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[2013] ZAKZDHC 53
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Sasol Oils (Pty) Ltd v KZN Oils (Pty) Ltd (1616/09) [2013] ZAKZDHC 53 (2 October 2013)
IN
THE KWAZULU-NATAL HIGH COURT, DURBAN
REPUBLIC
OF SOUTH AFRICA
Case No: 1616/06
In
the matter between:
SASOL
OIL (PROPRIETARY) LIMITED
.............................................................
Plaintiff
and
KZN
OILS (PROPRIETARY) LIMITED
...........................................................
Defendant
JUDGMENT
KOEN, J
INTRODUCTION
[1]
This is an action in which the plaintiff claims from the defendant
payment of the sum of R6 385 957.84, interest on the individual
amounts making up that sum as set out on annexures ‘A’
and ‘B’ to the particulars of claim from the dates
appearing alongside such amounts to date of payment, and costs of
suit. The defendant counterclaims for an alleged overpayment
in the
sum of R61 076.00 together with interest thereon at the rate of 15,5%
per annum from 16 August 2004 to date of repayment,
and the costs of
the counter-claim.
[2]
The amounts in annexure ‘A’ to the particulars of claim
total R611 172,13 and represent the unpaid purchase price
of
petroleum products (‘product’) alleged to have been sold
and delivered to the defendant from time to time.
It
is common cause that this claim arises
1
from the fraudulent
conduct of Baher Ezzad Marcous Armanyous
(‘Marcous’),
the former sales manager of the defendant. Marcous was responsible
for the purchase of fuel for export
from the plaintiff. It is not in
dispute that he abused that position by placing orders with the
plaintiff in the name of the defendant
and in collusion with others,
including probably employees of the plaintiff and a customer or
customers of the defendant, achieved
deliveries of fuel for nefarious
gains for himself and others, without the plaintiff or defendant
receiving any payment in respect
of such deliveries. When he realized
that this scheme was about to be revealed, he absconded, apparently
never to be seen again.
That has left the plaintiff and the defendant
having to resolve between themselves on whom the loss for the
outstanding purchase
price of the product ordered by him should fall.
Resolving that question is primarily what this case is about. An
amount of R500
000 falls to be deducted from the total on annexure
‘A’ in respect of the proceeds of two guarantees which
were held
by the plaintiff and cashed by it.
2
[3] The amounts in
annexure ’B’ total R274 229.71 and relate to alleged
short payments in respect of admitted purchases
of fuel supplied, due
to exchange rate fluctuations affecting the purchase price in rand
terms.
[4] Ultimately, the
correctness or otherwise of the parties’ claims must be sought
in the terms of the agreement between.
This judgment will therefore
first examine the respective contentions of the parties as averred in
the pleadings and thereafter
the evidence adduced in support thereof,
to determine the terms of the parties’ agreement.
THE PLEADINGS
[5] The plaintiff avers that it sold
and delivered product to the defendant at the latter’s special
instance and request from
23 April 2004 until 22 July 2004. The
purchase price for the petroleum products was Dollar based and had to
be converted to South
African Rand. Annexure ‘A’ sets out
the details of alleged sales for which payment was not received, with
reference
to the invoices numbers,
3
the date of each invoice, the Dollar
value, the equivalent Rand value, product delivered and quantity
delivered. Annexure ‘B’
reflects invoices that were short
paid.
[6] The plaintiff contends that each
sale and delivery of product was a separate transaction pursuant, in
each instance, to a separate
and distinct agreement. The defendant
responds that every sale and delivery was pursuant to the terms of a
prior agreement governing
all future sales and supplies of product.
[7] The following emerges from the
defendant’s plea
4
and the plaintiff’s Replication
thereto:
(a) The defendant pleads that during
or about July 2003 it, represented by its managing director Mr
Rajendran Reddy (‘Mr Reddy’),
and Exel Petroleum (Pty)
Limited (‘Excel’) represented by a trader Mr Goosen,
5
concluded an agreement that was oral,
alternatively partly oral and partly in writing, the written portion
of the agreement comprising:
(i) a letter from Exel to the
defendant dated 7 July 2003;
6
(ii) an application dated 23 July 2003
seeking a new trading account with Exel;
7
(iii) a fax dated 3 September 2003
from Exel to the defendant;
8
and
(iv) Exel’s general trading
terms and conditions.
9
The Replication admits that these
annexures (attached as ‘C’ to ‘F’) are what
they purport to be, but denies
that the attachments constitute the
written portion of an agreement allegedly concluded in July 2003,
pleading, consistent with
the plaintiff’s contention, that each
agreement concluded between Exel and the defendant depended on the
terms of the particular
agreement, some of which were oral and some
of which were reflected in the invoices, delivery notes and documents
reflecting the
accompanying payment.
(b) The defendant pleads that in terms
of Exel’s general terms and conditions any order by the
defendant was only to be processed
once Exel received confirmation of
payment from its bankers, Absa.
10
It pleads further that it was pursuant
to this agreement that the defendant from time to time placed orders
with Exel and effected
payment to it.
(c) The defendant pleads that the
aforesaid agreement was subsequently varied to the extent that the
plaintiff stepped into Exel’s
shoes from January 2004. The
terms that regulated the agreements for the supply of petroleum
products thereafter continued to apply
mutatis
mutandis
. This is partly
confirmed in the Replication where it is replied that from 1 January
2004 Exel’s rights and obligations were
ceded and assigned to
the plaintiff.
(d) The defendant pleads that
subsequently, on 2 April 2004, the plaintiff required a fresh
application for a new cash account and/or
credit facilities and/or
change/update of customer data
11
to be completed. The plaintiff
approved the application, annexures ‘G1’ to ‘G5’,
on 13 April 2004 in terms
of a memorandum, annexures ‘H1’
and ‘H2’, signed by P Lai, the acting financial manager
of the plaintiff.
(e) Upon the request of the plaintiff,
the defendant also completed an application for export trading,
annexures ‘I1’
to ‘I6’. In this application
the defendant
inter alia
warranted its acceptance of the terms
and conditions stipulated by the plaintiff which were to regulate the
supply to the defendant
of petroleum products for export trading. I
shall return to these below when dealing with the evidence.
(f) The defendant pleads that the
conclusion that annexures ‘G’, ‘H’ and ‘I’
constitute an agreement
that the terms that were to regulate export
trading was strictly cash before delivery unless otherwise agreed to
in writing, that
no amendment to the plaintiff’s credit terms
will be valid and/or enforceable unless reduced to writing and signed
by the
plaintiff, and that over-deliveries would not be allowed. The
plaintiff in its Replication admits that annexures ‘G’
to
‘I’ are what they purport to be, but denies that they
constitute an agreement as alleged.
12
(g) The defendant
maintains that it was pursuant to that agreement that it placed
orders with the plaintiff for the products, effected
payment to the
plaintiff of the value of the products reflected in the plaintiff’s
pro forma invoices and took delivery of
diesel and petrol, including
five transactions reflected on annexure ‘A’ which are
admitted by the defendant.
(h) Save for five transactions on
annexure ‘A’ admitted by the defendant after it had
conducted its investigations,
the defendant denies that it placed any
orders with the plaintiff for any of the products referred to in
Annexure ‘A’,
that it received delivery of such petroleum
products, that it is liable to pay Exel or the plaintiff for such
petroleum products,
and the correctness of annexure ‘A’.
Pleading over, it denies liability for the payment on the basis that
the orders
were fraudulently placed by Marcous acting in collusion
with a Mr Julian Stone and/or other employees of the plaintiff
without
payment first having been received from its customers and
paid or notified to the plaintiff. It pleads that on 16
th
August 2004 it authorised the
plaintiff to cash two guarantees in the value of R100 000,00 (hundred
thousand rand) and R400 000,00
(four hundred thousand rand)
respectively and to use the proceeds thereof to discharge the
defendant’s liability for the
payment of the five transactions
admitted, in the amount of R438 923,04, thus resulting in an
overpayment of R61 076,97,
13
being the subject of its counterclaim.
