About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Free State High Court, Bloemfontein
SAFLII
>>
Databases
>>
South Africa: Free State High Court, Bloemfontein
>>
2014
>>
[2014] ZAFSHC 130
|
|
Engen Petroleum Limited v Van Loggerenberg N.O. and Another (A110/13) [2014] ZAFSHC 130 (14 August 2014)
FREE
STATE
HIGH COURT, BLOEMFONTEIN
REPUBLIC
OF SOUTH AFRICA
Case
No. : A110/13
In
matter between:
ENGEN
PETROLEUM LIMITED
….....................................................................................
Appellant
and
ROBERT
HOWARD VAN LOGGERENBER N.O
…...................................................
1
st
Respondent
PETRONELLA
FRANCINA VAN LOGGERENBERG N.O
…................................
2
ND
Respondent
Coram:
Van Der Merwe, et C. J. Musi, et Lekale JJJ
HEARD
ON:
9 JUNE 2014
JUDGMENT
BY:
C.J. MUSI, J
DELIVERED
ON:
14 AUGUST 2014
[1]
This is an unopposed appeal against the judgment of a single judge of
this division. The court
a quo
discharged a provisional order of sequestration with costs. The
appellant, being dissatisfied with the order, applied unsuccessfully
for leave to appeal in the court
a quo
.
It subsequently applied, successfully, for leave to appeal at the
Supreme Court of Appeal. The Supreme Court of Appeal granted
it leave
to appeal to a full bench of this court. This appeal is therefore
with the leave of the Supreme Court of Appeal.
[2]
The first and second respondents are trustees of the HJP Trust
(IT1876/1996) (the Trust). The Trust conducted a road
transportation business. During June 2004 the respondents
qua
trustees of the Trust entered into a written agreement, styled an EDC
membership agreement (EDC), with the appellant.
[1]
[3]
In terms of the EDC the appellant, through an approved Bank, made
available a form of credit facility to the Trust for the purpose
of
funding
inter alia
the Trust’s “away from home” diesel purchases at
the appellant’s national dealer network.
[4]
EDC cards were issued to the Trust by the approved Bank on behalf of
the appellant. The scheme worked as follows. The
Trust would
utilise the EDC cards to purchase the appellant’s brand diesel
and other products at various independent retailers
that form part of
the appellant’s national dealer network. The approved
Bank would pay the retailers. The appellant
would in turn settle the
approved Bank or become liable to the approved Bank for settling the
retailer and the Trust became liable
to the appellant for having
settled or having become liable to the approved Bank. The
respondents, in their personal capacities,
also bound themselves as
sureties to the appellant for the debt of the Trust.
[5]
Pursuant to the conclusion of the EDC the Trust commenced purchasing
the appellant’s brand of diesel and lubrication products.
The EDC was valid for a period of 36 months only and expired at the
end of May 2007.
[6]
During 2007 the road transportation business of the Trust was
acquired by the HJP Vervoer CC (the CC). It is not clear how this
happened because the respondents refused to give any information
relating to the take-over. The respondents, in their personal
capacities, are the only members of the CC.
[7]
The CC purchased diesel and lubricants from retailers using the EDC
cards issued to the Trust in terms of the EDC.
[8]
The CC accepted liability for the purchases it made with the EDC
cards issued to the Trust. Resultantly, on 3 February 2011,
it signed
an Acknowledgement of Debt wherein it acknowledged that it owed the
appellant the aggregate liquidated amount of R1 453 690.40.
It was unable to make payments in terms of the acknowledgement of
debt and the appellant successfully applied for its compulsory
Winding-up.
[2]
[9]
Above and beyond the R1 453 690.40 admitted by the CC, the
appellant alleged that the Trust owed it R2 731 175.55
because it
purchased diesel and lubricants in terms of the EDC.
[10]
On 4 May 2011 the appellant’s attorneys and Mr Johan
Oosthuizen, an attorney who represented the respondents in their
various capacities as trustees of the Trust, sureties of the Trust
and members of the CC met to discuss how the debt would be settled.
[11]
On 5 May 2011 the appellant’s attorney recorded what transpired
at the meeting in a letter which was sent to Oosthuizen
as follows:-
“
Dear
Johann(sic)
Re:
ENGEN PETROLEUM LIMITED/ H J P VERVOER
1.
