentation and/or fact it relied
upon.”
This
was the sixth ground of appeal.
It
remains my firm view that, on the evidence, I correctly found no
misrepresentation in respect of the product was made by the
defendant. My finding was materially supported by the evidence of Dr
Chalera when he said:
“…
when
I proposed to Sasol Wax that I think, I personally tested this
product and I think it is a product that is going to be accepted
in
the market… let’s test this market and see how the
response of the market is going to be. The response I got was
that if
I think the product can work and it is my responsibility to buy the
product on my own and test the market.”
[25]
The aforegoing passage demonstrated, without any doubt, that the
defendant did not endorse the product as being a marketable
brand of
illuminating paraffin and did not represent to the plaintiff that the
product he had tested was suitable for the purpose
of being used as
domestic illuminating paraffin. The defendant did not make such a
representation on Dr Chalera’s own evidence.
“
The
response I got was that if I think the product can work and it was my
responsibility to buy the product on my own and test the
market.”
The
emphasis I provided clearly indicated that the defendant left it to
the plaintiff to decide whether the product could work for
the
commercial purpose for which he wanted to market it.
[26]
Evidently the plaintiff was not induced or misled by the defendant to
purchase or market the product. The responsibility of
making the
decision whether the product was suitable for the purpose of
commercially exploiting it, rested squarely on Dr Chalera’s
shoulders. That conclusion is fortified by Dr Chalera’s own
say-so, as outlined and analysed in the aforegoing paragraph.
I am
not persuaded that the conclusion I reached was incorrect. It seemed
to me that Mr Leeuwner was correct in saying that that
conclusion was
undoubtedly correct.
[27]
The honourable court should have found
that –
“
The
memorandum of understanding transmuted into a supply agreement
…
..”
This
was the seventh ground of the appeal.
I
was at pains to deal with the transmutation as a legal concept and
otherwise. I believe that I properly and fully discussed the
concept. I drew a distinction between the implied meaning of
such a term, as being a suspensive condition, on the one hand,
or
simply as a
pactum de contrahendo
,
on the other hand.
I
found that the suspensive condition must contain within itself the
terms and meaning of the condition. The transmutation upon
development of the business plan required separate agreement on
further terms and conditions as would be contained in the envisaged
business plan. In the circumstances I came to the conclusion
that the transmutation condition relied upon was but a
pactum de
contrahendo
and not a suspensive condition.
[28]
Mr Leeuwner contended that my decision in fact and in law on the
point of the alleged transmutation was unassailable.
At
paragraph [41] of the judgment I dealt with the point at length.
A
condition which was dependent on another separate agreement to be
concluded was not enforceable.
“…
because
of the absolute discretion vested in the parties to agree or
disagree.”
In
the final analysis I came to the conclusion that the memorandum of
understanding as such could not be regarded as a supply agreement
because of its vagueness as more fully explained at paragraph [42] of
the judgment. In my view the memorandum of understanding
was never
transmuted into a supply agreement. There were simply too many
unknown factors to validate such a transition.
[29]
The honourable court should have found
that –
“
the
defendant misrepresented to the plaintiff that the product met the
legal requirements…”
This
was the eighth ground of appeal.
The
purported ground of appeal presumably refers to the definition of
illuminating paraffin in the Petroleum Product Act. The contention
of
the plaintiff was founded on a misconception of the provisions and
the purpose of the particular statute. Paraffin with
a
composition that does not comply with the composition of the product
defined as illuminating paraffin in the particular statute,
is not
per se
a
prohibited substance, as the plaintiff would have it. It
entailed that it was not the statutorily defined brand of
illuminating
paraffin. Simply put – it might nonetheless still
be illuminating paraffin, but not illuminating brand of paraffin as
statutorily
and chemically defined paraffin. It was not demonised or
banned by law. The statute simply does not apply to such a product.
That
is all.
[30]
The honourable court should have found
that –
“
No
agreement was signed between the parties other than the MOU.”
That
was the ninth ground of appeal.
The
argument had no substance. The fact of the matter was that pertinent
order confirmations were signed by the plaintiff’s
agent.
Moreover, the credit application was also similarly signed.
Although none of the two documents were signed by the
defendant and
notwithstanding lack of the defendant’s signature on them, the
defendant gave effect to them and regarded them
as binding on both
parties just as the plaintiff did. It was never the plaintiff’s
case that because the order confirmations
and the credit application
were not signed by the plaintiff, they were therefore of no legal
force and effect in law. This
ground of the plaintiff’s
appeal was spurious, as Mr Leeuwner described it.
