About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2013
>>
[2013] ZAGPPHC 182
|
|
Ambasaam CC v B Braun Medical (Pty) Ltd (71774/2011) [2013] ZAGPPHC 182 (3 July 2013)
NOT
REPORTABLE
IN THE NORTH GAUTENG HIGH COURT,
PRETORIA
(REPUBLIC OF SOUTH AFRICA)
CASE No. 71774/2011
DATE:03/07/2013
In
the matter between:-
AMBASAAM
CC
.......................................................................
Plaintiff
and
B
BRAUN MEDICAL (PTY)
LTD
..............................................
Defendant
JUDGMENT
Van
der Byl AJ:- Introduction
[1]
This is an action, based on a written carriage agreement (“the
agreement’), in which the Plaintiff claims, together
with
interest and costs of suit, payment by the Defendant to the Plaintiff
of two amounts, namely, an amount of R15 170 431,59
and an amount of
R9 483 980,35.
[2]
The two claims relate to -
(a)
an alleged repudiation of the agreement as concluded originally
between the parties on 8 December 2008 relating to certain vehicles
specified in the agreement and which would have endured for a period
of five years until the end of August 2013;
(b)
an alleged repudiation of an amendment allegedly concluded between
the parties on or about October 2009 relating to two 8 ton
trucks in
addition to the vehicles referred to in the agreement as originally
concluded which would allegedly have endured for
a further five year
period until the end of October 2014.
[3]
The Defendant filed a counterclaim (claim 1) for rectification of the
agreement in certain respects (which claim was, so I was
informed
from the bar by counsel acting on behalf of the Defendant at the end
of the trial, not pursued) and a counterclaim (claim
2) for payment
by the Plaintiff to the Defendant of an amount of R120 000, together
with interest.
[4]
By agreement between the parties I ordered that the issues pertaining
to the merits and the quantum in relation to the main
claim and, in
so far as it may be necessary, the counterclaim in terms of Rule
33(4), be separated, that the action to proceed
in relation to the
merits and that the issues pertaining to the quantum, if need be, be
stayed until such time as the issues on
the merits have been finally
adjudicated.
[5]
On behalf of the Plaintiff I heard the evidence of Mr. Morkel, being
the only member of the Plaintiff, and the evidence of Mr.
Armand
Junkuhn, who was previously employed as the responsible pharmacist by
the Defendant whilst the only witness who testified
on behalf of the
Defendant was Mr. Scottt Farrell who is employed by the Defendant as
its Chief Financial Manager.
[6]
It is common cause that the parties agreed in' terms of the agreement
as originally concluded on 8 December 2008, in so far
as those terms
are relevant for present purposes -
(a)
that the Plaintiff would render carriage services in respect of the
Defendant’s products, consisting mainly of medical
products, at
certain tariffs and fees payable to the Plaintiff for a period of
five years as from 15 September 2008 (clause 2,
read with clause 3,
of, and paragraph 1.1.1 of Schedule A to, the agreement, Pleadings
bundle p. 16);
(b)
that such services will be rendered by the Plaintiff -
(i)
in the so-called first geographical area, being the area consisting
of the former PVW area, by utilizing vehicles suitably equipped
for
the task
which
are referred to in clause 3.1.1 of, and Scheduie B to, the agreement
(or, perhaps, subject to what will be indicated below,
paragraph 2 of
Schedule A to the agreement);
(ii)
in the so-called second geographical area, being all areas outside
the first geographical area, but within the borders of the
Republic
of South Africa, where the Plaintiff tends to collections and
deliveries in the normal course of business, by utilizing
vehicles
suitably equipped for the task referred to in clause 3.1.2 of the
agreement, being vehicles other than the vehicles described
in
Schedule B to the agreement (or, as I have already
indicated,’perhaps, subject to what will be indicated below,
paragraph
2 of Schedule A to the agreement);
(iii)
by utilizing the services of a reputable third party carrier who
offers preferential rates to the Plaintiff to any location
situated
in the third and fourth geographical areas, being, in the case of the
third geographical area, all areas outside the first
and second
geographical areas which are still within the borders of the Republic
of South Africa and, in the case of the fourth
geographical area, the
neighbouring states of the Republic, in circumstances where it will
be deemed that such services were rendered
by the Plaintiff and it
should not be excused from any obligations under the agreement
(clause 3.1.3 of the agreement);
(c)
that the Plaintiff would provide vehicles, defined in Schedule B to
the
Agreement
(or, as already indicated, perhaps, subject to what will be indicated
below, paragraph 2 of Schedule A to the agreement),
for the exclusive
servicing of the Defendant during office hours and that such vehicles
may not be used inside or outside business
hours for any purpose
other than to service the needs of the Defendant (clause 3.2.1 of the
agreement);
(d)
that the Plaintiff would ensure that its drivers, assistant drivers
and dispatch managers are familiar with the Defendant’s
code of
conduct, purportedly annexed to the agreement as Schedule C (clause
3.2.11 of the agreement),
(e)
that the Defendant was entitled -
(i)
to require in its sole discretion the Plaintiff to supply an
additional vehicle or vehicles “with similar specifications
as
those vehicle already described in Schedule B hereto” (clause
4.1 of the agreement;
(ii)
to reduce the number of vehicles by giving the Plaintiff two calendar
months’ notice of such reduction (clause 4.5 of
the agreement);
(f)
that -
(i)
the Defendant shall bear the risk in, and to, the consignment whilst
in transit in excess of R120 000 and shall be entitled
to recover any
loss or damage to any consignment to the value of R120 000 from the
Plaintiff,
no
matter the cause of damage (clause 5.1, 5.2 and 5.3 of the
agreement);
(ii)
the Plaintiff shaii insure the vehicles for all risks and take out
public liability insurance in respect of the services and
shall make
copies of such insurance policies and proof of payment of premiums
available to the Defendant for inspection at request
(clause 5.4 of
the agreement);
(g)
that the Plaintiff shall ensure that each of its employees who are
exposed to the Defendant’s confidential information
to sign a
confidential undertaking, referring apparently to clause 8.1,
“similar to the one contained in the agreement' (clause
8.2.3
of the agreement);
(h)
that the parties are entitled to cancel the agreement in the event of
certain occurrences specified in clause 9 of the agreement.
[7]
The annexures referred to in the agreemsnt as Schedule B and Schedule
C seem not to have been annexed to the agreement, but,
as far as
Schedule B is concerned, it became clear from the evidence that the
parties regarded the vehicles referred to in paragraphs
2.1.1, 2.1.2
and 2.1.3 of Schedule A to the agreement as the vehicles envisaged in
clause 3.2.1 of the agreement (to which I will
refer in more detail
below).
[8]
According to the Plaintiff the parties on or about October 2009
concluded, as is
apparent
from two e-mails dated 20 and 29 October 2009 (Trial bundle, volume
1, pp. 1 and 4) and an addendum referred to as “Annexure
D"
(Trial bundle, volume 1, p. 6) forwarded to the Defendant’s Mr.
Scott Farrell by way of the e-mail dated 29 October
2009 in terms of
which the parties agreed (or purportedly agreed) that the Plaintiff
would, fora period of five years ending October
2014, make available
to the Defendant, in addition to the services and vehicles provided
in the agreement, two additional 8 ton
trucks at an additional charge
of R196 653 per month (ie., R98 326.50 per truck per month)
(excluding VAT) to support the Defendant’s
“growing renal
market outside the PWV area in geographical area 2”.
[9]
It would appear that the addition of these trucks was duly
implemented and the Plaintiff was paid accordingly (see, eg: Trial
bundle, volume 2, p. 142.1 and 143).
[10]
It would, furthermore, appear that there was a movement from the side
of the Defendant to implement some measures to cut the
Defendant’s
costs by 20 per cent which had given rise to various meetings and
discussions between representatives of the
Defendant and the
Plaintiff until 14 December 2010. At a meeting on this date between
Mr. Morkei and Mr Berent, the Chief Executive
Officer of the
Defendant, and Mr. Farrell, Mr. Morkei was informed that the
Defendant decided to invoke its rights in terms of
the agreement to
reduce the number of vehicles, referring apparently to the aforesaid
two 8 ton trucks, utilized in terms of the
agreement.
[11]
During March 2011 the Defendant received two letters dated 9 March
2011 and 14 March 2011 (Pleadings bundle, pp. 49 and 58)
from the
Defendant’s attorneys in
which
-
(a)
it was indicated to the Plaintiff that they were acting on behalf of
the Defendant and that all future correspondence and communications
should be addressed and directed to their offices and not to the
Defendant (para 1 of the letter of 9 March 2011, Pleadings bundle,
p.
50);
(b)
the Plaintiff was notified, purportedly in terms of clause 9.2 of the
agreement, of certain alleged breaches of the agreement
and certain
demands were made to the Plaintiff (paras 3 and 4 of the letter of 9
March 2011, Pleadings bundle, p. 52).