(i) In its Replication the plaintiff
pleads that Mr Reddy and the defendant’s credit manager Mrs
Naidoo at all relevant times
knew that the plaintiff invoiced and
delivered products without payment for those products having been
effected prior to delivery
and on the strength of assurances given by
the defendant that payment would be made. The defendant however
maintains that neither
it nor the plaintiff had agreed, either orally
or in writing, to any variation of the terms of the agreement
requiring payment
upfront or in cash before delivery. In the
alternative the defendant denies any waiver of strict compliance with
the terms requiring
payment upfront prior to the delivery of products
being effected. It maintains that such terms could not be waived as
it served
the benefit and interest of both parties, but in any event,
as a matter of fact, that it had not waived such terms.
(j) To conclude, the defendant pleads
that the plaintiff cannot enforce a claim against the defendant
contrary to, alternatively
in breach of the terms of the agreement,
in particular the term that payment had to be effected upfront and/or
in cash prior to
the delivery of the products.
14
(k) The plaintiff seeks to place some
reliance on an alleged extra curial admission that the defendant
admitted owing the plaintiff
money for the products sold and
delivered as reflected on annexure ‘A’ to the particulars
of claim, in an affidavit
submitted by the defendant to the South
African Police Services and a document prepared by the defendant
identifying 72 allegedly
fraudulent transactions. The evidence on
this aspect was however at best equivocal and does not disturb the
probabilities which
arise from the facts in this matter.
(l) As far as annexure ‘B’
to the particulars of claim is concerned, the defendant admits that
it placed orders for
the supply of the petroleum products on the
dates and for the amounts and the product as set out in annexure ‘B’.
It
also admits that it paid the amounts as set out and that it
received the products. It however denies liability for the difference
in price, pleading that the defendant was not notified of the changes
in the Rand/Dollar exchange rate and did not receive a settlement
reconciliation reflecting such changes and did not furnish invoices
or statements reflecting the charges as required, alternatively
that
the plaintiff was now estopped from claiming such alleged shortfalls.
Further it pleads that if it is liable to the plaintiff
in respect of
any short payments, that the amount of R61 067,97 resulting from the
cashing of the guarantees should be set off
against the total of
annexure ‘B’.
THE ISSUES
[8] The issues arising
from the pleadings are in broad terms:
What are the terms of
the contract between the plaintiff and the defendant; specifically
whether they prevent the plaintiff
from claiming payment for
products sold and delivered without payment being received by the
plaintiff up front, or at the very
least, the defendant having
first furnished the plaintiff with proof that the deliveries had
been paid for by its customers
before the plaintiff delivered the
product? This issue involves determining the true terms of the
agreement, whether there
were any variations thereto and any waiver
of such terms?
If the issues in
subparagraph (a) above are answered in favour of the plaintiff,
whether the defendant is liable for the fraudulent
conduct of its
export manager, Marcous?
If answered in the
affirmative, whether the plaintiff proved that the products were
sold and delivered?
Whether the plaintiff
is entitled to recover the short payment of the products reflected
on Schedule “B”?
THE ONUS
[9] The onus to prove the
agreements and the transactions giving rise to the alleged
indebtedness by the defendant to the plaintiff,
is on the plaintiff.
This will include, should they arise, any variation of terms to an
agreement and any waiver of terms thereof.
The onus to prove the
overpayment claimed in the counterclaim is on the defendant.
THE PLAINTIFF’S
VERSION AND EVIDENCE
[10]
The plaintiff adduced only the evidence of Mr Klopper, the Manager:
Economic Crime Risk Management for the plaintiff, to prove
the sales
and deliveries. He has no personal knowledge of any of the
transactions. He holds a B.Comm Honours degree and a Post
Graduate
Diploma in Forensic Accounting and Auditing and started working for
the plaintiff in 1996 as an internal auditor doing
basic internal
audit work. He investigated the alleged 72 fraudulent transactions on
annexure ‘A’ and compiled a spreadsheet
based on
information available within the plaintiff’s systems, including
the manual accounting records and the electronic
accounting records
available in the SAP system.
15
He analysed the process
from the point that the plaintiff received alleged individual orders
from the defendant until delivery,
which it was common cause,
occurred when the
products were pumped into transporters’ tanks at the
plaintiff’s Natref refinery. He illustrated the
process of his
investigation with reference to transaction 21 as an example,
referring to the placement of the order, the pro forma
invoice, the
persons involved in the process, the upliftment of the product at the
Natref refinery, the commercial and tax invoices
generated and the
Customs documentation.
[11] After Mr Klopper
testified about all the documentation, he stated that there was
nothing in the documentation indicating that
the petroleum product
was not sold by the plaintiff and collected for or on behalf of the
defendant. After he had dealt with three
of the disputed
transactions, the defendant’s counsel indicated that the
defendant understood what the documents are and
that Mr Klopper
should only identify any issues that he wanted to identify above the
face value of these documents. Mr Klopper
then conceded that he was
not able to find all the transactions with Exel where the invoice
numbers start with a ‘T’.
He also identified the items
that he had no documentation for, namely transactions ‘A1’
and ‘A2’. He could
not find Natref dispatch documentation
for transactions ‘B14’ and ‘B15’. He was not
able to look at the
original DA 550 documentation for transactions
‘A10’ to ‘A14’. He could also not obtain this
documentation
for the transactions identified as ‘B1’,
‘B3’ to ‘B9’, ‘B13’ to ‘B15’,
‘B17’ to ‘B19’, ‘B21’, ‘B26’
and ‘B27’, ‘B31’ to ‘B36’
and
‘B12’.
[12] It also emerged from
his evidence that:
(a)
The plaintiff instituted disciplinary proceedings
16
against a Mr Stone and Ms
Kotze, two of its employees, for
(i) gross negligence
arising from their failure:
(aa) to ensure that
payment had been received by the plaintiff prior to the release of
orders amounting to R4 160 126.04 in
the case of the defendant;
and
(bb) to exercise due care
in reviewing the age analysis of the defendant’s account.
(ii) bribery/corruption
in that they received and/or attempted to receive bribes from
customers of the plaintiff, including a payment
of R15 000.00 from
Marcous as inducement to perform corrupt and /or dishonest acts;
(b) the plaintiff
instituted disciplinary proceedings against Stone for:
(aa) falsification in
that he denied when questioned having received the payment of R15
000.00 from Marcous;
(bb) fraud in that he
intentionally and unlawfully misrepresented to the plaintiff that it
should release products to the defendant,
a cash customer in
circumstances where he knew that payment had not been received and
thereby caused a loss to the plaintiff in
an amount of R5 440 542.97;
(cc) fraud in similar
circumstances to the latter charge in relation to another customer
Musiwa Trading CC.
Mr
Stone was found guilty as charged
in
absentia
.
The evidence pointed to
Mr Stone having received a payment of R15 000.00 from Marcous.
17
Ms Kotze was convicted of
gross negligence in relation to the orders that were delivered and in
failing to review the age analysis.
THE DEFENDANT’S
VERSION AND EVIDENCE
[13]
The defendant’s evidence is that on or about 7 July 2003 Mr
Goosen of
Exel
Petroleum (Proprietary) Limited
furnished
a quotation
18
to Mr Reddy of the
defendant for the exportation of petrol and diesel to Harare,
Zimbabwe. This quotation which set out the conditions
upon which
products would be supplied provided:
‘
(a)
Payment
in US Dollars / SA Rands
will
be upfront, before loading of road tankers will be authorised, by
means of cash in advance
…..’
