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2009
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[2009] ZAGPPHC 17
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Kievitskroon Country Estate (Pty) Ltd v Department of Land Affairs (6504/09) [2009] ZAGPPHC 17 (2 April 2009)
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTH
GAUTENG HIGH COURT, PRETORIA)
Case
No: 6504/09
KIEVITSKROON
COUNTRY ESTATE (PTY) LTD
Plaintiff
v
DEPARTMENT
OF LAND AFFAIRS
Defendant
JUDGEMENT
SAPIRE, A J:
The
plaintiff owns an extensive rural property near Pretoria on which
commodious and attractive buildings have been erected. These
buildings standing in a park, house luxurious guest accommodation and
facilities for holding social functions. Conferences are
a
speciality. The defendant is the Department of Land Affairs. It has
been incorrectly cited in these proceedings. The incorrect
citation,
however, has been accepted and the case has proceeded as if the
Minister had been correctly cited.
In
mid 2004 officers employed by the Defendant decided to hold a
prestigious international conference, the theme of which was
"Development
Information: An African Perspective". The
conference was to run over four days. Delegates, both local and from
overseas, were
to be invited. The theme is esoteric to the
unacquainted and its practical importance to the Defendant has not
been explained in
these proceedings.
The
defendant engaged a private company which was referred to as
"Bonisiwe" to assist in the logistical organisation for
the
conference and especially to scout for a suitable venue. The
plaintiffs establishment was selected. Bonisiwe informed the
plaintiff of the defendant's requirements and requested a provisional
booking for the four days over which the conference was to
run.
Plaintiff welcomed this enquiry and a pro-forma invoice detailing the
plaintiffs charges was sent to Bonisiwe together with
a document
providing for terms and conditions upon which business with the
plaintiff was to be conducted. A provisional booking
subject to
confirmation was made for the period of the conference.
The
defendant's changing requirements were reflected in further pro-forma
invoices. By the 16
th
of August 2004 despite continuing discussion there had been no
confirmation of the booking which Bonisiwe had made. A certain Mr
Kaba, a senior official of the defendant had visited the premises
from whom it had been expected that confirmation would be
forthcoming.
This did not happen.
The
plaintiff in an e-mail informed the defendant through it's agent that
the plaintiff required to know whether the booking was
confirmed or
cancelled. Mention was made that the contract terms which had been
submitted duly subscribed should be returned with
confirmation
together with an order number or payment from the defendant.
Defendant did nothing to confirm the booking and the
matter dragged
on until the plaintiff on the 20
th
September 2004 again in writing made it clear that unless immediate
confirmation was received the booking would lapse. For some
reason
which is not clear Bonisiwe could not itself confirm the booking and
the defendant confirmed the booking now acting through
Connex a
travel agent through which the defendant was contracted to make such
bookings. On the strength of a buying order issued
to it Connex
issued a voucher guaranteeing payment thereby confirming and securing
the Although the defendant did not sign the
document in which the
terms and conditions upon which the plaintiff did business, it was
well aware that such terms and conditions
were applicable. Not only
had the document been submitted to Bonisiwe when the enquiry was
first made, but defendant until a late
stage relied on its non
signature of the document the existence which it was aware to
maintain that the booking had never been
confirmed.
Although
on the pleadings it was denied that the booking had been confirmed
and the case was fought on the basis that the booking
was provisional
until the contract had been signed it soon became apparent even to
the defendant that this defence could not be
maintained. The
conclusion that a binding contract was constituted by the
confirmation of the booking cannot be escaped. Not long
after the
confirmation the defendant cancelled the booking. The reason for it
so doing is not important. It seems that Ministerial
authority for
the Defendant to host the conference was required and was not
forthcoming. Mrs Biko was instructed to effect the
cancellation. This
she did after being informed that cancellation would involve
liability for a cancellation fee of 100% of the
pro forma invoice.
Notwithstanding having been so advised the defendant abandoned the
reservation.
In
view of the cancellation the plaintiff demanded payment of the
cancellation fee which was provided for in terms of paragraph
3 of
the terms and conditions to which reference has already been made. It
is clear that these terms and conditions were known
to and accepted
by the defendant as the basis upon which business was done. The term
on which the plaintiff relies provides that
on cancellation within 0
to 14 days prior to the event date, (by which we are to understand
the first day for which the booking
was made), 100 % of the amount
charged in the pro-forma invoice would be payable. The last pro-forma
invoice was for an amount
of R425 960, 00. This is the amount claimed
in the summons and which has not been paid by the Defendant.
During
the course of the trial I raised a question as to whether the
provision for a cancellation fee was not a penalty in terms
of the
Conventional Penalties Act, 15 of 1962. The defendant up to this
point had not been alive to this question and the plea
did not
contain any reference to the penalty being excessive. After the
evidence on both sides had been concluded and before argument,
the
defendant amended its plea to make the necessary allegations to raise
this issue. I had raised the issue
mero
motu
as
it seemed to me that the penalty was excessive. The pro-forma invoice
included items which involve the supply of consumables
to the
delegates to the conference. In view of the cancellation the costs of
such consumables would not have been incurred by the
plaintiff and
any consumable which may have been acquired could unless perishable,
still be useable. The cancellation to this extent
would result in a
considerable saving to the plaintiff. Because the question of the
penalty was raised after some of plaintiffs
witnesses who may have
been able give information on the basis of which an informed
calculation of the saving to plaintiff could
have been calculated,
had completed their testimony, the defendant did not have an
opportunity to investigate and establish the
cost of the consumables
and hence the saving to the plaintiff. No application was made to
recall any witness. Those witnesses who
were questioned were not able
to contribute anything useful.
It
is not possible for me on this account to reduce the penalty to the
extent of plaintiffs savings. I would also have had to take
into
account other prejudice to the plaintiff consequent on the
cancellation arising from the loss of profit which would emanate
from
having over 200 guests at the centre for four days, many of whom
would at their own expense make use of the plaintiffs facilities
during their stay. A further saving by the plaintiff is the
non-payment of VAT which was included in the pro-forma invoice. This
requires no evidence as it is a matter of law that VAT is payable at
14% on the invoice value of the goods and services supplied
buy the
Plaintiff as vendor. If as is the case no goods or services are
supplied no VAT is payable
I
therefore reduce the penalty by deducting the VAT at 14
%.
This
I do by taking the figure of R425 960, 00 claimed by the plaintiff
and multiplying it by 100 /114. In round figures this is
R373 650.
The amount should have been paid three days after the cancellation
moa interest will run from then.
Judgment
will therefore be entered against the defendant in favour of the
plaintiff for:
1. Payment
of R 373 650.00
2.Interest
thereon at the rate of 15.5 % per annum from 26
th
Sept 2004 being the mora date to date of payment
3. Costs
of the suit.
SAPIRE,
AJ
JUDGE
OF THE NORTH GAUTENG HIGH COURT
PRETORIA