[12]
As is apparent from, particularly, the letter dated 9 March 2011, it
is contended
that
the Plaintiff breached the agreement in the following respects,
namely -
(a)
that the Plaintiff, through its managing member, Mr. Morkel, in the
course of the second half of 2010 utilized one of the vehicles
referred to in clause 3.2.1 of the agreement “for his personal
use” (para 3.1 of the letter dated 9 March 2011, Pleadings
bundle p. 52);
(b)
that during or about December 2010 an employee of the Plaintiff, one
Elmond, breached the Defendant’s code of conduct
contrary to
the provisions of clause
3.2.11
of the agreement, by, inter alia, arranging for certain of the
Defendant’s products to be delivered at certain addresses
without following the requisite procedures and that the Defendant
refused the said Elmond entry to its premises, but that the Plaintiff
has, however, indicated that it wishes Elmond to be allowed back onto
the Defendant’s premises (para 3.2 of the aforesaid
letter,
Pleadings bundle p. 52);
(c)
that the Plaintiff failed or refused, contrary to the provisions of
clause 5.3 of the agreement, to make payment in the amount
of R120
000 to the Defendant which amount pertains to damages suffered by the
Defendant in relation to an Orthopilot machine which
was damaged
beyond repair whilst being transported by the Plaintiff or one of its
sub-contractors in terms of the agreement (para
3.3 of the aforesaid
letter, Pleadings bundle p. 52);
(d)
that the Plaintiff failed or refused, contrary to the provisions of
clause 5.4 of the agreement, to supply the Defendant with
copies of
insurance policies and proof of payment of premiums relating to such
policies despite the Defendant having requested
the Plaintiff to
supply same to it (paras 3.4 and 3.5 of the aforesaid letter,
Pleadings bundle p. 5; ;
(e)
that the Plaintiff failed or refused, contrary to the provisions of
clause 8.2.3 of the agreement, io supply the Defendant with
the
confidentiality agreements that the Plaintiff was supposed to
conclude with its employees (para 3.6 of the aforesaid letter,
Pleadings bundle p. 53);
(f)
that the Plaintiff, through its Mr Morkei, during February / March
2011
communicated
to certain of the Defendant’s employees with a view of
convincing such employees of the veracity of his allegations
that the
Plaintiff has the exclusive right to tend to delivery of Defendant’s
products within the first geographical area
and that no other carrier
may be utilized for such purposes (para 3.7 of the aforesaid letter,
Pleadings bundle p. 53);
(g)
that the Plaintiff, through its Mr. Morkei, placed sustained pressure
upon the Defendant to sign a revised version of the agreement
without
focussing the Defendant’s attention on all the relevant
amendments and without declaring the practical impact which
such
amendments will have (para 3.8 of the aforesaid letter, Pleadings
bundle p. 53);
(h)
that such amendments attempted to limit its duties in terms of the
agreement and to revoke certain of the Defendant’s
rights
granted to the Defendant in terms of clause 4.5 of the agreement
(para 3.9 of the aforesaid letter, , Pleadings bundle p.
53).
[13]
In consequence of these alleged breaches, it was demanded from the
Plaintiff
(para
4 of the aforesaid letter, Pleadings bundle pp. 53 to 56) -
(a)
to pay within 7 days as from the date of the letter an amount of R120
000 into the banking account of the Defendant’s
attorneys (para
4.1);
(b)
to so deliver to the Defendant ail insurance policy documents in
terms of which
every
vehicle referred to in the agreement has been insured and in terms of
which the Plaintiff took out public insurance liability
and proof of
payment of the premiums relating to such policies (para 4.2);
(c)
to so deliver to the Defendant all written confidential agreements
entered into by the Plaintiff with its employees (paras 4.3,
4.4,
4.5, 4.6 and 4.7);
(d)
to so comply with the provisions of clause 14.6 of the agreement by,
inter alia -
(i)
ensuring, and put in place effective measures that the vehicles in
question be utilized solely for the Defendant’s purposes
and
that such vehicles comply with the specifications and requirements
set out in the agreement;
(ii)
respecting the Defendant’s refusal of entry by the Plaintiff’s
employees who breached the Defendant’s code
of conduct to its
premises and to put into place practical measures to ensure its
compliance with its duties in this regard;
(iii)
desisting from attempting to misinform the Defendant’s
employees in relation to, inter alia, the Plaintiff’s right
to
be exclusively utilized by the Defendant as a courier in the first
geographical area;
(iv)
desisting from attempting to circumvent its duties by way of
suggesting the urgent signature by the Defendant of documents
prepared by or on behalf of the Plaintiff.
(para
4.8)
[14]
The concluding paragraph of the letter (Pleadings bundle, para 5, p.
57) reads as follows:
“
Kindly
note that our client shall proceed to cancel the AOC without further
notice to Ambasaam cc and to claim damages from Ambasaam
cc, in the
event that Ambasaam cc does not timeously adhere to the
aforementioned demand".
[15]
On 16 March 2011 the Plaintiff, through its attorneys, addressed a
letter to the Plaintiff’s attorneys (Pleadings bundle,
p. 65)
denying in effect the alleged breaches and indicating that the
Plaintiff regards the Defendant’s actions as actions
of
repudiation of the agreement and afforded the Plaintiff time until 1
April 2011 to withdraw unconditionally all the allegations
and
demands made in the letters of 9 and 14 March 2011 and indicated that
should the Defendant not avail itself of this opportunity
the
Defendant will accept the repudiation and regard the agreement as
cancelled
[16]
On 25 March 2011 the Defendant in writing (Pleadings bundle, p. 69)
indicated that it is not prepared to withdraw any allegation
or
demand it made.
[17]
The Plaintiff, thereupon, instituted this action against the
Defendant indicating that the allegations contained in the respective
letters are all untrue, unfounded and of no substance (paragraph 12
of Particulars of Claim, Pleadings bundle, p. 8) and
constituted
a breach of the agreement by having levelled false allegations and
accusations against the Plaintiff “and indeed
repudiated the
agreement' (paragraph 19 of Particulars of Claim, Pleadings bundle,
p. 10).
[18]
These alleged breaches are echoed, perhaps, as I will point out
below, in certain respects in more detail and sometimes in
a
different context, in the Defendant’s Plea (para 6 of
Defendant’s Plea, Pleadings bundle, p. 86).
[19]
In view of the aforegoing the real issue between the parties which I
am called upon to consider and pronounce upon is the
question whether
or not, regard being had, particularly, to the letters dated 9 and 14
March 2011 addressed by the Defendant’s
attorneys to the
Plaintiff, the Defendant repudiated the agreement and the aforesaid
addendum and, if so, whether the Plaintiff
accepted the repudiation
so that it was, therefore, entitled to cancel the agreement and
addendum.
[20]
This issue calls at first for a consideration of the legal principles
relating to the doctrine of repudiation.
Relevant
legal principles relating to the doctrine of repudiation
[21]
In Nash v Golden Dumps (Pty) Ltd
1985 (3) SA 1
(A) the following is
said in this regard at 22D:
“
Where
one party to a contract, without lawful grounds, indicates to the
other party in words or by conduct a deliberate and unequivocal
intention no longer to be bound by the contract, he is said to
"repudiate" the contract.... Where that happens, the other
party to the contract may elect to accept the repudiation and rescind
the contract. If he does so, the contract comes to an end
upon
communication of his acceptance of repudiation and rescission to the
party who has repudiated.’’
[22]
Referring to this passage from the Nash case, supra, Nienaber JA in
Datacolor
International (Pty) Ltd v Intamarket
(Pty) Ltd
[2000] ZASCA 82
;
2001 (2) SA 284
(SCA) indicated at
294A
the following -
(a)
that this is the conventional exposition of the operation of the
doctrine of repudiation leading to rescission, with its emphasis
on
the guilty party's intention and the innocent party's acceptance and
that the test for repudiation is not subjective but objective
(at
294B),
(b)
that the emphasis is not on the repudiating party's state of mind, on
what he subjectively intended, but on what someone in
the position of
the innocent party would think he intended to do and that repudiation
is accordingly not a matter of intention,
it is a matter of
perception and the perception is that of a reasonable person placed
in the position of the aggrieved party concluding
that proper
performance (in accordance with a true interpretation of the
agreement) will not be forthcoming (294F);
(c)
that as such a repudiatory breach may be typified as an intimation by
or on behalf of the repudiating party, by word or conduct
and without
lawful excuse, that all or some of the obligations arising from the
agreement will not be performed according to their
true tenor (at
294H)\
(d)
that repudiation is “a serious matter3’ requiring anxious
consideration and - because parties must be assumed to
be predisposed
to respect rather than to disregard their contractual commitments -
not lightly to be presumed (at 294J);
(e)
that the conduct from which the inference of impending non- or
malperformance is to be drawn must be clearcut and unequivocal,
ie
not equally consistent with any other feasible hypothesis (at 295C).