[31]
The plaintiff also complained about the evidence relating to annexure
x. The plaintiff complained that the document was
submitted
after the closure of the plaintiff’s case and that the
plaintiff was not given an opportunity to commend on it.
As a
result of that the plaintiff objected to the use of the document and
disputed its contents. See the plaintiff’s
supplementary
heads of argument.
[32]
Obviously that argument referred to the email sent by Ms Cawood to Dr
Chalera. The plaintiff raised the objection against
that
email. However the evidence of Ms Cawood in this regard was
fully canvassed in cross-examination by the plaintiff’s
counsel. The plaintiff was properly informed of this damning
evidence and the defendant’s intention to adduce such
evidence. It was put to Dr Chalera during his evidence.
Mr Ellis, counsel for the defendant, said the following:
“
Sir
evidence will be presented that the credit application was e-mailed
to yourself with the Standard Terms and Conditions of Sale...”
In
my view the plaintiff’s argument about the missing icon was a
proverbial storm in a tea cup.
[33]
It can therefore be clearly seen that the objection and complaint
now raised by the plaintiff during its application
for leave to
appeal, was without any merit. I do not intend to deal with the
plaintiff’s supplementary heads of argument
any further.
The gist of the points made in them has already been dealt with
earlier in this judgment. Such points
do not deserve any
further attention.
[34]
Mr Leeuwner argued that as regards the points raised from paragraph 7
onwards in the supplementary heads of argument the submission
of the
plaintiff were not supported by the evidence and that much of the
reference to evidence was factually incorrect and not
in accordance
with the record. Indeed, Mr Leeuwner’s submission was correct.
It will serve no useful purpose to refer
to the errors contained in
the plaintiff’s supplementary heads of argument.
[35]
I now turn to the prospects of success if the matter were to be
allowed to go on appeal. In my view it is not necessary
to
elaborate upon the complete dearth of the prospects of success on
appeal. I pause to point out, however, that the plaintiff
did
not take issue with my judgment pertaining to its failure to prove a
legal duty of care to prevent the incurrence of pure economic
loss.
I dealt with that topic from paragraph [32] to [34] of the judgment.
I have nothing more to add.
[36]
Furthermore the plaintiff did not take issue with my judgment
concerning the composition and basis of the calculation of
recoverable
damages. I found, and I want to believe that I
correctly did so, that the plaintiff’s claim was founded on
nothing
but the true delictual foundation.
Vide
paragraph [10] of the judgment. In that regard my judgment
entailed that even if the complaints raised by the plaintiff against
my judgment, were all sustained, then the damages claimed by the
plaintiff were not recoverable in law and that the plaintiff had
failed to prove any damages at all.
The
plaintiff should have proven its damages based on the position in
which it would have been had the alleged misstatement not
been made.
That the plaintiff failed to do.
Vide
paragraph [52] of the judgment.
That being the case, the plaintiff failed to prove damages. On
that score alone the
plaintiff’s claim cannot, in any event,
succeed.
[37]
Having considered all the argument presented to me for consideration,
I am not persuaded that I have committed any appealable
and material
misdirection either on any matter of fact or on any question of law.
As I see it Mr Leeuwner was correct in
his principal submission, that
there is no reasonable prospect that another court might come to a
different conclusion. Accordingly
I am not inclined to grant
the relief sought.
[38]
There remains one more aspect to comment on. Professor Philip
Lloyd and Mr Justus van Wyk were among the experts the
defendant had
intended calling. However, the two were not finally called.
In view of that the defendant has graciously
and on its own accord
undertaken to waive its right to recover the costs, which I
erroneously awarded in its favour in respect
of those two expert
witnesses. I am indebted to Mr Leeuwner and his clients for
their responsible attitude.
[39]
Accordingly I make the following order:
39.1 The plaintiff
is refused leave to appeal against the judgment.
39.2 The plaintiff
is directed to pay the costs relating to this application for leave
to appeal.
______________
M.
H. RAMPAI, J
On
behalf of the plaintiff: Attorney M. Khang
Instructed
by:
Mphafi
Khang Inc
BLOEMFONTEIN
On
behalf of the defendant: Adv P.G. Leeuwner
Instructed
by:
Cliffe
Dekker Hofmeyer Inc
c/o
Hill, McHardy & Herbst Inc
BLOEMFONTEIN