(b)
‘The Rand/Dollar exchange rate applicable will be the Reuters
closing rate of the previous day, prior to the transfer
of funds. The
Reuters exchange rate on day of loading will be applied to calculate
your final invoice Rand value. A settlement
reconciliation between
yourself and Exel will be made depending in the change in the Reuters
exchange rate between the date of
initial transfer and the date of
loading’.
(c)
‘If our quotation is successful, Exel will require the
following:
---completion
of application to open an export account with Exel….’
(my underlining).
[14]
Mr Reddy testified that the defendant was cautioned by Mr Goosen
about the risks of trading in Zimbabwe. Mr Goosen recommended
and he,
Mr Reddy, accepted that the defendant should also trade with its
proposed customers in Zimbabwe on a cash before delivery
basis, being
the basis on which the plaintiff would also trade with the defendant,
in order to avoid any risks associated with
such trade. Mr Reddy
confirmed with Mr Goosen that the defendant would engage in trade
with Exel on such basis. The defendant completed
an application
19
to open an export account
with Exel. The application recorded that the method of payment
foreshadowed thereby was ‘cash before
delivery’.
[15]
The General Terms and Conditions
20
which regulated trade by
Exel with its customers was communicated to the defendant under cover
of a letter
21
dated 3 September 2003
and provided as follows:
‘
1.
Payment
by the buyer will be cash upfront
….
6.
This pro forma is subject to the terms and conditions of Exel’s
official quotation submitted to the buyer. The above terms
and
conditions of the Pro forma Invoice are in addition to those of the
Quotation…..
The
Rand/Dollar exchange rate applicable will be the previous day, prior
to the transfer of funds, Reuter’s closing rate.
On loading of
product the Reuter’s exchange at date of loading will be
applied to calculate your final invoice Rand value.
A settlement
reconciliation between yourself and Exel will be made depending in
the change in the exchange rate between date of
initial transfer and
date of loading….
A
faxed copy of the payment made into Exel’s banking account must
be forwarded to Exel. The order will only be processed once
confirmation from Exel’s bank (ABSA) is received by Exel’
.
(my underlining).
[16]
In a fax
22
dated 8 January 2004 the
defendant was notified of the merger between Exel and the plaintiff
and was advised that all transactions
and operational issues would
thereafter be handled by the plaintiff. The plaintiff’s General
Trading Terms and Conditions
23
were communicated to and
accepted by the defendant. They were substantially the same terms as
the Exel Trading Terms and Conditions
and provided inter alia as
follows:
‘
1.
Payment
– upfront
by Telegraphic Transfer or irrevocable Letter of Credit confirmed by
ABSA Bank, or irrevocable Payment Guarantee from a first class
international bank…
4.
Payment must be for the full invoiced amount...
7.
…A faxed copy of the payment made into our banking account
must be forwarded to Sasol.
The order will only be processed once
confirmation from the bank is received by Sasol.’
(my underlining).
[17]
On 2 April 2004 the defendant was required to complete an
application
24
to open an export trading
account with the plaintiff. The application provided as follows:
‘
9.4
No amendment to Sasol’s credit terms shall be valid unless it
is in writing and signed by Sasol…
9.5
If at any time the purchaser is in default of payment, Sasol shall,
without prejudice to any other legal remedy have the right
to defer
further deliveries until payment…
9.10
I/we hereby unconditionally accept and confirm that all transactions
and purchases or petroleum products will be liable to
the terms and
conditions of sale of Sasol Oil, of which a copy is included
herewith’.
[18]
The memorandum
25
dated 13 April 2004 which
set out the outcome of the above application records as follows:
‘
APPLICATION
FOR CREDIT TERMS: CASH BEFORE DELIVERY…
Product
will be supplied on a Cash Before Delivery basis.
Should
the customer wish to pay by cheque, the cheque must be cleared before
delivery (please communicate to the customer)…
OUTCOME:
Approved
on the condition that:
The
account must be managed strictly on a
cash before delivery basis.
Should
the customer wish to pay by cheque, the cheque must be cleared before
delivery
Over
deliveries must not be allowed.
Payment
by means of electronic transfer will be recommended.”
(my underlining).
This result of the
application was communicated to and accepted by the defendant.
[19] On 14 June 2004 the
defendant completed a further export trading application updating its
data, recording:
‘
CREDIT
TERMS: STRICTLY CBD UNLESS OTHERWISE AGREED IN WRITING’
[20] Clauses 9.4, 9.5 and
9.10 of the previous application were replicated as clauses 8.4, 8.5
and 8.10 in the new application.
[21]
The defendant mirrored the plaintiff’s trading terms and
conditions in its dealings and interactions with its customers.
26
The documentation is
consistent with the evidence of Mr Reddy.
[22]
From 8 May 2004 the plaintiff released some deliveries of petroleum
products prior to the receipt of payment in respect thereof.
This was
the case in respect of all the disputed transactions reflected on
annexure ‘A’. No written agreement was concluded
between
the parties varying the payment terms requiring payment to be
effected in cash and upfront and before delivery.
[23] The aforesaid terms
were also consistent with the plaintiff’s internal credit
control policy. This policy provided as
follows:
(a)
Sales of petroleum products would be handled on a cash before
delivery basis;
27
(b)
Only after the approval of a credit facility would the Supply and
Trading Department be authorised and allowed to deliver any
produce
on credit or cash.
28
(c)
Credit control would be required to verify the receipt of payments
and thereafter capture the payment on the customer’s
account.
29
(d)
Only thereafter would credit control be authorised to:
30
(i) release the sales
order;
(ii) print the released
order;
(iii) print the export
documents;
(iv) forward the sales
order to the customer;
(v) receive the relevant
customs documents;
(vi) remove the interface
block from the sales order;
(vii) manually check the
interface block;
(viii) contact the
transporter to pick up the documents and collect the product.
(e) The relevant
accounting entries would be created automatically on the plaintiff’s
SAP accounting system.
(f)
No deliveries or part deliveries would be allowed before payment has
been received.
31
(g)
No second delivery may be made to a customer before the previous
delivery has been paid in full.
32
(h)
All payment terms or changes in payment terms may only be allowed in
writing.
33
(i)
Credit control must compile weekly and monthly reports on outstanding
debtors and unpaid items. The reports must be completed
every Tuesday
by 10h00 and distributed to certain identified personnel. All
relevant information should be reported to the Risk
and Financial
Manager.
34
(j)
Outstanding debtors on the system must be followed up by credit
control, distribution and traders as one team and must be sorted
out
on a daily basis and should not be carried forward from week to
week.
35
(k)
Monthly reports will be compiled with the total outstanding amounts
on the debtor’s age analysis as of the last day of
each month.
No adjustments will be made to the figures and every debit and credit
from 30 to 180 days must be explained in full
under the reasons for
the outstanding debtors.
36
(l)
The credit controller should print the age analysis on a daily
basis.
37
(m)
If a debtor does not comply with the approved credit terms or exceeds
its credit limits the debtor must be contacted telephonically
to
regularise the situation, a meeting should be arranged to ensure
payment and if non compliance continues a decision must be
taken to
terminate future deliveries.
38
(n)
Cash before delivery will only be accepted on the basis of an
electronic transfer of funds, bank drafts or bill of exchange.
No
cheques or ‘physical’
cash
will be accepted.
39
(o)
Invoices should be presented and faxed or emailed to the customer on
a weekly basis.
40
(p)
Statements should be sent out to the customer on the 6
th
of each month.
41
(q)
The credit controller should undertake all reconciliations
highlighting short and overpayments per invoice and per payment.
42
(r)
If an account is defaulted and needs to be blocked it is the duty of
the credit controller to block it after contacting the
business
trader and customer before loading the block.
