Dole South Africa (Pty) Ltd v Pieter Beukes (Pty) Ltd (8729/01) [2006] ZAWCHC 58; 2007 (4) SA 577 (C) (8 December 2006)

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[2006] ZAWCHC 58
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Dole South Africa (Pty) Ltd v Pieter Beukes (Pty) Ltd (8729/01) [2006] ZAWCHC 58; 2007 (4) SA 577 (C) (8 December 2006)

IN THE HIGH COURT OF SOUTH AFRICA
(CAPE
OF GOOD HOPE PROVINCIAL DIVISION)
CASE NO. 8729/2001
REPORTABLE
In
the matter between:
DOLE
SOUTH AFRICA (PTY) LTD PLAINTIFF
and
PIETER BEUKES
(PTY) LTD DEFENDANT
JUDGMENT
DELIVERED ON 8 DECEMBER 2006
DLODLO,
J
INTRODUCTION
(1) In
this matter the Plaintiff, Dole South Africa (Pty) Ltd. (“Dole”)
is an exporter of fruit from South Africa to foreign markets.
The
Defendant, Pieter Beukes (Pty) Ltd. (“the Defendant”), is a
producer of table grapes in the Hex River Valley. Dole was appointed
by the Defendant as its agent for the export and marketing of the
grapes, and seeks to recover from the Defendant, monies paid to
the
Defendant as an “advance” or “voorskot”, prior to the
marketing of the grapes, on the ground that the eventual nett
proceeds
obtained from the sale of the grapes was less than the
advance.
(2) On
26 October 1999, a written contract was signed between the parties in
terms of which Dole was appointed as the agent of the
Defendant for
the export of table grapes to Europe, and which written agreement
sets out in some detail the applicable terms and
conditions. The
Defendant seeks to avoid the written contract on various grounds, in
particular the consequences of Clause 17.1 thereof,
which states
clearly and unambiguously that any advance is a loan to the Defendant
(and not a fixed price or a minimum guaranteed
price); that interest
accrues thereon from the date of the advance, and that it is
repayable to Dole (in whole or in part) in the
event of the nett
proceeds obtained from the sale of the grapes being less than the
amount advanced.
(3) Generally
stated, the present hearing is tailored such that the Court must
determine whether or not the Defendant was bound by
the written
agreement. By agreement between the parties, the issues relating to
the contract were to be heard and determined separately
from the
quantum. Mr. Gess appeared for the Plaintiff whilst Mr. van der Riet
(SC) appeared for the Defendant.
THE PLAINTIFF’S CLAIM
(4)
Dole
claims that, on 26 October 1999, it concluded a written agreement
with the Defendant, in terms of which Dole agreed to export
table
grapes from South Africa to foreign markets on behalf of the
Defendant. The contract was valid for a period of one year (Clause
4.1). Clause 17.1 of this written agreement provided that:
“
Dole S.A sal
die verskaffer op Vrydae volgende op die inname week ingevolge 11.2
en soos bepaal deur aanhangsel A, vir die vrugte
goedgekeur deur
PPECB tydens die inname week, in voorskot betaal. Die voorskot is ‘n
lening aan die verskaffer en is nie ‘n vaste
of minimum
gewaarborgde prys nie. Indien die uiteindelike opbrengs uit die
produk verkry, minder as die voorskot is, sal die verskil
tussen die
werklike bedrag wat aan die verskaffer betaalbaar is en die voorskot
van die verskaffer verhaal kan word.”
(5) It
is common cause that the Annexure “A” referred to was not
attached to the contract when it was signed (the document only
being
finalised later) and that it was subsequently made available to the
Defendant. The document refers in its heading to “
Advances
”,
and sets out the quantum of advances offered by Dole, making separate
and specific provision for each grape variety and each
production
week. Higher advances were available for certain varieties, and
within varieties varied according to the production week.
(6) Dole
pleaded that, at the end of the 1999/2000 season, the advances so
made to the Defendant exceeded the nett proceeds obtained
from the
sale of the grapes by some R1 664 926.68, which amount Dole seeks to
recover in the present action. The written agreement
contained
various additional important clauses, including a sole memorial
clause (clause 21); a non-variation clause (clause 21.1)
and a no
representation clause.
THE DEFENDANT’S PLEA
(7)
The Defendant admitted that the written agreement was signed on
26 October 1999 but
pleaded that same was (for the reasons set out in paragraph 3 of its
plea),
void ab initio
, alternatively, legally unenforceable.
The Defendant alleged that an oral agreement had been concluded
between the parties, immediately
prior to the execution of the
written agreement, which contained,
inter alia
:
an express term at
variance with the written agreement, being that the advances paid by
Dole to the Defendant were not loans but were
minimum guaranteed
prices, and that no part thereof was recoverable should the quantum
of the advances exceed the nett proceeds;
alternatively
a tacit term to the same effect as the
alleged express term; alternatively
an implied term to the same effect.
In its Plea, the
Defendant pleaded in this regard that it had been orally agreed that:
Dole would from time to time, after delivery
of the grapes, make payments to the Defendant, which payments were
of the nature known
in the deciduous fruit industry as “advances”;
The advance payments would at no stage during
the season be less than R20,00 per carton;
Should the nett price obtained in due course
for the grapes be less than the advance payments, then Dole would
not be entitled to
recover the difference from the Defendant, and
such a loss would be for Dole’s own account.
(8) The
Defendant, having alleged and pleaded the existence of a prior oral
agreement inconsistent with the subsequent written agreement
signed
by it, was required to allege and prove facts which explained this
conduct on the part of Mr. Beukes, and Defendant pleaded
as follows:
(i) The
written agreement was signed by Mr. Pieter Beukes, at the request of
Mr. Anton van Zyl (“Mr. van Zyl”), an employee of
Dole, without
Mr. Beukes having read same;
(ii) That
Mr. van Zyl knew that Mr. Beukes had not read the agreement before he
signed it.
(iii) The
amount of the advances payable, and the fact that this would be a
minimum amount which Defendant would receive for each
carton of
grapes was material/fundamental to the decision of the Defendant to
conclude the agreement;
(iv)
That prior to the agreement being signed Mr. van Zyl had given Mr.
Beukes the assurance that the written agreement did not contain
any
clauses inconsistent with the prior oral agreement, and incorporated
the terms of that prior oral agreement;
(v) That
this latter representation/assurance on the part of Mr. van Zyl
induced Mr. Beukes to sign the written agreement, and that
Mr. van
Zyl had been aware of this.
(vi) The
Defendant then proceeded, for the purpose of seeking to establish
that Mr. van Zyl did or ought to have realised the possibility
that
Mr. Beukes did not actually consent to the terms contained in the
written agreement at the time that he signed same (and therefore
that
he should have enquired as to whether Mr. Beukes actually understood
and assented to the agreement and not “snatched at a
bargain”, to
plead facts and circumstances which Defendant alleged that Mr. van
Zyl was aware of at the relevant time.
