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[2009] ZAGPPHC 24
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Combined Distribution Solutions CC v Courier Freight Group (Pty) Ltd t/a XPS (10777/2004) [2009] ZAGPPHC 24 (15 April 2009)
/LVS
IN THE HIGH
COURT OF SOUTH AFRIC
(NORTH GAUTENG HIGH
COURT, PRETORIA)
DATE: 15/4/ 2009
NOT REPORTABLE
CASE NO: 10777/2004
In the matter between:
COMBINED DISTRIBUTION
SOLUTIONS CC PLAINTIFF
Vs
THE COURIER FREIGHT
GROUP (PTY) LTD DEFENDANT
t/a XPS
_____________________________________________________
JUDGMENT
_____________________________________________________
BOTHA, J
The plaintiff is
Combined Distribution Solutions CC. The defendant is Courier Freight
Group (Pty) Ltd, trading as XPS.
The plaintiff claims
damages for breach of contract in an amount of R696 428.00.
The defendant has a
counterclaim for services rendered in an amount of R281 094.96.
The plaintiff relies on
an oral contract allegedly concluded on 11 February 2004. It is
alleged that the plaintiff was represented
by Ms Althea Oosthuysen
and the defendant by Mr Victor Hendricks and Ms Dawn Venter.
The terms of the
agreement are alleged to be the following:
the plaintiff, a broker
for the supply of courier services, intended to contract the courier
services of one of its clients, Elster
Kent Metering (Pty) Ltd
(Kent) out to the defendant on condition that the defendant assist
the plaintiff in the establishment
of a so-called full in-house
system;
Kent was prepared to
supply a computer, a modem and Telkom land line needed for the
operation of the full in-house system;
The defendant would
supply the computer software and printer for the full in-house
system after the computer, modem and Telkom
land line had been
installed;
In view of the fact that
the defendant required a minimum turnover of R50 000.00 per month
before supplying a full in-house system,
Kent confirmed that as soon
as the full in-house system had been installed, it would place 100%
of its courier work with the
plaintiff;
The printer to be made
available by the defendant had to be delivered on or before 20
February 2004;
After the defendant had
installed the computer software and printer, the plaintiff would
have been able to handle 100% of Kentâs
courier needs.
It is alleged that the
plaintiff was able to fulfil its obligations in terms of the
agreement.
It is alleged that it was
crucial that the computer software and printer had to be made
available on or before 20 February 2004
for the installation of the
full in-house system.
It is alleged that the
plaintiff proceeded to make arrangements with Kent for the supply of
the computer, modem and Telkom land
line.
It is alleged that the
defendant repudiated the agreement by failing to make the computer,
software and printer available on or
before 20 February 2004, thereby
having the effect that the plaintiff could not install the full
in-house system.
It is alleged that the
plaintiff accepted the defendantâs repudiation of the agreement.
It is alleged that it
was, at the time of the conclusion of the agreement, in the
contemplation of the parties that the plaintiff
would suffer damage
if it could not fulfil Kentâs courier needs.
It is alleged that at
the time of the conclusion of the agreement, the plaintiff concluded
an agreement with Kent in terms of which
Kent would, as soon as the
full in-house system had been installed, place 100% of its courier
services with the plaintiff.
It is alleged that from
March 2004 to October 2005 Kentâs courier services amounted to R2
437 511.00. On that the plaintiff
would have made a gross profit of
R696 428.00 taking into account a purchase price of R1 741 107.00 and
a 40% profit margin.
The defendant admitted a
meeting on 11 February 2004 but denied that any oral agreement was
concluded as alleged or at all. It
is alleged that at the meeting
the parties discussed the installation of the full in-house system at
Kent.
It is alleged that the
parties knew and that Ms Oosthuysen ought to have known, that a
written application had to be made to the
defendant for the
installation of the full in-house system at Kent. It is alleged that
the Plaintiff lodged such an application
on 17 February 2004 and that
it was rejected on 17 February 2004 by the defendant, as represented
by Mr V Hendricks.
The counterclaim is
based on an alleged agreement concluded on 14 January 2003 in terms
of which the defendant would purchase and
deliver parcels on behalf
of the plaintiff to the plaintiffâs clients.
It is alleged that the
defendant would grant the plaintiff credit, that interest would be
charged on outstanding amounts at the
maximum legal rate, and that
payments would be made within 30 days of the date of statements.
It is alleged that the
plaintiff is indebted to the defendant in an amount of R281 094.96 in
respect of services rendered between
January 2003 and February 2004.
The plaintiffâs plea
to the counterclaim in essence amounted to a denial. The defendant
was put to the proof of its counterclaim.
During the trial, whilst
Ms Oosthuysen was still giving evidence, the parties asked me to make
an order in terms of Rule 33(4)
to the effect that the issue of
liability in respect of the plaintiffâs claim be adjudicated first
and separately. I made such
an order and postponed the other issues
sine die.
Mrs Althea Oosthuysen
testified that she was the only member of the plaintiff. The
plaintiff was incorporated in 2003. Previously
its name was B.O
Distribution.
The plaintiff was a
broker in the courier industry. The plaintiff used service providers
that disposed of logistical networks.
She would negotiate tariffs
with a service provider, add a mark-up and then approach a client.
She would then conclude a contract
with a client, normally an oral
contract.
When the plaintiff had a
parcel to deliver the driver of the service provider would present a
waybill on which the address of the
client and the delivery address
had to be entered. The driver would take the parcel and leave a copy
of the waybill. The parcel
would then be taken to a central hub
where it would be sorted according to its destination. Upon delivery
the particulars of the
recipient and the time and date of delivery
had to be entered on the waybill.
At the end of the month
the service provider would send the plaintiff an invoice together
with a freight management report (FMR)
indicating the movement of
each parcel and a hard copy of the proof of delivery (POD) which is a
signed copy of the waybill.
The plaintiff then had
to make payment, if it was satisfied with the correctness of the
invoice, within 30 days.
She referred to Elster
Kent Metering (Kent). Kent manufactured water meters and relied on
courier services for the distribution
of its product. Kent had an
in-house system for the consignment of parcels on a daily basis. She
was referred to Mr Johan Bezuidenhout
of Kent with a view of taking
over Kentâs courier work that at the time was being done by RTT.