[23]
I can now against the background of these principles consider
seriatim the merits of each of the alleged breaches according
to the
evidence adduced by or on behalf of the parties on both sides.
[24]
I prefer to do so in the order they have been dealt with in the
Defendant’s Plea, albeit an order differing from the
order they
were dealt with in the letter of 9 March 2011.
Firstly,
the damage to or loss of the Orthopilot machine (para 6.2.1 of the
Piea, Pleadings bundle, p. 86 and para 3.3 of the letter
of 9 March
2011, Pleadings bundle p. 52) which is also the subject matter of
claim 2 of the counterclaim
[25]
As is apparent from the Defendant’s Plea, it is the contention
-
(a)
that during the course of the year 2010 this machine, being the
property of the
Defendant
to the value of R1 million, was damaged beyond repair whilst being
transported by a third party carrier (the allegation,
as is apparent
from the letter of 9 March 2011, that it was transported by the
Plaintiff was not persisted with);
(b)
that upon or about 4 March 2011 (Trial bundle, volume 1, p. 33) the
Defendant required the Plaintiff to make payment in the
amount of
R120 000 in terms of clause 3.1.3, read with clause 5.3 of the
agreement; and
(c)
that the Plaintiff, despite its obligations, failed or refused to
make such payment to the Plaintiff.
[26]
In order to understand the evidence in proper context, I need to
refer to the
provisions
of clauses 3.1.3 and 5 of the agreement which read as follows:
“
3.1
For the duration of the agreement, the (Plaintiff) shall:
3.1.3
by utilising the services of a reputable third party carrier/s who
offers preferential rates to the (Plaintiff), take delivery
of the
consignment, designated by the (Defendant) for carriage, at any time
during business hours from the warehouse, and deliver
same to any
location situated in the third and fourth geographical areas, it
shall be deemed as if the (Plaintiff) personally tended
to such
deliveries, and the (Plaintiff) shall not be excused from any of its
obligations hereunder by virtue of the fact that certain
events
transpired whilst the consignment was under the control of a third
party carrier.’’]
"5.1
Subject to the provisions detailed below, the (Defendant) shall
bear
the risk in and to the consignment whilst in transit.
5.2
The (Defendant) shall take all necessary measures for the protection
of the consignment including insurance thereof against
all risk for
loss, damage or destruction and shall be liable for all risk in
excess of R120 000...
5.3
The (Defendant) shall insure all risk in respect of the consignment
in transit at its own cost, but shall be entitled to recover
any loss
or damage to any consignment to the value of R120 000... from the
(Plaintiff), no matter the cause of damage.
5.4
The (Plaintiff) shall insure the vehicles for all risks and take out
public liability insurance in respect of the services at
its costs
and shall make copies of such insurance policies and proof of payment
of premiums available to the (Defendant) for inspection
on request.”.
[27]
In my view, upon a proper interpretation of these provisions, it is
the Plaintiffs prerogative to obtain and utilise the services
of a
third party carrier offering preferential rates to the Plaintiff,
that being the reason why it is deemed that the Plaintiff
tended
personally to any deliveries made by such third party carrier and why
the Plaintiff is held liable in terms of clause 5.3
for any loss or
damage to any consignment to the value of R120 000 “no matter
the cause" and no matter when such loss
or damage occurred
whilst the consignment was conveyed by either the Plaintiff or any of
its third party carriers.
[28]
The uncontested evidence of Mr. Morkei shows that in the
implementation of this clause a carrier known as Orion was one of
the
Plaintiffs third party carriers utilised in the execution of the
agreement, particularly, clause 3.1.3 of the agreement. The
procedure
followed was that Orion would invoice the Plaintiff, whereupon, the
invoice was submitted to the Defendant. After the
Defendant paid the
Plaintiff the Plaintiff in turn paid Orion.
[29]
In response to the allegations made in this particular paragraph of
the
Defendant’s
Plea Mr Morkel testified -
(a)
that the incident pertaining to the Orthopilot machine already
occurred during the latter part of October 2010;
(b)
that the Plaintiff was not liable for the amount of R120 000 claimed
because the carriage of the machine was not governed by
the agreement
because, as opposed to the provisions of clause 3.1.3 of the
agreement, the Defendant instructed Orion directly to
convey the
machine;
(c)
that the Plaintiff in any event had specific dedicated machines for
the carriage of sensitive machines like the Orthopilot machine;
(d)
that the Orthopilot machine went missing whilst conveyed between Port
Elizabeth and Johannesburg by a carrier, despite efforts
by Mr.
Morkel to arrange for the Plaintiff itself for the transportation of
the machine, not contracted by the Plaintiff, but one
contracted by
Orion and one over which the Plaintiff had no control;
(e)
that it did not receive any invoice from Orion for this specific
carriage and it also did not include any amount for the carriage
of
the machine from Port Elizabeth to Johannesburg in any invoice
submitted to the Defendant;
(f)
that the transportation of the machine was, therefore, not done in
accordance with the terms of the agreement;
(g)
that he nevertheless submitted a claim to his broker (Trial bundle,
volume 1, p. 73) in which he disclosed all the facts to
which he
already referred to and that he was informed that the claim is not a
valid claim covered by his insurance policy because
in the
circumstances the Plaintiff did not deliver the service relating to
the conveyance of the machine (I may mention that it
is not clear to
me in terms of which insurance policy the claim was submitted as the
Plaintiff was in terms of the agreement only
bound to insure his
vehicles and to take out public liability insurance).
[30]
This evidence was not contested by Mr, Farrell, but he nevertheless
persisted with his contention that the Plaintiff is to
be held liable
despite the fact that he conceded on a question asked by me that in
so far as a third party carrier is contracted
directly by the
Defendant such carriage falls outside the ambit of the agreement.
[31]
I have no reason to disbelieve the evidence of Mr. Morkel in this
regard and to accept any interpretation of clause 3.1.3 justifying
any claim against the Plaintiff in relation to the loss of the
Orthopilot machine.
[32]
It accordingly follows that there is no merit in the Defendant’s
alleged breach of the agreement in this regard and accordingly
also
in claim 2 of the Defendant’s counterclaim.
[33]
This brings me to the second of the Defendant’s allegations
contained in its Plea.
Secondly, the meat transported in one
of the vehicles designated to be used exclusively for purposes of the
Defendant (para 6.2.2
of the Plea, Pleadings bundle p. 87 and para
3.1 of the letter of 9 March 2011, Pleadings bundle p. 52)
[34]
As is apparent from the Defendant’s Plea, it is in this regard
the Defendant’s contention that the Plaintiff,
through its sole
member, Mr. Morkel, in breach of clauses
3.2.1
and 3.10 of the agreement caused meat to be transported in one or
more of the vehicles that the Plaintiff was to supply to
the
Defendant in terms of the agreement.
[35]
When regard is had to paragraph 3.1 of the letter of 9 March 2011 it
is apparent that the breach is here described in narrower
or,
perhaps, more detailed terms to the effect that Mr. Morkel “utilised
1 (one) of the vehicles referred to in clause 3.2.1
for his personal
use".
[36]
Clauses 3.2.1 and 3.10 on which reliance is placed in this regard
read as follows:
“
3.2
the (Plaintiff) shall be obliged to do the following in order to
give
effect to this agreement:
3.2.1
Provide vehicles as defined in Schedule B for the exclusive servicing
of the (Defendant) in terms hereof, during business
hours for the
duration of the agreement.
The
vehicles may not be used inside of or outside of business hours, for
any purpose other than to service the needs of the (Defendant).".
“
3.10
Maintain the vehicles in a clean, presentable, undamaged and road
worthy condition at all times, bearing in mind that the vehicles
will
mainly transport medical products and will carry the (Defendant’s)
branding.”.
[37]
In his evidence Mr. Morkel testified on this issue -
(a)
that he was on an occasion informed that an employee employed by the
Plaintiff in terms of another agreement had taken photos
of meat
transported in one of the vehicles which was part of his fleet used
in the performance of the agreement;
(b)
_ that, having heard the rumour during November 2010 of photos having
been
taken
by one of his employees, he called the employee concerned, a certain
Mr. Adonis, to his office and confronted him with the
rumour,
whereupon, the employee showed him one of the photos on his cell
phone and said that he would show the photos to the Defendant
should
his salary not be increased.
[38]
He testified that this incident relates to one of his hunting
expeditions during September 2010 and that he has sent for the
processed meat to be collected from a butcher to whom the carcasses
had been taken to be processed and be brought to his house
where the
biltong and dried “wors" were to be hanged up.
[39]
According to him -
(a)
he loaded the processed meat the next morning in one of the vehicles
referred
to
in the agreement and requested Mr. Adonis to take it to the
Defendant’s distribution centre to be distributed amongst or
shared with members of the management and employees of the Defendant;
(b)
he, upon the attempt to blackmail him, forthwith terminated Mr.