(9) The
alleged facts and circumstances, of which Mr. van Zyl was alleged to
have been aware, were alleged to be the following:
(i) The
agreement was tripartite and included a third party, Dole Europe,
which entity was unknown to Mr. Beukes;
(ii) Clause
17.1 of the agreement provided that the advances were loans, and were
not fixed or minimum guaranteed prices, and were
repayable by the
Defendant should there be a shortfall;
(iii) That
there was a practice in the deciduous fruit industry, to the effect
that advances were not considered as loans, but as
minimum guaranteed
prices and that any shortfall was not recoverable from the producer;
(iv) That
Mr. van Zyl and Mr. Beukes had, during the previous season, concluded
a bi-partite agreement, the provisions of which with
regard to
advances followed the alleged industry practice;
(v) That
during the previous season (1998/1999), at the time of concluding the
agreement, Mr. van Zyl had provided Mr. Beukes with
the Dole standard
export contract, in which the alleged industry practice was followed,
and that Mr. Beukes on behalf of the Defendant
was aware of the terms
contained in that standard contract;
(vi) That
Dole had deliberately changed its standard contract for the 1999/2000
season so as to depart from the alleged industry practice’
(vii) That
clause 17.1, insofar as it departed from the alleged industry
practice, and departed from the prior oral agreement, was
unusual and
such a clause would not have been expected by Mr. Beukes to have been
contained in the agreement that he signed;
(viii) That
Mr. Beukes on behalf of the Defendant was in fact not aware of the
content of the written agreement, either prior to or
at the time of
the signature thereof, and would not have signed it if he had been
aware, or had been made aware, of the provisions
of Clause 17.1
insofar as it departed from the alleged prior oral agreement and the
alleged industry practice.
(10) The Defendant in conclusion alleged that:
There was no actual consensus between the
parties relating to the terms contained in the written agreement,
thereby rendering it
void ab initio
;
There was a duty on Mr. van Zyl, in the
circumstances, to draw Mr. Beukes’ attention to Clause 17.1 and
its meaning, and that
Mr. Beukes’ misapprehension regarding this
clause was to be attributed to a misrepresentation on the part of
Mr. van Zyl as the
content and import of the written agreement which
was provided for Mr. Beukes to sign.
In the nature of this
case and by agreement reached between the parties in Rule 37
deliberations, the Defendant became the party with
a duty to first
adduce evidence. I set out infra albeit in an extremely summarized
form the evidence tendered by the parties.
EVIDENCE IN DEFENDANT’S CASE
Mr. Beukes (“Mr. Beukes”) testified that
he is a farmer in the Hexrivervalley and that he actually took over
from his father
who was also a farmer. He was, however, involved in
farming as early as 1995 during the time of his father. He would,
for an example,
be engaged together with his father in some
negotiations about certain contracts to be concluded regarding the
export of grapes.
As far as Mr. Beukes is concerned, there were two
(2) probabilities of concluding the contracts with exporters. There
was fixed
priced contract, meaning that the exporter would promise
you that he would pay it in two (2) instalments. The first
instalment
was normally the soonest and biggest to be paid. The
second category of contract, according to Mr. Beukes, was subject to
a minimum
guarantee price. In the latter category the farmer would
get his first payment within a week or two after delivery of the
product
and the final payment would be forthcoming ten (10) weeks
later. According to Mr. Beukes, farmers did discuss among themselves

the question of which agents can give the best deal offer and which
not. It was generally accepted among farmers that an agent who
offered the biggest minimum guarantee price was the best one in the
foreign market. According to Mr. Beukes, the minimum guarantee
prices did differ from one year to the other depending on supply and
demand. But Mr. Beukes told the Court that in 1999 the minimum
guarantee prices were very high compared to the prices for the 2000
season. When asked what normally would happen if grapes were
found
to be rotten on arrival overseas, Mr. Beukes answered thus: “
Daar
sou eers ‘n onafhanklike inspekteur gevra word on na die omvang
van die skade te gaan kyk en dan moes hulle ten minste verkoelings,
die agent moes ‘n verkoelingsverslag gee van wat het hy met die
vrugte gedoen. Ek kan die vrugte net vat tot by die Hexco en
daarvan
af is dit die agent se pad om die vrugte aan die ander kant te kry.
So as hy genoegsame bewyse het dat die probleem aan
my kant ontstaan
het, dan kan hy dit verhaal van my voorskot
.” Mr. Beukes
testified that by the end of 1998 he concluded an agreement with
Dole and that Mr. Anton van Zyl acted on behalf
of Dole. According
to Mr. Beukes it was not mention to him either by Mr. van Zyl or any
other official of Dole that the first payment
by Dole was to be
regarded as a loan and that in the event of losses; those losses
would be for the account of Mr. Beukes. He maintained
that if
anybody told him that, he would not have concluded the contract
because there were enough other exporters who could export
the
fruits.
(12) When
Mr. Beukes was asked how the negotiations preceding the signing of
the October 1999 contract which constitute the subject
matter of this
litigation, were conducted, he explained as follows: “
Ons
het maar weer die normale goed bespreek van minimum eerste prys en
dan wanneer die finale betaal sou word. So ook wanneer die
risiko sal
oorneem, sou heel waarskynlik bespreek word. As daar ‘n probleem is
met kwaliteit, moet hulle darem vir ons ‘n kwaliteitseis
binne 72
na aankoms lewer en ja, die terme waarop hy gaan betaal. Die eerste
betaling twee weke na pak en dan die res tien weke of
wat ook al
daarna.”
He told the Court that the discussions took place
at his farm. He would not remember if Mr. van Zyl gave him an English
Dole contract
but stated that he would have asked for an Afrikaans
copy. He was given the Afrikaans copy. Asked what he said when the
contract
was presented to him Mr. Beukes answered: “Ons het gesels
en die goed wat ons bespreek het is in die kontrak en ons het die
kontrak
geteken.” He reiterated that he did not read the contract
before appending his signature thereon. Asked if Mr. van Zyl would
have
been aware that he did not read the agreement, he answered in
the positive. Asked what he thought was in the contract, Mr. Beukes
answered: “Ek het gedink wat in die kontrak staan is dat ek ‘n
R20 minimum betaling, eerste betaling of voorskot sou kry en dan
die
res binne tien weke en so ook wat die kwaliteitseise betref, dat as
daar enige, van enige kwaliteitseise ter sprake is, dan sal
dit binne
72 uur wees en die basiese goed, die kommissie wat hulle sal neem.
Die basiese goed wat ‘n mens maar bespreek.” He
added that Mr.
van Zyl did not tell him that Dole amended its standard contract
which was in place the previous year. He was accordingly
never told
that there was a provision in the contract to the effect that the
advance paid was a loan repayable should there be a
shortage. If he
was so told, he would definitely not have used Mr. van Zyl for
exporting his grapes. He referred to the contract
he had with Fox and
Brink founded on fixed minimum guarantee price but hastened to add
that there were problems – “hulle het
kwaliteitsprobleme opgetel
aan die ander kant en ek het my prokureur en ‘n makelaar gestuur om
te gaan kyk wat daar aangaan en
hulle het ‘n verslag opgestel. Ek
kan nie presies onthou wat in die verslag aangaan nie en ons het toe
by ooreenkoms gestop.”
(13) When
he was referred to the Dole contract Mr. Beukes testified that he was
never aware that there was also a third party, namely
Dole Europe
involved in the contract. Mr. Beukes took the Court through many
other contracts and contended all what was there provided,
was the
minimum guarantee price. Mr. van Riet (SC) referred Mr. Beukes to
pages 29 and 30 of the bundle and asked that he explain
to the Court
about the content of the documents and what discussions would have
taken place in connection with that documentation
between himself and
Dole. In this regard Mr. Beukes tendered the following explanation;
“As ek reg kan onthou, het ek eintlik nie
aandag aan dit gegee nie,
want ek het mos nou my prys gekry vir my vrugte en ek het heelwat
betalings na hierdie ontvang in daardie
spesifieke jaar, waar as
hulle dan nou wou, dit kon aftrek, maar ek het later bewus geword dat
hierdie twee betalings is afgetrek
of daar is twee betalings van my
state afgetrek in die 2000 seisoen, waarop ek Mnr. Botes gevra het
waarvoor is die geld afgetrek
en teen daardie tyd het ek al lankal
vergeet van hierdie twee afrekeningsdatum en hy het vir my gesê dit
kan stempels, hy het gereken
dit was stempels en plakkers en omdat
hulle vir my stempels en plakkers gebring het, het ek aangeneem okay,
dit is die aftrekking
wat gemaak is op my eerste betaling in die 2000
seisoen.” I will deal fully with Mr. Beukes’ evidence,
particularly his evidence
consequent upon cross-examination when I
evaluate the evidence holistically
infra
.