By handling smaller parcels she
could offer a more competitive
service.
Kent allowed the
plaintiff to be on the premises and she posted one Sipho Bongane to
Kentâs premises to handle smaller parcels.
She intended to use the
defendant, XPS, as the plaintiffâs service provider. She had been
a sales representative at XPS for
two years.
In order to get Kentâs
courier business a full in-house system had to be installed on Kentâs
premises. That entailed a computer,
a modem, a Telkom land line, a
printer and computer software. The software consisted in a programme
to process the information
relating to the addresses of provenance
and destination. The printer was a specialized Litho printer that
printed stickers with
bar codes.
The bar codes on the
stickers are scanned at the hub and further on the information is fed
into a data system. In that way it
was possible to trace the
whereabouts of a given parcel at any time.
She approached XPS to
handle Kentâs work because XPS was one of the biggest operators in
the country.
She discussed tariffs
with XPS, then added her mark-up and eventually submitted her tariffs
to Kent. Her tariffs were competitive
and Kent accepted them. All
the plaintiff had to do was to install a full in-house system at
Kent.
She referred to an
e-mail dated 9 February 2004 from XPSâs sales manager, Ms Dawn
Venter, (A2). In the letter Mrs Venter referred
to a report from
XPSâs operational manager, Mr Desmond Permal about a meeting at
Kent (Elster). Mr Permal was of the view that
the in-house system
had to be installed as quickly as possible. Ms Venter asked for
Kentâs details so that XPSâs IT department
could prepare the
software.
At that stage Kent had
not yet cancelled its contract with RTT.
On 11 February 2004 she
had a meeting at XPSâs headquarters with Mr Victor Hendricks, XPSâs
managing director and Ms Dawn Venter.
They discussed the
requirements for the installation of a full in-house system at Kent.
Mr Hendricks told her that XPS would
supply a printer, new or second
hand.
On 11 February 2004 at
9h57 pm she sent an e-mail to Dawn Venter asking for a date during
the next week for the implementation
of the full in-house system.
See A3.
The agreement was that
XPS had to provide the software and the printer. Kent was prepared
to provide the computer, the modem and
the land line.
XPS insisted on an
turnover of R50 000.00 per month.
Kent undertook to give
the plaintiff 100% of its business if a full in-house system was
installed.
The deadline for the
installation of the in-house system was 20 February 2004. If that
was done, the contract with RTT would be
cancelled.
Kent provided a land
line and a computer and modem.
On 12 February 2004 at
7h53 am Mr Ben Burger of XPS sent an e-mail to Mr Permal to the
effect that Mr Permal could go ahead. The
customer would supply the
hard and software. The software referred to Kentâs Windows
programme.
On 11 February at 4h39
pm Mr Permal sent her an e-mail (A4) in which he stated that the
client would indicate by Friday (13 February
2004) whether it wanted
XPSâs PX containers.
On Friday 13 February
2004 at 3h51 pm Dawn Venter sent her an e-mail (A7) in which she said
that it would take seven days to install
the full in-house system.
She asked details of the client. She asked for a meeting at 13h00 on
the Monday.
On the same day she
replied indicating that a meeting at 13h00 would suit her. See A8.
On Sunday 15 February
2004 at 8h48 pm she sent an e-mail to Dawn Venter asking her when she
could say that XPS would arrive for
the installation of the in-house
system at Kent. See A9.
On Monday 16 February
2004 at 8h46 am Dawn Venter replied that they had to get together so
that she could sign a form for the in-house
installation. See A12.
This document was not a contract document. She had to supply
information about the clientâs requirements.
There was a meeting on
Monday 16 February 2004. She completed an application form for a
full in-house system. She signed the
document and Dawn Venter signed
it. She never saw it again. At that stage there was no indication
that XPS was not willing to
install the in-house system.
On 18 February 2004 she
received an e-mail from Dawn Venter sent at 12h40 in which she was
told that XPS could not find a Zebra
printer. A new one would cost
R20 000.00 and XPS was not sure that the volumes would justify the
cost of a new printer. She apologised
for having to cancel a meeting
to be held.
She was prepared to
negotiate about a printer but at that time XPS also put her account
on hold. She had problems with her account
with XPS. She did not
receive all the credits to which she was entitled. Then she was sent
accounts that referred to invoices
that she had not yet received.
She had to pay XPS within 30 days which was before it was possible to
invoice her own clients.
On 18 February 2004 she
queried her account, but she received no response from XPS.
On 9 February 2004 Mr
Sotyato of XPS sent her a reminder in respect of alleged arrears.
See A1. She completed a reconciliation
of her account (see A20) in
terms of which she owed an amount of R90 524.22. She did not include
credits to which she claimed
to be entitled. She only included
invoices in respect of which she had had the opportunity to invoice
her client.
She answered Mr Sotyato
on 15 February 2004. See A10.
XPS had already
installed the software at Kent. Only the printer was outstanding.
She dealt with the complaints set out in
her letter of 15 February
2004 to Mr Sotyato. Invoices were a month late so that she could not
invoice her clients. In respect
of the client Pall SA there were
days that were not billed. She did not get all her credit notes.
She did not receive the documents
needed to verify XPSâs
statements: FMRâs and PODâs. She indicated that she was prepared
to submit to an audit.
On 18 February 2004 Mr
Sotyato sent her a letter complaining about the plaintiff exceeding
its credit limit. She regarded that
as normal when a business was
growing. See A17.
On 19 February 2004 she
answered Mr Sotyato denying that he had sent her all outstanding
invoices. See A19.
Mr Sotyato did not
answer her. He only put her account on hold.
She tried to save her
clients by using another service provider, Courier-It.
On 20 February 2004 her
then attorney, Mr Hefferman, sent a letter to the defendant in which
he stated that the amount of R90
524.22 had been paid into his
trust account. He asked that the account be rein-instated and that
the documents requested be supplied.
On 23 February 2004 Mr
Sotato replied in a letter in which he demanded payment of R200
000.00 in two tranches before the suspension
of the account be
lifted. See A24. That amount exceeded the amount of R177 736.55 as
stated in A1.
On 25 February 2004 Mr
Hefferman sent a letter to Mr Sotyato. See A26. In paragraph 1.3
the point was made that the plaintiff
could not invoice its clients
without proper information of the defendantâs accounts.