Adonis’ services and contacted Mr. Farrell of the Defendant
and
informed him of the incident and drove to the Defendant’s Head
Office where they awaited the arrival of Mr. Adonis, but
he never
arrived;
(c)
Mr Farrell indicated to him that it is in any event an internal
matter of the Plaintiff and that the Defendant has no interest
in it;
(d)
the matter was again some two weeks later, ie., on 25 November 2010,
as he had some biltong and dried “wors” with
him for Mr.
Berent, the Chief Executive Officer of the Defendant, they again
discussed the matter on the golf course, whilst sharing
a golf car,
as a non-event;
(e)
at a meeting held on 14 December 2011 which was the run-up
(“aanloop”) from a proposal by the Plaintiff that the
agreement be adjusted by a 20 per cent cut in relation to the fees
payable thereunder and a reduction of the vehicles utilized
in terms
of the agreement because of financial pressure, Mr Farrell said to
him that to terminate the agreement was as easy as
to draw a line
through the agreement;
(f)
Mr. Berent then showed him a number of photos which were obviously
the photos taken by Mr. Adonis depicting a vehicle being
used for the
carriage of meat, whereupon, Mr. Farrell informed him that the
Defendant regards the carriage of meat as a serious
issue and it
would allow the Defendant to terminate the agreement;
(g)
that he was, thereupon, informed that the Defendant intends to invoke
the provisions of clause 4.5 of the agreement by reducing
the number
of vehicles to the number of vehicles used in terms of the agreement
with effect from 1 March 2011 (which seems to have
as its aim at that
stage the taking away of the two 8 ton trucks to which I have already
referred to);
(h)
that on 15 December 2011 at 1 pm Mr. Farrell forwarded an e-mail
message to the Plaintiff confirming their discussions on 15
December
2011 relating to the reduction of the vehicles and the transportation
of the meat demanding a response relating the meat
issue on the same
day at 4:30 pm (Trial bundle, volume 1, p, 18);
(i)
that the Plaintiff, thereupon, responded to that e-mail by way of an
e-mail message dated 17 December 2011 (Trial bundle, volume
1 p. 21)
in which he stressed -
(i)
that, in so far as the Defendant wished to attend to the second,
third and fourth geographical areas itself leaving the Plaintiff
only
with the first
geographical
area, such a situation calls for an amendment of the agreement, and,
in relation to the carriage of the meat, he was
surprised that this
matter was brought up at the meeting;
(ii)
that it occurred during September 2010 and was dealt with at the time
with the knowledge of the Defendant;
(iii)
that it was in any event a “once-off" event;
(iv)
that at the time the agreement was concluded the use of the vehicles
were thoroughly discussed during which it was made clear
that the
parties intention was that the Plaintiff would not transport any
packages for competitors or other third parties with
the intention to
derive additional income out of the vehicles described in the
agreement;
(v)
that the vehicles in question were in any event from time to time
used to transport personal items for some of the management
staff of
the Defendant to Cape Town, Durban, Port Elizabeth and Johannesburg
with knowledge of Defendant’s management, particularly,
Mr.
Farrell, as is apparent from, eg., e-mail dated 31 January 2011
(Trial bundle, volume 1, p. 29.1);
(vi)
that the meat was in any event not transported together with any
products of the Defendant; and
(vii)
that the vehicle was in any event properly cleaned in accordance with
the procedures prescribed by the Defendant,
which
evoked no response from the Defendant;
(j)
that there were amendments effected to the agreement which became
operative from 1 January 2011 pertaining to the utilization
of a
third party carrier to assist in the carriage, namely, a party called
Orion that was at all times utilized by the Plaintiff
on behalf of
the Defendant, in terms of which the Defendant and Orion would as
from 1 January 2011 be contracting directly with
each other (which,
as I understand the amendment, effectively rendered clause 3.1.3 to
be no longer effective);
(k)
that the Plaintiff on 11 January 2011 addressed a letter to Mr.
Farrell in which he followed up on the need to procure an amendment
to the agreement in order to reflect the new arrangement between the
parties (Trial bundle, volume 1, p. 24).
[40]
Mr Junkuhn who testified on behalf of the Plaintiff testified in
relation to this
incident
-
(a)
that he was in the employ of the Defendant as its responsible
pharmacist as from November 2005 until the end of October 2010;
(b)
that it was his obligations and functions with the Defendant to
ensure that the Defendant complies with all the provisions of
the
Pharmaceutical Act and the Medicines Control Act;
(c)
that, if any person should have been concerned about the use of the
vehicles in question, he should have been that person;
(d)
that he implemented control measures in order to ensure that the
vehicles used for the carriage of the Defendant’s products
are
regularly cleaned;
(e)
that he was aware of the fact that vehicles forming the subject
matter of the agreement were utilized for the transportation
of the
furniture of the Defendant’s chief executive officer and other
high ranking persons in the employ of the Defendant;
(f)
that he was aware of the use of a vehicle for about two or three
years to bring meat for the staff;
(f)
that he reminded Mr. Morkel to ensure that the vehicles be cleaned
according to the measures provided for the cleaning of vehicles;
(g)
that an issue relating to this incident was never brought to his
attention by either Mr. Berent or Mr. Farrell.
[41]
Mr. Farrell in his evidence denied that Mr. Morkel phoned him after
the altercation Mr. Morkel had with him Mr Adonis and at
first also
denied that they had any discussion on the golf course. According to
him he checked his diary which contained no indication
of a golfing
event during that period and he also asked Mr Berent who according to
him also denied such an occasion on the golf
course. However, when he
was confronted under cross-examination with an e-mail (Exhibit D1)
forwarded to him and Mr. Berent on
24 November 2010 reminding them of
their golf game the next day at 7h35 and an e-mail forwarded to Mr.
Morkel in which he agreed
to a golfing arrangement, he, apart from
referring to an extract from his diary (Exhibit D2) indicating that
he had meetings at
8h30 and 14h30 on 25 November 2010, conceded that,
in denying in his evidence in chief any golfing arrangement with Mr.
Morkel,
he relied on his secretary confirming that no golf game was
scheduled. He, however, concede that they could have had a golf game
on on that date. Having conceded that he made no mention of whether
or not the incident with Mr. Adonis was on that occasion discussed
between them.
[42]
In relation to the incident relating to the transportation of the
meat, he testified -
(a)
that Mr. Adonis arrived at their premises informing him that he had
just been dismissed by Mr Morkel and that he had some photos
he would
like to show him;
(b)
that at the same time a call came through from the Plaintiffs Eimond
saying that he should sent him back to the office as it
concerns a
matter which had nothing to do with the Defendant;
(c)
that on that point he was curious and invited him to the board room
where the photos forming part of the papers in this matter
were
handed to him;
(d)
that he was shocked and went upstairs to Mr. Berent;
(e)
that they were concerned as they were highly regulated by the Medical
and Pharmaceutical Council;
(f)
that he denies that Mr. Morkei had contacted him prior to Mr. Adonis
having arrived at the Defendant’s offices;
(g)
that he was concerned, referring to one of the photos (Exhibit C1),
that, notwithstanding a denial by Mr. Morkei in his letter
of 15
December 2010, meat products were transported together with products
of the Defendant;
(h)
that, because of threats by Mr. Adonis that he would go to the press
unless he is rewarded financially for the information he
gave to the
Defendant, he regarded it necessary, as is reflected in his letter of
4 March 2011, to request the Plaintiff to make
available to the
Defendant the confidentiality agreements concluded with the
Plaintiffs employees.
[43]
Mr. Farrell testified that, regard being had to one of the photos,
marked C1, that
he
was concerned that the meat in question was transported together with
medical
products
of the Defendant. Having looked at the photo there is in my view no
indication,
as
alleged, that there was blood seeping over boxes which appeared to be
boxes containing products of the Defendant. Mr. Adonis
was not called
and, having regard to the photo itself, there is certainly no clear
evidence that the photo is sufficient evidence
supporting Mr.
Farreil’s concerns which are mere speculative in nature. Mr
Adonis seems in any event to have been a criminal
black mailing
individual whose conversation with Mr. Farrell should have been
regarded by Mr. Farrell with particular suspicion.
It, however,
appear that he, because of his subjective inclination, was inclined
to believe Mr. Adonis. He should in my view to
have been more
objective. In my view the direct evidence considered in context in
any event does in any event not support any possibility
that meat was
conveyed together with medical products of the Defendant.
[44]
Having considered the evidence and the documents relevant to this
issue, 1 am unpersuaded that this incident which occurred
during
September 2010 of which Mr. Farrell, on his own version, became aware
at the time Mr. Adonis was dismissed by the Plaintiff,
is an incident
which could possibly have been regarded as at least a continuous
breach.
[45]
It is in any event, regard being had to Mr. Farrell’s
unreliable, if not deliberate false, denial, of the matter having
been regarded by him and Mr. Berent as a so-called “non event'
at the time, clear that it was not regarded of such a serious
nature
that it could have a negative effect on the continued execution of
the agreement.