EVIDENCE IN PLAINTIFF’S CASE
Mr. Anton Francois van Zyl (“Mr. van Zyl”)
testified that he is a trained horticulturist. He started to work in
the fruit industry
in 1989 with Unifruco as a table grape technical
representative, and it carried on until deregulation of the industry
in 1997.
Mr. van Zyl then worked with a company called Sunpride for
about six (6) months. That was until he was appointed by Dole South

Africa. Unifruco was until deregulation in 1997 the sole agent of
the Deciduous Fruit Board and on a statutory basis and in terms
of a
deciduous fruit scheme, saw to all the exports of fruit from South
Africa abroad. Mr. van Zyl no longer works for Dole South
Africa but
he now farms on his own with deciduous fruit with export plums and
local peaches, apricots, dried fruit. He prefixed
his testimony with
a brief history of Dole South Africa and how it started in this
Country. Furtheron as basis of his testimony,
Mr. van Zyl explained
to the court what used to be the position when he worked for
Unifruco as its sole export agent. At that stage,
according to Mr.
van Zyl, all the fruit was done on a consignment basis – meaning
that the grower would produce fruit and he
would present same for
certification by the Perishable Products Export Control Board to
assure that it complies with certain standards.
Unifruco would then
take ownership of the fruit, but not ownership as owner, the
principal or the owner would still be the producer.
He called this a
consignment deal. Then about ten (10) days after intake Unifruco
would pay the grower an advance, (voorskot) the
aim being that it
would help the grower with his cash flow requirements at that stage.
Upon the export of the fruit and sale thereof
a final payment would
be made to the grower. Even during those times of Unifruco it was
possible to recoup a part of the advance
from a grower, according to
Mr. van Zyl. He testified then that he was then personally involved
in negotiations with certain growers
where purely on the quality
side, recoupment was made. He hastened to add that it was his
understanding that there was tremendous
pressure on the pool to
recoup due to exchange rate charges, or other factors that could
have influenced a return in South African
rand terms back to the
grower. Mr. van Zyl testified that even when he left Unifruco to
join Sunpride, he met Pieter Beukes. The
deals, according to Mr. van
Zyl’s knowledge, concluded with Mr. Beukes Senior even at that
stage were consignment deals. The
only difference was then the fruit
destined for the Middle East.
Mr. van Zyl testified that when he joined
Sunpride and subsequently Dole at least up to the period when the
1999, 2000 season began
there would basically be two (2) types of
deals, namely, an outright buying of fruit from a grower, a category
that does not have
the involvement of an agent. The second brand
would be where one could actually split it in two lines. The one
would be an outright
consignment deal wherein the farmer is the
owner of the fruit carrying the risks up to the final point of sale
in the market (European
market). Mr. van Zyl explained further that
in this category the farmer carries all the costs for shipping,
distribution, documentation,
administration etc. He added that in
the case of Dole and most of the consignment agents, they would pay
the bills, but then recoup
it from the grower. The second category
in that brand would be something like a consignment deal but with a
certain benchmark or
a certain value that is entrenched with the
grower, for an example R40 for a particular box of fruit.
Mr. van Zyl testified that in South Africa
Dole paid advances, but these were not minimum guarantees. These
were explicitly described
and discussed as not minimum guarantees by
Dole South Africa. He emphasized that advances were not structured
in a way that a grower
could understand that they could be minimum
guarantees. In other words, according to Mr. van Zyl’s evidence,
the advance paid
to the grower would be recoupable if the returns
from the overseas market would be less than the actual advance paid
to the grower.
Under the minimum guarantee the advance payment is
not recoupable unless there was fruit quality problems ascribed to
the producer’s
negligence. In Mr. van Zyl’s evidence all
exporters, not only Dole South Africa, handled fruit as a matter of
norm at that period
of time by way of consignment deal. He added,
however, that there were instances where certain exporters needed a
break into the
market and they offered certain levels of
entrenchment or guarantees on different ways, but the norm in the
industry, the gross
volume of fruit handled be it summer fruit or
table grapes from south Africa to the European market, was done on a
consignment
basis.
Mr. van Zyl then testified about the contract
between Dole and the Defendant company – adding that Dole did not
grant any minimum
guaranteed prices to any producer at all in the
Hex River area in 1999/2000 season – nor was any such impression
created. Mr.
van Zyl was personally involved in the drafting of the
contract and therein he testified he included all points of the
agreement
with the growers although the final product thereof was
finalized by a legal company on behalf of Dole so as to ensure that
all
the legal terms and points were covered. Importantly, Mr. van
Zyl pointed out that the old Dole contract was concluded between

Dole South Africa and the producer. The 1999/2000 contract contained
clause 17.1 forming the subject of discussion in this litigation.
Mr. van Zyl explained that the reason why clause 17.1 was put in the
contract in the form it is, was to leave no uncertainty with
the
growers as to what the structure of the actual deal concluded with
them was. Dole did not want the grower to be unsure or to
interpret
or to come to the conclusion in any way that Dole was doing an
entrenched minimum guarantee deal with the grower. According
to Mr.
van Zyl when he met and discussed with Mr. Beukes they spoke about
the advances paid or payable and the structure how it
would be paid.
But he added that at that stage the document or the appendix to the
contract depicting the exact advances was not
available yet.
This document was made available quite a
while later. Mr. van Zyl categorically denied that he would have
said to Mr. Beukes that
R20 is cast in stone. He maintained that he
was very clear on the structure of a consignment deal of an advance
of a loan and the
structure how it was put together. According to
Mr. van Zyl the contract was given to the Beukes’ (Heinie Beukes
Senior and Pieter
Beukes). The meeting took place in a room
resembling a living room, a very nice informal social room and most
dealings Mr. van
Zyl had with the Beukes family over the period that
he dealt with them happened in that same room. He described the
room. At that
stage, testified Mr. van Zyl, further he handed to Mr.
Beukes an English copy of the written agreement. Mr. Beukes’
reaction
is said to have been “okay dis mooi, maar het jy nie vir
my ‘n Afrikaanse een nie?” but Mr. van Zyl subsequently made an

Afrikaans copy available to Mr. Beukes although not on the same day.
Mr. van Zyl alerted the Court to the fact that he procured
fruit all
over the Country and that it would be difficult for him to have gone
back to numerous farmers he serviced and ask what
exactly happened.
He, however, hastened to add that he was very firm on one thing,
namely that he discussed and explained the terms
and the conditions
of the contract to all the growers that Dole dealt with, emphasizing
that, that was a core part of his job.
In his evidence he would take
the contract and have same in front of himself and would give the
grower a copy to hold in his hand.
He would sit actually next to the
grower, so that both he and the grower can have a look at the
contract, they together would go
through each paragraph in the
contract. According to Mr. van Zyl he dealt rather extensively with
the content of paragraph 17.1
of the contract because Dole had
decided to make that aspect absolutely clear to growers. Mr. van Zyl
added that he did not want
a farmer in a consignment environment to
be unsure where he stood. He emphasized that the above was but his
modus operandi. He
would go through each contract very clearly with
the grower because he wanted the growers to fully understand what
was being dealt
with. In his discussion of the contract with the
farmer, seeing that the impact on the whole logistics of exporting
fruit in a
consignment environment leans very strongly on the crop
prediction, they would also discuss every minute detail of it. He
denied
that he did not go through the contract with Mr. Beukes.