Thank you for having travelled to Durban
yesterday together with your clients’ representatives to meet
with me and mine in
order to explore settlement of this matter.
2.
In order to avoid misunderstandings, so
that we can move forward in a towards settlement constructive manner
(sic), it is necessary
for me to record the salient aspects of our
discussions as follows:
2.1
my client made it perfectly clear that
there is no truth whatsoever in the rumours doing their (sic) rounds
that it was advising
your clients’ creditors that it was in the
process of issuing a Winding-Up Application;
2.2
my client underlined the fact that it had
not ruled out the possibility that it may have to bring such
proceedings, dependent
on the outcome of our meeting, but
it had most certainly not reached such a conclusion prior to our
meeting and more to the point,
it certainly has not held
discussions with any other creditors of your clients;
2.3
according to your clients:-
i)
the Close Corporation is indebted to SARS
in the sum of R5m for unpaid VAT;
ii)
the Trust is indebted to SARS in the sum of
R700k for unpaid VAT;
iii)
your clients’ accountant is
responsible for the aforesaid liabilities as he failed to pay VAT
Output to SARS for the last
12 months;
iv)
consequently the Close Corporation ceded
its book debt to SARS to settle the aforesaid claims against it and
the Trust;
v)
the original transport business of the
Trust ceased some time ago and its sole business became the rental of
motor trucks to the
Close Corporation;
vi)
the Close Corporation’s business
became that of a transporter;
vii)
the Trust and Close Corporation both
stopped trading on 15 March 2011;
viii)
the Trust bought diesel every month from
Engen for use by the trucks of the Close Corporation and the Close
Corporation paid for
the diesel;
ix)
although the Trust (sic) used and paid for
the diesel, it ought not have been invoiced by my client as the Trust
was responsible
for payment;
x)
the Close Corporation is only indebted to
Engen in terms of an AOD and the Trust is indebted to Engen for the
balance of its claim;
and
xi)
your clients’ Mr Van Loggerenberg
intends to take up employment in his father’s newly established
business, which is
also a trucking business in order to sustain
himself.
3.
I do not intend to engage in argument with
you about whether or not your clients’ submissions are sound or
even true.
Prima facie
I must state that I find them to be incredible. Be that as it
may, I intend only to pursue settlement and in this regard
call on
you to let me have your clients’ offer by 15H00 on Monday next
week, as was undertaken by you.
4.
Kindly be adviced that should I not receive
same, I shall reach the conclusion that this matter is outside of the
realms of settlement
in which event my client shall take whatever
steps it deems necessary to protect its interests.”
[12]
On 11 May 2011 Oosthuizen sent an email to the appellant’s
attorney that in part reads as follows:-
“
Manogh,
hope you are doing well. I had a discussion with SARS this
morning again and it seems that we will be able to give
Engen an
amount of round about R900 000 of the debtors of the CC for
payment of the amount owed by the CC and Mr and Me. Van
Loggerenberg
to Engen….”
[13]
On 24 May 2011 Oosthuizen wrote another letter to the appellant
wherein he indicated that the respondents are willing to cede
the net
profit from the sale of their personal immovable properties to the
appellant. He further stated, in the letter, that
“According
to our calculations your client will, in terms of the above
transactions, receive an amount of approximately R1
600 000…
.
Please take note that this settlement offer is made in full and final
settlement of the debt for which Mr and Ms Van Loggerenberg
signed as
sureties for the debt of the HJP Trust. You will therefore
notice that the above properties are registered in their
personal
names and not in the name of HJP Trust.
This step is taken in good faith as neither our client not (sic) Mr
or Ms Van Loggerenberg had or have any intention to cause
your client
to suffer damage…” (My emphasis.)
[14]
In their answering affidavits however, the respondents denied that
the Trust, at any stage, negotiated with the appellant to
pay any
debt. It was also denied that the Trust bought any petroleum products
from the appellant or its retail network after the
EDC expired.
It was further denied that Oosthuizen intimated or offered that the
Trust would pay its indebtedness to the
appellant. According to
the respondents they, i.e. the Trust and the respondents in their
personal capacities endeavoured
to settle the debt of the CC and not
any debt of the Trust. The admissibility of the letters was,
correctly, not challenged by
the respondents. See
LYNN
& MAIN INC v NAIDOO AND ANOTHER
2006 (1) SA 59
(NPD) at para 22 to 30.