[46]
I, furthermore, find it strange that in paragraph 3.1 of the letter
of 9 March 2011 the meat issue was obviously not regarded
as so
serious as to be mentioned explicitly
and
as serious it became apparent from the Defendant’s Plea and Mr.
Farrell’s evidence. In that paragraph reference
was only made
of the use one of the vehicles in question "for his personal
use” which creates the impression that it
was decided only
after summons was issued to elevate the meat issue to a threat to the
control under the relevant health legislation
is Defendant is
subjected. This in any event appears, regard being to the, in my
view, exceptionably credible evidence of Mr. Junkhun,
to be highly
overstated.
[47]
The irony of this issue is that on the one hand Mr. Morkei merely
used the vehicle to share the meat he had hunted with management
and
on the other hand that management themselves made use of the vehicle
to have some of their personal goods to be transported
by the
Plaintiff for their own personal use.
[48]
I am accordingly unpersuaded that this issue, which was single
incident, is one which constituted such a serious breach, if
any,
which justified the actions taken by the Defendant some five months
later by way of the letters of 9 and 14 March 2011.
[49]
It seems to me to nothing than an opportunistic and vindictive
reaching to a matter that had already been duly dealt with and
smacks
of sheer hypocrisy and double standards.
[50]
This brings me to the third of the Defendant’s allegations
contained in its Plea. Thirdly, the alleged breach by Elmond
of the
Defendant’s code of conduct (para
6.2.3 of the Plea, Pleadings bundle p.
87 and para 3.2 of the letter of 9 March 2011, Pleadings bundle, p.
52)
[51]
As is apparent from the Defendant’s Plea, it is in this regard
the Defendant’s case that during or about December
2010 an
employee of the Plaintiff, one Elmond, breached the Defendant’s
code of conduct contrary to the provisions of clause
3.2.11 of the
agreement, by, inter alia, arranging for certain of the Defendant’s
products to be delivered at certain addresses
without following the
requisite procedures and that the Defendant refused the said Elmond
entry to its premises, but that the Plaintiff
has, however, indicated
that it wishes Elmond to be allowed back onto the Defendant’s
premises.
[52]
Clause 3.2.11 on which the Defendant relies reads as follows:
"3.2
In addition to, and without derogating from any other duties and
obligations which may be contained elsewhere in yje agreement,
the
(Plaintiff) shall be obliged to do the following in order to give
effect to this agreement:
3.2.11
Ensure that the drivers, driver assistants and
dispatch
manager/s utilized by the (Plaintiff) to service (the Defendant), is
familiar with (the Defendant’s) code of conduct,
as same may be
amended from time to time, and that such staff strictly adhere
thereto. (The Defendant) reserves the right to refuse
entry to any of
the (Plaintiff’s) staff to its premises, including the
warehouse, in the event that any such staff member
breaches the
(Defendant’s) code of conduct. Such restriction placed on any
of the (Plaintiff’s) staff shal not relieve
the (Plaintiff) of
any of its obligations as contained in this agreement, including its
obligations under clauses 3.2.4 and 3.2.5
supra. The (Plaintiff)
shall be obliged to
provide
the (Defendant) with appropriate replacement staff within 72 hours of
any refusal of access as herein before described.
The (Defendant’s)
code of conduct is attached hereto as annexure ‘C’) and
forms an integral part to this agreement.".
[53]
The evidence on both sides, however, seems to be something else than
the allegation that Elmond “breached the Defendant’s
code
of conduct contrary to the provisions of clause 3.2.11 of the
agreement, by, inter alia, arranging for certain of the Defendant’s
products to be delivered at certain addresses without following the
requisite procedures".
[54]
On this issue it would seem, regard being had to the evidence of Mr.
Morkel, that another employee of the Plaintiff, one Joseph,
had laid
a complaint that Elmond, a supervisor employee of the Plaintiff, was
part of a group of people who stole goods from the
Defendant’s
warehouse.
[55]
The Plaintiff then investigated the matter and during disciplinary
proceedings exonerated Elmond, but found the said Joseph
guilty of
misconduct and dismissed him. Somehow Joseph ended up as en employee
of the Defendant.
[56]
According to the evidence of Mr. Farrell the Defendant held its own
investigations and disciplinary proceedings during January
2011 in
which Joseph testified and it was held that Elmond and a supervisor
in the Defendant’s employ worked together in
stealing goods
from the Defendant's warehouse consequent upon which the supervisor
was discharged.
[57]
Assuming, as difficult as it may be, that this is the incident
referred to the Defendant's Plea and its letter of 9 March 2011,
this
evidence shows at the very least that there are two contradictory
versions between the parties as to whether or not Elmond
contravened
the Defendant’s code of conduct (which incidentally is not
annexed to the agreement).
[58]
Under these circumstances I accept that the Defendant may have been
entitled to refuse Elmond entry to the Defendant’s
premises in
terms of clause 3.2.11, but I fail to see how under such
circumstances it can be contended that the Plaintiff breached
the
agreement. If regard is had to paragraph 6.2.3 of the Defendant’s
Plea, as is contended in para 3.2 of the Defendant's
letter of 9
March, the complaint seems to be that the Plaintiff wished “for
Elmond to be allowed back!' onto the Defendant’s
premises.
Apart from the dispute as to whether or not Elmond was involved in
any breach of the Defendant’s code of conduct,
there is s no
evidence that the Plaintiff insisted on Elmond being allowed on the
Defendant’s premises or to have sent Elmond
to the Defendant’s
premises despite the Defendant’s refusal. In so far as the
Defendant elected to refuse Elmond access
to its premises I suppose
it is its prerogative.
[59]
I, however, fail to see, as already indicated, how the Plaintiff can
under these circumstances be blamed or accused of having
breached the
agreement or to have failed to respect the Defendant's refusal to
allow Elmond to the Defendant’s premises.
[60]
In my opinion this issue is equally one that does not justify an
allegation that the Plaintiff breached the agreement.
[61]
This brings ms to the fourth of the Defendant’s allegations
contained in its Plea.
Fourthly,
the alleged communication by Mr. Morkel to Defendant’s
employees that he has the exclusive right to tend to delivery
of
Defendant’s products (para 6.2.4 of the Plea, Pleadings bundle
pp. 87 and 88 and para 3.7 of the letter of 9 March 2011,
Pleadings
bundle, p. 53)
[62]
As is apparent from the Defendant’s Plea, it is in this regard
the Defendant’s case that the Plaintiff, through
its Mr Morkel,
during February / March 2011 communicated to certain of the
Defendant’s employees with a view of convincing
such employees
of the veracity of his allegations that the Plaintiff has the
exclusive right to tend to delivery of Defendant’s
products
within the first geographical area and that no other carrier may be
utilized for such purposes.
[63]
Mr Morkel in his evidence denied that he had done what is alleged in
this paragraph or that he had in any manner been reminded
not to
perform any such actions.
[64]
Mr. Morkel pointed out that he was in terms of the agreement entitled
to a fixed fee whether or not the Defendant made use
of any of the
vehicles which were to be provided in terms of the agreement and
that, as far as the Plaintiff is concerned, it was
immaterial to it
whether or not the Defendant elected to obtain the services of any
other carrier for which services he would in
any event had to pay
over and above the fees payable to the Plaintiff in terms of the
agreement.
[65]
No evidence was adduced on behalf of the Defendant in this regard
(which in any event appears to have been based on hearsay)
to
contradict this denial by Mr. Morkei.
[66]
I am accordingly unpersuaded that the Defendant has shown that the
Plaintiff breached the agreement in this regard.
[67]
This brings me to the fifth of the Defendant’s allegations
contained in its Plea.
Fifthly,
the Plaintiff’s alleged failure or refusal to supply the
Defendant with copies of insurance policies and proof of
payment of
premiums relating to such policies (para 6.2.5 of the Plea, Pleadings
bundle p. 88 and paras 3.4 and 3.5 of the letter
of 9 March 2011,
Pleadings bundle, p. 52)
[68]
As is apparent from the Defendant’s Plea, it is in this regard
the Defendant’s case that upon or about 4 March
2011 the
Defendant requested the Plaintiff to supply it with copies of the
insurance policies referred to in clause 5.4 of the
agreement
together with proof of payment of premiums relating to such policies
and that the Plaintiff refused or failed to do so
in breach of its
obligations under the agreement.
[69]
Clause 5.4 of the agreement reads as follows:
“
5.4
The (Plaintiff) shall insure the vehicles for all risks and take out
public liability insurance in respect of the services at
its costs
and shall make copies of such insurance policies and proof of payment
of premiums available to the customer (Defendant)
for
inspection
on request.”.
[70]
This allegation relates to a request made by Mr. Farrell by way of an
e-mail forwarded to Mr. Morkel on Friday, 4 March 2011
at 11:57am
(Trial bundle, volume 1, p. 33) in which he, apart from dealing with
other issues, requested the Plaintiff to supply
the Defendant on the
Monday at 12:00pm “with copies of Ambasaam cc’s insurance
policies (referred to in clause 5.4)
together with proof of payment
by Ambasaam of the relevant premiums, since the effective date of the
contract.