The next witness called by the Plaintiff was
David Joachim Scholtz, the general manager of deciduous fruit at
Dole. He also prefixed
his testimony with what I would call the
history in the deciduous fruit industry. He emphasized that the
departure point of the
deciduous fruit industry was always from the
single channel days, to consignment business. Mr. Scholtz fully
corroborated the testimony
of Mr. van Zyl and emphasized that the
advance is defined or determined by trying to evaluate what kind of
cash flow the producer
will need in that part of the season and to
assist him with that. There are projected prices which are a lot
more technical and
are often difficult to determine. It was Mr.
Scholtz evidence that out of the single channel days into the
deregulated environment
till today, the norm is still consignment
business. He gave reason for the existence and use of the
consignment business deal,
namely that in the deciduous fruit
business, the main markets are UK and the continent of Europe and
that out of the sanction days
it was the only markets available to
Dole for many years. Expanding on this aspect, Mr. Scholtz mentioned
that the business is
built on those markets and those markets won’t
give orders at fixed prices to a South African exporter. In other
words, in Mr.
Scholtz’ evidence, the whole business is developed
as a consignment business. Mr. Scholtz then fully explained what is
to be
understood by consignment deal. In his explanation the
exporters act as agents for the producers, where all the risk of the
final
result is for the account or the benefit of the producer, the
advances will not be minimum guarantees at all.
He emphasized that in any event procuring
people, like Mr. van Zyl, did not have the mandate to negotiate
minimum guarantee prices
because it is obviously a different level
of risk and a different set of rules. According to him there was not
even the mentioning
of minimum guarantees from Dole’s side in
those days. Dole never had any minimum guarantees even before the
insertion of clause
17.1 in dole’s contracts. In 1999/2000,
according to the testimony of Mr. Scholtz, Dole had to recover
outstanding balances from
at least 80% of the farmers. Of all those
farmers only three (3) did not pay. It was the Beukes (the
Defendant) and Nervana, a
family of Pieter Beukes and Moddersdrift,
also a family of Beukes – cousins or uncles. All three (3)
non-payers, according to
Mr. Scholtz, claimed that they did not read
the contract and do not want to pay back. I will deal with evidence
that the Defendants’
witnesses gave under cross-examination infra
where I evaluate evidence and submissions.
THE LEGAL PRINCIPLES APPLICABLE IN THIS MATTER
(21) First
and foremost one needs to bear in mind the general principle set out
by Innes CJ in
Burger v Central South African Railways
1903 TS 571
, namely that:
“
It is a sound
principle of law that a man, when he signs a contract, he is taken to
be bound by the ordinary meaning and effect of
the words which appear
over his signature.”
It is for the party
seeking relief from an agreement that he has signed to convince the
Court that he was misled as to the purport
of the words to which he
was thus signifying his assent. See:
George v Fairmead (Pty)
Ltd.
1958 (2) SA 465(A).
With regards to the
mistake which the Defendant alleged, the following authoritative
legal formulation enunciated from
ABSA Bank Ltd. v The Master
NNO
1998 (4) SA 15(N)
is of significance and is, in my view,
applicable in this matter as well:
“
A unilateral
mistake, other than a mere error in the motive, also does not allow
the party labouring under the erroneous belief to
repudiate his
apparent assent to a contract except in very narrow circumstances, as
explained in George v Fairmead (Pty) Ltd. 1958(2)
SA 465(A) at 471
and National & Overseas Distributors Corporation (Pty) Ltd. v
Potato Board 1958(2) SA 473(A) at 479. The effect
of these decisions
is that, for a unilateral mistake to vitiate the necessary assent to
a contract, the error must be a justus error.
In this respect the
courts in applying the test, have taken into account the fact that
there is another party involved and have considered
his position.
They have, in effect, said:
Has the first
party – the one who is trying to resile – been to blame in the
sense that by his conduct he has led the other party,
as a reasonable
man, to believe that he was binding himself?"
(22) A
party to a contract who has concluded same whilst labouring under a
bona fide
and reasonable mistake as to its contents will not
be bound by the provisions thereof. In particular, where the
contracting party
has been led to believe by the other party that the
contract contains certain provisions, which in fact it does not, the
party relying
upon the misrepresentations, will not be bound by the
agreement. In this regard it was stated in
Tesoriero v BHYJO
Investments Shareblock (Pty) Ltd.
2000(1) SA 167(W) at 175:
“
The
misrepresentation need not have been fraudulent or negligent. The
duty to inform would or could arise where the document departs
from
what was represented, said or agreed beforehand or whether other
contracting party realizes or should realize that the signatory
is
under a misapprehension or whether the existence of the provision or
the contract is hidden or not apparent by reason of the way
in which
it is incorporated in a document or whether provision, not clearly
presented, is unusual or would not normally be found
in the contract
presented for signature.”
See also:
Spindrifter
(Pty) Ltd. v Lester Donovan (Pty) Ltd.
1986(1) SA 303(A).
(23) In
the absence of an actual misrepresentation on the part of the
non-resiler (be it innocent, negligent or fraudulent), it has
been
held that there is a duty on that party – if he realises, or ought
reasonably to realise, that there is a real possibility
of mistake-
to speak and enquire whether the intention indicated by the signature
of the agreement expresses the actual intention.
The “
snapping
up of a bargain
”, in the knowledge of the possibility that the
declared intention did not represent the actual intention, would not
be
bona fide
and in such circumstances there is no binding
agreement. See:
Sonap Petroleum (SA) (Pty) Ltd v Pappadogianis
1992(3) SA 234(A). In
Prins v ABSA Bank Ltd.
1998(3) SA
904 (C), Davis AJ proposed a useful summary of the position as
follows:
“
There are three
different sets of circumstances where a party has invoked the defence
of justus error to resile from a contract.
(i) Where
the mistaken party is not to blame for the mistake in the sense that
he behaved as a responsible person would have behaved
in the
circumstances, namely with due care. See
Spindrifter
case at
316.
(ii) Where
the error has been induced by a misrepresentation of the other party
who might have acted either fraudulently, negligently
or even
innocently. See
George v Fairmead
at 471 B-D.
(iii)
Where the non-resilers’ reliance on the appearance of the
consensus is
unreasonable. See
Standard Credit Corporation Ltd. v Naicker
1987(2) SA 49N at 53 I-J.’
Davis AJ continues in
909 B-C that the following series of questions can be used to
determine whether reliance on the contract was
reasonable in terms of
the conduct of the party allegedly creating the impression of
consensus and the conduct of the other party
in believing the
impression:
Is there consensus?
If not, is there dissensus caused by a
mistake?
Is the other party aware of the resiler’s
mistake?
Who induced the mistake and was it done by
commission or omission, which was either fraudulent negligent or
even innocent?”
(24) Regard
must be had to what transpired in
Constantia Insurance Co. Ltd.
v Compusource (Pty) Ltd
2005(4) SA 345(SCA) in which the
Supreme Court of Appeal held that the term in question was an unusual
one and which the Defendant’s
representatives may well not have
wished to agree to, had they been aware of the full implication
thereof. It was accordingly held
that the reasonable person in the
person of the Plaintiff would have enquired from the Defendant’s
representatives at the time
whether he appreciated the meaning of the
clause and would have explained same to him. The legal consequences
of the Plaintiff’s
failure to follow this approach in that matter
led to the finding that the Defendant could not be held to the
provisions of a clause
to which its representatives did not and could
not reasonably have been thought to agree (see paras 19-23 of the
judgment at 254
G-356G).
EVALUATION OF
EVIDENCE AND APPLICATION OF LEGAL PRINCIPLES
(25) In Mr. van
Riet (SC)’s submissions, the Plaintiff’s case is not based on the
caveat subscriptor principle, but rather that
there was true oral
consensus as to the content and meaning of clause 17 of the
agreement, which consensus is reflected in the written
contract.