She referred to a series
of letters sent to Kent and other clients sent on 26 February 2004 to
dispel rumours that the plaintiff
was experiencing financial
problems. See A36, 37, 39, 42, 45, 48 and 51.
At the moment Kent was
the plaintiffâs biggest client. She got the business of Kent in
November 2005. She established the turnover
of Kent as set out in
paragraph 11 of the particulars of claim by accessing RTTâs network
with Kentâs customer code. She explained
how the plaintiffâs
gross loss of profit was calculated.
A88-333 was compiled
from the information drawn from RTTâs network. For each month
there were sheets showing buy rates and sell
rates. On A122 the
first item, the rate of R40.00 represents what XPS would have
invoiced. On A108, the first item, the rate
of R56.00 represents the
amount of R40.00 plus the plaintiffâs mark-up of 40%.
She testified that she
had to accept the plaintiffâs repudiation.
She never saw B24, a
document dated 17 February 2004, in which the reasons for the
rejection of the plaintiffâs application are
stated. She did not
send the document to the defendants head office.
With reference to the
alleged reasons she testified that she gave Mr Hendricks and Ms
Venter a projected income of close to R100
000.00 per month.
She admitted that her
handwriting appeared on B 25 and B26, two pages of a new in-house
application form. The completion of the
form was an administrative
procedure. She wrote âASAP (23 February)â. She filled in the
particulars of Sipho Bongane and
she ticked off the services
required. She never received a copy of this document.
The defendant did indeed
install the software at Kent. She agreed in cross examination that
B46-50 was an example of a contract
between XPS and a client. A
contract would be concluded only after credit was approved.
She denied that there
was a difference between a courier service using containers and one
with an in-house system. Containers
were used depending on volumes
irrespective of whether there was an in-house system processing the
movement of parcels.
She agreed that Ms
Venterâs e-mail of 11h06 on 10 February 2004 was sent before the
conclusion of the agreement. See A4-5.
She agreed that it showed
that the defendant wanted to accommodate the plaintiff.
She was referred to Mr
Permalâs e-mail dated 11 February 2004, and sent at 4h39 pm to her.
She agreed that the client who had
to advise by the Friday whether
he found the PX option acceptable, was Kent. PX containers were
small containers that were presented
as an alternative to pallets.
The PX containers were not part of the in-house system. They were
part of a solution.
The client, Kent, did
accept the PX solution. Mr Permal was present when the PX containers
were delivered at Kentâs. She insisted
that the PX containers had
already been delivered when the e-mail dated 11 February 2004 4h39 pm
(A4) was sent. Kent wanted to
see how the service was operated.
She would have responded
to this e-mail because she was in daily contact with the defendant.
The response was by way of a verbal
communication.
She conceded that the
containers could have been delivered after the 11
th
February 2004, but then they must have been delivered before the 20
th
February 2004.
She conceded that only
Mr Hendricks had authority to conclude a contract on behalf of the
respondent.
When the agreement on 11
February 2004 was concluded, costs were not discussed either. They
worked with rates already agreed upon
between the plaintiff and the
defendant in respect of other clients.
The plaintiff had
various accounts with the defendant relating to various customers.
The plaintiff could get separate credit limits
for individual
customers.
An in-house system was
something new for the plaintiff.
The meeting on 11
February 2004 was for the supply of the printer. That would have
completed the in-house system. At that time
the software had already
been installed.
It was put to her that
in the particulars of claim it was stated that the software had not
been supplied. She answered that it
had to be upgraded to make the
printer functional. She did not mention the upgrade of the software
because she was not asked about
it.
The mini in-house system
that was operated at Kent was operated with small volumes.
She was asked why, if a
date of installation had been agreed on 11 February 2004, was it
necessary to ask a date and time for the
implementation of the
in-house system. See A7, the e-mail of 11 February 2004, sent at
9h57. Her answer was that she knew how
it worked in practice. She
had to set a date. One could never guarantee what an IT department
would do.
The meeting on 11
February 2004 was not about the date, but about the full in-house
system.
She gave the time of 23
February 2004 (in the application) because things always go wrong.
When she wrote âASAP 23 Februaryâ
she meant that the installation
should be done earlier if possible.
She could not remember
every word that was spoken, but she could remember that XPS agreed to
install a full in-house system.
A reason why she asked
for a date of installation was that she was hoping to get an earlier
installation.
At the time she had no
other clients with a full in-house system.
She recruited Mr Bongane
to operate the mini in-house system.
She denied that her
request for a date of installation showed that there was no
agreement. By asking for a date of installation
she was trying to
put pressure on XPS.
She denied that she did
not report back to XPS regarding Kentâs attitude in respect of the
PX containers.
Mr Bongane would confirm
that software for a mini in-house had been installed.
She agreed that nobody
from XPS had told her that there had to be an upgrade. That was her
own inference.
She was asked why Ms
Venter would ask her for customer details on 13 February 2004 at
15h51. See A7. She answered that she did
not know. She suggested
that Ms Venter might have thought that it was easier to get the
particulars from her.
When she worked at XPS
she did not handle an application for an in-house system. She cannot
recall that she completed an application
for a mini in-house system.
She agreed that on B25 she was given a choice between a mini and a
full in-house system.
Kent gave the plaintiff
part of its business to prove that it had the technology to provide a
service. The plaintiff could only
prove that properly when the full
in-house system was installed. The plaintiff needed the agreement to
show its capacity.
The application forms
were signed after 11 February 2004. It was an administrative
procedure that made sense. The defendant had
to update its records.
She said that she did
not respond in writing to Ms Venterâs e-mail of 13 February 2004
sent at 15h51 (A7). It appeared, however,
that she did respond to it
on 13 February 2004 at 22h47 (see A8).
She was asked why she
again asked on 15 February 2004 when XPS would arrive to effect the
installation. See A9. She explained
that she was anxious.
She was referred to Ms
Venterâs e-mail of 16 February 2004 sent at 8h46 am (A12) and it
was put to her that there would have
been no contract before she
signed an application. She answered that she was told that it would
be a formality. It was not her
fault if the defendant skipped its
own procedures.
When she was referred to
B24, the document giving the reasons for the rejection of her
application, she described it as fraudulent.