[71
] I must say I find this request strange for at least four reasons.
Firstly, it is difficult to comprehend why such a request
is made
after the agreement was already in force and executed for some three
years. Secondly, why the Plaintiff was requested to
do so with such
haste. Thirdly, why the request was followed up a few days later on 9
March 2011 by a letter of the Defendant’s
attorneys, Fourthly,
in so far as the Plaintiff is in terms of clause 5.4 required to
insure the vehicles for all risks and to
take out public liability
insurance. It is even so much the more puzzling if regard is had to
the evidence of Mr. Farrell, if I
understood him correctly, in so far
as he testified that he was concerned about the Orthopilot incident
(which I already held to
have been unfounded).
[72]
Mr. Morkel in any event testified that upon having received this
letter he collected the documents requested and delivered
them at Mr.
Farrell’s office on the Monday, and on the Friday, 9 March 2011
he received a letter from the Defendant’s
attorneys delivered
to him by the Sheriff, being a situation which he perceived as an
intention by the Defendant to cancel the
agreement.
[73]
Mr Farrell in his evidence denied ever having received any
documentation from Mr Morkel as alleged in his evidence.
[74]
As will be indicated below I was for various reasons not impressed
with the evidence of Mr. Farrell and I have no reason to
disbelieve
Mr. Morkel, particularly, if regard is had to the fact that he
obviously regarded the continuance of the agreement to
be of primary
importance to the Plaintiff. It is on the probabilities obvious that
Mr. Morkel would hardly have ignored the request
for the various
documents to be submitted as requested.
[75]
This brings me to the sixth of the Defendant’s allegations
contained in its Plea.
Sixthly,
the Plaintiff’s alleged failure or refusal to supply the
Defendant with proof that the Plaintiff had concluded confidentiality
agreements with the Plaintiff’s employees (para 6.2.6 of the
Plea, Pleadings bundle p. 88 and para 3.6 of the letter of 9
March
2011, Pleadings bundle, p. 53)
[76]
As is apparent from the Defendant’s Plea, it is in this regard
the Defendant’s case, as is the case in relation
to the fifth
of the Defendant’s allegations, that upon or about 4 March 2011
the Defendant requested the Plaintiff to supply
it with proof that it
concluded confidentiality agreements with its employees as required
by clause 8.2.3 of the agreement and
that it refused or failed to do
so in breach of its obligations under the agreement.
[77]
Also in this regard I find the request strange, particularly, bearing
in mind that the agreement was, as I already indicated,
at that stage
already in operation for some three years.
[78]
If I understood Mr. Farrell correctly, it would seem that this step
was deemed necessary because of the incident with Mr. Adonis
and Mr.
Adonis’ threat to go to the press unless he is financially
remunerated for the information.
[79]
Mr Adonis was at that stage no longer in the employ of the Plaintiff
and I fail to see what assistance Mr. Adonis’ contract
of
employment would have been to the Defendant.
[80]
It in any event does not appear from the evidence whether or not Mr.
Adonis was indeed remunerated and, if not, whether he
had given the
information to the press.
[81]
Apart from these considerations, it is, as is apparent from clause
8.2.3, that a “confidentiality undertaking similar
to the one
contained in the agreement to be signed by “each of its staff
members, whom are exposed to confidential information
of the
(Defendant)". As I already indicated, the “similarJl
agreement seems to be the one referred to in clause 8.1
which seems
to relate to “trade secrets, technology and other proprietary
information pertaining to the products and the
business” of the
Defendant.
[82]
There was no evidence as to who the employees are in respect of which
the “confidential agreements" were required
and who are
exposed to the Defendant’s “trade secrets, technology and
other proprietary information pertaining to the
products and the
business".
[83]
I am accordingly also in respect of this issue unpersuaded that the
Plaintiff has in any way breached the agreement.
[84]
This brings me to the seventh and last of the Defendant’s
allegations contained in its Plea.
Seventhly, the Plaintiff’s
alleged repudiation of the agreement by various actions (para 6.2.7
of the Plea, Pleadings bundle,
p. 89 and paras 3.8 and 3.9 of the
letter of 9 March 2011, Pleadings bundle, p. 53)
[85]
As is apparent from the Defendant’s Plea, it is in this regard
the Defendant’s case that the Plaintiff on or about
20 January
2011 repudiated the agreement by, inter alia -
(a)
falsely alleging that an agreement had been reached with the
Defendant, represented by Mr. Farrell, in terms of which the
agreement
had been amended in several material respects;
(b)
stating that the Plaintiff would supply the Defendant with a document
which incorporated the amended terms of the agreement;
(c)
proclaiming that the Plaintiff and Defendant had agreed that the
amended agreement would be signed on 20 January 2011;
(d)
supplying the Defendant with a document (Annexure BBM 1 annexed to
the Defendant’s plea, Pleadings bundle p. 107) which
differed
in material respects from the agreement and the Plaintiff insisted
upon the Defendant signing such document.
[86]
These allegations differ in certain respects from the contentions
raised in paragraphs 3.8 and 3.9 of the letter of 9 March
2011 from
which it appears, as I have already indicated -
(a)
that the Plaintiff, through its Mr. Morkei, placed sustained pressure
upon the • Defendant to sign a revised version of
the agreement
without focussing the Defendant’s attention on all the relevant
amendments and without declaring the practical
impact which such
amendments will have (para 3.8 of the aforesaid letter, Pleadings
bundle p. 53);
(b)
that such amendments attempted to limit its duties in terms of the
agreement and to revoke certain of the Defendant’s
rights
granted to the Defendant in terms of clause 4.5 of the agreement
(para 3.9 of the aforesaid letter, , Pleadings bundle p.
53).
[87]
I in any event fail to see how it can be alleged that the Plaintiff
in any of these
respects
repudiated the agreement.
[88]
It would appear that the issues surrounding these allegations found
its origin, as I have already indicated, in two occurrences,
namely -
(a)
firstly, in an agreement during October 2009 between the parties
that, in addition to the vehicles provided for in the agreement,
the
Plaintiff would make two 8 ton trucks available to support the
Defendant’s “growing renal market outside the PWV
area in
geographical area 2";
(b)
secondly, in a movement from the side of the Defendant sometime
before 14 December 2010 to implement some measures to cut the
Defendant’s costs by 20 per cent, by reducing the number of
vehicles, referring apparent ly to the two 8 ton trucks, utilized
in
terms of the agreement.
[89]
In relation to both these occurrences various factual disputes exist
between the parties.
[90]
In relation to the first of these occurrences, it is common cause
that during October 2009 the Defendant indicated a need to
convey
bulk deliveries requiring bigger vehicles than the 4, 2 and 1 tonner
vehicles provided for in the agreement which would
save costs in that
in a bigger vehicle one delivery can be made instead of more than one
delivery by way of the vehicles described
in the agreement. The
parties, therefore, agreed to the addition of two 8 ton trucks to the
fleet which obviously influenced the
adjustment
of fees to an additional fee of R196 653 per month. This situation
then continued until more or less the middle of 2010.
[91]
There is, however, a dispute between the parties as to whether or not
the addition of these trucks required an amendment to
the agreement.
[92]
On the one hand, it was the Defendant’s contention that the
Defendant was by virtue of the provisions of clause 4.1 of
the
agreement entitled to decide, in its sole discretion, to require the
Plaintiff to supply additional vehicles.
[93]
On the other hand, it was the Plaintiff’s contention that the
addition of vehicles of this nature called for an amendment
of the
agreement.
[94]
This dispute is, perhaps, of importance in relation to the second of
the Plaintiffs claim to which I have already referred
to in paragraph
[2](b) of this judgment.
[95]
Clause 4.1 of the agreement which is relevant in considering the
dispute between the parties in this regard reads as follows:
“
4.1
In the event that the (Defendant) decides, in it sole discretion, to
increase the number of vehicles, it shall be entitled to
require the
(Plaintiff) to supply an additional vehicle/s, with similar
specifications as those vehicles already described in schedule
B
hereto.".
[96]
As I already indicated, there is no “Schedule B" annexed
to the agreement, but the parties regarded the vehicles
referred to
in paragraphs 2.1.1, 2.1.2 and 2.1.3 of
Schedule
A to the agreement to be the vehicles to which this clause relates,
which reads as follows:
2.1
The following fees shall be levied in addition to the fee set out in
clause 1.1.1 of schedule A, should the customer (Defendant)
require
the carrier (Plaintiff) to provide additional vehicles as per clause
4 of the agreement:
2.1.1
4 Tonner R70 000 excluding VAT Per month per vehicle
2.1.2
2 Tonner R56 000 excluding VAT, Per month, per vehicle
2.1.3
1 Tonner R41 000 excluding VAT Per month, per vehicle”.
The
fees set out in Clause 1.1.1 referred to in the paragraph 2.1
amounted to a sum of R325 000 (excluding VAT) per month.