Concluding on this aspect, Mr. van Riet (SC) submitted that the whole
basis as to why the Defendant accepted the duty to
begin, has fallen
away and the overall onus remains on the Plaintiff to prove such
consensus. In the alternative (only to the extent
that the Plaintiff
may contend that the signer beware principle still apply), Mr. van
Riet (SC) relying on the recent Supreme Court
of Appeal Judgment of
Constantia Insurance
supra
, argued that no
reasonable person in the position of the Plaintiff would have been
misled by Mr. Beukes’ signature to the contract
into believing that
he was agreeing to the advance being a refundable loan.
(26) In Mr. van
Riet (SC)’s submission as regard the alleged consensus/dissensus
Mr. Beukes’ evidence that he believed that the
advance was the
minimum amount that farmers would receive, cannot be rejected and
that, to the extent that Dole clearly intended
the voorskot to be a
loan, there was a misunderstanding between the parties, much on the
same basis as there were similar misunderstandings
between so many
farmers and exporters in regard to the legalities of the advances at
that time. To the extent that Mr. van Zyl’s
evidence may be argued
by Plaintiff to exclude such understanding, submitted Mr. van Riet
(SC) that he clearly overstated the position
and that, in any event,
Mr. Beukes’ clear recollection and evidence cannot be rejected.
(27) In
conclusion Mr. van Riet (SC) submitted that the true defence in this
case (as in
Constantia
supra
) is not one of
misrepresentation by omission, but one of dissensus in that the
Defendant says Mr. Beukes was unaware that the contract
provided for
a repayable loan and would not have contracted with the Plaintiff if
he did. Under the circumsntaces, submitted Mr.
van Riet (SC), the law
is that the Defendant would, despite Mr. Beukes’ lack of actual
consensus be bound to the provisions of
the contract, but only if
Dole’s representatives relied on an impression created by Mr.
Beukes in signing the contract that he
was assenting to its terms and
was reasonable in doing so. If, however, submitted Mr. van Riet (SC)
further, a reasonable person
in their position would have realised
that Mr. Beukes, despite his apparent expression of agreement, did
not actually consent to
be bound by the clause, this clause could not
be said to be part of their agreement. In the latter regard I am
referred to
Constantia Insurance
case page 353 G-I.
(28) In contrast
to the aforementioned submissions, Mr. Gess as a starting point dealt
somewhat exhaustively with what the Defendant
in the instant case was
required to have done. This, Mr. Gess succinctly set out as follows:
“
In seeking to
avoid the consequences of the agreement which was signed, and which
by that signature assent to the terms thereof is
usually presumed, it
is submitted that the Defendant would have to show inter alia that:
That
there was no consensus in respect of the terms contained in the
written agreement. The Defendant sought to show this by alleging
that there was a prior oral agreement between the parties which
contained express, tacit or implied terms relating to the advances,
and that the terms of the written agreement (without his being aware
thereof – in that he had not allegedly read the agreement
prior to
signing same) contained material provisions at variance therewith;
and
If
he could show that there was in fact such dissensus that this was
occasioned by a misrepresentation on the part of Dole, whether
innocent, negligent or fraudulent. The Defendant sought to show this
by, inter alia, alleging that Van Zyl had represented to Defendant
that the terms of the alleged oral agreement (as contended for by
the Defendant) had been included in the written agreement, but
had
not; alternatively
If
he could show that Van Zyl appreciated, or ought reasonably to have
appreciated, that Beukes was labouring under a mistake as
to the
content of the written agreement, such as would have created a duty
on his part to speak and enquire, and that he failed
to speak and
enquire but rather ‘snatched at a bargain’.”
(29) Regard
being had to the rather detailed Defendant’s Plea in this matter
set out earlier on in this Judgment, Mr. Gess’ aforementioned
submission, in my view, cannot be faultered. It is not entirely
correct that the Plaintiff in this case abandoned reliance on the
caveat subscriptor principle. The starting point is as referred to by
Harmse JA in
Sonap Petroleum SA (Pty) Ltd v Papadogianos
1992(3) SA 234 (A) quoting from the statement by Blackman J in
Smith
v Hughes
, namely:
“
himself
that a reasonable man would believe that he was assenting to the
terms proposed by the other party, and that other party upon
the
belief enters into the contract with him, the man thus conducting
himself would be equally bound as if he had intended to agree
to the
other party’s terms”
.
As long ago as
in 1903 it was our law and it remains our law that when a party signs
a contract it is taken to be bound by the ordinary
meaning and effect
of the words which appear over his signature. For the Defendant to
succeed it needed to convince the Court that
it was misled as to the
purport of the words to which he signified his assent by appending
his signature.
See:
Burger
v Central South African Railways
1903 TS 571
;
George v
Fairmead (Pty) Ltd
1958(2) SA 465 (A)
(30) Maybe it is
apposite to now refer to the evidential material used in this case.
Importantly Mr. Beukes admitted that he could
not recall the exact
words which were used when the contract was being negotiated. On
occasion he suggested that it had been stated
that the advance would
be a “minimum guarantee” or even a “minimum price” (which
would apply to sale and not agency) even
though he had earlier
conceded that these words had not been used. On other occasions Mr.
Beukes simply stated that he was told that
he would not receive less
than twenty rand (R20) or that no amount would be deducted therefrom
and that the twenty rand (R20) was
his. Mr. Beukes’ evidence
regarding promises of an advance of not less that R20,00 must not be
considered in isolation, but in
the context of the stage of the
negotiations, and in particular the fact that Dole had not yet
determined the quantum of the advances
it would offer for the season.
Annexure “A” to the agreement was not present at the time of the
negotiations or the signature,
and this was the document that was
supposed to determine the advances which Dole was prepared to pay,
per cultivar, per week. As
Mr. van Zyl testified, Dole had not yet
determined the exact amount of the advances – but was promising
advances of not less that
R20,00, as this represented the estimated
production cost of the farmer. In the event, the schedule (Exhibit A,
page 100) did provide
for advances, the quantum of none of which for
first class fruit was less than R20,00 and in some cases was greater.
In the absence
of Annexure “A” it would be natural to want to
know what the expected advances would be. In my view, the mere fact
that a person,
in these given circumstances, is assured that the
advances will not be of a quantum of less than R20,00 (which turned
out to be a
correct prediction of the quantum that eventually
appeared on the Schedule, and also of the advances actually paid over
by Dole)
– is a far cry from an assurance that the advance will be
construed as a minimum guaranteed price – particularly against the
background of the industry norm.
(31) The
evidence by Mr. Beukes that in deciduous fruit industry there was an
established practice that a reference to both a “voorskot”
or
“advance”, and to a “first advance” only had one meaning when
used, that meaning being that of a “minimum guarantee
price” in
which no part of the amount so advanced could be recovered from the
producer, seems so wrong to the extent that it would
be fair to say
that he was deliberately being untruthful in this regard about his
understanding. Having had sight of the content
of the Exporter’s
Handbook prepared by Fruit South Africa pages ten (10) and forty (40)
thereof, as well as the uncontested evidence
of Mr. Scholtz and Mr.
van Zyl, I am bound to reach an inescapable conclusion that Mr.
Beukes was not truthful to me on this aspect.