She accepted that she
could have faxed B25, 26 and 27 (parts of the application) to the
defendant. When she was told that Ms Venterâs
handwriting appeared
on B24 she was prepared to accept that it was not fraudulent.
XPS told her of its
requirement of a R50 000.00 turnover at Kent. She informed XPS of
the possible turnover. If she was asked
she could easily have
obtained confirmation from Kent.
The e-mail of Ms Venter
on 18 February 2004 (A18) came as a surprise.
She was asked whether
she reacted to. She answered that it came at a time when her account
was put on hold. She thought she would
have responded but there was
nothing in the file. She did speak to Ms Venter and she phoned Mr
Hendricks, but he refused to answer
his cell phone.
She was referred to her
letter to Mr Sotyato on 19 February 2004 (A19) and it was pointed out
that she did not deal with the issue
of the in-house system. She
explained that she could not deal with both issues.
She did speak to Kent,
but they were not stranded because they still had RTT as their
service provider.
She denied that she told
Ms Venter that she would approach Berco as her service provider.
Berco was her opposition.
It was pointed out to
her that her attorneyâs letter of 20 February 2004 (A21) did not
mention any breach of contract. She answered
that her priority was
to get her account active again. Then she would be in a position to
negotiate with XPS about a printer.
It was put to her that
the question of breach of contract was not mentioned because she
accepted the position that her application
for a full in-house system
had been rejected. She answered that if her account had not been put
on hold she would have been able
to discuss the matter of the
printer.
It was put to her that
the fact that she asked for a date of installation in three e-mails
(one on 11 February 2004 and two on
13 February 2004) showed that
there was no agreement. She repeated that there was an agreement.
It was put to her that
she could not bind the defendant and that authorization was required.
She answered that she could bind
the defendant by the verbal
agreement. She did not agree with a statement that PX containers
were not used in an in-house system.
It was put to her that
XPS was used in an in-house system. She explained that XPS was the
defendantâs trading name. One could
not say that RTT, for
instance, used XPS.
In this case the
customer wanted an in-house system. XPS wanted PX containers, not
large containers.
The defendant did not
want to use large containers because it was afraid that large pallets
would break.
In re-examination she
referred to an e-mail dated 4 February 2004 sent by Mr Ben Burger to
Mr Permal in which he said âgo aheadâ.
Mr Burger was the
defendantâs national sales manager. He had the authority to enter
into agreements.
She referred to Ms
Venterâs e-mail on 9 February 2004 to her in which Ms Venter said
that Mr Permal thought that they had to
get the in-house going as
quickly as possible so that they could pick up the business as soon
as the client saw that they could
handle the volumes. See A6.
The reason why they
agreed on the date of 20 February 2004 was that they wanted to prove
during the rest of the month that they
could handle the volumes.
She could not understand
the allegation in B24 that she could not give turnover figures
because she had told Ms Venter that the
business would amount to
almost R100 000.00 per month.
That concluded the
evidence on behalf of the plaintiff.
An application for
absolution from the instance at the end of the plaintiffâs case was
dismissed.
On 30 March 2009 the
defendant asked to recall Ms Oosthuysen to put to her the version of
two witnesses with whom it had not consulted
previously. The
application was granted.
When it was put to Ms
Oosthuysen that Mr Permal would say that the PX system was offered as
an alternative option, she answered
that mini containers would only
be used for pallet freight. Other freight would still go through the
normal courier system. Kent
would use both systems. RTT was using
the so-called XPS system with an in-house system. The PX option was
part of the whole solution.
She was asked whether
she told Mr Permal that she had concluded an agreement. She replied
that he was only there to evaluate operational
requirements. He had
to find a solution for the incompatible freight.
It was put to her that
her indication in the application dated 17 February 2004 that
installation had to be effected by 23 February
2004 was at variance
with the particulars of claim. She answered that the 23
rd
February 2004 was the utmost stretch.
She was referred to C23,
a document dated 23 March 2003, relating to a mini in-house system
for the University of Pretoria. She
acknowledged that she wrote the
name âGideonâ at the top and that she did the typing. Otherwise
she could not remember the
matter. She never got the contract.
The first witness for
the defendant was Mr Victor Hendricks, who, in 2004, was its acting
national sales manager.
He denied that he
concluded an oral agreement with the plaintiff as alleged in the
particulars of claim.
He described the
procedure for the installation of an in-house system. The sales
person would make an analysis of the business
with regard to volume
and money. If the money value was more than R80 000.00 a contract
would be considered. The operations staff
would also be involved.
An FMR would be required. Eventually he would have to make the
decision. Then there would have to be
an application to the IT
department. They had to find the equipment and install a land line.
He could recall the
application for an in-house, B25-27. The decision was no. There was
no supporting documents in respect of
profitability and no FMR.
He confirmed the reasons
for refusal as recorded in B24. He denied that he undertook to Ms
Oosthuysen to provide an in-house system.
There could have been
discussions about the possibility of the installation of an in-house
system, but there first had to be a
full feasibility study.
With reference to Mr
Permalâs e-mail sent on 11 February 2004 at 16h39 to Ms Oosthuysen
(A4) he explained that Mr Permal considered
the PX solution to be
more appropriate in view of the size of the freight.
Defendant had two
divisions: the XPS division and the PX division. Each division had
its own staff and vehicles. They were not
separate corporate
entities.
He cannot remember that
he had any further discussion after he had turned down the
application.
He agreed that he had a
meeting with Ms Oosthuysen, but added that it was primarily a meeting
with the client Brother, whose representative
did not arrive as a
result of an accident. There was a casual discussion about the
installation of an in-house system at Kent.
He could not make a
decision because he needed information on feasibility. He said that
to Ms Oosthuysen. He thinks she accepted
it because she was aware of
the defendantâs procedures. That was the end of the matter.
He left the defendant in
2006. He never consulted with anybody about this case until three
weeks before he gave his evidence.
He was aware that the
personnel of the defendant had been looking at the possibility of a
full in-house at Kent. Mr Permal seemed
to be positive, but he
inclined towards an PX solution.
The IT division would
become involved after he had given the go-ahead. They would be
involved only after approval. They would
not take any steps before
there was authorization.
He did not know that at
11 February 2004 XPS was handling small parcels at Kent. It was
possible that there could have been a
trial run in respect of small
parcels.
Mr Permal had no
authority to suggest the installation of a full in-house system.