43
[24] The defendant dealt
with all of its export customers on a cash before delivery basis. It
did not open accounts for any such
customers and did not extend to
them any credit facilities.
[25] Mr Reddy was aware
of the significant risks that were involved in engaging in trade on
any terms other than cash before delivery
with customers located
outside the boundaries of South Africa, and was not willing to expose
the defendant to any risks in relation
thereto.
[26] Mr Reddy steadfastly
maintained that he was not aware of and would in any event not have
sanctioned or countenanced the release
of deliveries by the plaintiff
prior to the receipt by the defendant of payment and payment to the
plaintiff in respect thereof.
DISCUSSION
[27] The discussion of
the merits shall firstly consider the claim represented by annexure
‘A’ to the particulars and
thereafter consider that
represented by annexure ‘B’ to the particulars of claim.
THE ANNEXURE ‘A’ CLAIM
[28] The plaintiff did not adduce
evidence from any representative who would have concluded the
individual transactions with whoever,
but probably Marcous,
representing the defendant in respect of the disputed transactions.
The whereabouts of Ms Kotze, Mr Stone
and Mr Goosen, all of whom
dealt with the defendant most, if not at all material times, were
known to the plaintiff. Yet they were
not called to explain the
conclusion of the separate agreements allegedly giving rise to the
individual transactions detailed in
annexure ‘A’. An
adverse inference must be drawn from the failure to call these
individuals.
[29] The plaintiff however endeavoured
to overcome its difficulties in this regard by relying on the
provisions of
section 3(1)(c)
of the
Law of Evidence Amendment Act 45
of 1988
, contending that the hearsay evidence emerging from the
documents and Mr Klopper’s evidence in relation to the
individual
transactions was admissible in the interest of justice,
having regard to:
(a) the nature of the proceedings,
being civil as opposed to criminal proceedings (where the approach to
admitting such evidence
would be more circumspect);
(b) the nature of the evidence,
involving as it does reliance on contemporaneous documents created in
the plaintiff’s SAP
computer system and there being no
suggestion of any tampering with such documents;
(c) the purpose for which the evidence
is tendered, namely to show that product was delivered;
(d) the probative value of the
evidence, which it was submitted was strong because the documentation
applied where there were admitted
transactions and there was no
rational basis to contend that they would not similarly be the basis
for the disputed transaction
on annexure ‘A’;
(e) the reason why the evidence is not
given by the person upon whose credibility the probative value of
such evidence depends;
and
(f) the lack of prejudice which the
admission of the evidence might entail, it being argued that Mr Reddy
of the defendant said
that these deliveries in respect of the
disputed items were made to Bravo Trading.
The plaintiff argued that If each
witness who had personal knowledge of the facts had to be called the
trial would have been an
enormous waste of court time and money; the
documents are contemporaneous, they are consistent and there is no
reason to doubt
there veracity. Accordingly, the submission was that
Mr Klopper’s evidence, together with the documentary evidence
contained
in the five volumes of exhibit ‘A’, as
summarised in exhibit ‘C’, proved the placement of the
orders, the
sale of the product and the delivery thereof as well as
the purchase price of the product sold and delivered.
[30] The relevant
documents extracted and referred to by Mr Klopper certainly suggests
with some probative force that:
(a) in respect of the
disputed transactions, product was ordered by the defendant and
delivered by the plaintiff without payment
ever being received; and
(b) in a number of
admitted transactions, delivery of the product at Natreff had
occurred prior to payment being received by the
plaintiff, without
any complaint by the defendant. It is however not surprising that no
complaints were raised, as generally one
would not necessarily expect
complaints to be raised while no problems are experienced. But the
irresistible inference which the
plaintiff wants to draw from the
fact that there were some admitted transactions where delivery was
made before payment was received
without any protestation, is that
the disputed transactions on annexure ‘A’ were, on
probability each individually
concluded on the contractual basis that
delivery could be effected without prior payment, or that this had
become the contractual
basis upon which the parties dealt with each
other.
[31] As regards viewing
each disputed transaction as a separate and distinct transaction,
there was of course no direct evidence
of the underlying agreement
giving rise to the individual deliveries. All the documentation
established was the processing of the
deliveries giving rise to the
individual transactions. Proof of delivery at the Natreff refinery,
does not establish liability.
It is only delivery with proof of the
underlying terms of the agreement giving rise to a legal liability,
which could impose legal
liability. The mere fact that some
deliveries were effected before payment was received, but with
payment nevertheless subsequently
being made by the defendant, does
not
per se
establish liability for all deliveries, if the
terms of the agreement were that delivery was only to be effected
after payment
had been made.
[32]
The evidence certainly proves at the level of probability that a
fraud was perpetrated by Marcous. In order to be successful,
the
fraud also required collusion within the operations of the plaintiff,
or, at the very best for
the plaintiff, a gross dereliction of duty on the part of some of its
employees.
It
is undisputed that in releasing the relevant deliveries the
plaintiff’s staff acted contrary to their instructions and
in
particular contrary to the plaintiff’s credit control policy.
44
It is overwhelmingly
probable that the release of deliveries by the plaintiff prior to the
receipt by it of payment in respect thereof
in respect of the
disputed transactions occurred by reason also of a fraud perpetrated
on the plaintiff by one or more of its employees
acting in concert
with Marcous
45
There was a total failure
on the part of the plaintiff’s employees including Kotze,
who was at the material
time the credit controller responsible for the defendant’s
account,
to
adhere to the requirements of the plaintiff’s credit control
policy. If the policy was properly adhered to no delivery
of any
product should have been undertaken by the plaintiff. Certainly no
second delivery or any further deliveries should have
been undertaken
by the plaintiff. The relevant age analysis would have reflected the
irregular arrear position in relation to the
account on a daily,
if not a weekly,
if not a monthly basis
and, at the very least, further deliveries should have been stopped.
[33]
Puzzling also is the fact that although Mr Goosen telephoned Mr Reddy
on 16 July 2004 and advised him that the defendant was
indebted to
the plaintiff in an amount of approximately R1.2 million arising from
deliveries which had been released without payment,
the
plaintiff released some twenty two further deliveries of product
without prior receipt of payment in respect thereof during
the period
16 July 2004 until 10 August 2004. If this was due to the terms of
the agreement(s) pursuant to which deliveries were
made no longer
requiring payment before deliveries were made, then I would have
expected Mr Goosen to testify to that effect and
explain the patent
conflict with the express terms contained in the documentation relied
upon by the defendant requiring payment
up front before deliveries
should be made. There was no such evidence. Without it being
explained that Mr Goosen was not available,
an inference to the
contrary, namely that payment up front was no longer required, cannot
simply be assumed. Again, an adverse
inference is clearly justified
on the facts as against the plaintiff.
46
The justification for
such adverse inference must weigh against the plaintiff because its
employees would have exclusive knowledge
as to what transpired within
the operations of the plaintiff in releasing deliveries without
payment and contrary to the terms
of the agreement.
[34]
Based on the aforesaid, it cannot be said that the delivery of
product before payment was received in respect of some, or even
many
of the admitted transactions,
carries
as the only reasonable inference that this was the agreement in
relation to all recorded purported sales by the plaintiff
to the
defendant. Most importantly also, such a conclusion ignores the
defendant’s direct evidence altogether.
[35]
The defendant’s version, as also borne out by the contents of
the documents it relies on as expressing the terms of the
agreement
between them pursuant to which the individual transactions were
concluded,
clearly
referred to it being on the basis of cash before delivery. This was
not just a fanciful term but one based on the very reality
of risk
when dealing with export fuel sales which, on the unchallenged
evidence of Mr Reddy, was discussed between the parties
and which
they endeavoured to countenance by the terms of their agreement.