Mr. Beukes is no
newcomer in the deciduous industry. He was brought up by the family
therein involved. He, himself is a seasoned
businessman in deciduous
industry. What is abundantly clear is that the practice was that in
the case of agency business, an advance
(payment in anticipation of
the proceeds of fruit to be sold on behalf of the producer) was
recoverable in the event of the nett
proceeds being less than the
advance, and that this had prevailed even prior to deregulation in
the days of Unifruco Ltd. and the
Board. This practice was clearly
the norm. Only in exceptional cases was it specifically agreed
(usually when the exporter had a
special requirement for specific
fruit) that all or a part of the advance would be a minimum
guarantee, in which case the exporter
deliberately took the risk
that, if the nett proceeds were less than that part of the advance
which was subject to the minimum guarantee,
same could not be
recovered. Furthermore, an “advance” and a “minimum guaranteed
price” did not have the same meaning.
(32) Needless to
mention that insofar as it was also alleged and pleaded that the term
may have been an
implied term
(my underlining), it is
essential to emphasise that Mr. Beukes accepted that the relationship
between Dole and the Defendant was
one of principal and agent. The
normal position with regard to such an agency relationship would
clearly be that all expenses incurred
by the agent pursuant to his
mandate were incurred on the principal’s behalf; the principal
would be entitled to the nett proceeds
after expenses (and subject to
a duty to account); and that any amount advanced or loaned by the
agent to his principal prior to
the sale of the produce, and in
expectation of the eventual receipt of the proceeds of the crop sold
by the agent on the principle’s
behalf, would be repayable to the
agent. As in all instances of agency, the risk of loss from the
transaction would be that of the
principal alone, as would be the
right to the profits, unless expressly provided otherwise.
(33) Mr. Beukes
told the Court that the practice of Dole in 1998/1999 season had been
to grant advances which were minimum guaranteed
prices. It is common
cause that Mr. Beukes had also pleaded that at the time of
contracting in 1999/2000 season he had been aware
of the terms of the
Dole contract for the previous year. It is of note though, that an
oral contract was infact concluded with Mr.
Beukes’ father and not
with Mr. Beukes himself. Mr. Beukes was unable to testify that he was
present when the said oral contract
was concluded. It is not without
significance that although an unsigned written contract had been
available that year (after conclusion
of oral agreement) Mr. Beukes
was obliged when cross-examined to concede that he had never read the
document at all and was consequently
unaware of its terms. Strangely
when Mr.Beukes testified he conceded that he had not only never read
any previous Dole contract,
but that the contract with Modderdrift
had never been in his possession at the relevant time. How on earth
can he give his counsel
wrong instruction in this regard, remains a
mystery and is thus totally beyond my comprehension. Therefore
unavoidably, in my view,
the enquiry in respect of the signing of the
1999/2000 season agreement must be proceeded with on the basis that
Mr. Beukes had had
no insight into the Dole standard contract for
1998/1999 season, and had never read any part thereof.
(34) Mr. Beukes
testified that he signed the agreement in Afrikaans on 26 October
1999, in the presence of Mr. van Zyl, and without
first reading same.
He could not dispute that either on 5 October 1999 or 14 October 1999
(but in any event in excess of a week before
the signature of the
Afrikaans version of the written agreement on 26 October 1999), he
may have been given an English copy of the
agreement by Mr. van Zyl.
The evidence of Mr. van Zyl, which was not contested, was that he had
first handed over an English version,
and had later brought an
Afrikaans version on a separate occasion at least a week later. If
this had taken place, he would have asked
for an Afrikaans copy, (the
purpose of this request would not have been to read the Afrikaans
version, but rather to gain time to
seek to negotiate further with
Dole’s rivals for better prices). He was unable to state whether in
those circumstances the English
version was retained by him or
returned to Mr. van Zyl. Mr. van Zyl testified that he would not have
taken the English version away
with him. Mr. Beukes maintained that
he never read any agreements, and never had any intention or wish to
read either the English
or Afrikaans version of the Dole agreement.
He accepted, if Mr. van Zyl had left the English version with him
(either on 5 October
1999 or 14 October 1999) and had later brought
him an Afrikaans version, Mr. van Zyl could reasonably have assumed
that Mr. Beukes
would have read the agreement in the meantime. He had
the opportunity of reading the agreement before signing same, but
chose not
to read it. He was not told by Mr. van Zyl not to read the
agreement before he signed same.
(35) By reason
of his concessions regarding the English version, Mr. Beukes was
unable to state that Mr. van Zyl was actually aware,
at the time that
Mr. Beukes signed the agreement, that Mr. Beukes had not read the
agreement and acquainted himself with the contents.
When put to him,
Mr. Beukes denied that Mr. van Zyl had explained the content of the
written agreement to him before he had signed
same, and in particular
that he had explained the involvement of Dole Europe as a third party
to the agreement; the nature of the
advances as set out in clause
17.1 and the meaning of clause 17.2 relating to the exchange rate
policy and the charging of interest
on the advance at the LIBOR rate.
(36) Mr. van Zyl
on the other hand, testified that he was certain that he would have
adhered to his modus operandi and, as with all
other growers,
explained the pertinent terms to Mr. Beukes. He believed that he
would have gone through the contract with Mr. Beukes
at the time that
he first presented the contract- (which was the English version).
Although he conceded readily under cross-examination
that he gave
evidence about the explanation of the contract on the basis of the
modus operandi which he had followed in all cases,
he was not shaken
on his assertion that he had done so with every farmer. This
explanation is furthermore probable. The criticism
of his evidence
under cross-examination is not justified. He was being asked to
speculate regarding the modus operandi and the manner
in which he
might theoretically had explained the matter to individual farmers.
He had no individual recollection and relied in his
modus operandi
only. Had he recalled exactly what he said to a specific farmer, this
might of itself not have been credible. To say
that the
recoverability was not hammered on as a “mega point”, does not
detract from the fact that the record shows that in both
instances
Mr. van Zyl confirmed that he would have explained the nature and
purpose of the advance to each producer.
(37) Mr. Beukes
further testified that he had signed the agreement without reading
same because Mr. van Zyl assured/represented to
him that the terms of
the written agreement were consistent with the alleged prior oral
agreement. Mr. van Zyl denied that he had
misled Mr. Beukes as to the
terms of the written agreement, and it was in any event his evidence
that he would have followed his
modus operandi with Mr. Beukes, as
with all other producers who signed the written contracts. Mr. Beukes
maintained in his testimony
that he was unaware at the time of
signing of the agreement that same was tri-partite in nature in that
Dole Europe was a party thereto.
On being cross-examined on this
aspect he conceded that the face of the document referred clearly and
in bold letters to both Dole
South Africa and Dole Europe. Every page
of the agreement alongside the position at which Mr. Beukes
initialled, it is stated in
black type-face that the agreement was a
tri-partite one. How on earth can Mr.Beukes maintain he did not
become aware that three
(3) parties were party to this agreement is
once more beyond my comprehension. Even if it can be accepted that he
did not read the
document, he, however, would have had sight of this
as he initialled and fully signed at the tail of the agreement.
(38) Taking a
step backwards to what, according to Mr. Beukes explained he
understood the practice to have been in the deciduous industry
in
general, I hasten to add that it would not be unreasonable to have
expected the Defendant to have called at the very least an
expert
witness with regard to such industry practice or even another grape
producer to confirm the alleged practice. This the Defendant
did not
do despite its awareness that the Plaintiff would lead evidence to
negate its understanding of the practice in the industry.
It is also
not without significance to note that when Mr. Beukes was asked for
basis of his understanding of the industry practices
prior to and
during the 1999/2000 season, he explained that he had never read any
contract at all relating to the export of fruit
whether such contract
related to a fixed price deal or to the appointment of an agent. Mr.
Beukes on his own version, had only been
involved in the marketing of
fruit for one or two years and until the year under discussion he had
been assistant to his father.
In the season 1998/1999 Mr. Beukes
concluded contracts which were either on fixed price deals or deals
where minimum guarantee prices
had been expressly given. Strangely
even in those instances, he had never read the contracts at all.