The defendant could run
both a PX as well as an XPS system. Both systems or divisions fell
under the umbrella of the defendant.
If both systems were applied
there would be separate invoicing. One could combine both systems if
the volumes justified it.
Mr Permal would not have
had any grasp of the issue of feasibility.
RTT run a full in-house
service at Kent. It used big containers. The service it provided
was a combination of what XPS and PX
would be. It was a total
solution.
His obligation was to
look at the courier business only. Technically he could look at the
PX side. The plaintiffâs application
was for an XPS service for
smaller parcels.
He agreed that the
defendant had everything to gain if RTT could be supplanted.
He was referred to an
e-mail sent by Ms Venter to Ms Oosthuysen on 9 February 2004 at
14h29. See A2. He agreed that it appeared
from it that Mr Permal
thought that the defendant could cater for Kentâs needs. With
regard to the reference to the organising
of software, he agreed that
the IT department would not react without his blessing. To the
extent that Ms Venter said that she
would start organising software,
she had no authority to do so. What Ms Venter wrote in the e-mail in
this regard was not procedure.
What was required was
not only figures but a full FMR. What Ms Venter was asking in this
e-mail was full details for the purposes
of an FMR.
On 11 February 2004 he
told Ms Oosthuysen to give the necessary information to Ms Venter.
He told her that he needed full information
for an FMR.
He agreed that after the
meeting on 11 February 2004 Mr Permal referred to a full in-house.
See his e-mail to Ms Venter sent on
11 February 2004 at 16h39, A4.
Mr Permal had no authority. He agreed that it appeared from this
e-mail that Mr Permal saw the
possibility of a combination of PX and
XPS systems from an operational point of view. It was not, however,
for him to decide.
The final issue was whether it was feasible.
He was referred to the
e-mail of Mr Ben Burger to Mr Permal, sent on 12 February 2004 at
7h53. It saidâ Go ahead, the customer
is supplying the hard and
softwareâ. See A4. He pointed out that the customer could not
provide the software.
Mr Burger should have
known that information was required before a decision could be made.
Mr Burger was a regional sales manager
who reported to him. He could
not say why Mr Burger sent the e-mail. He know what the defendantâs
internal regulations were.
He could not remember
whether he was shocked when he received Mr Burgerâs e-mail. He
would have asked Mr Burger to set the record
straight.
Ms Venter, who was also
an addressee of the e-mail, would also have objected to it.
The e-mail was discussed
with Mr Burger. Mr Burger said that he could not remember why he
answered in that fashion. He could
not remember what preceded it.
He accepted that Mr
Burger had no ulterior motive. He was referred to Ms Oosthuysenâs
e-mail of 11 February 2004 sent at 21h57
to Ms Venter which she asked
for a date during the next week for the installation of the in-house.
See A3.
It was also sent to him.
He could not remember what his reaction was.
He had a discussion with
Ms Venter on 11 February 2004 after the meeting with Ms Ossthuysen.
He told her that without information
he could not approve of a full
in-house. Ms Venter knew what was required.
He was referred to Ms
Venterâs e-mail sent on 13 February 2004 at 15h51 in which she said
that it would take 7 days to get the
software for the in-house. See
A7. He agreed that this seemed to be an answer to the request for a
date for the installation
of the in-house. The problem with the
answer is that he had given no approval.
He agreed that there was
no indication in the e-mails that information was required for an
FMR.
There was mention in the
e-mail of 13 February 2004 of an application of an administrative
nature.
The e-mails could have
created an expectation, but the client was fully aware of what was
required.
He would not have relied
on the clientâs estimate of expected turnover. He would have
approached Kent.
He was referred to Ms
Venterâs e-mail dated 16 February 2004 sent at 8h46 to Ms
Oosthuysen. See A12. He agreed that it did
not refer to him and
suggested that after a form was signed the matter would be referred
to the IT department. He agreed that
it created the impression that
approval had been granted.
When he was asked why he
rejected the application he answered that he did not think that he
had rejected it. It was not considered
because of a lack of
information. He would not reject it because information was still
outstanding.
He was referred to Ms
Venterâs e-mail dated 18 February 2004 at 12h40 to Ms Oosthuysen.
See A18. He agreed that it created
the impression that Ms Venter had
a discussion with him on that very day. The Zebra printer was
required for an in-house. His
concern was the cost of a new printer.
It made no sense to spend money on a new printer without an FMR.
In view of the fact that
Ms Oosthuysen was an existing client, he would have been prepared to
provide her with a spare Zebra printer.
There were 65 Zebra
printers in Gauteng but it could take months before one became
available.
He was referred to B24,
the fax message dated 17 February 2004. He explained that Ms
Oosthuysen sometimes used the defendantâs
Centurion office to send
faxes to Ms Venter in Johannesburg.
He was referred to the
allegation in the fax that he turned down the application. He
confirmed that he did not approve or reject
the application.
It was put to him that
the issue was the supply of a Zebra printer. He answered that it was
part of the problem. The defendant
would not supply new equipment if
the project was not viable. It would be prepared to assist with a
second hand printer.
The application form
B25-27 had to be signed by him. It was not completed in the
appropriate spaces on B25 because the FMR was
not forthcoming. He
had to return the application down because there was no information
and no FMR.
He was referred to Ms
Venterâs e-mail sent on 18 February 2004 at 12h40 (see A12) and
referred to the fact that only reference
was made to the cost of a
new Zebra printer. He said that that was Ms Venterâs
interpretation. She was a typical saleslady,
always positive.
It would have been Ms
Venterâs task to inform the client of the rejection of its
application.
He confirmed that B25-27
was in internal document and normally not to be signed by the client.
On 11 February 2004 Ms
Oosthuysen mentioned the possibility of an in-house. He mentioned it
in passing that it would be evaluated
if there was a full FMR.
Mr Desmond Permal was
the defendantâs branch or operations manager in February 2004. His
responsibility was to ensure that parcels
were collected and that
they reached their destinations.
He confirmed the e-mail
sent on 11 February 2004 at 16h39 that he sent to Ms Oosthuysen, but
actually addressed to Ms Venter.