[36]
As much as there were separate transactions giving rise to the
individual deliveries, the probabilities are that these specific
sales and deliveries occurred against the background of the agreement
between the parties contended for by the defendant.
[37] That it was a
material term of the parties’ agreement that the plaintiff had
to be paid in cash before delivery occurred
is in my view also
supported by the successful disciplinary measures taken by the
plaintiff against its employees. There would
be no basis for taking
disciplinary proceedings against Ms Kotze for failing to ensure that
payments were received by the plaintiff
prior to the release of
orders unless her conduct was contrary to the terms of the parties’
agreement.
[38]
The uncontradicted evidence of Mr Reddy was that it was a material
express term of the agreement that deliveries of petroleum
products
would only be undertaken on a cash before delivery basis and all the
relevant documents and the evidence points to this
conclusion.
47
[39] The only questions
remaining are, accepting that it was a term of the parties’
agreement that delivery was not to occur
before payment was made to
the plaintiff, whether that term was varied or waived?
WAS THERE A VARIATION
OF THE TERM REQUIRING CASH PAYMENT BEFORE DELIVERY
[40] The plaintiff’s
credit application and the credit control policy expressly stipulated
that:
‘
no
amendment to Sasol’s terms shall be valid unless it is in
writing and signed by Sasol’
[41]
It is common cause that the plaintiff did not in writing amend the
credit terms extended to the defendant. That disposes of
any notion
that there could be a valid variation of that term.
WAIVER
[42]
In paragraph 9 of the plaintiff’s particulars of claim the
plaintiff pleaded as follows:
48
‘
Payment
of the purchase price of the petroleum product referred to in
annexures “A” and “B” by the Defendant
to the
Plaintiff had to be effected in cash by no later than the date on
which the invoice for the delivery of the petroleum product
was
issued. The Defendant failed to make the cash payment as aforesaid,
although the Plaintiff delivered the petroleum product
to the
Defendant.’
[43]
In a request for further particulars
49
the defendant requested
the plaintiff to:
‘
(a)
State whether such cash payments were in terms of the Plaintiff’s
trading terms and conditions. If so, a copy of such
terms and
conditions is requested.’
(b)
‘State the basis underlying the plaintiff’s alleged
delivery of the petroleum products prior to receiving the cash
payments’.
[44]
The response
50
put up by the plaintiff
is in the following terms:
‘
The
Plaintiff and the Defendant deviated from the standard terms and
conditions in that the Plaintiff did not receive payment for
all the
petroleum products before delivery. This term and condition was for
the sole benefit of the Plaintiff. The Plaintiff, through
its
conduct, waived strict compliance therewith. The Defendant’s
managing director, Mr Reddy, knew from approximately May
2004 that
the Plaintiff and Defendant deviated from this term and condition.’
[45]
In argument Mr Pretorius SC for the plaintiff conceded that he would
be hard pressed to argue that a term requiring payment
before
delivery was to be effected, if proved to have been a term of the
agreement, did not endure for the benefit of both parties.
51
That concession was
correctly made. The question remaining is whether there was a waiver
of the benefits of such a term by the defendant.
[46]
There was no evidence of an express waiver. At best for the plaintiff
it would have to prove a waiver arising from the conduct
of the
parties.
52
[47] Mr Reddy testified
that when Mr Goosen indicated that Exel would supply petroleum
products required by the defendant on a cash
before delivery basis,
Mr Goosen explained the reasons underlying such requirement. Apart
from it apparently being a Reserve Bank
requirement relating to cross
border transactions, it was also a prudent business practice as there
are plainly significant risks
to trading with customers in a foreign
country. Mr Reddy appreciated the risks and agreed to the basis on
which the plaintiff proposed
that the parties would trade, as it
would also suit the defendant’s requirements. There would be no
risks to both the plaintiff
and the defendant if products were
released by the plaintiff only after payments in respect thereof were
received by the defendant
and paid over to the plaintiff, or at the
very least, the plaintiff being advised by the defendant that payment
had been received.
The term requiring payment in cash upfront prior
to delivery served to benefit both the plaintiff and the defendant.
It was the
basis in terms whereof Exel initially and the plaintiff
subsequently were willing to trade with the defendant. In the light
of
that background neither of the parties would at the level of
probability readily waive the benefit of such a term.
[48]
In its further particulars
53
the plaintiff contends:
‘
The
Plaintiff requested payment in advance. The requests were addressed
to Mr Marcous Baher. Mr Baher promised that payment would
be made,
and in certain instances payment was made. In addition the Plaintiff
had surety for an amount of R500 000.00.’
[49] The security put up
by the defendant, of course, did not relate to the petroleum export
account at all but related to a separate
lubricants account and a
furnace oil account which was never activated. That part of the
particulars furnished appear to be factually
incorrect. There was no
evidence of any agreement that the plaintiff would utilize and/or
rely upon either of the two guarantees
for the purposes of the export
trading account. It was only
ex post facto
that they were
applied to discharge the admitted indebtedness arising from five
transaction on annexure ‘A’. In any
event, there was no
evidence that the plaintiff relied upon the said guarantees in
releasing any of the disputed deliveries. Nor
was any evidence
adduced by the plaintiff that Marcous made any promises to pay. In
the absence of such evidence there was no basis
for any alleged
waiver of the term requiring payment before the release of the
petroleum products.
[50] In the final
analysis, at best for the plaintiff, its case for contending that
there was a waiver is mainly or solely dependant
on the evidence that
in relation to some deliveries for which liability was accepted, the
defendant paid for the deliveries although,
ex facie
the
applicable invoices, delivery had already occurred and thus preceded
payment, that is without payment having been made up front
in respect
of such product before or at the time of delivery.
[51] Mr Reddy and Mrs
Naidoo denied being aware that any product had been released prior to
payment until after 16 July 2004 when
Mr Goosen telephoned Mr Reddy
about the account being in arrears. According to Mr Reddy and Mrs
Naidoo, the defendant had entrusted
the handling of the export
account to Marcous. Marcous’s authority was limited to
transacting for the sale of products on
a cash before delivery basis.
Marcous was required to liaise with their customers regarding the
defendant’s requirements
and payment. As and when the defendant
required the delivery of petroleum products to its customers Mrs
Naidoo was to ensure that
payment had been received by the defendant
from its customer, and if so, she and Marcous would approach Mr Reddy
for authorisation
to effect payment from the funds held to the
plaintiff. The documents that were presented to Mr Reddy for such
purpose would invariably
include the relevant pro forma invoice which
would set out the calculation undertaken by Marcous as to the profit
which the defendant
would realise from the transaction, checked by
Mrs Naidoo, and her confirmation that the relevant funds had been
received by the
defendant. If these requirements were met, Mr Reddy
would authorise the payments to the plaintiff.
[52] It was argued on
behalf of the defendant that Mr Reddy did not and was not required to
consider and/or study the documents
underlying each transaction, that
he accordingly did not become aware that certain of the deliveries in
respect whereof payment
was made had already been delivered, and that
this only came to his attention and knowledge after Mr Goosen’s
telephone call
of 16 July 2004.
[53]
Only five of the twenty seven payments reflected on the
PriceWaterhouseCoopers schedule
54
in respect of deliveries
already made were effected subsequent to 8 May 2004 and prior to 16
July 2004. These payments were made
on 25 May 2004, 30 June 2004 and
6 and 7 July 2004. At the level of probability, Mr Reddy in approving
payments based on the underlying
documents required to be placed
before him, must have been aware from the contents of the tax
invoices and sometimes other documents
clearly indicating a delivery
date which had already passed (one such invoice in fact being
initialed by him), that these payments
between May and 16 July 2004
were made subsequent to delivery and therefore contrary to the terms
of the parties’ agreement.