Asked to comment on one of these,
namely, one he concluded with SAFE,
he told the Court that it provided for minimum guarantee prices
whilst at the same time admitting
that he never read it. When Mr.
Beukes was asked to examine the document in the witness box, he did
concede that there was no express
provision for minimum guarantee
prices, but merely a reference to “advances” and a mechanism for
determining same. He conceded
that such advances could not be a fixed
minimum price. He concede further that the terms of the contract did
not even provide for
an advance in a predetermined amount, but that
it was in fact an approximate amount determined by SAFE after taking
various factors
into account.
(39) It came as
a complete surprise to me when Mr. Beukes subsequently conceded that
his knowledge was based solely upon the oral
communications and
dealings with those exporters with whom he had dealt in the previous
year and that he in fact had no knowledge
of practices in the wider
industry at all. When asked to comment on the written agreement that
he had concluded with Capespan grapes
in a subsequent year, he
conceded that there was no express reference therein to the advances
not being recoverable. Furthermore,
whilst conceding that the
agreement with Capespan provided that Defendant was obliged to pay
interest on the advances made to it,
he persistently contended that,
should the nett price achieved be less than the advances made, the
Defendant was not liable for the
interest which it had undertaken to
pay to Capespan, and that Capespan would not be entitled to recover
either the advances or even
the interest thereon which Defendant had
undertaken to pay. How can this testimony be accepted as a truthful
explanation of what
Mr. Beukes believed the practice and his
obligation were, I ask rhetorically.
(40) It is
common cause that Dole standard contract for the previous year
(1998/1999) contained no express term at variance with clause
17.1.
It merely referred to an advance being paid, but did not address
expressly the question of the recoverability of that advance.
It is
contended on behalf of the Defendant that Dole had changed the
standard contract for 1999/2000 and that in doing so departed
from
the practice. This contention has as its basis that Mr. Beukes’
evidence about industry practice regarding advances is correct.
The
contention cannot therefore be sustained because Mr. Beukes is
clearly incorrect on this aspect. It must immediately be pointed
out
that the 1998/1999 standard contract of Dole and of other exporters
for that matter, though not expressly dealing with recoverability
of
advances, was also in no way inconsistent with the industry practice.
It merely did not spell it out. This did not mean that the
exporter
could not recover portions of those advances when the overseas market
brought forth a loss instead of a profit. Clause 17.1
therefore, in
my understanding, merely spelled out “in terms” the existing
established industry practice and was indeed, in my
view, entirely in
accordance therewith. I was very much satisfied with the testimony of
both Mr. van Zyl and Mr. Scholtz on this
aspect. They were both
extensively cross-examined on this aspect and their evidence did not
change its “colour”. It is clear
from their evidence that the
purpose in providing for clause 17.1 in the new agreement was to
remove any possibility of uncertainty.
All that Dole clearly did in
clause17.1 was to clarify what was always in any event the position,
namely that the advance was neither
a fixed price (similar to
purchase and sale) nor provided a minimum guarantee price. In my
judgment there was nothing new and therefore
unusual or unexpected in
the contents of clause 17.1. In any event because Dole decided to
spell out the position in no uncertain
terms, that does not in my
view make the position totally new. Mr. van Zyl and Mr. Scholtz’
evidence on this aspect remains convincing.
They both totally
disputed the practice as alleged by Mr. Beukes. Their clear evidence
was that the norm for conducting business
as an agent in the
deciduous fruit industry was in accordance with the provisions
contained in clause 17.1. The provisions should
in that context have
been expected or even anticipated as the norm.
(41) Mr. Beukes’
evidence that no farmer who was aware of clause 17.1 would agree to
the term contained therein is hardly helpful
in this regard. This is
countered by Mr. Scholtz’ evidence to the effect that the clause
was indeed in accordance with the practice
and that of the producers
in the Hex River Valley who had been required to repay part of the
advances to Dole in 2000, only the Beukes
family had alleged that
they had not read their contracts and that they were not bound by
clause 17.1. It is important to have regard
to Mr. Scholtz’
uncontested evidence to the effect that Dole, as South Africa’s
third largest exporter of table grapes from South
Africa, at present
exported between four (4) and five (5) million cartons of grapes per
year from this country, almost exclusively
as agent and in almost all
cases incorporating terms the same as clause 17.1, which provided
that advances were repayable.
(42) Mr. Beukes
presented himself as an unintelligent, inept and totally ignorant
businessman, this despite his business experience
and education. He
persisted to exhibit what I regard as a wrong picture of himself. I
can hardly accept that a man of his experience
and education would
not read anything meant for him to read. In his testimony, it is not
only business contracts, periodicals and
letters sent to him that he
does not read; he also admitted to not have read an ante-nuptial
contract relating to his own marriage.
I am called upon to accept and
believe all what he told me in Court. A man must display honesty and
sincerity before he can venture
to ask any court to accept and belief
his version. Under cross-examination and whenever Mr. Beukes
perceived that he was being pushed
into a corner, he would merely
answer “ek kan nie onthou nie; ek weet nie …..”etc. Mr.
Beukes’s entire view of the industry,
and the terms of business
which applied to his relationships with exporters, was coloured and
influenced (on his own version) by
what was and is an entirely
unhelpful and unreasonable attitude on his part that he did not read
any documents which he received,
be they advertising material or
contracts. It is my view that those dealings with Mr. Beukes would
have been reasonably entitled
to expect that, as a person involved in
producing grapes and negotiating with exporters for the marketing
thereof, he would have
taken the trouble to acquaint himself with the
industry and would have read materials and contracts put in his
hands. At some point
Mr. Beukes suggested that he would have chosen
the exporter with the highest minimum guaranteed price as such
exporter no doubt had
the best market. But he continued to concede
that the advance offered by Dole was substantially lower than the
minimum guaranteed
price offered by competitors such as Del Monte, or
fixed price deals he had with other exporters. Accordingly, the
decision to contract
with Dole at all cannot, in my view, (as alleged
by Mr. Beukes) have been based upon the quantum of the advance but
rather on a belief
in the possible final price that could be achieved
by Dole in the foreign market place. The advances paid by Dole were
in accordance
with the schedule of Advances (Exhibit A, page 100) and
were in respect of certain varieties, higher than twenty rand
(R20,00) per
box. The difficulty is that if Mr. Beukes’ evidence is
accepted, that would actually amount to accepting the proposition
that an
exporter would agree on minimum guaranteed price of twenty
rand (R20,00), or not less than twenty rand (F20,00) per carton, and
thereafter
voluntarily and unilaterally (without being contractually
obliged to do so) increase that minimum guaranteed price and thereby
increase
its own exposure in the market. Exporters are seasoned
business entities. They would not shoot themselves in the foot.
(43) One last
aspect deserving attention is that Mr. Beukes could not dispute the
suggestion that he had, on a prior occasion, been
handed an English
version of the agreement under discussion, and that he had asked for
an Afrikaans version, which was only delivered
later. He also could
not dispute that the same English version was most probably left with
him until an Afrikaans version was presented
to him later. Although
he said he could not recall such incident, he was, however, prepared
to accept that it had taken place. What
struck me is that he was very
clear of what his motivation would have been for asking for an
Afrikaans “afskrif”. Mr. Beukes
did remember the incident of the
English copy. He was untruthful when he told the Court that he did
not recall. If he truthfully
did not recall the occasion, it would
not be expected that he would be able to describe his motivation with
such clarity. I would
have understood if his motivation was that he
wanted to have a copy in his mother tongue so that he could read
same. Instead he stated
that his intention was not to read the
document but rather to buy time so as to try to do a better deal with
a rival and in Mr. Beukes
own words to “play with van Zyl.”