The e-mail was sent after he had
visited the premises of Kent with Ms Oosthuysen. At the premises he
saw pallets that were incompatible
with the defendantâs XPS
vehicles and he suggested that a PX service would be compatible. If
the PX service was satisfactory
the plaintiff would be able to obtain
the contract for the rest of the clientâs parcels, being smaller
parcels.
Ms Oosthuysen did not
inform him that she had concluded an agreement with Mr Hendricks and
Ms Venter. She did not even tell him
that she had met them earlier
that day.
An in-house system was
not needed for a PX service because only containers are identified,
not individual items.
He had no reaction to
the e-mail and he did not have any further involvement in the matter.
On that day he visited
Kentâs premises for the first time.
Ms Oosthuysen said that
she would like to have a full in-house if she could get the contract
for the small parcels. She said that
if Kent used the PX service she
would get the small parcels business.
The defendant was
already moving small parcels from Kentâs premises. The defendant
was using pre-printed weighbills on which
the particulars of
consignees had to be entered by hand. He was not aware of the fact
that that operation was in fact a trial
run.
He would not say that
the plaintiff was at the time running a mini in-house system at Kent.
With a mini in-house
system the defendant would have no one on the premises. There would
be a printer but not one that printed
bar codes.
He agreed that it was Ms
Oosthuysenâs aim to get the whole account of Kent.
He was referred to Ms
Venterâs e-mail sent on 9 February 2004 at 14h49 to Ms Oosthuysen.
See A2. He was referred to the statement
that he thought that the
in-house had to be started as soon as possible because they would
pick up the business once Kent saw that
they could handle the
volumes. He said that the key phrase was âonce they saw that we
can handle the volumesâ.
As he saw it the PX
service would be the foot in the door. Then, if the rest of the
business was obtained, a full in-house would
follow.
He agreed that a full
in-house system would have been necessary to accommodate all the
volumes handled by RTT.
He was referred to Ms
Oosthuysenâs request for a date for the installation of the
in-house. See the e-mail sent on 11 February
2004 at 21h57. It was
also sent to him. He was asked what his reaction was. He said that
it did not concern his functions.
He also did not know what Ms
Oosthuysen and Ms Venter had discussed.
When referred to the
e-mail sent by Mr Burger on 12 February 2004 at 7h53 he answered that
the client could not supply software.
He was not prepared to infer
that the e-mail referred to the installation of a full in-house,
including a Zebra printer.
He was referred to Ms
Venterâs e-mail sent on 13 February 2004 at 15h51 referring to the
software set up for an in-house. He
declined to comment on it
without knowledge of what had been agreed.
The defendantâs last
witness was Ms Dawn Venter.
She was a sales
representative with the defendant in February 2004. She had no
authority to conclude agreements in respect of
XPS services. She
resigned in 2006.
She had discussions with
Ms Oosthuysen regarding an in-house system at Kent.
She confirmed her e-mail
on 9 February 2004 sent at 14h49. See A2. Ms Oosthuysen wanted to
do the parcels business.
With reference to the
e-mail sent by Ms Oosthuysen on 11 February 2004 at 9h57 (asking a
date and time for the installation of
the in-house) she denied that
there was an agreement for the installation of an in-house. The
defendant had no details of the
client (Kent).
In her answer on 13
February 2004 sent at 15h51 (see A7). She asked for the clientâs
details such as figures to show viability.
The seven days for
installation would run from Mr Hendrickâs approval.
With regard to Ms
Oosthuysenâs e-mail of 15 February 2004 sent at 20h49 (A9) asking
when XPS would arrive at Kent for installation,
she said that Ms
Oosthuysen was pushy and domineering.
In her e-mail of 16
February 2004 sent at 8h46 (see A12) she was once again pressing for
details. They were never supplied.
She explained that the
application form B25-27 was faxed to Ms Oosthuysen and that she faxed
it back after having completed it.
She took the application
to Mr Hendricks. Ms Oosthuysen never supplied the figures. She
could not remember a figure of R100 000.00
per month.
She confirmed that she
wrote the reasons for the rejection of the plaintiffâs application
on B24. It was done after the event
for the own purposes.
Mr Hendricks decided
that they could not proceed. They needed figures. The in-house
system was needed for small parcels. The
defendant said that it
could not handle pallets. It had to be a PX service.
She confirmed the
reasons for rejection stated in B24. Another reason was that the
plaintiffâs account was on hold.
She was asked what she
meant when she said in her e-mail of 18 February 2004 that the
request for an in-house could be set in motion
if a second hand Zebra
printer became available. See A18.
They were told by the
accounts section that there was a problem with the plaintiffâs
account. The non-payment of the account
was the main reason for the
rejection of the application.
In cross-examination she
stated that she only consulted in this case three weeks before she
gave evidence.
She denied that there
was any discussion of an in-house system at Kent on 11 February 2004.
Only the accounts of Brother and BMW
were discussed.
Before 17 February 2004
there was a verbal application for an in-house.
The application could
not be considered unless it was in writing.
The prime reason why the
application was rejected was that the plaintiffâs account was on
hold.
She was asked why Ms
Oosthuysen was not told what information she had to furnish. She
answered that she knew. She had worked
for the defendant.
She confirmed that no
steps could be taken until the application had been approved.
According to her Mr
Permal was not satisfied that there were enough parcels at Kent for
an in-house system.
She did not know that Ms
Oosthuysen was after the work of RTT. Ms Oosthuysen had to come back
by Friday 20 February 2004 on the
issue of the PX service, but she
never did.
When asked about Mr
Burgerâs e-mail in which he said: âGo aheadâ (see A4) she said
Kent must have referred to the PX service.
When asked why she did
not respond to Ms Oosthuysenâs e-mail of 11 February 2004 sent at
21h57 (A7) by telling Ms Oosthuysen
that she must be labouring under
a misunderstanding, she answered that she told Ms Oosthuysen many
times in telephone conversations
and e-mails what the position was.
She conceded that it was
not necessary for Ms Oosthuysen to sign the application for an
in-house. It had to be completed. Ms
Oosthuysen had to supply the
details. She had to fill in the form. The form was needed to
procure equipment from the IT department.
She was asked where were
the e-mails in which she asked Ms Oosthuysen to give an FMR. She
answered that on her resignation everything
on her computer was
deleted.
She was referred to an
e-mail sent to her by Ms Oosthuysen on 11 February 2004 at 8h25. In
it she complained about the defendantâs
service. She answered that
this e-mail related to the plaintiffâs account.