[15]
It was the Trust’s case that after the expiration of the EDC in
2007, the CC purchased the appellant’s products
and not it. It
attached invoices wherein the appellant invoiced the CC for petroleum
products supplied to it by the appellant.
The Trust also disputed
that its indebtedness can result from the expired EDC.
[16]
The court
a quo
found that the EDC expired after 36 months and that the CC and not
the Trust did business with the appellant thereafter.
According
to the court
a quo
it
is logical that the Trust could not have been indebted to the
appellant post 2007.
[17]
The court
a quo
also found that it is unclear, from the correspondence between the
attorneys, whether Oosthuizen was acting on behalf of the CC
or the
Trust.
[18]
The court
a quo
further found that because the approved bank issued the EDC cards;
issued statements to the Trust and Trust had to make payments
to the
approved bank, the Trust was therefore not indebted to the appellant.
[19]
Mr Harcourt on behalf of the appellant challenged all the above
mentioned findings of the court
a quo
.
He submitted that the court
a quo
erred
in its findings because the correspondence between the parties
clearly shows that the Trust was indeed a debtor of the appellant.
He further argued that the court
a quo
should have found that the approved bank was an agent of the
appellant.
[20]
The facts of this matter present a few material factual disputes.
The most significant being whether the trust was a
debtor of the
appellant after the expiration of the EDC.
[21]
This being an application for final relief the factual disputes must
be resolved by having regard to infamous and well-known
dictum in
Plascon Evans Paints Ltd v Van
Riebeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A) at 635 C
.
The factual issues must therefore be decided based on the
respondents’ version unless their version is untenable or
far-fetched.
[22]
It is common cause that subsequent to the expiration of the EDC, no
express written or oral agreement was entered into by the
parties.
It is also common cause that subsequent to the expiration of the EDC,
the cards issued to the Trust were used to
purchase diesel and
lubricants from the appellants’ retail network. The same
EDC cards were used prior and subsequent
to the expiration of the EDC
agreement. The first question that arises is what is the status
of the expired EDC? Secondly,
given the facts of this matter,
where there was performance after the expiration of the EDC,
purportedly in terms thereof, whether
the Trust can be held liable
where there was no express agreement.
[23]
With regard to the first question, the EDC agreement was a periodic
contract, i.e. it was only binding during the period of
its
subsistence. It expired and was no more at the end of May
2007. It was therefore terminated by the effluxion of
time.
[24]
After its termination the appellant did not cancel the EDC cards
issued to the Trust. The Trust continued to use the
EDC cards.
The parties continued to conduct themselves as if the EDC was
still in place, although the CC, seemingly unbeknown
to the
appellant, at some stage after the expiration of the EDC, used the
cards for its own purposes.
[25]
Mr Harcourt argued that the EDC has relocated after its expiration
and that we should find that it relocated on a month-to-month
basis.
[26]
Service contracts like leases can relocate into new contracts after
the expiration of the initial contract. The relocation
can be
express or tacit. Whether a tacit contract came into being and what
the terms thereof are is a factual question dependent
on the
surrounding circumstances.
See
Fiat SA v Kolbe Motors
1975 (2) SA 129
(O) at 138
;
Golden Fried Chicken (Pty) Ltd v
Sirad Fast Foods (CC) and Others
2002 (1) SA 822
(SCA)
.
[27]
The surrounding circumstances will assist the court in making the
necessary inferences. What the parties thought is of no moment.
It is
their conduct and the outward manifestation of their thoughts that is
important. We do not have to attempt to delve into
the windowless
inner chambers of their minds to see what they intended. See
Fiat
SA v Kolbe Motors supra
. It had been
said that “the law does not concern itself with the working of
the minds of parties to a contract, but with
the external
manifestation of their minds… if by their acts their minds
seem to have met, the law will, where fraud is not
alleged, look to
their acts and assume that their minds did meet and that they
contracted in accordance with what the parties purport
to accept as a
record of their agreement. This is the only practical way in
which courts of law can determine the terms of
a contract”
South African Railways and Harbours v
National Bank of South Africa Ltd
1924 A.D. 704
at 715
.
There is no allegation of fraud in this matter.