[54] But these few
exceptions do not point to a consistent pattern of conduct,
especially where such conduct would be in conflict
with the express
terms of the parties’ agreement. Most importantly, these
exceptions are not consistent only with an inference
that there was
now an implied variation by waiver of a term of the agreement which
was to operate for the benefit of both parties.
[55] Payment having
already been received by the defendant from its customers in respect
of those transactions, it is unlikely that
the fact that the
deliveries were released by the plaintiff before payment was made to
it would have been of any serious concern
to Mr Reddy and the
defendant.
[56] It was only after 16
July 2013 that it transpired that the plaintiff was seeking payment
in respect of deliveries which were
already made and in respect
whereof the defendant had not received payment. It was these
transactions which raised the concerns
of the defendant and the
plaintiff. That concern notwithstanding, the plaintiff permitted
further deliveries without payment first
having been received to
still be made thereafter. This could only have been achieved by the
fraudulent or negligent conduct of
the plaintiff’s employees in
allowing deliveries to be effected without payment up front (for
which the employees were held
to account successfully) or allowed to
happen if there had indeed been a waiver by the defendant of the term
that payment was to
be made to the plaintiff up front before any
deliveries were made.
[57] There was no
evidence from any witness on behalf of the plaintiff that the
deliveries were released before payment because
the plaintiff indeed
viewed the term as varied or waived.
[58] But the aforesaid
facts must also be measured against the relevant legal principles to
establish whether, even in the absence
of such evidence, there was
indeed a waiver which would preclude the defendant from relying on
the term of the agreement that deliveries
were only to occur if
payment had been made.
[59]
The learned author Christie
55
has stated:
‘
Having
gone to all the trouble to acquire contractual rights people are, in
general, unlikely to give them up. There is therefore
a presumption,
even in some cases a strong one, against waiver.
That
means not only that the onus is upon the party asserting waiver to
prove it, but that although, as in all civil cases, the
onus may be
discharged on a balance of probability, it is not easily discharged.’
[60]
In
Hepner
v Roodepoort-Maraisberg Town Council
56
Steyn C J said:
‘
There
is authority for the view that in the case of waiver by conduct, the
conduct must leave no reasonable doubt as to the intention
of
surrendering the right in issue (
Smith
v Momberg
(1895) 12 SC 295
at p 304;
Victoria
Falls and Transvaal Power Co Ltd v Consolidated Langlaagte Mines Ltd
1915 AD 1
at p 62) but in
Martin
v de Kock
1948 (2) SA 719
(AD) at p 733 this Court indicated that that view may possibly
require reconsideration. It sets, I think, a higher standard than
that adopted in
Laws
v Rutherfurd
1924 AD 261
at p 263, where Innes CJ says: “The onus is
strictly on the appellant. He must show that the respondent, with
full knowledge
of her right, decided to abandon it, whether expressly
or by conduct plainly inconsistent with an intention to enforce it.”
This
accords with the test applied in [
City of Cape Town v Kenny
1934 AD 543]
and was followed in
Collen v Rietfontein
Engineering Works
1948 (1) SA 413 (AD) at p
436 and
Linton v Corser
1952 (3) SA 685
(AD) at p 695. (Cf.
Ellis and others v Laubscher
1956 (4) SA 692
(AD) at p 702). In my opinion
the test is more correctly stated in these cases.’
[61]
Clear proof is required,
especially
of a tacit as opposed to an express waiver. As Corbett AJA remarked
in
Borstlap
v Spangenberg
:
57
‘
Dit
is herhaaldelik deur ons Howe beklemtoon dat duidelike bewys van ‘n
beweerde afstanddoening van regte geverg word, veral
waar op ‘n
stilswyende afstanddoening staat gemaak word. Dit moet duidelik blyk
dat die betrokke persoon opgetree het met
behoorlike kennis van sy
regte en dat sy optrede teenstrydig is met die voortbestaan van
sodanige regte of met die bedoeling om
hulle af te dwing.’
[62]
In
Ex
Parte Sussens
58
it was held that:
‘
The
necessity for a full knowledge of the law in the case of waiver
follows from the principle that waiver is a form of contract,
in
which one party is taken deliberately to have surrendered his rights:
there must therefore be proof of an intention
so to surrender, which can only exist where there is knowledge both
of the facts and the legal consequences thereof.’
[63] Christie
notes
that the necessity to prove knowledge of the rights allegedly
waived
before it can be said that the conduct in question amounts to waiver,
applies equally to a case where the act of alleged
waiver has been
performed not by the party to the contract himself but by his agent.
In
Pretorius v Greyling
59
Price J said:
‘
It
seems to me, however, that in a matter of waiver it cannot be said
that the knowledge of the principal is that of the agent or
that
knowledge of the agent is that of the principal, because before there
is a waiver there must be an unequivocal act done with
full knowledge
of all the relevant facts as well as of the rights which it is argued
have been waived. This knowledge, to be effective
in the case of
waiver, must be the knowledge of a single person, not partly of one
and partly of another, because no intention
to waive can be inferred
unless the particular person himself who commits the act which is
said to constitute waiver knew of the
relevant facts and intended to
waive the rights of which he was fully aware.
If
in this case it is the agent who waived the rights then it must be
proved that he himself knew all the relevant facts as well
as the
principal’s legal rights and intended to waive those rights,
and it must also be proved that he was authorised to
waive his
principal’s right’.
[64] It was improbable
that any person authorised to make a decision on behalf of the
plaintiff in relation to the agreement would
have authorised or
sanctioned the delivery of petroleum products without payment being
received by the plaintiff in respect thereof
in cash, upfront and
prior to delivery. This fact is also consistent with the disciplinary
proceedings the plaintiff instituted
against Ms Kotze
[65]
When Mr Goosen initially contacted and subsequently wrote to the
defendant,
he
recorded that exports were on strictly cash before delivery basis.
60
This was accepted by the
defendant. Mr Goosen would not have scribed otherwise unless that was
a term of the agreement.
[66]
The management of the plaintiff did not proceed on the basis of any
alleged waiver. In fact, they were totally unaware, at
least for some
time until probably even after Mr Goosen contacted Mr Reddy, that due
to the conduct of some of its employees, the
disputed deliveries were
being released without payment first having been received. Were it
not for such conduct and fraud,
the
disputed deliveries would not have been released.
[67]
It was certainly not open to the plaintiff,
even
if the knowledge of its employees can be attributed to the plaintiff,
to unilaterally waive a
material term of the agreement fundamental thereto,
which produced
consequences which both parties were at pains to avoid.
61
[68]
The non-variation clause in the agreement further also precludes
reliance on an alleged waiver. The credit application form
signed by
the defendant contained a non variation clause. In
Witon
Chemical (Proprietary) Limited v Rebuff (Proprietary) Limited
62
the court observed as
follows:
‘
One
must immediately distinguish between a waiver of accrued rights and a
waiver to rely on certain contractual provisions. The
defendant here
relies on a waiver to rely on certain contractual provisions. This
amounts to a variation of the agreement which
flies in the face of
the non-variation clause.’