(44) The
evidence of Mr. van Zyl which was not contested was that he had first
handed over an English version, and had later brought
an Afrikaans
version on a separate occasion at least a week later. Mr. van Zyl’s
evidence, which is of cardinal importance is that
he was certain that
he would have adhered to his modus operandi and, as with all other
growers, explained the pertinent terms to
Mr. Beukes. It is, however,
not without significance that he readily conceded under
cross-examination that he gave evidence about
the explanation of the
contract on the basis of the modus operandi which he had followed in
all cases. I hasten to mention though
that Mr. van Zyl was not shaken
on his assertion that he had done so with every farmer. I would have
been very concerned and in fact
suspicious of Mr. van Zyl’s
evidence if he testified that he specifically remembered dealing with
Mr. Beukes and that he remembered
specifically explaining to him the
contract provisions, clause by clause. But he categorically stated
what his modus operandi was
with regard to all growers. This, in my
view, is credible. Well, to say that the recoverability was not
hammered on as a “mega
point”, in my view, does not detract from
the fact that the record shows that in both instances Mr. van Zyl
confirmed that he would
have explained the nature and purpose of the
advance to each producer. Importantly Mr. van Zyl denied that he had
misled Mr. Beukes
as to the terms of the written agreement. In his
evidence he would have followed his modus operandi with Mr. Beukes,
as with all
other producers who signed the written contracts. Both
Mr. van Zyl and Mr. Scholtz confirmed the purpose in providing for
clause
17.1 in the new Dole agreement, namely that all what Dole had
done was to clarify what was always in any event the position (being
that the advance was neither a fixed price in the context of purchase
and sale nor provided for a minimum guaranteed price).
(45) I cannot
find in the evidence that Mr. van Zyl is an untruthful witness. I
cannot in the evidence make a finding that Mr. van
Zyl concluded an
agreement contrary to the policy of his employer. I cannot on the
evidence led in this matter make a finding that
an agreement was
concluded with the Defendant which agreement was out of the ordinary
for the business of Dole. It was for the Defendant
to produce proof
tending to convince the Court, on the balance of probabilities that
Mr. van Zyl did not explain the nature and tenor
of the written
agreement to Mr. Beukes before the latter appended his signature
thereon. On the other hand, the probabilities favour
the finding that
Mr. van Zyl did explain the nature and tenor of the written
agreement. The following are but a few of such factors:
Mr.
Beukes did not only testify that the provisions of clause 17.1 had
not been drawn to his attention, but went further and alleged
that
Mr. van Zyl had not drawn his attention to Dole Europe or to the
LIBOR interest in clause 17.2.
Given
the evidence of Mr. van Zyl that he explained these matters to each
and every producer before the agreements were signed;
that he
invariably and without exception followed this practice, a
suggestion to the contrary falls to be rejected.
No
convincing or any reason at all was offered by the only Defendant’s
witness, Mr. Beukes as to why Mr. van Zyl would have departed
from
his established modus operandi.I am told there are twenty four (24)
producers in the Hex River Valley with whom Mr. van Zyl
dealt that
year. The Defendant did not call even one of the twenty four (24) to
come and tell the Court that the modus operandi
testified to by Mr.
van Zyl had not been followed with him as well.
If
it is the truth that Dole amended the 1999/2000 standard contract
(and particularly clause 17.1) for the specific purpose (as
testified to by Mr. van Zyl and Mr. Scholtz) of avoiding disputes
due to a failure to have spelled out the position regarding advances
(a need which had been occasioned due to a perceived risk of
disputes arising from an incident the previous year involving SAFE),
there would have been, in my view, every reason to ensure that
clause 17.1 was drawn to the attention of producers. It is extremely
improbable that Mr. van Zyl would not have done so.
(46) The
probability that the terms were explained to Mr. Beukes by Mr. van
Zyl is further strengthened by the fact that there was
also a need to
explain to the producers that they were separately appointing Dole
Europe as an agent and that the concept of the
LIBOR interest, Which
was a new feature introduced by Dole, would clearly be explained to
the producers. It is most unlikely and
improbable that none of these
matters (as suggested by Mr. Beukes) was raised. Moreover, the
contents of the agreement under discussion
including clause 17.1 are
clear and unambiguous. I accept the practice in the deciduous
industry as contended by Dole.
(47) Accordingly
the conduct and the statements of Mr. van Zyl, in my view, fall to be
judged in accordance with the practice in the
industry as the
background. It is no doubt reasonable to accept that Mr. van Zyl
would reasonably have believed that Mr. Beukes (who
was participating
in the industry) had this same basic understanding and grounding as
to the norms of the industry. In my view, apart
from Mr. van Zyl’s
evidence that he explained the salient terms of the agreement to Mr.
Beukes, there would then be no reasonable
grounds for Mr. van Zyl to
have appreciated that Mr. Beukes was under any misapprehension at all
as to the terms contained in the
written agreement. I find that Mr.
van Zyl is a man of vast knowledge and experience in the export of
deciduous fruit industry. He
presented to this Court the most
logical, thoughtful, narrative and informative version. That he was
an honest and reliable witness
in this matter cannot be doubted. Same
cannot, however be said of Mr. Beukes. It is my view that farmers
with whom Mr. van Zyl did
business must consider themselves as having
been very fortunate. They most certainly must have taken full
advantage of his knowledge
and expertise in the export of deciduous
fruit industry generally. Mr. Scholtz’ evidence corroborated and
merely complimented evidence
tendered by Mr. van Zyl.
(48) Mr. van
Riet (SC)’s contention of the term contained in clause 17.1 as
being unusual must necessarily now be viewed in the
context that I
have shown above in this Judgment that there was nothing new and thus
unusual with recoverability of the advances
in the export of
deciduous fruit industry generally. In any event, Mr. van Zyl
explained the provisions including clause 17.1 to
Mr. Beukes just as
he did with the other growers he dealt with.
(49) It is
important to note that this case is totally different from what is
obtained in
Constantia Insurance
case
supra
. The
latter case is therefore distinguishable and in my view reliance on
it in view of findings set out
supra
is totally misplaced. Mr.
van Riet (SC) attaches too much importance on the following words
from Mr. van Zyl uttered in the course
of cross-examination, namely,
“’n mens onderhandel net nie so nie. Waar jy gaan deur die inhoud
en die bedoeling van wat ‘n
voorskot is, maar ek het nêrens vir
hom gesê jong, maar luister – wat ek wel sou sê, on second
thought, wat ek wel sou sê as
daar ‘n gehalte probleem met jou
vrugte sou wees, dan sal ons na jou terugkom om geld te vra.” In my
view, that hardly says Mr.
van Zyl did not explain the content of
clause 17.1. I have referred to how clear clause 17.1 is. In any
event, Mr. Beukes himself
testified that in the event of a problem
with regards to the quality of the fruit, the agent invariably came
back to the producer.
In my view, in these circumstances, the
Defendant must be held bound to what he signified with his signature.
See:
Burger v Central South African Railways
supra
.
It cannot be contended in the instant matter that Mr. Beukes was in
any way misled as to the purport of the words to which he signified
his assent. See
George v Fairmead (Pty)
supra
.
Evidence has not shown that Mr. Beukes in any way laboured under a
bona fide and reasonable mistake with regards to the content
of the
contract under discussion in this matter. See:
Tesoriero v BHY
JO Investments Shareblock (Pty) Ltd supra
;
Spindrifter
(Pty) Ltd (Pty) Ltd
case
supra
.
ORDER
It
is ordered and directed that the Defendant is bound by the terms of
the written agreement annexed to the Particulars of Claim
as
Annexure “A” signed between the parties on 26 October 1999.
The
Defendant shall pay the Plaintiff’s costs occasioned by the
present hearing.
_______________________
DLODLO,
J