[28]
An inference may be drawn from the surrounding circumstances or the
proved facts in a civil case if it seems to be the more
credible,
likely or acceptable one from amongst several conceivable ones,
unlike in a criminal matter where it must be the only
reasonable
inference. See
Ocean Accident and
Guarantee Corporation Ltd v Kock
1963 (4) SA 147
(AD) at 159D; South
Africa Railways and Harbours v Dhlamini
1967 (2) SA 203
(D) at
207G-H; Marine and Trade Insurance Co. Ltd v Van der Schyff
1972 (1)
SA 26
(AD) at 32D; Govan v Skidmore
1952 (1) SA 732
(N) at 734C
.
[29]
In this matter there was no express agreement. The appellant
and the Trust conducted themselves as if the EDC was
still extant, although it was terminated by effluxion of time.
Their conduct evinces a desire to revive their former contractual
relationship on materially the same terms as existed before that
termination. There is no evidence that the appellant ever
entered into any agreement with the CC. Likewise there is no
evidence that the CC used the Trust’s EDC cards with the
permission of the appellant.
[30]
In my view, the inference to be drawn from the facts of this matter
is that there was a tacit relocation of the material terms
of the
EDC. The tacit agreement is a new agreement and not a
continuation of the old one. See
Golden
Fried Chicken supra at 825 D
.
[31]
Having found that there was a relocation, the next question to
consider is whether it was for a fixed term or on a month-to-month
basis as Mr Harcourt argued. In
Doll House Refreshments
(Pty) Ltd v O’Shea and Others
1957 (1) SA 345
(T) at 348 F-H
it was said:
“
It
is, I think, clear that a relocation after a lease has expired is a
new contract which may be express or tacit. If the reletting
is
express the question which of the terms of the expired lease form
part of the new contract is a question of interpretation as
is
explained in
Webb v Hipkin
1944 A.D 95
.
Where the relocation is tacit, there is a presumption that the
property is relet at the same rent and that those provisions
that are
‘incident to the relation of landlord and tenant’ are
renewed. But provisions that are collateral, independent
of and
not incident to that relation are not presumed to be incorporated in
the new letting.”
[32]
What the law in effect desires to achieve by the implication of the
contract is to give such business efficacy to the transaction
as must
have been intended by both parties who are after all business
people. See The Moorcock
(1889), L.R. 14 P.D 64
at 68.
The implied terms are therefore designed to the needs of the actual
transaction of the parties rather than a notional
reasonable
contract. The acts and conduct of the parties will form the
basis of the implied terms.
[33]
There is no evidence or suggestion, on the facts of this matter, that
the parties intended the relocation to be on a month-to-month
basis.
There is also no evidence that they wanted the agreement to relocate
for three (3) years as the initial one.
On the contrary the new
contract by all accounts went beyond the three year period of the
initial one. In my view, it is
not necessary for us to come to
a definitive finding as to the intended period of the tacit
contract. The period of the contract
is not ‘incident to
the relation’ between the parties. It is collateral and
independent of that relation. It
can therefore be for an indefinite
period too.
[34]
The court
a quo
should have found that a new contract came into being between the
appellant and the Trust after the expiration of the initial one.
In
fact the Trust categorically admitted that it received services from
retailers in terms of the EDC after its expiration.
[35]
The finding of the court
a quo
that it is not clear on whose behalf Oosthuizen was acting, is, with
respect, clearly wrong.
[36]
In the founding affidavit it is clearly stated that on 4 May 2011 the
meeting between representatives of the appellant and
Oosthuizen who
represented the respondents in their several capacities of sureties
of the Trust, trustees of the Trust and members
of the CC was held at
the appellant’s attorney’s offices. This fact was
admitted by the respondents in their
answering affidavits.
[37]
When Oosthuizen made the offers to liquidate the debts of the
respondents in their personal capacities, he could only have
meant
the debts owed to the appellant pursuant to them being sureties for
the Trust’s debts. They are, on the papers before
us, in no
other way indebted to the appellant.
[38]
When Oosthuizen intimated that the respondents would sell their
personal properties and cede the profits therefrom to the appellant
“in full and final settlement of the debt for which Mr and Me
Van Loggerenberg signed as sureties for the debt of the HJP
trust”
he could only do so on behalf of the respondents in their personal
capacities. They cannot be held liable as sureties
if the principal
debtor is not liable at all.