[97]
In my view, upon a proper interpretation of this clause, the
paragraph clearly -
(a)
on the one hand, relates to fees payable in respect of vehicles which
the Defendant may in terms of clause 4.1 require to be
supplied by
the Plaintiff in addition to the vehicles on which the parties
originally agreed upon; and
(b)
on the other hand, indicates that the vehicles which were originally
agreed upon are 4, 2 and 1 tonner vehicles and are the
type of
vehicles which may in terms of clause 4.1 be required to be added to
the existing fleet.
[98]
This is also obvious from the fact -
(a)
that the aforesaid paragraphs 2.1.1, 2.1.2 and 2.1.3 made no
provision for any
fee
in respect of any 8 ton trucks;
(b)
that different fees had accordingly to be determined, as had indeed
been done as is apparent from the “draft addendum"
prepared by Mr. Morkei and which had indeed been paid by the
Defendant since the parties had agreed upon the addition of the two
trucks.
[99]
I am accordingly of the view that Mr.Morkel was correct in holding
the view that the addition of the two 8 ton trucks indeed
required an
amendment of the agreement.
(I
may mention that it seems to me that the Plaintiff could have
provided the trucks in terms of clause 3.1.2, but this is an issue
which had not been relied upon before me and I accordingly ignore
that possibility)
[100]
I am, furthermore, on the probabilities, not satisfied that Mr.
Farrell, in denying that he ever received the annexure, marked
“Annexure D" referred to in Mr. Morkel’s e- mail
dated 29 October 2009 (Trial bundle, volume 1, p. 4) furnished
by Mr.
Morkei, was quite frank and honest with the Court. This is apparent
from an e-mail dated 11 January 2011 (Trial bundle,
volume 1, p. 24)
addressed by Mr. Morkei to Mr. Farrell in which it is indicated that
Mr Farrell agreed to consult with the Defendant’s
attorney “to
include the addendum to our agreement. Although Mr. Morkei forwarded
an e-mail to Mr. Morkei on 12 January 2011
(Trial bundle, volume 1,
p. 25) that contention was not contested. In his evidence when
questioned about these e-mails Mr. Farrell
merely indicated that he
maintains that he never received “Annexure D" and that he
did not regard it necessary to respond
in that regard to Mr. Morkel’s
e-mail.
[101]
Notwithstanding the absence of a further agreement to provide for the
addition of the two trucks, it in any event appears
that the parties
agreed to the addition of the two 8 ton trucks in the terms set out
in the aforesaid Annexure D.
[102]
In relation to the second of the occurrences referred to above,
almost one year after the first occurrence, during the middle
of
2010, so Mr. Morkel’s evidence continued, suggestions were made
from the side of the Defendant that due to financial pressure
the
Defendant would like to look at an adjustment to the agreement by
cutting the costs by 20 per cent, particularly, relating
to the fees
payable thereunder.
[103]
After various meetings and discussions between Mr. Morkel and,
particularly, Mr. Farrell, a meeting took place between Messrs.
Berent and Farrell on the one hand and Mr. Morkel on the other.
[104]
At this meeting, apart from, as I have already indicated, various
photos having been displayed to Mr. Morkel by Mr. Berent,
Mr. Morkel
was informed that the Defendant intends to invoke the provisions of
clause 4.5 of the agreement to reduce the number
of the vehicles
utilized in terms of the agreement as from 1 March 2011.
[105]
Following this meeting Mr. Farrell forwarded an e-mail to Mr. Morkel
on 15 December 2010 (Trial bundle, volume 1, p. 18) in
which he,
apart from again addressing the meat issue, confirmed that the
Defendant has given the Plaintiff notice in terms of clause
4.5 of
the agreement that, effective from 1 March 2011, that the Defendant
will reduce the number of vehicles to “the number
as quoted in
Annexure ‘B’ to the agreement’ and that therefore
the Defendant will adjust their billing accordingly.
[106]
On the same date the Plaintiff forwarded an e-mail (Trial bundle,
volume 1, p.
21)
responding to Mr. Farrell’s e-mail in which he expressed a
concern -
(a)
that the e-mail created some confusion;
(b)
that it creates the impression that the Plaintiff will still be
responsible for the third party courier services, but that such
courier will directly invoice the Defendant so that only the billing
system has changed;
(c)
that, as he understood the Defendant’s explanation, the
Defendant will manage and take ownership of all the requirements
outside Gauteng;
(d)
that the trucks will no longer be required;
(e)
that the Defendant will, therefore, take over the total
responsibilities of the second, third and fourth geographical areas
and that the Plaintiff would only be responsible for the first
geographical area;
(f)
that a written amendment of the agreement will be done by the
Defendant.
[107]
The Defendant did not respond to this letter.
[108]
in a further e-mail forwarded to Mr. Farrell on 11 January 2011
(Trial bundle, volume 1, p. 24) Mr Morkei referred to an urgent
need
for an agreement of carriage reflecting their new arrangements and
requested them to agree to a timeline to have it signed
on 20 January
2011 and in an e-mail dated 20 January 2011 (Trial bundle, volume 1,
p. 26) he, referring to an agreement the previous
day, indicated that
the Plaintiffs lawyer can provide an agreement reflecting the changes
to which they have agreed.
[109]
On 28 February 2011 Mr Morkei forwarded another e-mail (Trial bundle,
volume 1, p. 31) to Mr. Farrell in which he once again
referred to
the “outstanding contract reflecting the Defendant’s
changed requirements indicating that the Defendant
agreed to have it
finalized and signed that week.
[110]
It would appear that Mr.Morkel submitted a suggested agreement to the
Defendant for its consideration on 20 January 2011 (Trial
bundle,
volume 1, p. 26) in which he indicated that “other than giving
effect to your new requirements please note also a
change in par
3.2.7".
[111]
It would seem that this agreement is the subject matter of the
Defendant’s allegation contained in paragraph 6.2.7 of
the
Defendant’s Plea.
[112]
In two e-mails dated 28 February 2011 and 2 March 2011 (Trial bundle
volume
1
pp. 31 and 32) Mr. Morkel forwarded to Mr. Farrell he thanked Mr.
Farrell for a discussion they had earlier the morning of 2 March
2011
in which he, inter alia, indicated that they agreed to have “the
outstanding contract' finalized and signed that week
and inquired
when the agreement will be ready for collection so as to enable him
to plan his time around it.
[113]
Ultimately, as I have already indicated, Mr.-Farrell responded in an
e-mail on Friday, 4 March 2011 at 11:57 am (Trial bundle
volume 1,
pp. 33 and 34) in which he, inter alia -
(a)
expressed his disappointment with the comparison between the original
agreement and the “supposedly revised contract",
bearing
in mind that the Defendant merely invoked clause 4.5 of the
agreement;
(b)
indicated that the Defendant is of the view that there is no
necessity to sign a new contract and that it will not entertain
any
signing thereof;
(c)
referred to the damage caused to the Orthopilot machine and demanded
payment of R120 000 from the Plaintiff;
(d)
required from the Plaintiff to supply before the Monday, 12 noon, the
Defendant with proof that certain insurance policies are
in place and
that confidentiality agreements have been concluded between the
Plaintiff and its employees as provided for in respectively
Clauses
5.4 and 8.2.3 of the agreement.
[114]
According to Mr. Morkei he complied with the request to supply the
documentation referred to in the letter by delivering personally
the
documentation at Mr. Farrell’s office whereafter he on 9 March
2011 received the letter from the Defendant’s attorneys
in
which he was, inter alia, directed not to communicate directly with
the Defendant’s representatives and was informed that
all
future communications should be through the offices of the
Defendant’s attorneys.
[115]
On this evidence I am unpersuaded that the Plaintiff, through Mr.
Morkei -
(a)
falsely alleged that an agreement had been reached with the
Defendant, represented by Mr. Farrell, in terms of which the
agreement
had been amended in several material respects;
(b)
stated that the Plaintiff would supply the Defendant with a document
which incorporated the amended terms of the agreement;
(c)
proclaimed that the Plaintiff and Defendant had agreed that the
amended agreement would be signed on 20 January 2011.