When referred to the
defendantâs plea, she made it clear that she was not the source of
the allegations contained in it.
It was pointed out to
her that the application for an in-house (B24-27) was transmitted on
17 February 2004 at 16h34. She was
asked why it was said in the plea
that the application was rejected on 17 February 2004. She said that
she could have discussed
the application with Mr Hendricks on 18
February 2004. She was referred to her e-mail of 18 February 2004
(see A18) in which she
said that she had just discussed the matter
with Mr Hendricks.
She was asked about her
suggestion in that letter that the request for an in-house could be
re-activated if a Zebra printer became
available. She said that that
could only happen if the Kent account justified it.
Even if Ms Oosthuysen
managed to get a printer there would still be the problem of her
account.
She was asked why she
did not say in her e-mail of 18 February 2004 that the application
had been turned down. She replied that
she meant to say that it was
turned down. She did not leave a door open. She could not remember
why the other reasons for the
rejection of the application were not
stated.
She only heard later
that the account was put on hold. When asked in re-examination
whether the so-called agreement related to
an in-house system or to a
PX system, she answered that it related to a PX system. The
defendant could not handle the bulk of
the freight which consisted of
pallets.
There had to be a
separate agreement for a PX system. There was no application for a
PX system.
The court has to decide
the issue of liability in respect of the plaintiffâs claim. The
issues of the quantum of the plaintiffâs
claim and defendantâs
counterclaim, have been postponed sine die.
The main factual issue
is whether an agreement was concluded on 11 February 2004 in terms of
which the defendant would install
a full in-house system at Kent on
or before 20 February 2004.
It is convenient at this
stage to record some impressions of the witnesses and to make some
comments on aspects of their evidence.
Ms Oosthuysen did not
make a bad impression as a witness. She was sometimes inclined to be
dogmatic. She was criticized about
why she asked for a date of
installation if there was a fixed deadline of 20 February 2004. Her
explanation that she wanted to
put pressure on the defendant and that
she even hoped for an earlier installation was acceptable. The fact
that she was prepared
to extend the date of installation is not
inconsistent with her evidence that there was an agreed date.
At first she described
B24 as fraudulent, but when she was told that the body of the text
was written by Ms Venter, she readily
accepted it.
Her explanation that
after 18 February 2004 she concentrated on the issue of her account
because it enjoyed priority can be accepted.
As it is, the summons
was issued on 22 April 2004.
Mr Hendricks was an
intelligent witness who, on the whole, fairly made concessions that
were necessary. He contradicted himself
about whether he had
rejected the application for an in-house or merely declined to
approve it.
On his evidence the IT
department could not have reacted without a go-ahead from him.
He could not explain Mr
Burgerâs e-mail. It must be remembered that it was copied to him.
If he saw it at the time he could
not have left it there. His later
evidence that he discussed the e-mail which Mr Burger sounded like
speculation or a reconstruction.
Mr Hendricks could
not explain Ms Venterâs e-mail of 13 February 2004 (A7). That
e-mail, saying how long it would take to set
up the software for the
in-house, goes against his evidence that on 11 February 2004 he told
Ms Oosthuysen that he could not approve
the in-house.
He fairly conceded that
Ms Venterâs e-mail of 16 February 2004 (A12) created the impression
that approval for an in-house had
been given.
He conceded that he was
prepared to assist the plaintiff, being an existing client, with a
second hand printer. That makes it
not improbable that there could
have been approval which was only revoked when it was discovered that
there was no second hand
printer available.
Mr Permal was not keen
to be involved. He mostly avoided sensitive questions by repeating
that he was merely an operations man.
His description of what
a mini in-house was, came very close to what the plaintiff was at the
time operating at Kent. He evaded
the question about what Ms Venter
said he told her according to her e-mail of 9 February 2004 sent at
14h49 (A2).
Ms Venter tried to
explain why Ms Oosthuysen was never asked in an e-mail to produce an
FMR by suggesting that there were other
e-mails that were deleted
from her computer when she left the defendantâs employ. It is
improbable that such e-mails would have
been deleted if one bears in
mind when the summons was issued and when she resigned. It is also
improbable that they would have
been deleted from the computers of
staff members of the defendant to whom they had been copied.
Her version that the
seven days for installation would run from the date of approval does
not accord with her e-mail of 13 February
2004 sent at 15h51 (A7).
She gave the fact that
the plaintiffâs account had been put on hold as one of the reasons
why the application for an in-house
was refused. Later she gave it
as the main reason. It was not pleaded. It appeared that on 17
February 2004 the account was
not yet on hold.
Her evidence that an
in-house service was not discussed at all on 11 February 2004 is in
contrast to the evidence of Mr Hendricks.
She denied any knowledge
of Ms Oosthuysenâs aim to capture the business of RTT. It is
strange that she would not have been aware
of it, especially in view
of Mr Permalâs e-mail of 11 February 2004. See A4.
Her explanation that Mr
Burger in his e-mail of 12 February 2004 (see A4) must have referred
to the PX service, makes no sense.
She was wrong in saying
that her e-mail of 18 February 2004 (A18) said that the application
had been turned down and that it did
not leave the door open. She
could not explain why the reasons for the rejection given in her
evidence were not stated in the
e-mail.
In the end she said that
the negotiations were aimed at an agreement for a PX service. That
was never pleaded and it does not
explain the application for an
in-house system.
On the facts there are
two mutually destructive versions before the court as the whether an
agreement was concluded on 11 February
2004.
The court cannot resolve
the dispute on credibility alone. It has to be resolved with
reference to the probabilities.
Mr Seleka, who appeared
for the defendant argued that the evidence shows that the parties
were only negotiating but never reached
consensus on all the material
terms. He did not, however, argue that there had to be consensus on
both the PX and XPS solutions
before there could be agreement on the
overall solution. He in fact argued that there had to be separate
agreements in respect
of the PX and the XPS systems.
Although it is clear to
me that Ms Oosthuysen pursued an arrangement whereby the plaintiff
would replace RTT both in respect of
bulk freight and courier
service, it is clear that on her evidence that there was an agreement
on the in-house system. She was
amenable to the PX option and she
had reported to the defendant that Kent also found it acceptable. On
her version the fact that
the issue of the PX service was not
canvassed with Mr Hendricks on 11 February 2004, did not detract from
the agreement that was
reached on 11 February 2004.