[39]
Those admissions also make plain that the HJP Trust admitted
liability to the appellant. There is no way in which
Oosthuizen,
an attorney, would offer to settle the debt of the Van
Loggerenbergs in their personal capacities, if he was of the view
that the
Trust did not owe the appellant any money. This also
goes to show that the Trust’s version is not only contrived but
also far-fetched and untenable.
[40]
In the letter dated 5 May 2011, written to Oosthuizen, it is clearly
stated that Oosthuizen admitted that the Trust is indebted
to the
appellant because it and not the CC bought the diesel.
Oosthuizen did not respond to this letter setting out the discussions
held at the 4 May 2011 meeting. No reply having been vouchsafed
to this letter what then is the status of its contents? In
Benefit
Cycle Works v Atmore
1927 T.P.D 524
at 530 the question was
correctly, in my view, answered as followed:-
“…
Where
as in this case, negotiations had taken place immediately preceding
the writing of the letter, and the writer then places
on records his
version of what had taken place during the negotiations, and there is
no reply by the other side, then the court
is bound to attach the
greatest importance to that fact.”
[41]
Oosthuizen by not responding to the letter must be held to have
admitted its contents. In fact his actions and communications
subsequent to receipt of the said letter also show that he agreed
with its contents. It is clear that the court a
quo
should have found that Oosthuizen was
acting on behalf of the Trust too when he communicated, in some
instances, and failed to communicate,
in the other instance, with the
appellant.
[42]
I am also of the view that the court
a
quo
erred in finding that the Trust was
not indebted to the appellant because the approved bank issued the
EDC cards and statements
and that the Trust had to pay the money to
the approved bank.
[43]
The appellant’s case is clear. The bank issued the cards
on its behalf. The cards could only be used at identified
independent retailers that formed part of the appellant’s
national dealer network. Whenever an independent retailer
extended credit to the EDC cardholder the bank paid the retailer.
The appellant then became liable to pay the bank the money
that it
paid the retailer. The cardholder would then become liable to
pay the appellant because the appellant had either
paid or is liable
to pay the bank. The arrangement is an atypical one, but its
strangeness does not mean that the cardholder cannot
be liable to the
appellant. It is clear that the approved bank acted as the
appellant’s agent in respect of the Trust, on
the one hand, and
in respect of the retailers on the other. The respondent was
therefore indebted to the appellant.
[44]
The other issue that must be considered is the fact that an invoice
was issued in the name of the CC. It is in my view
of no moment
in whose name the invoice/s were issued because there is a clear and
unambiguous admission and correction to the effect
that the petroleum
products were supplied to the Trust and more importantly that the
invoice/s were erroneously issued in the name
of the CC.
[45]
The Trust, the CC and the respondents in their personal capacities
tendered R1 600 000.00 in full and final settlement of their
indebtedness to the appellant. This constituted an act of insolvency
by
inter alia
the Trust, in terms of
section 8(e)
of the
Insolvency Act 24 of 1936
,
because it was an offer from the Trust to enter into an arrangement
with the appellant in order to be released wholly or partially
from
its debts. It is also clear that the Trust is unable to pay its debts
in the ordinary course. The appellant’s claim
is a liquidated
claim that exceeds fifty pounds. According to the respondents the
Trust’s operations were taken over by the
CC. The Trust
therefore does not have any assets. The Trust not only committed an
act of insolvency, it is also factually insolvent.
In my view the
court
a quo
should have found that a proper case for the confirmation of the
rule
nisi
had been made out. It should
therefore have granted the relief sought.
[46]
I accordingly make the following order:-
a)
The appeal is upheld.
b)
The order of the court
a
quo
is set aside and replaced with the
following:
i.
The provisional order of sequestration is
confirmed.
ii.
Costs to be costs in the sequestration.
c)
The costs of the appeal shall be costs in
the sequestration.
____________
C.J.
MUSI, J
I
agree.
_______________
Van
der Merwe, J
I
agree.
__________
Lekale,J
On behalf of the
Appellant: Adv. Harcourt SC
Instructed
by: Maharaj Attorneys
DURBAN
Correspondent:
Claude Reide Inc
Bloemfontein
On
behalf of the Respondents: No appearance
/ar
[1]
EDC
is an acronym for Engen Diesel Club
[2]
A
final order of liquidation was issued against the CC under case
number 4901/2011.