[69]
In
Academy
of Learning (Pty) Ltd v Hancock and Others
63
Brand J (as he then was)
stated as follows:
‘
In
my view the subsequent oral agreements relied upon by respondents
would constitute amendments or 'changes' to clause 5.4 of the
agreement. (See, for example
,
Van Tonder en 'n Ander v Van der Merwe en Andere
1993 (2) SA 552
(W). In terms of clause 19 such oral amendments or
changes are not binding on parties. It is a trite principle that a
'non-variation
clause' such as clause 19 is in itself binding and
enforceable. (See, for example,
SA
Sentrale Ko-op Graanmaatskappy Bpk v Shifren en Andere
1964 (4) SA 760
(A) at 766.) Consequently, the oral amendments
contended for by respondents must be regarded as of no force and
effect. However,
even if the subsequent agreements must be regarded
as constituting a waiver or an indulgence by applicant - as opposed
to an amendment
- clause 19 is wide enough to exclude oral waivers or
indulgences as well. (
Compare
Hillsage Investments (Pty) Ltd v E National Exposition (Pty) Ltd
and Others
1974 (3) SA 346
(W) at 354;
Impala
Distributors v Taunus Chemical Manufacturing Co (Pty) Ltd
1975 (3) SA 273
(T) at 178.) Even in this event such oral waiver or
indulgence would thus be equally unenforceable against applicant.’
[70] By parity of
reasoning, the waiver contended for by the plaintiff would be
unenforceable as against the defendant. It is highly
improbable that
the defendant would knowingly have countenanced the release of
products by the plaintiff in circumstances where
the defendant had
not received payment in respect thereof from its customers,
particularly having regard to the enormous risks
of releasing
products to foreign customers and/or consignees in respect of
customers who did not have any accounts or credit facilities
with the
defendant.
[71] The evidence
overwhelmingly points to the conclusion that a fraud was perpetrated
within the operations of both the plaintiff
and the defendant and it
was for this reason only that the disputed deliveries were released.
The plaintiff has failed to discharge
the onus which rests upon it in
relation to the waiver relied upon.
[72] In the light of my
aforesaid conclusions it becomes unnecessary to consider the further
issues identified in paragraph [8](b)
and (c) above and I refrain
from doing so.
[73]
The supplies of petroleum products for which the plaintiff seeks to
hold the defendant liable were undertaken in breach of
the term of
the agreement requiring cash payment to precede delivery. In
Academy
of Learning (Pty) Ltd v Hancock & Others
64
Brand J
(as
he was then) stated as follows:
‘
As
I see the legal position - and I do not understand the learned author
Christie to differ fundamentally - a debtor can rely on
the
creditor's wrongful conduct as an excuse for his/her failure to
perform if the facts of the case fall within the ambit of one
or more
of the following three broad categories:
…
(c)
Where the creditor's conduct complained of by the debtor in itself
constituted a breach of an express or an implied term of
the
agreement. This is the type of situation where the creditor expressly
or impliedly bound him/herself 'to carry out the
necessary
preliminaries which rest upon him' (Christie (op cit at 550); see
also, for example,
Design and Planning Services
(
supra
at 695C - E)) or to 'do nothing of his own motion to put an end to
that state of circumstances under which alone the arrangement
can be
operative'. (Christie (op cit at 550).) The latter example given by
the learned author Christie must, however, be understood
in the
context of the quotation where it comes from, namely from the dictum
by Cockburn CJ in the case of William Stirling the
Younger v Boyd
& Maitland 5 Best & Smith
840, which was referred to with
approval by Searle JP in the case relied upon by Christie, namely
Truter v Hancke
1923 CPD 43
at 50. This dictum by Cockburn CJ
reads as follows:
“
If
a party enters into an arrangement which can only take effect by the
continuance of a certain existing state of circumstances,
there is an
implied engagement on his part that he should do nothing of his own
motion to put an end to that state of circumstances
under which alone
the arrangement can be operative.”'
Christie
65
states as follows in this
regard:
‘
A
plaintiff who sues for payment must allege and prove that he has
performed his obligations entitling him to payment, and no matter
how
positively the defendant alleges that the plaintiff has not performed
but is in breach, the onus remains on the plaintiff to
prove he has
performed’.
[74] Accordingly, the
plaintiff has failed to prove that it has any enforceable contractual
right for recovery of the purchase price
of the disputed petroleum
products reflected on annexure ‘A’.
THE ANNEXURE ‘B’
CLAIM
[75] This claim is
founded upon differences in the exchange rate between the date of
payment by the defendant and the date of delivery
of petroleum
products admitted to be sold and delivered by the plaintiff to the
defendant.
[76]
The documents showed (and Mr Klopper accepted) that it was a material
term of the agreement between the parties
66
that in the event of
there being any change in the Reuters exchange rate between the date
of payment and the date of loading,
the
plaintiff would furnish the defendant with a reconciliation
reflecting the particulars of such difference and the additional
amount if any payable in respect of each transaction for payment by
the defendant.
67
[77] Mr Reddy testified
that the appropriate time for the defendant to be furnished with such
reconciliation was prior to or immediately
after the time of loading.
This was the only viable means whereby the defendant would be in a
position to recover from its customers
the amount thereof. As far as
Mr Reddy was aware credits or debits arising from each transaction
were addressed in subsequent transactions
concluded between the
plaintiff and defendant. Clearly, such a reconciliation had by
necessary implication to be furnished as soon
as possible after the
individual transactions were completed, or at least within a
reasonable time of them being completed so as
to enable the defendant
in turn to recover any difference from its customers.
[78] No such
reconciliation as foreshadowed by the agreement was provided to the
defendant. The first time the defendant became
aware of the
plaintiff’s claim in this regard was when the action was
instituted. That was not within a reasonable time.
[79] By that stage it was
too late for the defendant to recover from its customers the amount
that was payable by each of them.
[80]
Due to the breach by the plaintiff of its obligations,
it is not entitled to
recover from the defendant the amount foreshadowed by annexure ‘B’.
68
[81] The plaintiff’s
claim founded upon annexure “B” accordingly also falls to
be dismissed.
THE DEFENDANT’S
COUNTERCLAIM
[82] It follows from the
dismissal of the plaintiff’s main claims that the defendant
would be entitled to judgment against
the plaintiff for payment of
the amount of R61 076.00 plus interest thereon at the rate of 15,5%
per annum with effect from 16
August 2004 to date of payment.
COSTS
[83] The defendant has
been successful and there is no reason why it should not be entitled
to its costs both in defending the plaintiff’s
claims against
it and in pursuing its counterclaim. The costs of two counsel have
been sought. Such costs are in my view justified
in defending the
plaintiff’s claim. The counterclaim was integral to that
defence. The amount of the counter claim is however
only R61 076.00.
In the exercise of my discretion I am disposed to allowing the costs
in respect thereof on the high court scale
in view of it being tied
so closely to the plaintiff’s claim, but to allow only the
costs of one counsel.
ORDER
The plaintiff’s
claims are dismissed with costs, such costs to include the costs of
two counsel where two were employed,
and all reserved costs; and
Judgment is granted
against the plaintiff in favour of the defendant for:
Payment of the sum of
R61 076.00;
Interest on the sum of
R61 076.00 at the rate of 15,5% per annum from 16 August 2004
to date of payment;
Costs of suit, such
costs limited to the costs of employing one counsel.
___________________
1
Five
transactions on annexure ‘A’ were admitted by the
defendant and do not arise from the fraudulent activities of
Marcous.
2
This
was conceded by the plaintiff’s counsel during argument.
3
In
some instances the tax invoice and in others the pro forma invoice
numbers are provided.
4
The
defendant’s initial plea to the particulars of claim was a
bare denial denying that it placed any orders and received
the
products. It subsequently amended its plea.
5
In
paragraph 1.6 of the replication the plaintiff denies that Mr Goosen
had authority to conclude the agreement as alleged.
6
Annexures
‘C1’ and ‘C2’.
7
Annexures
‘D1’ to ‘D4’ to the plea
8
Annexure
‘E’
9
Annexure
‘F’
10
The
further terms of the agreement were as pleaded in paragraph 9 of the
Plea. They are not relevant to this judgment.
11
Annexures
‘G1’ to ‘G5’, page 28 read with pages 52 to
56.