If I consider the
evidence of the witnesses, their merits and demerits and the
probabilities, I find it more probable that an agreement
in respect
of the provision of an in-house system was concluded on 11 February
2004.
The e-mails show that
steps were taken for the preparation of the installation of such a
system. There is no evidence in the e-mails
that Ms Oosthuysen was
called to order and told that there was no agreement and that she
first had to submit an FMR. The application
on which the defendant
placed so much reliance, turned out to be nothing more than an
internal interdepartmental requisition form,
as a rule not even to be
signed by the client. The way in which the so-called rejection was
communicated to Ms Oosthuysen shows
that the problem was the
non-availability of a second hand printer, and not a lack of
financial data.
There was an important
difference between Mr Hendricks and Ms Venter about whether an
in-house was discussed on 11 February 2004.
On Mr Hendrickâs
version it made no sense that Ms Venter would be engaged in
discussions about the date and time for the installation
of a full
in-house.
Ms Oosthuysen
consistently acted like someone who believed that she had concluded
an agreement. If there had been no agreement
her requests regarding
the date and time for installation must have been sheer effrontery.
Ms Venter tried to say
that there was not enough parcels at Kent for a full in-house. That
was not the evidence of Mr Permal,
who said that if regard be had to
RTTâs business there were enough small parcels to justify a full
in-house system. As I have
said before, she should have been aware
of this. In fact, it must have been obvious that if RTT was
operating a full in-house
system, the volumes must have been
sufficient to justify it. For that reason it would have been
understandable why there was no
insistence on an FMR.
Then there was the
failure to call Mr Ben Burger. His e-mail clearly justifies the
conclusion that an agreement had been reached
on 11 February 2004.
It was so irreconcilable with the evidence of Mr Hendricks and Ms
Venter that they were at a loss to explain
it. Mr Burger was senior
enough that he would have known whether there was a factual basis to
give a go-ahead. He was available
as a witness and if he could have
given an innocent or neutral explanation of the e-mail, the defendant
should, and no doubt would,
have called him. It was not for the
plaintiff to have called him, because the e-mail, as it stands,
suited it perfectly.
For all these reasons I
conclude that as to what happened on 11 February 2004 the
probabilities favour the plaintiffâs version.
The plaintiff alleged in
paragraph 7 of its particulars of claim that the refusal to deliver
the computer software and printer
on 20 February 2004 or within a
reasonable time thereafter constituted a repudiation of the
agreement. It is alleged in paragraph
8 that the repudiation was
accepted either previously or by way of the summons.
Although the letter
dated 18 February 2004 may be construed as not being an unqualified
refusal to deliver a printer, it is clear
form the evidence that the
defendant did indeed repudiate the agreement. There was no evidence
that the repudiation was accepted
before the issue of summons. The
date of service of the summons, being the 6
th
March 2004, must therefore be accepted as the date on which the
contract was cancelled.
It is not clear to me on
what basis damages could be claimed for a loss of income until
October 2005 but that is an issue of quantification
with which I need
not concern myself.
In paragraph 10 of the
particulars of claim it is alleged that the plaintiff had agreed with
Kent that as soon as the in-house
system was installed, Kent would
allow the defendant to handle 100% of its courier freight. The
evidence about whether there was
an agreement with Kent was vague,
but Mr Seleka accepted that the issue of the agreement with Kent was
an issue that more properly
belonged to the quantum enquiry.
A problem that I have is
whether the plaintiff would have been able to use the defendant as
its subcontractor where its account
had been put on hold. It appears
that it must have been on hold at the latest from 23 February 2004.
That is not a question of
quantification, but of causation, which is
a prerequisite for liability.
It is common cause that
the suspension of the account has endured to this very day. Whether
the suspension was justified, will
only be determined when the
counterclaim is adjudicated.
If I look at the
evidence, it shows that the breakdown came when the account was
suspended. Ms Oosthuysen said that she had to
focus her attention on
the issue of the account.
For that reason she
could not pursue the suggestions conveyed in the letter of 18
February 2004 or even attempt to see whether
she could provide the
printer herself. Seen from that perspective the cause of the
plaintiffâs loss was the suspension of the
account. If it was
unjustified it may provide a cause of action for any loss sustained.
In my view the
suspension of the account was a supervening event that superseded the
effect of the repudiation. It can be tested
in this way: the
plaintiff cannot demonstrate that but for the repudiation of the
agreement it would have traded with Kent with
the defendant as its
service provider. There would have been no trade until the
suspension was lifted.
Mr Botes, who appeared
for the defendant, argued that the suspension only affected the
plaintiffâs account in respect of other
clients. He submitted that
the Kent account was not affected by the suspension. There is no
indication in the correspondence
that that was the position. It is
true that the evidence was that the plaintiff used the defendant as a
service provider in respect
of other clients (such as Brother, BMW
etc) and that the plaintiff had an account for each client. The
evidence was also that
there was a separate credit limit for each
account. All that does not mean that the suspension did not relate
to the overall account.
It would be most improbable and even
unbusinesslike if the defendant were to allow the plaintiff to use
its services on some accounts
whilst others are suspended.
The fact is that the
correspondence does not indicate that the suspension was confined to
certain accounts. For what it is worth
it appears from a letter
dated 22 January 2004, attached to the application for security for
costs, that on the Kent contract an
amount of R26 785.99 was
outstanding. The total outstanding amount at that stage was R236
460.45. It related to 5 account numbers.
I repeat: the further
correspondence did not refer to specific accounts, only to the
globular indebtedness.
In
Hart
and Honoré, Causation in the Law at 250
the following is said:
âBut
in civil law the position is different. Compensation is there
given for the infringement of some right and where economic
loss
is concerned, plaintiff only establishes the right to
compensation when he shows that, in the absence of the wrongful
acts on the part of the defendant or anyone else, he would have
enjoyed the relevant economic advantage.â
That
is applicable in this case. The plaintiff has failed to prove
causation and therefore there is no reason to consider the issue
of
quantum. The claim must be dismissed.
The following order is
made:
The
plaintiffâs claim is dismissed with costs.
_________________________
C.
BOTHA
JUDGE
OF THE HIGH COURT