[116]
In relation to the contention that the Plaintiff supplied the
Defendant with a document (Annexure BBM 1 annexed to the Defendant’s
plea, Pleadings bundle p. 107) which differed in material respects
from the agreement and the Plaintiff insisted upon the Defendant
signing such document, a scrutiny of that agreement does not in my
view disclose any indication of an intention on the part of
the
Plaintiff to repudiate
the
originai agreement or, as alleged in paragraph 3, without '‘declaring
the practical impact which such amendments will
have"
[117]
As is apparent from paragraph 6.3 of the Defendant’s Plea
(Pleadings bundle, p. 90), it is the contention that each
of the
following amendments contained in the amended agreement constitutes a
repudiation of the original agreement -
(a)
the deletion of the words “and whereas the carrier is able to
secure preferential tariffs from various carriers, other
than itself,
pertaining to deliveries falling within the third and fourth
geographical areas" in thethat the Plaintiff preamble
of the
agreement;
(b)
the deletion of the definition of the “fourth geographical
area":
(c)
the deletion of the definition of the “second geographical
area”]
(d)
the deletion of the definition of the “third geographical
area":
(e)
the deletion of clause 3.2 which provided for a duty on the Plaintiff
to make deliveries in the second geographical area through
the
utilisation of vehicles other than those described in Schedule B;
(e)
the deletion of clause 3.1.3 which provided that the Plaintiff would
via third party carriers make deliveries in the third and
fourth
geographical areas;
(f)
the rewording of clause 3.2.1 to read: “ The vehicles may be
used inside of or outside of business hours, for any purpose
to give
effect to this agreement and for the benefit of the employees of the
customer and the carrier";
(g)
the deletion of clause 3.2.8 which provided for the Plaintiffs duty
to deliver products in the second, third and fourth geographical
areas;
(h)
the amendment of clause 4.5 by the substitution for the words “the
customer shall be entitled to reduce the number of
vehicles by giving
the carrier two calendar months’ notice of such reduction”
of the words “the customer shall
be entitled to reduce the
number of vehicles only by mutual written consent between the
customer and the carrier, by giving the
carrier 2 (two) calendar
months’ written notice of such reduction".
[118]
As I have already indicated (see: paragraph [103](e) and (f) above),
it would appear that the parties agreed that the Defendant
will take
over the total responsibilities of the second, third and fourth
geographical areas and that the Plaintiff would only
be responsible
for the first geographical area which in my opinion explains the
amendment to the preamble to the agreement, the
deletion of the
definitions of the second and fourth geographical areas and the
amendments of clauses 3.2, 3.1.3 and 3.2.8.
[119]
The amendment suggested in relation to clause 3.2.1 seems to me to
have been intended to accommodate, as had obviously happened
in the
past, the conveyance of personal goods of employees of the Defendant
and also for employees.
[120]
The amendment suggested of clause 4.5 seems to have had as its aim to
prevent a one-sided decision on the part of the Defendant
to reduce
the vehicles to be utilised in terms of the agreement which is an
amendment which the Defendant was obviously free to
reject.
[121]
In view of the aforegoing the amendments suggested by the Plaintiff
cannot in my view by any stretch of the imagination be
seen or
regarded as a repudiation of the agreement.
Conclusion
[122]
Having considered all the evidence I am satisfied -
(a)
that the Defendant had no intention to continue with the agreement
and, therefore, elected to get out of the agreement and has
for that
reason reached opportunistically at incidents of the past which had
obviously already been dealt with and disposed off
and, furthermore,
grabbed at a number of unsubstantiated and unfounded issues;
(b)
that the Defendant’s letter of 9 March 2011, as amplified in
certain respects by the letter of 14 March 2011, contains,
as
contended by the Plaintiff, unfounded and unsubstantiated
allegations;
(c)
that by having levelled those allegations the Defendant indeed
repudiated the agreement;
(d)
that in having done that the Plaintiff has, as was held in the
judgments in Nash, supra, at22D and Datacolor, supra, at294A,
objectively created without lawful excuse a perception which placed
the Plaintiff in a position to conclude that proper performance
of
the agreement will not be forthcoming;
(e)
that in the result the Plaintiff was placed in the inevitable
position to accept such repudiation and to cancel the agreement.
[123]
All this is apparent from various indications.
[124]
In the first place, as I have already indicated, reliance is placed
on a number of issues which are not substantiated be the
objective
facts.
[125]
In the second place the fact that the Defendant approached its
attorneys on these issues which could easily have been resolved
between the parties in circumstances where it obviously instructed
the attorneys that no further communications be conducted with
the
Defendant, but only through the attorneys which is a strong
indication that the Defendant already wished the agreement to be
cancelled.
[126]
In the fourth place there is the unimpressed evidence of Mr. Farrell.
[127]
I was unimpressed with the evidence of Mr. Farrell, particularly, if
regard is had to the fact -
(a)
that he was an evasive and untruthful;
(b)
that he was in many respects unnecessarily and wrongly subjectively
inclined, if regard is had, inter alia, to his denials to
almost each
and every crucial issue, such as -
(i)
that Mr. Morkel phoned him after he was confronted by Mr Adonis;
(ii)
that they had, until such time as he was confronted with evidence to
the contrary, a discussion on te golf course relating
to the meat
incident which actually supported Mr. Morkel’s evidence;
(iii)
that it would be as easy for him to cancel the agreement by drawing a
line through it;
(iv)
that he never received Annexure D despite the fact that the Defendant
proceeded to implement that arrangement which primarily
conformed to
the contents of that agreement and which in effect accords with the
provisions of that agreement; that he received
the documentation
requested in his letter of 4 March 2011;
(vi)
that he persisted with the allegation, despite clear indications that
he was wrong, that the Plaintiff was bound to pay R120
000 despite
having conceded that the machine was transported by a carrier
directly instructed by Defendant and therefore not as
provided in
terms of Clause 3.1.1.
(c)
that he, despite contrary evidence, obviously believed the hearsay
evidence of Mr. Adonis, who was clearly a criminal black
mailer, that
the photo, marked D1, shows that meat was transported with products
of the Defendant;
(d)
that he for some inexplicable and dubious reasons gave the Plaintiff
unreasonable short notice in his letter of 4 March 2011
to supply
copies of the Plaintiffs insurance policies and proof of payment of
premiums payable in terms of those policies and proof
of confidential
agreements concluded with its employees despite the fact that the
agreement was at that stage already in operation
for almost three
years;
(e)
that he obviously instructed the Defendant’s attorneys to
direct the Plaintiff to no longer communicate in any way with
the
Defendant or its management except through its attorneys.
[128]
The Defendant’s obviously intention to terminate the agreement
is clearfrom the,
as
I already held, clearly wrong insistence that the Plaintiff should
pay within seven days as from 9 March 2011, being the letter
addressed by the Defendant’s attorney to the Plaintiff, after
which, as is contained in the concluding paragraph of the letter,
that the Defendant “shall proceed to cancel the AOC without
further notice to Ambasaam ccand to claim damages from Ambasaam
cc".
This threat alone is a clear one that should such payment not be made
the agreement will be cancelled without any further
notice.
[129]
This situation is, however, different in relation to the agreement in
relation to the two 8 ton trucks envisaged in Annexure
D (Trial
bundle, volume 1, p. 6). Although the situation is, as I have already
indicated that clauses 4.1 and 4.5 do not apply
to these two trucks,
the parties were clearly in agreement to proceed on the,basis that
the two trucks be utilized for the Defendant’s
purposes on the
terms set out in the said Annexure D. It would, however, appear, if
regard is had to the Plaintiffs e-mail dated
17 December 2011 (Trial
bundle, volume 1 p. 21), that the Plaintiff accepted or agreed that
the fleet be reduced the two trucks
leaving the Plaintiff with effect
from 1 March 2011 only with the first geographical area in respect of
which the two trucks were
never intended to be utilized. I am
accordingly not satisfied that it has been shown that the Defendant’s
repudiation related
to the agreement relating to the two 8 ton
trucks.
[130]
I am for these reasons satisfied that the Plaintiff has on a balance
of probabilities proved its case in relation to its claim
in respect
of the repudiation of the agreement as originally agreed upon on 8
December 2008.
Order
[131]
In all the circumstances, and for the reasons given, I make the
following orders:-
1.
THAT it be declared that the Defendant be liable to the Plaintiff for
such damages as may be proved by the Plaintiff consequent
upon the
Defendant’s repudiation of the agreement concluded between the
parties on 8 December 2008.
2.
THAT the Defendant’s counterclaim for payment by the Plaintiff
of R120 000 be dismissed.
3.
THAT the Defendant be ordered to pay the Plaintiff’s costs.
P
C VAN DER BYL
ACTING
JUDGEOF THE HIGH COURT
ON
BEHALF OF THE PLAINTIFF: ADV M P VAN DER MERWE
On
the instructions of:COUZYN, HERTZOG & HORAK
321
Middel Street Brooklyn
PRETORIA
Ref:
J Sterk/en/MOR50/0001
Tel:
012 460 5090
ON
BEHALF OF THE DEFENDANT: ADV A R G MUNDELL SC
On
the instructions of: D J GREYLING INC
Ref:
D J Greyling/cg/GG0515 Tel: 011 768 2311
c/o
MARKRAM INC Upper Floor Brooklyn Design Square
cnr
Middel & Veale Streets Nieuw Muckleneuk
PRETORIA
Ref:
26/DJG1/1
DATE
OF HEARING: 20, 21 and 31 May 2013
JUDGMENT
DELIVERED ON: 3 July 2013