12
In
its Replication the plaintiff pleads that the defendant placed
orders with it long before the agreement pleaded in paragraphs
13 to
15 of the defendant’s plea and attaches annexures ‘R1’
to ‘R4’ indicating when the defendant
paid certain
invoices together with the proof of payment attached to the
spreadsheet, marked ‘A1’ to ‘A13’.
13
The
difference between R500 000,00 and R438 923,04. In reply the
plaintiff denies that it owes any money to the defendant.
14
A
further plea that the plaintiff did not have the
locus standi
to institute proceedings for recovery of any amounts that may be
payable to Exel was abandoned at the commencement of the
proceedings.
.
15
SAP
stands for Systems Application Program.
16
Exhibit
D103 to 105.
17
Exhibit
A1602.
18
Exhibit
D5 and 6.
19
Exhibit
D8 to 11.
20
Exhibit
D26.
21
Exhibit
D25.
22
Exhibit
D32.
23
Exhibit
D33.
24
Exhibit
D40 to 44.
25
Exhibit
D46 and 47.
26
Exhibit
D55.
27
Exhibit
E17: Credit Terms: paragraph 4.1.
28
Exhibit
E20: Handling and Approving of Credit Facilities: paragraph 8.1.
29
Exhibit
E7: Process flow: paragraphs 11 and 12.
30
Exhibit
E7: Process flow: paragraphs 17 to 21; Exhibit E37: Releases of
Orders: paragraph 18.4; Exhibit E45: SAP paragraphs 26
to 34.
31
Exhibit
E2: Payment terms: C001.
32
Exhibit
E3: A: Payment terms.
33
Exhibit
E3: A: Payment terms.
34
Exhibit
E4: F: Reports; Exhibit E24: Weekly and monthly reports: paragraph
4.
35
Exhibit
E4: F: Reports.
36
Exhibit
E4: F: Reports (2); Exhibit E42: Age Analysis: paragraph 22.
37
Exhibit
E44: Printing of Age Analysis: paragraph 25.
38
Exhibit
E21: Noncompliance with requirements: paragraph 9.3.
39
Exhibit
E22: Cash before delivery: paragraph 11.
40
Exhibit
E31: Statements and invoices: paragraph 14.4.1.
41
Exhibit
E31: Statements and invoices: paragraph 14.4.2.
42
Exhibit
E38: Reconciliations: paragraphs 18.4.
43
Exhibit
E47: Procedure for blocking of accounts.
44
Exhibit
E.
45
The
evidence reveals that Marcous received into his personal banking
account the following payments from one of the defendant’s
customers and in particular Bravo Trading on the following dates -
27 May 2004: R87 000.00; 4 June 2004: R61 500.00; 29 June
2004: R20
000.00; 9 July 2004: R103 572.00; 28 July 2004: R40 000.00, giving a
total of R312 072.00.
His
credit card statements reflected substantial credits - 18 June 2004:
R7 000.00; 21 June 2004: R10 000.00; 5 July 2004: R10
000.00; 5 July
2000: R10 000.00; 6 July 2004: R7 000.00; 12 July 2004: R15 000.00;
12 July 2004: R15 000.00; 13 July 2004: R100
000.00; 14 July 2004:
R15 000.00; 16 July 2004: R15 000.00; 19 July 2004: R10 000.00; 5
August 2004: R15 000.00; 6 August 2004:
R15 000.00; 7 August 2004:
R15 000.00; 10 August 2004: R15 000.00, giving a total of R274
000.00.
His
banking account reflected the following additional credits - 1 July
2004: R15 000.00; 13 July 2004: R10 000.00; 13 July 2004:
R10
000.00; 24 July 2004: R4 100.00; 27 July 2004: R15 000.00; 30 July
2004: R15 000.00; 31 July 2004: R23 280.37; 3 August 2004:
R20
000.00; 3 August 2004: R15 000.00; 4 August 2004: R15 000.00, giving
a total of R142 380.37.
During
that time Marcous’ income from his employment with the
defendant generated an income of approximately R10 000.00
per month
only and he had no known legitimate source from which he could have
generated the above credits and payments totaling
at least R728
452.37 over a period of approximately two (2) months.
The
fact that he absconded on 6 August 2004 at a time when he was called
upon to answer allegations pertaining to his dealings
with the
plaintiff and the defendant’s customers lends credence to the
conclusion that he was perpetrating a fraud and
in collusion with an
employee or employees of the plaintiff, possibly Stone and Kotze and
possibly other employees of the plaintiff
in
46
Zeffert
and Paizes
The South African Law of Evidence
2ed (2009) page
135 to 137 and the cases cited therein;
Galante v Dickinson
1950 (2) SA 460A
at 465.
47
Exhibit
D5: The Exel Quotation.
Exhibit
D10: The Exel Credit Application.
Exhibit
D26: The Exel General Terms and Conditions.
Exhibit
D33: The Sasol General Terms and Conditions.
Exhibit
D43: The Sasol Credit Application .
Exhibit
D46 to 47: The Sasol Appraisal of the Credit Application.
Exhibit
D49: The Export Trading (Customer data) Application.
Exhibit:
The Credit Control Policy.
48
Pleadings:
page 7: paragraph 9
49
Pleadings:
page 130: Request for Further Particulars: paragraph 5.
50
Pleadings:
page 141: Further Particulars: paragraph 7.1.
51
It
was accordingly not open to the plaintiff to unilaterally waive
compliance with the condition.
52
Coopers
& Lybrand v Bryant
[1995] ZASCA 64
;
1995 (3) SA 761
(A) at 767E – 768E;
KPMG Chartered Accountants v Serurefin & Another
2009 (4)
SA 399
SCA at para 39;
Natal Joint Municipal Pension Fund v
Endumeni Municipality
2012 (4) SA 593
SCA at para 18.
53
Pleadings:
page 140: Further Particulars: paragraph 5.
54
Exhibit
I.
55
RH
Christie & GB Bradfield
The Law of Contract in South Africa
6ed (2011) at 457. See also
Road Accident Fund v Mothupi
2000
(4) SA 38
SA at para 16 to 19.
56
1962
(4) SA 772
(A) at 778.
57
1974
(3) SA 695A
at 704.
58
1941
TPD 15
at 20.
59
1947
(1) SA 171
(W) at 177.
60
Exhibit
D57.
61
Hilsage
investments (Pty) Ltd v National Exposition (Pty) Ltd and Others
1974 (3) SA 346
(W) at 354F-G.
62
[2002]
(4) All SA 232
(T) at 239 – 240.
63
2001
(1) SA 941
(C) at para 36.
64
2001
(1) SA 941
(C) at [33].
65
RH
Christie & GB Bradfield
The Law of Contract in South Africa
6ed (2011) at 516.
66
Initially
Exel and later the plaintiff.
67
The
transcript page 361 line 5 – 363 line 20.
68
In
the alternative, the plaintiff submitted that by virtue of the
relationship between the plaintiff and the defendant, the nature
of
the agreement that was being implemented and the risks associated
with recovering from foreign and other customers any additional
amounts payable by them, the plaintiff was obliged to communicate to
the defendant particulars of any additional amounts payable
by the
defendant prior to loading or immediately thereafter. Accordingly it
was submitted that having failed to do so, the plaintiff
is estopped
from pursuing any claim against the defendant for the amount claimed
by the plaintiff. Although it is not strictly
necessary to decide
this issue, there is merit in the submissions that by failing to
provide the defendant with reconciliations,
the plaintiff
effectively represented to the defendant that no amounts were
payable by it owing to any fluctuations in the exchange
rate, the
defendant accordingly accepted that no such amounts were payable by
it, the defendant accordingly did not seek to recover
from its
customers the amount of any shortfalls that were allegedly payable,
and in doing so it accordingly acted to its prejudice,
which would
afford grounds for an estoppel.